DECEMBER 2, 2008
Germans talk of troubles with Grand Prix
Hockenheim says that without financial aid from the state of Baden-Wurttemberg there will be no more Formula 1 races at the circuit near Heidelberg. Hockenheim made a substantial loss on this year's German Grand Prix and says that it is not possible for that to happen again. Baden-Wuerttemberg says it will not pay the bills and automobile makers BMW and Mercedes are both unwilling to invest although Hockenheim's mayor Dieter Gummer says they are the circuit's last chance. The rival Nurburgring says that it can host a German Grand Prix, but only every two years. The circuit has admitted that it made similas losses to those of Hockenheim when it hosted the European Grand Prix in 2007.
The state of affairs in Germany is a dramatic turnaround from the days when Michael Schumacher attracted huge crowds to the races. There are hopes that Sebastian Vettel can rekindle that enthusiasm but even with full grandstands it is now hard for the traditional European tracks to make money, without government assistance.
The Formula One group, which charges the fees that promoters are struggling to meet, believes that local governments should be involved in the funding of events, as they are with other major sports, notably the Olympic Games. Unfortunately this attitude is not one that has met with much positive feedback in F1's traditional markets with the races in Austria, Belgium, Britain, France, Canada, Australia and the United States all suffering from financial trouble in recent years. Other races are losing money but are being supported by local governments because they want the prestige that comes with a Grand Prix.
Formula One argues that cities that host the Olympic Games also lose money but that the prestige that comes from such events gives them the potential to earn much more from increased investment and tourism in the years that follow. It also argues that F1 is an annual thing and not a one-off. This is true but the counter argument is that F1 is less exclusive an event than the Olympic Games and thus does not warrant the same level of investment.
This all may have something to do with Bernie Ecclestone's desire to see Formula 1 race winners awarded with gold, silver and bronze medals - an Olympic concept - to try to create the perception that F1 is on the same kind of level as the Games. It is an interesting argument, but there is no doubt that at the moment F1 is finding itself increasingly marginalised to countries where there are no traditions in the sport and no real interest. Some argue that this is a bad thing and that F1 should remain where the fans exist, others take the view that in order to continue growing in the longer term F1 needs to be going into new markets and building audiences. This is a fine concept so long as the audiences can afford to go to the races, which is not the case in locatiions like China.