Analysis of the new and soon to be held F1 races

http://planetf1.com/editorial/7292771/Short-Lived-Circuits...

Nice article on the new and soon to be GP's in work.

 

The initial headline: The Indian GP was judged a great addition to the F1 calendar - but real judgement can only come several years later is a little bit obvious (but none the less a fact).

The article mentions Turkey, China and Korea as circuits that have struggled to draw crowds in but doesn't mention Indianapolis or Malaysia, both of whom were starting to struggle.

For a lot of new circuits the big problem is that for the initial race there is a lot of Government investment and back slapping but then it slowly disappears and the race suffers (Turkey is a classic example).

Martin Brundle said something interesting after the Indian GP about the new circuits and the Indian track.

Basically he said that when a lot of these new facilities are first used you get all these Government officials commenting on what a great achievement it all is and how they're going to create a national drivers academy to encourage more racing in the country. Then they say they will encourage more varieties of racing to take place on the circuit throughout the year to make full use of it, but in the end, nothing actually happens and the track lies dormant until F1 comes back the following year.

He's concerned that the Indian track could end up being the same, great intentions but no real commitment or support.

The Austin GP will be interesting to see how after the first couple of years they manage to keep the interest going and promote it. Indianapolis has already shown that it's not that simple.

The New Jersey GP will be interesting to see how after a couple of years they convince the locals that the race is more than just an expensive, noisy, inconvenience to them that they could well do without (this is exactly how a lot of residents in Monaco feel but the history of the race means they know they will not get rid of it).

 

Budgets both private and public are hurting. Austin needs significant marketing capital and little as of yet has appeared. That plus Austin will be competing on race day of the first race at the circuit with significant and much more popular events in the US listed already in this thread. Unless the rich, interested latin fans appear I dont think Austin will be a strong event in year 1. The tv coverage in the US is terrible to start with.

They have a long road to travel and limited funding and they are way behind the curve in just marketing the event. As I posted before the US has a shaky history at best with F1 to begin with. The market around NY is more viable even just for a street race. Austin in my opinion is at risk already. Bernie has little faith if one reads his quotes about the internal problems with the event and organizers/company. Lets hope they have a plan. None of any substance so far in terms of markeing the F1 event there.

 

Indianapolis was great the first couple of years, looked promising. But then the crowds dwindled and it just was not realistic for the promoter to continue unless Bernie reduced his fee.

Which he would not.

I hate to say this, but Austin may suffer the same fate. Even if they have revenue 300+ days per year from testing, and additional national weekend events, I do not see how they can pay the bills. Local SCCA will not add much to the coffer.

I think the lower up front cost for New Jersey will give them an advantage initially, but then American race fans are not into F1, and they can be rather fickle. So after a couple of years, attendance will likely fall.

Same with India, Russia, etc.

Really, only the European venues of historic significance can weather the storm. Silverstone, Spa, Monza, Monaco, etc.

Bernie is killing the sport.

 

Finally someone thinks what I am. Bernie is rich and getting richer and in essence the sport is not really stronger at all. Drop the schedule to 12 races in venues that really want it and do support it.

The rest are quick money schemes that only benefit a few or only Bernie and his bankers. I could care less if all the non traditional races left the schedule. Japan and Brazil and Europe would be fine by me. I have zero faith of the long term viability of F1 in the US. I have more faith in its dedicated fans who continue to left with sporadic coverage and a lack of a focused effort to make F1 viable for the long term.

 

I'm genuinely hoping that both races will do well and succeed but as you have said, history is against F1 being successful long term in the US as it just doesn't grab the attention to the more casual, less dedicated fan.

I'm not sure about the finances of the Austin track, but My biggest concern is that it seems a bit remote to draw in F1 fans year after year.

Seems I'm not the only one:

Not only that but it will also have the novelty factor to start with.

Plus I honestly believe that the organisers are completely underestimating the amount of disruption that this sort of race causes to the locals.
After the first couple of races I can see the locals calling for the race to be dropped to be honest.

Like I say, I hope they both succeed but I can already see reasons why they might not.

 

Having done some pencil work on race tracks and financial viability, the US numbers seem pretty depressing. I do not know how any "road racing" track can really make "a profit" if they spend more than $40M - $50M in construction costs, regardless of location. Texas has a fairly robust grassroots motorsports tradition, and I can see various track day events for both autos and motorcycles clamoring at the opportunity to access that track. I suspect there will be some sticker shock if/when they see what it costs to gain that access. I would love to be proven completely wrong.

Is Miller Motorsports profitable? It is kinda out in the middle of nowhere. Barber Motorsports profitable? Birmingham is kinda out there too. I love Laguna but it is county owned and operated and restricted in use.

So the old tracks struggle along and the new tracks were built by very high net worth individuals consumed by their passion to do so. Profit seems secondary to their mission.

Who is that person at COTA? If there is not a sugar daddy willing to just unload money as it is needed, then COTA will have to have a real, workable business plan and show some returns for it's investors (I assume). When tracks come down to that, and a reliance on various public tax breaks and funds, I worry that they end up being the white elephant shortly down the road. I am not big on public monetary support for motorsports, because it has been shown to often leave the public with holes in their pockets.

 

perhaps we're overlooking an important factor here. a corporation only needs to show a profit two out of five years. what if the investors are looking for a tax break here. if you make 100 million you need to have write offs to reduce your tax liablity. 5 to 10 million a year loss looks good when tax time comes around. all they have to make is one dollar over their expenses to show a profit.

 

Wish I had some of the $ he generates in this killing process!

Seriously, we may not like him and/or the way he treats promoters but he's made a lot of people very, very wealthy over the years.

The sport has *never* been more popular, at least in terms of the all important TV eyeballs.

*Nations* are climbing all over each other to host a race. That they'll never turn a profit isn't Bernie's problem - There's plenty out there willing to put up the $ it seems.

Oh, and despite whines to the contrary and our typically rose-tinted view of history, it's never been more competitive either.

Hardly "killing it" IMO.......

Cheers,
Ian

 

+1 In addition, they are hoping some Back Marker Drivers will add to the Hosting Nation (i.e. Chandok, NK, and Petrov).

 

So who will be the US back marker driver at NJ in 2013?

 

I agree, Bernie like him or loathe him he, you cannot deny he is a brilliant business man.

There was a program on over here about his daughters the other night, the money they have is out of this world type really showing the vulgar trappings of wealth.

 

What!, surely you take a day off work and go to see your doctor too when you have a spot on your chin ?

(I really couldn't believe that one!)

 

Well enuff said.. I didn't actually watch/catch it all, just folk mainly women telling me all about it..

 

I must confess, I saw that bit on Harry hill's TV Burp!


To be fair to Bernie, he has done very well out of F1, but F1 has also done well out of him.

With the forth coming US races though, I can't help feeling that he'll do well out of it again but F1 won't fair so well.

Time will tell I guess.

 

This just does not make any sense......no one stays in business very long with this mentality. I am surprised no one jumped on this comment sooner.

 

Profit and F1 dont go hand in hand in this world unless you are a major team or Bernie.

German GP is not profitable
Monza?
Belgium - they want to kill it every 2 years and like Germany needs gov money
Spain - same as above
Monaco - gov owned doesnt matter, wealth flows so its safe. Monaco a sunny place for shady people. Perfect for F1
China - Gov money
Turkey - dead with and without gov money
Australia - not profitable only has gov money
and on and on and on................

Bottom line is a dismal bottom line for the tracks. F1 is a loser and we have 2 new venues in the US and one of them is going to not make it in less than 5 years. Care to speculate which one?

 

NJ. If the State money keeps flowing each year, Austin GP might do fine

 

Objective analysis Id say Tx falls first. Neither state is that fiscally sound but Bernie WANTS a race in the NYC area. Street circuit much cheaper and the cache of NYC nearby is not easy to compete with. I will go to NYC no problem from Germany. 1 flight, 8 hours and Im in the black Lincoln to my hotel.

Tx is the odds favorite on cursory analysis to be gone first.
I can also sell this to my woman very very easily as posted by Andreas as well.
Id like to see Tx succeed but Im not counting on it when I compare both. They have never projected an air of confidence in building the track and are doing zero to market the event either. Tavo is hardly a power broker.

 

NJ sounds like a good idea, but I just don't see anybody wanting it to be in their back yard.
Australia spent $50 MM on their GP last year. Hardly cheap, and if the costs are similar in NJ, most definitively a loosing venture for those involved, unless they get some sort of incentives from the State (like in Austin)

As for why they aren't marketing the Austin race yet, I'm going to guess that they aren't going to do much until they get more of it built, and they get their final application in for the State subsidy funding (Nov. 18)

 

Any more than some want Austin F1 in theirs.

Marketing is simple really. Answer questions about an event. They can't or dont answer Bdelps emails currently. They are fighting against NASCAR and other events the weekend of the first event. They need help. Basics should be put out like: Location, date, cost of tickets and local accomodation. Really its not rocket science. Sure its a bit early but this is F1 not some dirt track event.

 

i know plenty of high income people who have money pits to boost their egos.