The Canadian Grand Prix at Montreal is in discussions with Bernie Ecclestone’s company about a new contract to retain the race for 10 years, according to a Reuters report today.
And the news highlights the push by F1′s commercial rights holder, backed by CVC Capital Partners to secure long term contracts with host venues.
Although CVC’s senior partner Donald McKenzie said recently that the proposed floatation of F1 may need to be postponed once again to 2014, getting a full calendar of events on long term contracts is a key component of the sale; circuit hosting fees are at around $700 million per year, a similar level to Media Rights sales as the major revenue streams for the sport.
So is a Concorde Agreement binding in the FIA and the teams; this remains unresolved at this time despite the old one expiring six months ago.
New races in New Jersey, USA and Sochi, Russia are due to come onto the calendar next year and a race in Bangkok is on the horizon, once a suitable location has been found which complies with local environmental legislation. Mexico looks likely to get a race in the next few years.
“All new agreements now being signed are for 10 years,” said Montreal promoter Francois Dumontier.
“I believe they want to consolidate the good grands prix. Montreal is such a race, undoubtedly. We saw as much (this year) with the full grandstands and the comments made by the drivers and teams.
“F1 has a project to enter the stock market. Ten-year contracts have a certain value when entering the stock market.”
However finding the right price point for the circuit hosting rights is always a delicate business. CVC’s business model for the sport since its acquisition seven years ago has put a big emphasis on rising circuit hosting fees, but in many locations which do not enjoy substantial government backing, ticket prices have risen as a result to levels the public is finding it hard to meet, particularly in Europe. Silverstone is seeing a slow down in sales this year and ticket prices have been cited by fans as a reason.
Sources within the circuit promoters’ world suggest that the recently formed Formula One Promoters Association, is likely to seek to strengthen its position in the coming years, much as the teams have attempted to do with mixed success via FOTA.
The Canadian Grand Prix is always one of the most popular events within F1 and one of the best attended races of the year, along with Silverstone and Barcelona.
Although the track itself is fit for purpose, this year’s event highlighted the lack of infrastructure at the circuit with largely temporary facilities now looking somewhat obsolete, as if F1 has outgrown the venue in its current guise.