On the railway

It is a rainy miserable day in England, but Chiltern Railways has a wifi service that actually works and so I am now sitting on a train, bound for Bicester and a lunch of Brawn and Fry, pondering Bernie’s latest remarks about being happy with 19 races. I suppose it is like saying that you are happy with getting almost all of your pocket money. You will put up with it, if you have to, but it would be nicer if you get all of money possible. As we know Mr E likes to maximise the revenues for everyone in the F1 business, particularly CVC Capital Partners, a group of folk that he wants to stay sweet with. Thus an extra $30 million from a 20th race is something worth having, even if one has to give away $15 million of that to the teams. As we mentioned yesterday, CVC Capital Partners know which side their bread is buttered on and do not really like it when they get less than they could. Thus, a 20th race is desirable, even if the promoter of said event pays only half the money. A bird in the hand is worth two in the bush. Thus I would read Bernie’s remarks about not caring as being a negotiating position, rather than a statement of fact. If the Turks, French or Austrians think that there might not be a deal possible then they will try a little harder to make it happen. There is an opportunity here to be grabbed and, who knows, Bernie might even be willing to do a one-off deal because he does not want to overcomplicate things in 2014 when he has to accommodate (in theory) a new Russian Grand Prix and the delayed event in New Jersey. Thus he does not need another long-term deal, unless the numbers stack up, and is looking to lose one of the current 19. He is not going to lose the big-paying and popular races and the weaklings are Spain, Germany, Belgium and Korea. The Spanish, Germans and Belgian promoters are all broke because the local authorities cannot afford to pay, even if it makes sense to do so. At the same time none of them want to lose the prestige and economic impact that their races bring. In Korea it is a slightly different story as the authorities there don’t want to pay out the money they are committed to pay and get nothing back from it. So they are holding the race simply to avoid looking like they are wasting public money. There is always the possibility that the event might begin to gather a following, unlikely though that may be.

Logically, however, if one of the bidders has a longterm plan that is stronger than one of the weaklings, then one can imagine a deal being struck. The most likely event in this respect would be the Austrians because Dietrich Mateschitz has money falling out of every pocket and can afford to revive his national GP just for fun. That would also help him when it comes to negotiating a deal for a race in Thailand, which Red Bull also wants to see. Turkey cannot get the Turkish authorities to come up with money, which is rather shortsighted when you consider that Istanbul wants to look good as it pushes on with its bid to host the Olympic Games in 2020. Four of the last 10 Games have been in Europe (London, Athens, Barcelona, Moscow), while only two have been in Asia (Beijing and Seoul) – three if you count Sydney, while the Americas have boasted three (Rio, Atlanta and Los Angeles), so on paper you would say that Tokyo is probably a better bet, even if Istanbul plays up its Asian, rather than European, image.

The French are a law unto themselves. The government wants to be seen to be reviving French industry but only if someone else is doing the investment, thus it will not pay for a Grand Prix, even if it could have a situation like Texas where the money comes from a state special events fund and the money is only released if the race delivers the goods.