Things have not been going well at the Nürburgring in recent years. The circuit shares the German GP with Hockenheim these days, but in an effort to generate more revenues from the venue the Rheinland-Pfalz regional government a few years ago agreed to provide huge subsidies to help Nürburgring GmbH to build a vast leisure park beside the circuit. The company promised to match the government investment with private money. It failed to do this and the government had to invest more money to get the project completed. Then estimates for the number of visitor proved to be wildly inaccurate and eventually the Rheinland-Pfalz’s finance minister Ingolf Deubel had to resign. In the middle of 2010 the government decided to rid itself of the problem and handed over the entire business (including the debts) to a new company called Nürburgring Automotive GmbH (NAG), which took over the running of the circuit, the hotels, restaurants, holiday homes, theme park, shops, convention centres and arenas on a lease that runs until 2040. The new company was run by the same people who had previously been managing the Ring, which was not a promising start. In an effort to increase revenues the new company raised prices of activities run at the circuit in the hope that these will keep the business going. This meant that the project ended up creating the opposite effect than intended with the circuit funding the park, rather than the park helping to keep the Nürburgring financially healthy.
The latest twist in the story is that the Rheinland-Pfalz’s Minister of the Interior, Sport and Infrastructure Roger Lewentz has announced that the lease is being terminated.
“The Nürburgring is a showcase for the Rheinland-Pfalz and of paramount importance for the region and its people,” he said. “That’s why the state government invested in the Nurburgring 2009 project, and that’s the basic idea that guides the current provincial government in its decisions.”
Lewentz said that the lease fees have not been paid.
“I have therefore proposed to the Cabinet to ask that the lease agreement with the Nurburgring Automotive GmbH as well as all other relevant agreements, particularly the concession contract for the organization of Formula 1 racing events at the Nurburgring, to be terminated immediately.”
NAS says it will take legal action to protect its position, while the Rheinland-Pfalz government says it will try to find a new operator for the facility.
The circuit authorities say that they had negotiated a deal with the Formula One group to host a race every two years for just €9.8 million ($13 million), which spread across two financial years meant an annual investment in F1 of only $6.5 million. Without the F1 deal the Nürburgring would likely sink further into financial trouble as the race generates not only spectators, but also visitors throughout the year.