Anyone who thinks that Valencia will ever be back on the Formula 1 calendar is an optimist. The race may have drawn some more tourists to the city, but the spending involved was colossal. The race was not supposed to cost the taxpayers anything, but the money that was supposed to come from private developers never appeared and the local government had to chip in $104 million. To that was then added another $319 million in race fees, infrastructure costs and so on.
The Grand Prix was only one of a number of flashy projects which marked the region’s recent history and which have left it with a debt burden of $38 billion. Now, as Spain cuts back on everything and raises taxes, in an effort to get out of the mess created by the regions, there are a string of corruption cases hanging over the local politicians. No-one wants the government to spend money and there was an outcry in January when the regional government stepped in to save the Valencia soccer team, which had failed to repay a $100 million loan. In the circumstances, the idea that the Grand Prix might return, even in a alternation agreement with Barcelona, seems far-fetched. There have also been reports that much of the F1 infrastructure been stripped out by locals, looking to sell everything they can to make ends meet.
Miraculously, the one region which has more debt than Valencia is Catalunya, which boasts a 30 percent bigger population and is more industrialised but it still has a debt of $67 billion. The regional government says it has worked hard to find a way to balance the books and is in the process of agreeing terms with Bernie Ecclestone to run the Spanish GP for next few years. The Catalans, if nothing else, get a bigger crowd than in Valencia.
The Central Bank of Spain says that the country’s debt burden is now at 84 per cent of Spain’s annual gross domestic product with a debt pile of $1.14 trillion. It is expected that the percentage will rise to more than 90 percent this year. Were it not for Fernando Alonso, Spain would be gone from F1…
joeblogsf1 
To be fair, both tracks are awful for spectators, I live here, have been to both, I will not return, it is much better on telly. Even though Barcelona is bad, you can only see a little part of the track, Valencia is the City’s harbour and is a part time street circuit, so it lacks the large permanent grandstands and large sculpted amphitheaters of freestanding Montmelo has, so it would always get less spectators, despite Spanish people feeling more comfortable there.
This is because of the Catalans from the region of Catalonia [Barcelona] and their retarded insistence on using the Catalan dialect everywhere, something nobody else in Spain understands. They are loosing a lot of tourism already due to this, plus the accompanying attitude. Nobody in Barcelona really speaks much Catalan, unless you are Spanish..
When I go to Barcelona for work I speak Catalan – it’s appreciated, though most English don’t even bother with any form of Spanish in Barcelona.
Barcelona may be losing a lot of tourism but I think the argument is that the Catalan region gets most of that tourism and pays it back to Madrid.
This entry is about politics and F1, not about language, but I feel the need to reply you, it’s very easy to insult people from the distance, to provide erroenous information and to draw erroneous conclusions.
Catalan can be considered a dialect from Latin if you wish. And my/our retarded insistence on using Catalan can be linked to the fact that it is my/our mother tongue. As well as Castillian.
I never regarded being able to communicate in my homeland using two languages as a grudge and I believe it has allowed me to learn easily languages such as English, Swedish, Japanese, French and German.
But of course any political ideas that use people’s feelings are utterly dangerous. The political usage of language is a very serious matter that unfortunately has been extensively abused by the Spanish and Catalan politicitans.
There might no be that many things that can be obtained from F1 but I have always appreciated the respect towards other people’s origins. No matter where does a driver comes from, or what language does he speak. What matters is how fast and consistent it is.
Spot on
Spot on to Joe’s comments, not the Catalan ones… 🙂 is a regional situation and all about the money and they use the language as a weapon.
If Valencia/Catalunya alternation plans fail, and it’s tough for Catalunya to carry the whole burden, do you think it is likely that they would try to alternate with someone else, like France?
Has it occured to you that the reason the Catalans do everything possible to make outsiders feel unwelcome is that they simply don’t want any outsiders to visit their homeland. Admittedly, that is at odds with any grander government tourism development, but they wouldn’t be the first batch of unfriendly, tribal, xenophobes on the planet.
$38 billion, $67 billion, $1,14 trillion. Some really mind boggling numbers.
How come everyone has such bad accountants…
Speaking of Spanish races, their cancellation won’t be a big loss. There are a couple of places that will happily jump to this occasion.
“Were it not for Fernando Alonso, Spain would be gone from F1…”
I watched the Graham Norton show last week because Lewis Hamilton was on it, as it happens there was a Spanish film director on it too, ( Pedro Almodova) surprisingly he said that Alonso was often attacked in the Spanish press. (I suppose in the same way that anybody successful or famous is a target in the UK)
If he is not that popular, would that affect the GP being held in Spain if those local government officials who will have to shell out the fees, look for an excuse not to?
http://www.bbc.co.uk/iplayer/episode/b01s5mry/The_Graham_Norton_Show_Series_13_Episode_4/
UK viewers can see it here.
He’s still popular, and I’d say the Spanish press is easier on him than the English press is on Hamilton or Button (or Alonso, for that matter). But it’s not like everyone likes him. The way much of the press fawns over him also contributes to his anti-fandom, even if that isn’t his fault.
$423 of government money for 5 years of dull racing, and some blurry pictures of a concrete harbour. Ho hum! Wonder how that will compare to the developing Grand Payout of Sochi? In my personal experience, and IMHO, Spain has very few F1 fans, and huge numbers of Fernando Alonso fans.
Ditto that ! Went to Barcelona in 2009. The adulation of Fernando was incredible. They even booed Lewis and his dad when he was shown on the screens around the track, let alone EVERY single lap when he came past.
As I may have pointed out a couple of times in the column, it can surely be no more than coincidence that the most heavily indebted semi-autonomous regions of Spain are the two which have done business with The Bernard. Well, at least it appears that he got paid, although many other creditors in Valencia are still whistling for their money. Funny, that.
Oh, and I, too, tried to watch the Graham Norton Show, if only to get an insight into how well The Ham’s media training has been going. I gave up after five minutes because the immensely full-of-himself Norton tied himself in knots by asking if he’d been pronouncing the name of Mr Almodóvar correctly. No, Mr Norton, you did not. Clue: the bloody big accent over the second ‘o’.
Other bloggers have not been kind to the Catalans and their language. They should bear in mind the region’s history, and especially the blood-stained dictator Franco’s attempts to wipe it out, together with the country’s three or four other regional languages.
To be kind, Catalan is not one of the prettiest languages to have descended from Latin, and both the vocabulary and spelling vary widely in the places where it is spoken, both on the Peninsula and in the Balearic islands. I’ve lived in the islands and have never yet encountered anyone there who spoke the local version of Catalan but was unable also to converse in Castilian Spanish.
Slightly off topic I know, but am I right in thinking that Fernando Alonso is one of the only current F1 drivers to live, and therefore pay taxes in, his country of origin?
I don’t know how many other F1 drivers do the same, but yeah, he moved back to his hometown a couple of years ago.
Valencia has a perfectly good race track just outside the city. Why not use it?
Because no one would go there either.
Too many short straights and tight turns, very Tilke-like. Oh and a very long pit straight too!
It’s not particularly good for MotoGP (at least it’s somewhere to go and watch some racing in Europe late in the year, usually in decent weather) so F1 would be awful.
Martin
That’s not true, the Motorsport culture in Spain is huge, just take a look at Moto gp. Never forget that “go to the races” as we say is a expensive business!
nice little track , excellent for bikes , but F1 ?
they tried pre season testing there , but it wasn’t considered suitable even for that
The IndyCar Long Beach GP owners say they’d only sell the event for “stupid money.” Looks like that’s the kind of money that made a GP happen in Valencia.
And it’s my impression that in F1 a “bigger crowd” is almost irrelevant, in Spain or elsewhere, in that there’s zero chance of recovering costs for a track-owner/promoter through attendee-spending anyway.
Read the story again.
Here’s what I wrote to my Spanish friend recently. Like so many others, he had to move to London to work. 57% youth unemployment in Spain, that’s revolution high. ‘I don’t know about Spanish central government, but from what I’ve heard almost all local mayors are either in jail, or haven’t been caught yet! Lots of EU and Spanish money has been wasted on corrupt schemes. Lots of places trying to look better than the village next door or the region next door. Eg Valencia GP, just petty, trying to keep up with Catalonia. It’s a shame because Spain has so much that is utterly fantastic. Lots of natural resources, lots of tourist resources, crops growing, so much that is gobsmackingly beautiful, energy falling out of the sky. IMHO, Spain will be fine and dandy in a few short years, but what do I know!’
So sad to read this vanity and monumental waste of both local officials and the whole Eurozone project – which sparked off the fairytale illusion of parity between more developed and less developed national economies – but is a system without any balancing mechanisms between the various economies (relative interest rates currency strength etc. which evolved over centuries) – other than the extreme measures forced on them by international capital markets – and which the poorest in particular are most affected by.
As to Spain not being on the radar for an F1 race, there surely aren’t many European races that can survive the highest bidder mentality but Bernie/CVC better be careful what he/they wish for
I wonder how Jerez and the proper Valencia track are fairing up…
I bet MotoGP has a better following than F1 in Spain due to three top riders competiting race by race rather than 1 top driver.
amnoonan
Valencia MotoGP used to be a sell-out but last time I went, 2009 there were seats available, it was still a decent crowd though.
You mention three top riders, there are also the Espargaro brothers, Terol, Simon, Baebera, Bautista, Rabat, Elias and Valentino Rossi, he,s popular just about anywhere he goes.
That,s a hell of a lot of local talent to draw a crowd.
Martin
If the world wide economics continue as they have been for the last 6 years (and the consensus is it will) then I think most European GPs will be unsustainable. I remember how hard Silverstone had to fight as it was simply getting to unaffordable. I wonder for how long Silverstone will sell out. There been issues in Germany, France, Italy, Belgium, everywhere not just Spain. I think there are only 3 types of locations possible. 1. Its historical GP allure (Monaco basically and perhaps Singapore now) 2. Oligarchs and Sheiks (Dubai, Bahrain, Sochi etc.) 3. those cities and countries desperate to spend a fortune and lose money to advertise (Malaysia)
there is simply no room for GP venues who try to break even or turn a profit based on the show it can provide, most sadly Spa Francorchamps.
In time Bernie or whoever controls the rights will come to understand that they need to change the economic model for the track owners as there simply are fewer fans in Valencia than in Silverstone. But for now there seems to be an endless list of Oligarchs, Sheiks and cash rich cities willing to lose vast sums of money.
Totally agree – see note above under Folkdisco. I don’t know how much of the total TV viewing F1 population lives in Europe but I suspect it’s a fairly substantial percentage and if too many of the races are run in dislocated time zones (I know it’s parochial) as far as Europe is concerned – and if there are few European races – then the entire F1 series wont , I suspect, be watched in the long run. How that scenario fits in with most of F1 being based in and around Silverstone I’m not sure
“In time Bernie or whoever controls the rights will come to understand that they need to change the economic model for the track owners as there simply are fewer fans in Valencia than in Silverstone. But for now there seems to be an endless list of Oligarchs, Sheiks and cash rich cities willing to lose vast sums of money.” Bingo!
The number of fans is irrelevant if the people paying are happy.
But if nobody is watching, the people paying won’t be happy.
It depends on their business model.
I might not understand your point Joe but as Metro city says if there are no (or many fewer) spectators and or TV viewers surely there will be far fewer sponsors or motor manufacturers interested in taking part and therefore less interest – repeat until disappearing into obscurity
If you can tell me of a sporting property that is on TV all over the world every 10 days, with huge viewers numbers, plenty of big sponsors and a sufficient number of spectators then I am happy to accept your point. Companies that are looking for ways to promote their brands globally do surveys into various sports and all reach the same conclusion, F1 is the best way to deliver their message. It is not cheap, but it is very effective. This is why new sponsors are coming all the time (despite lots of whining about money, this year F1 has added Rolex, Blackberry, Coca-Cola’s Burn brand, Emirates, Columbia Records and the lesser known, but still huge, Weichai Power, one of China’s leading manufacturers of heavy powertrain system and machinery vehicles. Many others have increased their sponsorships. I fear that your predictions of F1 dropping into obscurity will end being proven to be wrong.
Thanks for the response Joe – and I don’t want F1 to become any more obscure than you do – but when you see the incredible costs to stage races you have been referring to in the last week or so in particular then unless those costs are controlled I can’t see how European venues can continue – other than a few trophies such as Monaco (which for the first time in my memory isn’t live on BBC this year – I can’t believe that!)
The point I have tried to make a few times lately on your blog (and your blog is pretty unique in my experience in the lively and sheer variety of responses that arise from your blogs – including I suspect quite a few F1 people ‘in disguise’) – in response to various cost related articles is that whilst Bernie/CVC may be able to find people to take over races that have to be given up because they can’t be afforded – if too many of them end up in time zones too dislocated from Europe (and I appreciate therefore that I am being parochial) then the European audience may well wither in numbers.
It could be with the rise of the Far East this is irrelevant to the business model but it’s relevant to me! I can’t bear the thought of not being able to see Spa, Monza etc.- and that’s aside from how I’m going to watch Monaco this year!
As usual, your article was a very interesting analysis of the situation. However, in the last paragraph you wrote that Spain’s debt would perhaps soon exceed 90 percent of its GDP. I don’t know if this 90 percent figure was a coincidence or if you were perhaps referring to the paper by Reinhart and Rogoff. Their claim (that countries consistently experience a steep decline in economic grown if debt exceeds 90 percent of GDP) has been used by politicians on both sides of the Atlantic to justify austerity policies. Such policies typically benefit the rich at the expense of the poor.
However, the R-R study has been discredited by researchers at the University of Massachusetts, Amherst. Here is a link about the UofMA research:
and another viewpoint by Nobel laureate Paul Krugman:
It might actually be a good time for the local government to invest in infrastructure, such as an F1 race. As can be noted by at least one of the comments above, what we really have is an unemployment problem, not a debt problem.
The Spanish Central Bank said that.
Am I not right in thinking that the teams love Montmello for testing because it has fast and slow sections and numerous different types of corners? Having said that I went there in 1999 for the most boring F1 race ever when the only on track overtaking manoeuvre was Damon Hill for 8th place.
The cost of the three day pass was cheap, camping was cheap, food and drink likewise and great weather. A good crowd showed up to the race with a lot of Finns and Germans supporting Mika Hakk and M Schu.
I think the only Spaniards racing that year were de la Rosa and Gene at the back of the grid, so not a huge amount of local interest.
The race was boring but over the last two years, with the horrible “innovations” of DRS and fast wearing rubber we’ve seen a lot of overtaking due to tyre degradation.
Do you know I think I might even support crappy tyres – just at Barca mind you!
It is easy to scoff at DRS, KERS and tyres designed to improve the show, but are you really going to watch cars droning around line astern race after race after race? This is an inevitable result of aerodynamic development. I think that the methods being used to make the racing more interesting are imaginative and the best drivers still win – which says it all.
Just read on Spanish paper (El confidencial – Javier Rubio) that the Spanish GP spects/is going to make 160M profit
I would not comment if it wasnt because I beleive Javier tends to be right.
150M from TV, most of the tickets sold outside Spain.
Bernie takes the TV money. Not the circuit, unless the TV people are also paying the circuit – as a sponsor. It is Antena 3 and free to air. In 2012 the entire company made a profit of under€40 million. So the money is not from them. The ticket sales? Do some maths: Let’s be generous and say € 300 x 100,000. That makes €30m… I think you have confused economic impact with profit. It is quite possible that the region enjoys economic impact of € 150 million but that goes to hotels, restaurants, airlines and so on. Not to the circuit.
Indeed and the Hotels, Restaurants, Airlines and so on pay taxes which refunds the governmental Investment to a certain Point. Which is why some goverments invest into F1.