Thursday, October 25, 2007

F1 and Government Subsidies

By Bobby

In regards to my comments on F1 and government subsidies, I found interesting information:

The government of Australia spends A$30 million to subidise the ING Australian Grand Prix. From Credit Suisse: "The underlying problem is that organisers are now finding it virtually impossible to refinance their races. As they don't get a share of the receipts from advertising and TV rights during the Formula One weekend, they need to cover their costs from ticket sales alone."

F1 leader Bernie Ecclestone holds all television revenues, circuit advertising revenues (demands tracks remove all advertising banners from the track, and he puts up all banners), and hospitality suite revenues.

The track owners receive nothing from the Formula One Management because Mr. Ecclestone has taken away the entire source of revenue that tracks usually receive for races. He also hires scantily-clad models (they are better covered in Muslim countries owing to standards) to hang boards for all races.

The sanctioning fee for F1 is now at 25 million euros ($30 million US) with a 10% increase annually with Bernie having all advertising revenues. Sir Jackie Stewart noted most new F1 races depend on government subsidies,and warned that the manufacturers are already angry that Bernie's government subsidy requests hurt F1 and their manufacturers, Mercedes-Benz, BMW, Ferrari, Toyota, and Honda. He also warned three years ago, before Michelin's engineering fiasco at the Brickyard, that the USGP was also targeted because "a reluctance to give or accept government subsidy is not balanced by income potential for the promoter."

Tony George doesn't accept Indiana state government subsidies. Indianapolis Motor Speedway is a division of the Hulman & Company empire in Terre Haute, Indiana. As Bernie demands F1 controls all advertising on the track, local advertising panels are illegal. Tony would love to have on the track advertising panels featuring Coca-Cola, Sprint, Clarian Healthcare (Methodist Hospital), Holmatro, Bombardier, and other track sponsors.

MotoGP's policies are not as bad as Bernie Ecclestone when it comes to requiring government subsidies, and so Tony chose to run a MotoGP event at the Brickyard with a new Snake Pit complex. Also he can regulate a ban on advertising from his track (Laguna Seca also prohibits BWIN advertising). BWIN is an internet gambling site, and such advertising is prohibited in the United States.

So the real reason the US cannot get F1 is Bernie Ecclestone's ego and demands for all money hurts promoters. If Bernie puts up advertising of firms that compete against Nationwide, Lowe's, Coca-Cola, or other SMI sponsors whose names are plastered across the signs of his tracks, Bruton wouldn't build a great road course that would utilise The Strip at Las Vegas Motor Speedway for F1.

Bahrain, Shanghai, Malaysia, Australia, Singapore, and the Valencia races are all government-subsidised with taxpayer money going to support the races.

Bernie is a socialist! He doesn't want individuals to build their own tracks and give them races. Track owners can't even collect for advertising revenues. He DEMANDS taxpayers pay for his races. A similar rule in World Superbike motorcycle racing has forced Miller Motorsports Park in Toele, Utah to run two different tracks for the WSBK weekend next June; the US Superbike and other series will run the full 4.5 mile track because the American Motorcyclist Association can put their ads and Miller Motorsports Park ads on the infield; the perimeter 3.06 mile track is for World Superbike only because they want all advertising revenues. Larry Miller (of the Utah Jazz) collects all revenues for the US races, but not the WSBK races. No government subsidy for this race.

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