There are reports in the Canadian press that the future of the Grand Prix du Canada may be in doubt. A deal was agreed earlier this year by the federal, regional and local governments to find the money to extend the current contract to 2024. The current contract ends after next year’s race
At the moment the authorities are reckoned to be paying only $15.00 million per year, the sum being made up of $5 million from the Federal government, $4 million from the regional government of Quebec and $1 million from the City of Montreal, although this organisation is believed to pay a lot of the costs. There is an additional $5 million that comes from the private non-profit organisation called Tourisme Montreal, which is similar to a chamber of commerce in that it has 750 members, although most of its $30 million a year budget comes from a hotel tax in the city. The aim is to increase tourism from the current figure of around 8.5 million visitors a year. This generates around $2.5 billion in revenues for the city, which works out at just $300 a head. The reason for this is that about 4.3 million of the visitors come from the Quebec province, 1.6 million from the rest of Canada, around one million from the US and only around 850,000 from abroad. The Grand Prix plays a major role in the city’s tourism as visitors during the F1 weekend pay considerably more than the average. To make the race attractive to the Formula One group, it receives around 70 percent of the ticket revenues, which bumps up the numbers to an acceptable level of probably $35 million. The ticket prices range from general admission on Sunday at $100 to $560 for the best grandstand seats. It is reckoned that the race generates around $18 million in direct taxes and economic benefits of probably $100 million, so it makes sense for the city as it creates profits, employment and provides international promotion at effectively no cost. The glitch in the negotiations appears to be over the question of a five percent per year fee increase which the Formula One group would like to see (at most races it is 10 percent). It seems, however, that the federal government is not keen as this will increase its contribution by $250,000 in the first year of the new deal and by $12 million over the 10-year term of the contract, taking its annual contribution up to $7.2 million.
The key point to remember is that the Formula One group is not about to give away Montreal over a few million. The race is of key importance as F1 builds interest in the sport in the United States, with the plan being to have six races in the US time zones by 2015.
joeblogsf1 
Be a shame to loose it. Although I’ve never been, I hear it’s a great race to attend. I guess, as always, it all comes down the common denominator of $$$$.
This is one race I would be really miss if it was cancelled
What was the reason for the cancellation of the race in 2009?
A track that creates great races but the facilities are archaic by modern F1 ‘white elephant’ standards. I guess Bernie needs this race too much to put their backs to the wall and demand major investment in improvements (his usual M.O). If they’re struggling with fees jamming them for improvements is surely a bridge too far.
For F1 fans, too good a track to lose – Top 3 for interesting unpredictable races.
It’s a great track, one of my favourites, it would be a real shame to lose it. Like 99.something percent of F1 race watchers I’ll be doing so on TV not at the circuit, so the “facilities” not being up to snuff is no concern to me. I watch F1 for the racing, and a good track is vital for good racing – I could not care less if the Paddock Club toilets disappoint the Flavio Briatore’s of F1.
This goes double for Spa.
I recently saw the DTM race at Brands Hatch and apart from Gary Paffett being robbed of his third place (a well-earned third), as he was more or less mounting the podium, it was a good day’s racing. It all started around 10am and finished at round 5pm with various other races ‘thrown in’. Not to mention Jenson’s appearance to support Gary’s efforts. Two of us bought tickets for a box opposite the pits, teas and coffees and lunch included for £95 a ticket, including parking. Now, obviously it wasn’t a GP but it strikes me that something, somewhere, is well out of order when you compare the two pricing structures. $560 for a grandstand seat? I will never pay that for a GP, here or in Canada.
Yeah but that’s for a weekend isn’t it? With all the support races that go on around the F1 weekend. Three days of racing including 5 F1 sessions and 2 GP2 races – I think that makes your 7 hours of tin top racing look like relatively poor value. If you work out what you’re paying for per hour it’s not even far off yours, even forgetting the disparate in championships.
No – for the three days including practice and other events, some of which are single seaters. In terms of per/hour rates it’s miles (or Km) better value. You’re evidently prepared to pay to difference, I’m not. TV only for me.
And that’s nothing compared to Singapore! But I’m going every year. This year, Turn 2 (early bird prices of course). http://grandprixadvisor.com/index.php/circuit-guides/formula-1/singapore-marina-bay
You don’t work for CVC do you?!
I would hate to see our race go but I understand the Federal governments reluctance in shelling out more money. Montreal could easily afford the extra 1.2 million over ten years if they could keep the thieves out of the public coffers.
With a 5% annual fee rise, the 10th year will cost $24,433,419.40 with a $15 million start rate. This is not $1.2 million over 10 years; the government is in for 1/3, so the last year alone would cost the government an extra $3,144,473.13. A not inconsiderable sum; this is the magic of compound interest. In fact, if my calculations are correct, the added cost over ten years is $38,688,388; 1/3 of that is $12,896,129.33 – the additional revenues the government would be liable for with a 5% annual increase.
I was calculating only the money ($250,000) that the government does not want to pay. Not the whole fee. I thought that was obvious.
Yes, I understand that; 1/3 of the $750,000 for the one year increase. I was, however, responding to Brent’s comment that “…an extra 1.2 million over ten years….” was not much money. As I suggest, it’s more like $13 million over ten years.
“1.2 million a year” is what it should have read.
6 Races in the US time zones by 2015? So that’s Canada, Texas, New York and which other three, out of interest? I guess Mexico would be one?
I believe that Canada, Brazil, Austin, New Jersey, Mexico City and Long Beach are the targeted races.
Chortle I forgot about Brazil…ooops! Long Beach as well, wow, could be fantastic.
Nice to think there could be up to six races I can watch live, at a reasonable hour of the morning. West Coast fans of the sport are required to wake up with the roosters, or DVR it and avoid all internet publications until we can watch.
It would truly be a shame if the Montreal GP was to go away . Between the track … the crowds … the weeklong events … and especially Tourisme Montreal who could set up your entire trip from your flights right down to dinner reservations if you wished with a single phone call … the Montreal GP has been by far the #1 F1 race I’ve ever attended .
I think its also worth mentioning that the Montreal GP is one of the very few remaining F1 events where the grandstands are packed …. from Friday’s practice to the race itself
But I wonder . First … what is the status of the New Jersey F1 race ? And might that have any bearing on the decision to renew Montreal’s contract .. if the NJ GP happens ?
The question is answered in the original story. F1 wants six races in the US timezones so one is not a threat to the other. They are helping each other.
I realize this is just an exercise in picking nits, and I do understand the point you were making… but… unless the U.S. owns an island I’ve forgotten about that’s way the hell out in the Atlantic, Brazil’s race isn’t in any U.S. time zone…
It’s easy to think in terms of hemispheres, but that can paint a mental map that’s wrong…in the east-west dimension, Sao Paulo is about as close to Africa as to the eastern-most part of the U.S…
I am glad you understand the point, otherwise I might think you were a right nitpicker
Yes Joe I understand what F1 wants … my question was more oriented along the lines of … what can the Market here ( North America ) handle … seeing as how F1 .. at least in the US isn’t exactly a priority on anyone’s other than the few like myself’s minds .
Its not like there’s any rush to grab Austin GP 2013 tickets…. other than Monaco the TV audience in the US for F1 is still waning badly despite ( or maybe because of ) the switch from SPEED to NBCS …. the grandstands in Montreal were about as thin this year as I’ve seen them in decades … and …… IMO if the NJ GP happens that’ll take a major chunk of the market away from Montreal as I’d estimate … based purely on personal experience mind you … a good 40-65% of the crowd currently attending Montreal are from the Tri State ( NJ NY PA ) area .. not to mention southern New England . So IMO over saturation is a definite possibility when it comes to F1 in the US/CDN
As for me …. sure I’m hoping ( against all hope seeing as the ” Senna ” movie’s effect on F1 interest in the US was negligible at best ) that Ron Howard’s ” Rush ” will create a new wave of fans here …. boosting both TV and Live audiences ….. but having lived here going on 58 years ( with a few stints here and there in the EU UK and CDN ) … I wouldn’t place any bets on it
So anyway … thats the more complete explanation of my question …. the other one being …. What the ____ IS going on with the NJ GP ? News here in the US is scant at best ( other than a couple of slim articles in NJ’s ” Star Ledger news paper recently ) …. over UK way as well as the Italian and German press .. nada …. Ron Howard is screaming up and down to anyone who’ll listen that its a go ….
So what are you hearing good sir ? Anything ? Or is it all stuck in the Negotiations & Speculations mode ? Hows about a quickie update article on the event … assuming of course there’s anything to update about
Thanks
thank you GuitarSlinger for referring to this event as the ” Montreal GP ” which is due to your proven satisfaction with Tourisme Montreal’s unique services evidently.
curiously the city is branded as the City of Spectacles / La ville du Spectacle because of the long association with Cirque du Soleil and it’s creative founder Guy Laliberté whose ability to sell a fifty ( 50 ) per cent stake in his business model to a Abu Dhabi Investment Group several years ago made him the last space tourist to pay fifty (50) million US dollars for the experience.
merci beaucoup for this latest information.
I’ll be at montreal this year! WOOOT!!!
Having visited Montreal several times (for both F1 and other stuff), I can say that during F1 time, the prices are hiked everywhere. Hotels, Food, Events, all costs much more than what it costs the rest of the year.. During March last year, I was in montreal with some friends and we had an awesome dinner at a restaurant. A nice steak and potatoes and drinks. Came out to around $40 per person.. Later on, when I went there to watch F1, I decided to go to the same place and saw that the prices were hiked up around 50%-80% more. A pitcher of local beers that usually costs 15 to 18 Cad was marked 27 Cad! I was like WTF?
The Canadian govt is not going to get rid of an event that brings them so much money in taxes. You have to remember that the prices are not just applicable to the visitors.. It is for everyone.
Joe, you write a lot of your business articles in dollars – in this instance are we talking Canadian or US?
I always use US$ which are the currency of F1. There has been a shift in recent years in some contracts to Euros but the primary deals are still done in dollars.
Joe,
I wonder if there is some benefit in showing the number in the ‘local’ currency and then in brackets US dollars. With a very international readership, this is how The Economist does it.
Rob
Hardly seems worth it when its $1 to $1.03…having said that i’d take the 3% difference of $15 million…
Joe is there any other options in Canada that Bernie could exploit to get more money by starting a bidding war?
No.
Calgary.
Ha! And probably as the last race of the season.
Are you kidding?
Why not Red Deer or Grande Prairie?
It’s time to get the Canadian GP back to Mosport. (Canadain Tire Motorsport Park) There are new owners (multi billionaire developer with Ron Fellows a minority shareholder and face). They have bought all the land around the track and are making improvements constantly. Money seems to be no object and it would be great to see the F1 cars flying around Moss corner and up Andretti straight. They have also stated publicly that they would like to see F1 back there…
Great. If they have the money then they can have the race. Oh…
Montreal is the only race I’ve ever attended but my time there and it’s proximity to New York make it hard for me to go to another. I haven’t been able to attend in 5 years but plan to do so again soon. The city does a great job with it all and it would be a shame to lose it. I don’t think the New Jersey event will be half as good. I mean the entire experience, not just the actual track time.
Why not wait and see? I think New Jersey will be fabulous.
I hope you’re right!
wouldn’t surprise me if Canada did get the chop over another North American race. F1 gets terrible coverage here (having lived in UK and mainland Europe). The National (English) Broadcaster goes live 3-4 minutes before the race and drops the coverage for a pre-recorded program, as soon as it can, sometimes before the interviews. Adverts happen with no regad for action. BBC commentary which while great obviously doesnt cater for those ad breaks and often drop out for minutes on end of coverage.
If fanbase can watch decent coverage, they will go elsewhee and watch something else, ultimately resulting in less bums on seats at the venue.
Joe, wasn’t part of the deal for Canada to get an extention for the race that they had to upgrade the pit/paddock area? There was a story to this effect making the rounds [after last year’s race]. Have you heard anything else/more about this story? Thx
No
it is a matter of public record that Québec Tourisme and it’s Ministre délégué Pascal Bérubé are in talks with the promoter of Grand Prix du Canada to negotiate an agreement for 2014-2024 at this moment.
the latest information I can make available for public consumption is that when said delegate was interviewed during a Radio-Canada broadcast recently he said as much and made it clear that this spectacle ( GP du Canada) is in third place on his priorities to sort out.
the track improvements you mention are another negotiating gambit often used by the promoter to raise funding as 34% of Formula One Management (FOM) income is raised from venues hosting this type of event.
my source is the latest report from Financial Times USA which published an analysis way back in March 2013 on the possible flotation (IPO) of this entertainment and tourism business model.
Is CVC pushing Bernie to try to get more money
No. CVC have told Bernie to not worry about the money as they are true racing fans and would rather a race at Montreal or Spa and 0$’s, than a total bore fest at a tilke drome and plenty of $’s….
This is just a theory, gathered from reading various newspapers/racing blogs/forums/comments from people involved.
Octane (François Dumontier) used to orgranize the Edmonton IndyCar race. That went bust last year. The Octane branch that did the race actually went bankrupt. Dumontier said he personally lost money on the deal.
… However, apparently, some local companies lost even more. As in all these cases, there were arguments as to who should pay what to whom, in what order, who should be paid first, etc.
Edmonton is a VERY strong Conservative household. I believe the race was held in Minister Rona Ambrose’s riding. Prime Minister Harper is also from Alberta, so he has no doubt heard stories about the Edmonton race.
Might the government’s (i.e. the Conservatives’) unwillingness to shove money to Octane in Montreal be linked in some way to what happened in Edmonton? Especially as some political journalists consider Harper to take everything personally? And that he’s also known for his vindictiveness?
What is just theory?