JULY 18, 2012
Problems for Nurburgring and German GP
A report in the German Rhein Zeitung newspaper suggests that the circuit-owning Nurgurgring GMbH is on the verge of going into administration after a 13m Euro subsidy from the European Commission, sought by the Rhineland Palatinate state government, was denied.
There is already an investigation into whether 500m Euros worth of investment in the facility, which was redeveloped three years ago, was in contravention of European competition law.
The additional capital injection would have allowed Nurburgring to make payments on a 330m Euro loan. The article claims that, including the loan, Nurburgring has debts of over 400m Euros, while a recent study by Ernst and Young valued the site at just 126m Euros.
If Nurburgring enters administration, administrators will become responsible for its existing contracts, which include the German GP, shared in alternate years with Hockenheim, and a rock festival.
Without further investment, it is diffiuclt to see how Nurburgring could meet F1's hosting fees, calling into question both the future of the circuit and the race, as Hockenheim has previously said that it is not in a position to host the German GP every year.