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Montreal offers $75 million to get F1 race back
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Montreal offers $75 million to get F1 race back
Posted By: James Allen  |  06 Aug 2009   |  5:29 pm GMT  |  25 comments

Following on from the comments from Bernie Ecclestone on Monday that the Canadian Grand Prix will be back on the calendar next year, something the F1 teams are urgently demanding, a story has appeared in the Canadian paper the Globe and Mail with details of the offer on the table.

According to the paper’s well informed F1 writer, Jeff Pappone, Ecclestone rowed back a little this week from his initial enthusiasm, saying “We’re doing our best to make sure it happens.”

Pappone’s story says that Canadian GP officials met Ecclestone in London two weeks ago with a proposal. The deal on the table now is for less money than the one rejected by Ecclestone last time around, but this reflects the economic situation in North America.

“Apparently the proposal was about $75-million over five years,” says the story, “Much less than the offer rejected by Ecclestone last November. It is also thought the deal included a promise to pay Ecclestone the money he was owed under the previous arrangement.

“Last November, the city offered Ecclestone a five-year package for $110-million in sanctioning fees as well as 75 per cent of the first $10-million in profit and 25 per cent of the rest. In addition, the estimated $20-million from the race’s advertising and luxury box revenue would have gone to Ecclestone. His counter offer of a guaranteed $175-million over five years to keep Montreal on the F1 calendar was too steep for the city and the race was pulled.”

I posted recently on CVC’s business plan for F1, which envisages the sanctioning fees for races rising by almost 10% year on year, from $374.9 million in 2009 to $445 million in 2012. Discounts are surely not part of that plan. But F1 cannot afford to be absent from North America and with a new Concorde Agreement now having been signed, teams appear to have more say over how things are run. They are calling for races in all the key markets, as their statement yesterday showed,

“FOTA’s attention will now turn to other issues we believe to be in the long-term interest of F1: racing at the best tracks, in front of the biggest audiences and expanding F1’s reach.”

With this kind of pressure coming from teams and no other suitable North American venue in the pipeline for 2010 maybe a deal will be done to take the sport back to one of its most popular venues.

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25 Comments
  1. jeremy says:

    now we need to get Mexico back!

  2. Manuel says:

    I love Montreal circuit. I still remember 1998 race when Wurz rolled in the air at start. One crazy race.

  3. F1 Kitteh says:

    Numbers are interesting, so the original offer was $110 + $ 20 = $130mm + % of profits. Bernie is asking $175 so difference of $45mm. If we assume that ticket prices avg $200 x 150k attendance = $30mm/year then it looks like a profit of $10mm should be doable and that $7.5mm/year basically closes the gap to what Bernie is asking, plus he will get another 25% of the rest. If he has some confidence in the ‘profit’ determined by the organizers then I don’t see why he would not take it, the risk reward seem good. Unless he really does’t care and and extra amount does not flow directly into his pocket (or majority does not anyway) but rather than into CVC’s, who is only interested in a fixed income stream rather than the upside. Maybe we should have had an entrepreneur in the middle who would have shouldered the risk for the reward? Wait.. isn’t that what Bernie used to do ?

  4. jw1980 says:

    James,

    any idea when this race is likely to be if at all?
    Have you seen or heard about any leaks regarding next year’s calendar?
    I would like to attend one GP next year and Canada would be a great option.
    However, dates for holidays are being booked at a rapid rate at present at my workplace. I am concerned that by the time the calendar is released it may be too late to attend any races bearing in mind that I have no desire to go to Turkey, Malaysia, Bahrain, etc…

    1. James Allen says:

      Hopefully in the early summer, as before. We should start to get an idea of the calendar in the next few weeks.

  5. Werewolf says:

    I like Montreal. The circuit’s combination of fast straights and slow corners seems to produce good racing and interesting results. I’d welcome it back over some of the more modern, dull circuits, eg Valencia.

  6. Aaron says:

    About time, I miss Canada, I know its only off the calender for a year, but its vitally important to getting a race back in the states, that will take sometime after the crazyness a couple of years ago, but I think that we need Two races in North America as soon as possible.

  7. Dan says:

    Lets get this done. I doubt it will be paired with anything else, with BE’s comments on Indy and the change in management at the speedway.

    1. Rudy Pyatt says:

      Yeah, thing is (sorry for the length, again), no state or local government here will put up the outsized $$$$ needed to satisfy Bernie. His current business model requires that, so there’s no way we’ll get a US race again unless CVC makes him do it — unlikely, given that he seems to operate as he pleases (James, just what is the structure there? Has Bernie set it up so that he retains controlling interest?) And the only way they’ll do that is if there’s enough fan and sponsor interest here to make it worthwhile.

      The hard graft of advertising and marketing the sport here, building up fan and sponsor interest, is not (in his view) Bernie’s responsibility: He’s said so more than once. To a degree, he makes a fair point. The teams make no real effort to raise their US profile. Showing generic world-feed commercials, and then only on race weekends, is not enough.

      For all the criticism leveled at the manufacturers, their names are the ones people know, not those of the so-called “real racing teams.” Ferrari alone is recognized by sports fans beyond the existing (small) F1 fan base. Red Bull’s ads include every manner of extreme/”action” sport from air racing to skate boarding and motorcycle stunts, but NOT F1. Post-Ron Dennis McLaren has barely acknowledged their storied US involvement. Without Mercedes-Benz prodding them along, there’s utterly no reason to believe the team itself has any interest in racing here, or in raising their profile by reconnecting with that legacy; they’ve done nothing to warrant thinking otherwise. The rest, of course, have no pulse here — though Williams at least tried to do something back in the Montoya years. Nothing since.

      Time for FOTA to put up or shut up on this one. If they really want to be here, they’ve got to lay the groundwork — and make the sacrifices needed to do so. Get the drivers out there before the F1 season starts; make use of the summer shut down. Run Lewis Hamilton in the Daytona 500. Jim Clark ran a NASCAR race; Lewis can too. Run Button at the Sebring 12 Hours. Put Webber and Vettel into NHRA Top Fuel dragsters at Pomona or Englishtown. Put Kimi into a USAC sprint car race at Eldora. Will this put them all out of their comfort zone? Yes (well, Kimi enjoys rallies, so drifting on the throttle on dirt will feel familiar to him). But it will also introduce them to new audiences and help break the condescending and aloof attitude that the F1 circus has so often displayed here. And that’s worth the effort.

  8. Nicollers says:

    Montreal is my fave curcuit. For the most part, there is usually an exciting and memorable race there. Really hope they bring it back…..

  9. Sarah Jennings says:

    Wait, teams want to go Canada, F1 needs Canada and yet they have to pay Bernie $75 millon?

    That is sum business model Bernie has!

    Sarah J

  10. Steve says:

    Montreal always produces one of the best races of the year, so it will be good to see it back.

    It’s just a shame entertainment value isn’t as important to Bernie as his bank balance.

  11. john g says:

    if anything, bernie should be screwing places like china, abu dhabi and bahrain not Spa, Montral and Silverstone. i’m glad montreal looks like it’s coming back – i’ve been to almost all the races at some point over the last 3 years and canada has been my favorite – but bernie should never have let it go in the first place. i guess cvc have to pay off their massive debt somehow tho.

  12. guy says:

    I wonder if Bernie will agree to a budget cap for all race tracks to allow some of the old world circuits to get a look in. Thought not.

  13. David says:

    James,

    Are you hearing anything on a US race? I saw a quote from Bernie this week, saying he was looking at something here “after 2011″. I know he doesn’t want to come back to Indy, but I can’t think of another F1-ready track. Maybe Miller Motorsport in Utah, but Bernie doesn’t want to go there. He wants to be near a large city. I can’t imagine the teams want to wait until 2012 to get back here.

    Thanks

    David

    1. James Allen says:

      This has been a real saga. Point now is that the teams appear to have more influence and they are pushing for a permanent US home for F1. Has to be either East or West coast. That’s where the F1 heartland is in the USA.

  14. Attila says:

    James, what was your favourite Canadian GP presented by you?

    1. James Allen says:

      Attila, Probably the one where Jean Alesi won his only race for Ferrari. I did that one for US TV network ESPN, in the days before ITV. Great day!

  15. Attila says:

    In my opinion, Circuit Gilles Vileneuve is in the top 5 race track all over the world. Since I’ve been watching F1, always good races were held there. I want you back, Montreal!!!

  16. Tim from Canada says:

    Montreal is F1 in a nutshell. Great racing, glamour and style, beautiful scenery, culture, all mixed with insane fans who drink way too much on the subway car at 6 a.m. as they make their way to the circuit on race day. If the race is on next year, I’m going to be there.

  17. Kenny says:

    2009 Crisis: Breakaway

    2010-2012 Crisis: Venue Exodus

    2012 Crisis: Breakaway, the Sequel

    ad nauseum…..

  18. Jon W says:

    I hope they have some money left for some decent asphalt!

  19. Dave Bass says:

    I like the idea of a return to Canada & the US, how about the Leguna Seca track that looks to me to be an exciting & challenging circuit.

    1. James Allen says:

      Great track, I’ve always loved going there.

      1. Rudy Pyatt says:

        Let’s hope for it! MotoGP has established itself quite well there, so maybe their four-wheeled counterparts can consult with them?

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