“Formula 1” belittles the role of Europe

Formula 1 CEO Stefano Domenicali said there is no guarantee that the European rounds of the championship will retain their places on the calendar. Mr. Domenicali made it clear that the owner of the series, Liberty Media, is primarily aimed at extracting maximum income, which is hindered by the reluctance of many European promoters to pay for the right to hold races on an equal basis with colleagues from other countries such as Qatar, Saudi Arabia or China. As a result, there is a real threat that Formula 1 will be left without a number of “historic” races – for example, the Monaco, Italian or Belgian Grand Prix. However, there is no talk of a complete withdrawal from Europe.

Formula 1 CEO Stefano Domenicali, who is currently in Belgium, where the next round of the World Championship will take place on Sunday, made a number of statements that cause concern among European fans of the most prestigious racing series in the world. Mr. Domenicali answered the question, in particular, regarding the future of the Belgian stage. The Spa race is very popular due to both the configuration of the track and the unpredictable weather, which often leads to the same results of the stage itself.

But Sunday’s Grand Prix could be the last, as the Formula One stage’s contract expires at its conclusion, and negotiations to sign a new one are difficult.

Stefano Domenicali noted that they still continue and it is too early to say that the Belgian stage will not take place in 2023. But he also noted that European races, despite their long history, cannot be considered protected. “Obviously, we will always consider such stages as contenders for participation in the World Championship. But it should also be noted that the organizers of the stages should not consider their status as guaranteed, believing that you can do nothing, but still maintain the status,” said Stefano Domenicali. He remembered other European races with expiring contracts. “Monza will celebrate the centenary of the Italian Grand Prix this year (the contract expires in 2024.— “b”). I am Italian, but I always tell the organizers of the Italian Grand Prix that a glorious history is not enough. We need to look to the future, invest in it.” Thus, Stefano Domenicali actually responded to Red Bull boss Christian Horner, who said that a number of “classic” European races should receive protected status, as they are part of the DNA of Formula 1.

However, leaving aside the talk of a glorious past, a bright future and the DNA of Formula 1, it turns out that the dispute between the owners of Formula 1, the American Liberty Merdia, and the race organizers comes down to the amount of payments for a license to organize stages . For classic European races, these payouts are significantly lower than most of the stages that appeared on the calendar later. According to racingnews365.com, in 2022 the organizers of the Belgian Grand Prix paid $22 million for a license, the licenses for the Italian and British Grand Prix cost $25 million each, and Monaco only $15 million.

Organizers of younger races pay much more. For example, the Russian Grand Prix, before it was canceled this year, brought Liberty Media $50 million per season. This is close to the maximum bid ($55 million) in existence. So many contracts bring with the Grand Prix of Azerbaijan, Qatar and Saudi Arabia. $45 million this year was paid by the promoters of the Bahrain Grand Prix, but their contract has expired, and in the new one the price will obviously be higher. Formula 1 was supposed to receive $ 50 million from the Chinese Grand Prix, but the race has not been held since the start of the pandemic, although the contract has not been terminated and the stage will take place when the epidemiological situation in the country allows. This difference in price for the “old” and “new” races is due to two factors. First, the increased demand for the right to host the race. The calendar is already close to the limit agreed upon by the teams – 24 races (if not for the cancellation of the Russian Grand Prix, 23 stages would have been held this season already).

In such a situation, it is very difficult for “classic” races, whose organizers can justify the cost of paying for a promotional contract with nothing more than ticket sales, to compete with applications from, say, Middle Eastern monarchies, where $ 50 million or more per year is not considered an excessive price for the prestige of holding a formula stage.

Secondly, Formula 1 itself seems to be trying out new ways of monetization. A vivid example of this is the signing in March of this year of a contract to hold one of the stages in Las Vegas from 2023. By the way, after its appearance, the United States will become the only country that hosts three stages at once in one season. So, Formula 1 will organize the race in Las Vegas itself and expects that in the first year it will be able to earn about $100 million at the stage. Over the next ten years, and that is how long the project is designed for, revenues may exceed $1 billion If the project lives up to expectations, it is possible that it will be repeated in other places, which will naturally reduce the importance of Formula 1 cooperation with local promoters.

However, as Stefano Domenicali assured, it is by no means impossible to say that Formula 1 is leaving Europe. The series would like to make sure that a third of the races are held in the Old World (in the calendar of the current year, taking into account the Grand Prix of Azerbaijan, which, despite geographical subtleties, is still considered a European race, ten out of 22). Another third is planned to be held in the Americas and the Middle East. The remaining stages should take the countries of Southeast Asia and Australia.

Alexander Petrov