Hockenheim - the latest circuit to have doubts over its future

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1st December 2008, 16:16
christophulus

Hockenheim - the latest circuit to have doubts over its future

http://www.autosport.com/news/report.php/id/72283

They aren't due to hold the race until 2010 but this looks like another casualty of F1's high hosting demands. You'd have to wonder when Bernard is going to realise that no one can afford his ridiculous demands for hosting.

If Germany can't afford a race - especially how Hockenheim only holds it every other year - then this has got to set alarm bells ringing. There are plenty of German drivers and manufacturers in the sport so you would have bet on this race being safe.. maybe not :confused:
1st December 2008, 16:29
ArrowsFA1

I'd posted this news in the Another one bites the dust - Chinese GP thread because as time goes on more and more GPs appear to be struggling.

I've read about the teams being uncomfortable about the amount of debt CVC brought into F1, but the fees charged for races is what pays the interest on that debt so it's hard to see CVC willing to cut costs for the circuits. But if they don't...It may take some time (years) to play out but it does seem probable that Canada, China, and Hockenheim will not be the first to disappear, or at least, question the value of hosting a GP.
1st December 2008, 16:45
BDunnell

Quote:

Originally Posted by christophulus

http://www.autosport.com/news/report.php/id/72283

They aren't due to hold the race until 2010 but this looks like another casualty of F1's high hosting demands. You'd have to wonder when Bernard is going to realise that no one can afford his ridiculous demands for hosting.

If Germany can't afford a race - especially how Hockenheim only holds it every other year - then this has got to set alarm bells ringing. There are plenty of German drivers and manufacturers in the sport so you would have bet on this race being safe.. maybe not :confused:

Yes, but the German economy hasn't been the strongest for some years now.
1st December 2008, 16:50
Easy Drifter

The US, Cdn., And French GP's are all gone at least for the immediate future.
The German GP is questionable at BOTH tracks.
The Brit. GP is under threat.
By losing 3 races how much has Bernie lost in income? Many millions.
China, despite denials is questioning the costs.
New tracks and huge fees?
The Russian race has been mooted for years.
Champcar had a lovely experience with Korea.
India? Do you want to race there after last week? What a target a GP would be.
In this economic climate any Govt. is going to be looking long and hard at any investment in racing.
Three levels of Govt. in Canada (Prov. being Liberal Party and Fed. being Conservative Party) looked at Bernie's demands, made a counter offer which he rejected out of hand. The combined Govt.'s then released the details of the demands and their offer. Bernie was very upset and is still mouthing off. See TSN.
With the current losses of income due to loss of three races and potential loss of more Bernie is probably going to make even higher demands on other tracks.
Good luck.
Next thing we know he will be proposing Somalia. After all look at all the money the 'other' pirates are raking in with the ransom money. :rolleyes:
1st December 2008, 18:18
Nikki Katz

Terrorist attacks can happen anywhere, I don't think it's really fair to single out India because of what happened last week. I would have thought that it was one of the very few countries that can afford a race. However, I'm not really sure what the country would have to gain from F1, especially given poor ticket sales in China.
I think as far as Korea goes, the problems with ChampCar holding a race there shouldn't be so much of an issue, after all they also cancelled races at the last minute in the USA. F1 is a much bigger force. I'd imagine that F1 would be good for there, but again if it's not working in Shanghai then where will it?
The obvious place to look would be more races in the middle east, perhaps Saudi Arabia.

The article on the CVC debts is interesting. They've only been paying off comparatively small amounts of the loan, before the financial crisis hit it would still take over 20 years to pay off. Presumably now that'll be even longer, especially as we're losing so many races.

Does anyone else thing that the breakaway series threats are about to re-emerge?
1st December 2008, 21:45
Easy Drifter

When you think about it Bernie has had his race income reduced in the last 3 years by 70 to 100 million dollars because of race cancellations and lost fees. With Germany and the UK under fire maybe another 60 to 70 million on the table.
Do the lost races affect his TV revenue? Who knows, but I can see some countries possibly dropping F1 coverage especially if Germany and the UK go.
TSN in Canada and Speed in the US are possibilities.
To me it would make more sense to take a lower fee and have races and still a good fee than lose the whole thing in these tough times. That may be why he is a billionaire and I am not.
Yes, any country can have terrorist attacks but India appears to be getting less and less stable and certain elements in both India and Pakistan are trying to provoke trouble between the two countries. These groups, particularly in Pakistan, are powerful with high connections. There are also several areas of India (Kashmir being one) wanting independence with terrorist groups among them and tension between the extremist Hindu and Muslim factions is heating up.
Some organized group or groups had to stir up the riots resulting from the attacks. I doubt they just happened. When mobs take to the streets there is always some group stirring them up.
I am not saying India is an impossibility, just that care is required.
India is an emerging economic powerhouse but it is not there yet and many companies are going to be a little leery of just how secure things will be now.
Many extreme factions are urging war with Pakistan. They have fought several times before and border clashes are almost daily occurences. Both are nuclear armed. Afganistan is next door!
I think I just scared myself!!! :eek:
1st December 2008, 22:49
BDunnell

Quote:

Originally Posted by Nikki Katz

Terrorist attacks can happen anywhere, I don't think it's really fair to single out India because of what happened last week.

I agree. Many of the Middle Eastern countries could be singled out on that basis, and perhaps Russia.
2nd December 2008, 11:28
ioan

Quote:

Originally Posted by BDunnell

Yes, but the German economy hasn't been the strongest for some years now.

Not sure about that ,they might not be the strongest in the world but they are the strongest in Europe.

It's not about their economy it's more about them not wanting to throw money out of the window in the context of the actual economic climate.
2nd December 2008, 11:29
ioan

Question:

What happens if CVC can't pay back it's debt?

PS: IMO given that they were so stupid as to buy the F1 commercial rights for billions when Bernie only payed millions for it, they deserve their fate.
2nd December 2008, 18:21
Tallgeese

It's time for Bernie to go & a new vision in FOM administration. I don't see why circuits must pay so much, let alone the huge disparity. If you ask me, they should have a rotating system for GPs to be held with any country allowed two maximum. I personally favour an 18-race format, with no circuit being absent for more than one year. That way we can get great tracks such as Imola back!
2nd December 2008, 18:36
Nikki Katz

Quote:

Originally Posted by ioan

Question:

What happens if CVC can't pay back it's debt?

PS: IMO given that they were so stupid as to buy the F1 commercial rights for billions when Bernie only payed millions for it, they deserve their fate.

Hmm, I think that F1 itself is incredibly profitable, the problem lies with the holding company. If CVC went bust then administrators would come in and sell off the assets, e.g. F1. Presumably F1 is worth more as it is than as its component parts, it's mostly about the brand name and contracts after all, there can't be a great deal of tangible assets. It would therefore then be sold on to the highest bidder, presumably for a lot less than CVC "paid" for it.
So, it shouldn't be the end for F1, but it would be very disruptive.
2nd December 2008, 23:55
BDunnell

Quote:

Originally Posted by ioan

Question:

What happens if CVC can't pay back it's debt?

You can bet your life that the consequences wouldn't be the same as if we were not to pay back all of our debts.
2nd December 2008, 23:59
jso1985

Quote:

Originally Posted by Easy Drifter

When you think about it Bernie has had his race income reduced in the last 3 years by 70 to 100 million dollars because of race cancellations and lost fees. With Germany and the UK under fire maybe another 60 to 70 million on the table.
Do the lost races affect his TV revenue? Who knows, but I can see some countries possibly dropping F1 coverage especially if Germany and the UK go.
TSN in Canada and Speed in the US are possibilities.

While I agree totally that fees should be reduced, I doubt Bernie is worrying dropping key races will afect the TV revenue much, TV stations "sell" the package of having the whole sport on their channel not just a few races. at least in Europe and LatinAmerica, F1 will be always a good profit to broadcast no matter which races are in
3rd December 2008, 13:01
ioan

Quote:

Originally Posted by BDunnell

You can bet your life that the consequences wouldn't be the same as if we were not to pay back all of our debts.

I had no doubts about that! :D

What happens if manufacturers and/or privateers decide to pull out/go bankrupt because of financial difficulties? Sure there will not e to much value left into what CVC bought from Bernie.
3rd December 2008, 13:23
Sleeper

Quote:

Originally Posted by ioan

Question:

What happens if CVC can't pay back it's debt?

PS: IMO given that they were so stupid as to buy the F1 commercial rights for billions when Bernie only payed millions for it, they deserve their fate.

Probably the same thing when Kursch couldnt pay back its debts after buying F1, go bankrupt and get taken over by the banks (now theres a scary thought after the recent troubles). F1 was being run by three seperat banks for nearly 5 years before CVC bought it.
3rd December 2008, 14:02
ioan

Quote:

Originally Posted by Sleeper

Probably the same thing when Kursch couldnt pay back its debts after buying F1, go bankrupt and get taken over by the banks (now theres a scary thought after the recent troubles). F1 was being run by three seperat banks for nearly 5 years before CVC bought it.

So, no matter if the commercial right holder lives or dies F1 continues to live, with a new rights owner or the debitor banks.

So why should we effin care if some idiot was stupid enough to pay 3 billions for owning the commercial rights of a show that they don't really control.
What if the teams pull out? No matter who the owner is he's busted. Don't forget that the previous Concorde Agreement ran out already quite some time ago.
4th December 2008, 10:28
V12

Hockenheim's been dead since 2002 anyway...I wouldn't miss it.
4th December 2008, 19:09
philipbain

Quote:

Originally Posted by V12

Hockenheim's been dead since 2002 anyway...I wouldn't miss it.

Absolutely agree, the "redevelopment" (or as I like to call it, destruction) of Hockenheim is the root reason for it's demise as it was extremely expensive and made a once unique track into a rather uninteresting and extremely bland autodrome. The old circuit wasnt the most technical in the world but at least it dared to be different, a very high speed low downforce track where there was a rich contrast between the flat out straights and the twisty technical nature of the stadium sector which was made tricky as it had to be negotiated with very little downforce. The modern track is a made for TV track that is typical of modern tracks for being utterly unpunishing in the event of a driver making an error.