MARCH 4, 2009
Montreal goes on but F1 future is unlikely
The Circuit Gilles Villeneuve on the Ile de Notre Dame in Montreal has long been a favourite venue of the Formula 1 circus. And tens of thousands of F1 fans from across the United States have regularly made the pilgrimage to the city to enjoy the race and the party atmosphere that has been so successfully developed in the last 10 years. Everyone agrees that the event was good for the city, for the province of Quebec and for Canada in general. It is reckoned that the local economy got an annual boost of around $100m when F1 came to town. Hotel occupancy rates went up 30% along (along with the prices) and most restaurants and shops said that they doubled their regular income during the GP weekend.
"The Grand Prix is very important for Montreal," said local mayor Gerald Tremblay. "It creates economic spin-offs, but even more, it makes Montreal famous internationally. There are more than 300 million people who watch the Grand Prix."
Unfortunately the authorities did not want to invest. Normand Legault's Grand Prix F1 du Canada company had to pay not only the rights fees demanded by the Formula One group, but also has to rent the track from the Societe du Parc Jean Drapeau, a subsidiary of the Montreal City Council. He had to pay for the construction of 15 temporary grandstands, four bridges and miles of barriers, fencing and advertising hoardings. When F1 demanded better facilities Legault had to go to various different bodies to get the funding he needed. In the end Legault said he had no choice but to give in as F1 was not willing to compromise on the fees being demanded.
The local business community screamed in protest but the government did not help. F1 departed. In an effort to appease the business community, the Societe du Parc Jean Drapeau has now struck a deal with promoter Stock Car Montreal (SCM) and the International Speedway Corporation (ISC) to ensure that the NASCAR Nationwide event in Montreal continues for at least another three years. The news has been greeted with enthusiasm in the city, although it is unlikely that the event will bring in anything like the amount of money which arrived when the free-spending F1 circus came to town.
"This partnership ensures the continuity of major automobile racing events at the Circuit Gilles Villeneuve," said Serge Remillard, the chairman of the Societe du Parc Jean Drapeau. "It also underlines that the mission of the park is to host international events which make a significant contribution to Montreal's tourism industry."
As part of the deal, Legault has sold his interest in SCM to ISC. He says this is the best thing for the city.
"I can say without fear that this is the best thing that could happen for the survival of motor racing in Montreal," he said. "ISC enjoys an excellent reputation in motor racing, and is keen to create a long term relationship with Montreal and its faithful motorsport fans."
The new promoters say that interest in NASCAR is booming in Canada.
"With the growing popularity of NASCAR in our province, we are confident this third event will be a resounding success," said Francois Dumontier of Stock-Car Montreal. "This year's race will take place on an 'off' weekend for the NASCAR Sprint Cup Series and we plan to attract some of the biggest names in racing."
There is little doubt that the ultimate goal of SCM and ISC is to get a NASCAR Sprint Cup race in Montreal.
Sport in the US and Canada is much cheaper than F1 because of the competition that exists for big events. If a city wants to host the Superbowl, the biggest sports event in the United States, it costs only around $18m but in order to win such a bid it is often necessary for the cosntruction of a stadium or infrastructure investment in the area that can run into billions of dollars. There are huge numbers bandied about as the return on this investment but the reality is that a local area gains only around $50m in hard cash from visitors. The Superbowl guarantees around 95m viewers in the United States and while F1 can claim a bigger global audience few of them will ever consider travelling to Montreal.
The reality therefore is that F1 has not just lost its greatest asset in North America, it has also unwittingly handed it over to NASCAR, in much the same way as the Long Beach GP was handed over to CART back in the 1980s when the Americans refused to pay the money being asked. The problem, it seems, is that F1 is not willing to cut special deals in order to keep the sport in North America. This is presumably because of the fears that such action would result in calls from other promoters around the world to reduce the fees being paid.
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