JULY 26, 2006
How does this make sense?
The idea that Hockenheim and Nurburgring are going to share the German Grand Prix in the future makes little economic sense. The news, if confirmed, will mean that each track will have to pay the Formula One group once every two years rather than once a year but at the same time it means that each track will only have the big-earning F1 events once every two years, which means that there is little to be gained that is not lost in this deal. In addition the two circuits will still have to pay out to make improvements for F1 and that will cost the same money whether there is one race a year or one every two years. The Nurburgring has sufficient business and income to survive such an arrangement. It runs a number of big events which draw in large crowds, notably with the DTM, the 24 Hours on the old Nurburgring, truck racing, bikes and rock concerts. It also has a well-advanced day-to-day business generating income when there are no events taking place. Hockenheim, on the other hand, is less successful and heavily indebted. With less income but the same fixed costs, logically it would end up in a worse position than is currently the case.
There would also be less desire on the part of the local authorities to invest because they would be getting half the previous benefit with one race every two years.
The arrangement would obviously suit the Formula One group as it continues to earn no matter where the racing goes.
It is hard to imagine why the Nurburgring would want to get involved in such an arrangement as it could simply take over the German Grand Prix - of which. Let us not forget, it is the traditional home.
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