AUGUST 25, 2009
The future of Valencia as an F1 venue
The European Grand Prix at Valencia was not a success in 2008. It attracted a race day crowd of 115,123, although that seemed a rather optimistic figure to most of the F1 fraternity. This year the organisers claimed only 81,000. Spain is supposed to be F1's boom market so the results can only be described as disappointing. Within the sport there is an argument that F1 lacks a global superstar like Michael Schumacher, others argue that this is a smoke-screen and the truth is that F1 ticket prices are too high. A seat in the grandstand opposite the pits in Valencia was priced at 480 Euros ($685) while general admission on the Sunday only was 100 Euros ($143). The average income in Spain is only 23,400 Euros ($33,500).
Attracting more locals might be possible, but for anyone who has to stay in the city for the weekend the hotel costs are high, although they are better than they were last year.
The promoter has little choice but to have such high prices as it must pay the fees agreed in the contract with the Formula One group. The race has clearly lost money, but the local politicians are happy to invest more and have recently agreed a sponsorship deal for the event which will net the promoters an additional 90m Euros ($128m) over the next five years. This means that the race fees will effectively be covered and all the promoter needs to do is to balance the books using the ticket sales. This should make the race economically viable. The government says that thus far the race has cost only 63.5m Euros ($90m) for the construction work and claims that the race has had an economic impact in the region of around $570m, which seems a rather high figure.
The F1 race has obviously been helped by the news that the America's Cup sailing competition (or at least what is left of it given the amazing amount of self-destructive litigation going on between the contenders) has decided to move to Ras al-Khaimah in the United Arab Emirates, where it should take place next February. Valencia had money set aside for that and thus that cash can now be used for F1.
There is hope that not only will Fernando Alonso end up in a better car next year but also that there will be at least one Spanish team and possibly two. The new Campos team is to be headquartered in the region and there is still a chance that Epsilon Euskadi will get the BMW Sauber slot. This would give the locals someone to cheer, possibly with additional Spanish drivers.
The local government is continuing to invest in development. A new high-speed train link with Madrid is due to open soon, which will cut the journey time to 95 minutes, making it possible for people to visit the race for the day. Valencia's airport is also being developed and there is still much building going on.
It was noticeable that the coverage of this year's race had been rethought and there was much more evidence of the dramatic architecture in the city and the beaches. However pictures of the track still give more of the impression of it being in a dockyard than a glamorous harbour.
The local elections will not be held again until 2011 and so it is expected that the current policies will continue until at least then, although members of the government have been linked to the Gurtel corruption scandal, which is still brewing quietly in Spain.
All things considered, however, it seems that the Valencia race is here to stay, at least in the short to mid term.