The Belgian Grand Prix is one of the classic Formula 1 races, but it struggles to make any money because of the fees required by the Formula One group and the costs of staging the event. The latest figures reveal that the race promoter, Spa Grand Prix SA, which has been promoting the event since 2006 and has a contract to host the race until 2016, has made significant losses in both 2011 and 2012. The local government pays the debts because it considers the economic impact of the event to be of significant value to the region. The fees paid to Formula One are believed to be in the region of $20 million a year. The loss in 2011 was around $8 million, rising to $10 million in 2012. The results for 2013 have yet to be made public but further losses are expected despite the fact that the race increased its ticket sales by 15 percent in 2013.
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joeblogsf1 
Its disappointing that a classic race like Spa is presumably doomed to be lost because of the fees the organizers have to pay. One would hope that in some way these historic races – Spa, Monza, Silverstone – could be made mandatory races by the FIA and guaranteed slots. Surely F1 makes enough dosh that these races could be subsidized in some fashion to ensure that they’re not lost to the soulless races like Korea, Abu Dhabi, India…
Monaco and Nürburgring aren’t historic races, then, Sir?
I’m surprised that they don’t have a free events, like Monaco does (when in all likelihood, it can afford to pay its fee several times over).
But then Bernie does like the showiness of the place, even though the racing is terribad,
Good point…agree with you. But as an Indian I would want to the Indian Grand Prix to continue 🙂 Not that I think it has a soul…but maybe a different venue or a street track would be great for India…
That was a completely biased and pointless comment. Lets say Spa is cancelled due to lack of funding. 20 years down the line, the same tracks that you just called “soulless” will be the classic tracks and Spa will be just a random old track. Ofcourse, looking at the prices the circuits pay for an F1 race, it will be a miracle that the new tracks survive for 20 years, but if they remain, they will considered as great soulful tracks.
Being called a classic is nothing more than an exxagerated nostagia pushed by human emotion.
No, I disagree. Tracks like Abu Dhabi and Korea and Bahrain don’t have soul in the sense that they don’t use natural terrain, have real elevation changes, or have driver challenges. They are soulless Tilkedromes. I can name a few tracks that do have souls and are classic not because they are old, but because they are real race tracks: Spa, Brands Hatch, Road America, Monza, Silverstone, Laguna Seca, Montreal, Brazil …..add your own. Classic and soul are more than age and use. They have something that grips the fan viscerally, sometimes for reasons unknown, and can send a shiver of excitement down the spine when just entering the track. Those are the classic and without a soul the new tracks will never be classic.
Well said SteveH…agree with u fully! Brands Hatch’s Paddock Hill Bend is just awesome as is Spa’s Eau Rouge or Laguna Seca’s Cockscrew…and natural terrain features in the other tracks you’ve mentioned. Then there is also the Carousel at the Nurburgring Nordschliefe and the Flugplatz too, apart from the other elements.
‘shiver of excitement down the spine when just entering the track’……………..yes; I agree with you 100% here. There’s something about the classics’ take Spa, for example. I remember being able to sense/touch/feel the history of the place from the moment I set foot inside at La Source. The memories of the greats of the past who’ve raced there; Clark, Stewart, Senna etc etc……and the sadder memories of those who’ve perished there. The steepness of Eau Rouge is simply staggering when you ‘walk’ it for the first time. The TV footage simply doesn’t do it justice. The sight of Senna going through Eau Rouge in the MP4/4 in 1988 and on slicks during the early laps on a damp track in 1992 will stay with me forever. Brands as well; from the memories of the Brazilian kid winning his first ever car race (FF1600) in 1981, to the sadness of Jo Siffert loosing his life out at the back of the circuit. The place really does have soul, as well as elevation and interest. Just wish I could visit Suzuka one day – wow, the great memories of all those very early mornings in the late ’80’s/early 90’s watching Senna/Prost/Hakkinen.
Sounds like Spa needs the same deal that Monaco gets.
And the Nurburgring is on the market… Interesting…
Another inevitable outcome caused by the flawed financial model that, for some inexplicable reason, our generous host keeps defending.
If it was flawed it would not work. A race brings money to a region. It is deemed to be worth it by the people paying. I think the fees are too high because the promoters have to screw money from the public and the teams, media etc. I think the fees are pushed too high but they still work as a business model.
And if the teams owned F1, they would not be under the same financial obligation to make profit, so wouldn’t have to screw the promoters, who would not in turn have to screw them back. Even the public might get a break (though I doubt it)…
With all due respect (and you are due a lot of it), the flawed model is not working. The fact that Bernie has been getting away with it is not the same thing as demonstrating that it’s working.
Here’s a parallel: for 30 years, GM was heavily criticized for destroying its previously well-earned reputation for making good cars by making crappy cars that required rebates to sell… but their defenders on Wall St just tracked the stock price as “proof” that it worked… but it didn’t work, it destroyed the company… it just took a couple decades of wealth-extraction for it come to (whatever the antonym is for “fruition”). Same basic thing has been happening to F1. It works for Bernie but not for the sport/industry.
Requiring gov’ts to subsidize operating losses is not unlike GM issuing $4,000 rebates to get people to buy their cars. It works for a while, and then the well runs dry due to shortsighted mismanagement of longterm value. When Spa reliably requires big gov’t subsidies, when only 60K show up at the German GP (with Seb and MB as headliners), that demonstrates that something is very, very wrong.
The flawed model is working. Look at the FOM figures. Will it go on working?
FOM figures show that it’s working for FOM (aka Wealth Extraction, Inc). That’s a very different thing than showing it’s working for the sport/industry.
It’s not working for those who put on the races, for those of normal means who wish to attend races, for most of the teams whose best case scenario has been reduced to hopes for some Losers’ Points. or for most of the drivers whose fate is to never have a prayer of actually winning even a single race. The fact that it’s working for FOM and a couple teams who reap all the rewards doesn’t change any of that. You know all this as much as anybody and better than most.
Every year, the cost of the circuits keep increasing. The cost is pushed on to the people who come to the track, leading to fewer and fewer numbers. Eventually, the track will start losing too much money to keep the race and they will call it quits. At that time, all the jobs and money bought by the race will no longer exist.
I am pretty sure atleast 2 tracks will hang up their coats and call it a day in the next few years.
If that happens, a lot of revenue will just disappear.
So, no. The flawed model does not work.
The mortgage-backed security market worked too…until it didn’t.
Yes it is sad that we may be losing some of the traditional race tracks with their history and character, and you would think that the amount of money being made by the bodies running the sport would they be inclined to reduce fees. This would enable these venues to continue operating and allow them to improve the facilities as well. F1 seems to be extremely hard core so I can’t see any reprieve from what seems certain.
this ‘fees’ issue is getting out of hand – GREED
Formula 1’s commercial rights should be owned by the FIA and its worldwide member clubs – privatizing a sport is wrong (though I admit I may be speaking from the ivory tower of idealism).
Indeed, I mean FIA has done a wonderful job with WRC for the couple of years it was in its hands. Oh wait…
They are trying.
I think it’s impressive that they made such a small loss, doesn’t Melbourne lose 50 m a year, for that matter do any of the races actually make a profit?
It depends on how you count.
A$50 million is what the state government spends on the race.
From memory, I don’t think they make a loss. The report is available from the Australian GP Corp if you want to drill down into the detail.
The problem down there is that the state auditors do not include any intangible benefits that cannot be proved so there is always an argument. One can argue that the intangible benefits are somewhere between $ 0 and 100 million. The government tends to say one figure and the anti-race people say the other. The truth is somewhere in between. If the race did not bring massive benefits to Melbourne, it would not be happening.
FOM has four assets locked-up, under l-t contract, that create the commercial value of F1: Monaco, Spa, Monza and Ferrari.
The rest of F1, tracks and teams, are largely replaceable. Like Monaco, Spa should receive a deal from FOM that works for the circuit and the promotors.
I don’t agree. Monaco and Ferrari are the two things that matter.
A track with no hope of overtaking and the team with the biggest sense of entitlement, who have rather dubious morals (imo). Great..
Please don’t let Spa be lost! The 3 races I most look forward to; Spa, Suzuka & Monza. Hope Spa remains; it’s one of THE ultimate challenges for a driver. Sad thing is, it seems like it’s on its way out:(
I feel the same way. A very select few tracks have captured my attention, and as a result, I watch, follow and enjoy the entire Formula 1 season. But you can’t take the tasty filling out of the pie and expect me to remain happy while I consume the crusty bits.
A dessert of desert pies?
Yes, lose Spa and go drive in circles in the desert somewhere. Great.
Can’t wait ! Nothing like a 60 lap bore-a-thon in Bore-rain, Abu Dhabi, Korea, China.. zzzzzzzz.
Could any of us draw the circuit outline of Bore-rain, abu Dhabi, Korea, India or China from memory ?
I could for Imola, Spa, Brands, Silverstone, Monza etc..
This is the best circuit on the calendar, it’s essential IMHO it stays. It would be disastrous to lose this race.
Joe
Are we mad to think the powers that be care or is it a case of times change
Alternatively they could try running Spa on a more professional basis. The criticisms of Yeongam are justifiable . Maybe it’s improved since 2011, but it was diabolical. Sadly Spa really isn’t much better . I wasn’t daunted commuting from Brussels. Camping at the circuit wasn’t an option. The train service to Verviers was good, but the bus shuttle was poor. Local bus only for the Friday and insufficient buses on the Saturday and Sunday. The buses stop a long way from the circuit and the walking paths are neglected. The food is dreadful compared to Singapore and Melbourne. I couldn’t say that they attracted much of a crowd either despite fairly low ticket prices. I’m not surprised they make a thumping loss.
Take off the rose colored glasses. The drivers may like it but the paying public are voting with their feet.
I did a package to Spa, based in Brussels, on both the Saturday and Sunday. The buses stopped in the village/town and the paths were good. The food was no better or worse than at any other event (a burger from a van/stall is the same across Europe). I suspect that where the the event is losing money is in the participation of the locals, they are fantastic and everyone is so helpful. Many local bars/hotels/shops make a lot of money that probably keeps them going for the rest of the year.
Thanks Bernie. I wish that man could just disappear. If Spa is lost, I think that would be a turning point in F1.
Harrumph! If there were any justice in the world, Formula One should have to bleedin’ well pay Spa $20 million a year for the honour (and the benefits to the Formula One brand!!) of Spa making its wonderful track available.
F1 really needs to escape the hands of private equity if it is to continue its appeal (for me at least). $20m seems crazy, especially given the value the race adds to the calendar (which I suspect is more than the local Belgian economy benefits from the race).
Frankly, a 20+ race season is too long, and with each extra race some value is lost to the consumer in terms of excitement (too much of a good thing), especially if only a tiny number of those races are ‘classics’. It wasn’t that long ago that I used to get excited for each race, but now its a case of “here we go again”. Also, I think its harder for one person/team to dominate if there is a shorter calendar- one can only stretch a lead so far in 16 or so races.
Yes, some of this has to do with the Vettel effect, and perhaps if the racing were closer then a number of extra races would be better.
As things stand, I think Silverstone, Monaco, Spa, Monza, Nurburgring/Hockenheim, and Suzuka should form the spine of the calendar with no more than 10 other races at less historic venues.
I agree, Gurjeet. I’m getting more and more disappointed in the constraints on engineering, both chassis and engine. Would it have cost more to build new engines for 2014 without all the constraints, such as cylinder bore (hence compression ratio), c.g., weight, turbo location, V angle, etc. etc.? I suspect not, but we would have seen some interesting solutions. The same goes for the chassis and bodywork; the cars are looking more and more alike because the engineers are narrowing down on optimum solutions with the fixed rules. And why do the carsha ve to have equal front/rear weight distribution? I think some of the cars might benefit if they could move ballast around a bit. I don’t buy the Autocourse F1 annual anymore; I used to really enjoy the car and engine analysis, but it’s the same year after year now and boring.
I have almost given up on the sport; I didn’t watch the Korean race and suffered no great withdrawal symptoms. I will stick around into 2014 because of the engine changes, but they are losing me pretty quickly. Also, I’m tired of getting up at 4:00 am (or staying up until 1:00 am this weekend) to watch races. The season is lasting too long – racing in November? – and there are too many races. We used to have a race every two weeks, like clockwork, but now we are getting these silly long breaks (I’m not talking about the team holiday break), back to back races, and ridiculously inefficient flyaway scheduling.
Are there any F1 races that make a profit?
It depends on how you measure.
And whose profit you’re talking about!
Joe
Could you expand and or explain to those of us not familiar with, “…how you measure”.
I am not an accountant so options of “…how you measure” would be interesting.
Thanks
Martin
Not during a Grand Prix weekend.
Our local government can barely afford shoes, let alone subsidising an event which will make someone else double in profit what they would need to chuck in to break even. (We start having to pay additionally for waste collections next year) Presumably in Belgium the local government benefits by means of a local tax on business turnover or something.
Spa is the one race I manage to get to each year and it is never short of people. This year the track was full and as far as I could see the stands did not have much space.
Camping is always popular at the circuit and whilst I agree with a lack of public transport it is available and in good order considering that SPA is not close to any real big towns. 8M from the local council is money well spent as three of us this year paid 800euro in accommodation and food for the three days plus the tickets. It does not take much to realize that F1 is bringing in more than 8M to the local economy… SPA will stay for lots of reasons.
The change I believe we will see is more alternating circuits as the numbers who want a GP are greater than 20 races which stretches everyone from Fans to Team and TV crews to Journalists. And when I say fans I mean the real fans that watch over 8 hours of track time each race weekend.
Have it at Spa, call it the French GP and German GP in alternate years.
Next!
Does anyone in reality make even so much as a dime in actual after expenses etc profit from F1 other than perhaps a ( very – in many cases ) few local businesses ? From what I’ve been hearing … much like the Olympics … having an F1 even in your backyard is the very epitome of the term ” Money Pit ” Or as one City Manager recently shared with me in private ; ” The only way to make a million dollars on an F1 race is to spend ten ” .. Million that is 😉
Imagine if the Circuit of Wales is built and then secures a round of the F1 championship. Who would have to pick up the tab to cover the undoubted losses that would ensue? There should be no state aid in any shape or form for F1 races that is essentially underwritten by taxpayers.
‘There should be no state aid in any shape or form ‘ Could you name a race that receives no assistance from the government?
India?
That joke of a project was shelved as soon as they got planning permission. A couple of days in Ebbw Vale and Joe would be dreaming of a return to Mokpo.
One word: Greed.
Pure and simple
In the end it’s all about money. Who really wants to see F1 cars on the streets of Monaco? It may be steeped in history, but it’s dull as ditch water for those of us at home with next to no overtaking opportunities. It’s only when the fans talk with their feet that anything changes, it has to hurt in the pocket first.