JANUARY 7, 2001
What is going to happen with all the new races?
IT seems that barely a month passes without some new rumors about a new candidate for a Formula 1 Grand Prix. Everyone seems to want to hold a race. The teams have increased the calendar to 17 events each year but say they will not go any higher than that because of the pressures involved in holding more races. And, as NASCAR is currently finding out in the United States, too many races can be a bad thing.
So what is Formula 1 going to do to meet the demand for events. The inevitable answer is that the sport will simply raise the price until bidders drop out. There were vague plans for a Junior Formula 1 Championship involving the current Formula 3000 but there seems to be have been little progress in this respect. This Spring Formula 3000 will go the Brazil for the first time but the creation of a proper championship independent of Formula 1 itself is unlikely to happen within five years. There is simply not the interest in the junior formula. There have also been suggestions that events will be made to alternate to meet the demand. There is, for example, no reason that Germany has a perpetual right to the European Grand Prix except that with the Schumacher Brothers and Heinz-Harald Frentzen all doing well in F1 interest in the sport is high in Germany. Italy and France both, in effect, have two Grands Prix with Italy enjoying the San Marino event and Monaco being fundamentally a French event.
There is no doubt that there will be pressure on the European races in the years ahead. The FIA wants to have a more global World Championship and having 10 races in Europe simply does not make sense except from a historical point of view and, whether Europe likes it or not, things change. The problem at the moment, however, is that a lot of the races are on long contracts. Ecclestone likes to have things organized at least five years in advance. Several races have contracts coming up for renewal, notably San Marino, Germany and Italy but is hard to imagine that any of these will lose its date. Ferrari's influence should take care of the Imola date and the only reason a new deal has not been struck in Germany is that the race is being fought over by Hockenheim and the Lausitzring.
The Austrian GP is up for renewal in 2002 and this may provide the opportunity for another race to be added to the calendar, while 2003 will see the contracts with Brazil and Canada up for renegotiation. Both are likely to remain on the calendar as F1 wants to maintain (and indeed increase its profile in the Americas). It is possible that the Canadian date could be replaced by a second American event but the Canadians are likely to fight hard to hold on to their event. The wild card is Belgium where there are constant troubles with the local government and the race has only survived because Spa is such a good track and because Bernie Ecclestone is the race promoter.
Given that there are limited opportunities in the future there are a remarkable number of projects under discussions, including Argentina, Egypt, Beirut, Bahrain, Dubai, Calcutta, Bali, Singapore, South Africa, Holland, Greece, Croatia, Korea, China, Russia, Tunisia and San Francisco. Some are more serious than others and there are probably other schemes which have not yet come to light but what is very clear is that not all the races being mentioned can happen. Europe remains the dominant force in the F1 calendar with 11 of the 17 races but there is little doubt that F1 wants to get more of a presence in Asia, North America and the Middle East. The perfect calendar would be one in which all three of the major time zones (The Americas, Europe/Africa and Asia/Australasia each had five or six races). At the moment there are only three in the Americas, and three in Asia/Australasia.
In the end it will probably be a case of the survival of the fittest. As the fees rise so the less profitable races will fade away. Based on a study in 1997 Belgium, Austria and Spain produce the least income for their regions. This is largely because they attract a large percentage of campers (in the case of Austria and Belgium) or they are located close to a large population centre and the crowd is made up largely of locals who go home each night. This is a problem for the two Italian races while the European, British and French events generate more money because they take place in remote areas and so people have to find places to stay. There are large number of campers at both the European and French GPs but they seem to spend more money than those who go to Austria and Belgium. Malaysia is a guide to how the maximize benefits of a Grand Prix. The crowd last year was 75% non-local, which perhaps explains the huge income that the organizers announced after the first event.
With as many events wanting to be on the calendar as there are actual events, the best way for F1 to expand in the future remains some form of diversification but that can only be successful if it does not dilute the primary product.
If Formula 3000 will not work the best way forward would be for F1 to organize some form of a World Oval Championship. It is doubtful in the current political climate in Europe that Ecclestone would do this, but it is the logical way for his company to grow. Perhaps it would be best for him to be involved in such a deal as a partner with one of the US organizations which is currently running oval racing series. The obvious partners would be Tony George's Indy Racing League or CART. George is probably the better bet as he is involved in an organization called The Motorsports Alliance, in which Indianapolis and Daytona are partners. This controls more than 15 race tracks across America.
It may be that Ecclestone sees his company's future more as a television provider to other sports although knowing the way in which he operates, one should expect expansion in both directions. That will probably only happen after F1 and the European Commission have made their peace and there is a clear understanding of the commercial rules which govern the sport. What is interesting is that there is a trend at the moment for promoters to build combined oval and road track facilities - the best examples being Twin Ring Motegi, the Lausitzring and the new Rockingham facility in Britain. Toyota is planning to do a similar thing with Mount Fuji. This could mean future deals in which racing circuits would alternate World Championship events, holding F1 one year and an World Oval race the next. That would give Ecclestone the potential to collect fees from 34 venues.
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