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German GP cancellation: Are F1's financial problems getting out of control?

Gaurab Sinha
Editor's Pick
Published Mar 22, 2015
Mar 22, 2015 IST
The German Grand Prix takes a forced hiatus for this year

Race one was just done and dusted last weekend, and despite the comprehensive Mercedes dominance at Australia, we were still looking forward to 19 rounds of action filled races. However, there won’t be 19 more races to look forward to any more, as the mid-season German Grand Prix has been cancelled.

The race was supposed to be the 10th round of the 2015 championship season, and it was originally Nurburgring’s turn to host it. But the FIA confirmed earlier this week that there won’t be a German race this year. 

The German GP, as you know, in the last few years had been alternating each time with the Nurburgring and Hockenheim race-tracks. However, after the ownership changed at the ‘Ring, no new contract to host the race was conceived between the new track-owners and Bernie Ecclestone, the ringmaster of F1. Ecclestone, 84, was still hopeful for a late deal with the alternative Hockenheim track to host the race this year, but it did not materialize.

It has always been money over loyalty and fans for F1

Before stating our disappointments over the whole case, one can indeed concede two things; first that Ecclestone is the reason why the sport has enjoyed worldwide success. And other being, it is not his fault that a track owner (at either Nurburgring or Hockenheim) cannot meet the market’s demand. We can only speculate on what deal was offered to save the Grand Prix. Ecclestone knew that the German race was in danger this season for a long time. He did express his concerns, yet nothing substantial and ‘epiphanistic’ was done by him.

Now, you can blame the ‘LOT OF IT’ on him. However,it is all about money in the end. F1 cannot accommodate emotions, patriotism, heritage and loyalty. Besides, if the German influx and elements in the sport are to be accounted for, then I will have to make a list that will run util the moon.

In a nutshell, the current constructors’ champion of F1 is a German outfit and there are 3 drivers in Formula 1 from Germany. Two of them were on the podium in Australia last weekend.

Sport’s popularity in Germany

Of course, the whole credit of that should go to Michael Schumacher and his dominance pre and post millennium. However, it is also a fact that when he left the sport (for the second time), the number of German F1 supporters did show a slight decrease. The ticket revenues took a hit and only about half of the grand stands were filled during last year’s race.

Most of it can be blamed on high ticket prices as well due to Ecclestone’s shrewd negotiations with tracks and promoters. As a result, the tracks have to build paddock clubs and hospitality areas for the rich and famous guests of Ecclestone, whilst still coughing up the hefty promoter or race fee.

In most cases, local governments do pay this fee themselves. For instance, the governments of Russia, UAE, Bahrain do their bit in order to ensure a race in their nation. When government aid is not applicable, the race is always under threat of axing. The organisers in turn overcharge the spectators just to keep afloat . This clearly indicates F1‘s current demeanor on how to treat the feeble and poor, fans, at the end of the line.


The whole money structure is to be blamed for loss of races and also teams

This will be the first time since 1960 that a German Grand Prix will not feature in the official F1 World Championship season. The 2007 German race at the ‘Ringthe only other exception as it had to be called the European Grand Prix for contractual reasons. This is not the first time that a ‘classic race’ has been lost or is under threat. 

The Canadian Grand Prix, Italian Grand Prix at Monza, and most significantly, the Belgium Grand Prix, always stays under the radar of an axe; every single time there is a contract renewal up ahead. In fact, it is because of Formula 1’s nonchalant attitude that we do not have a French, Argentinian, Dutch, or a Portuguese, Grand Prix.

There is no work being done to reinstate them in that regard. Of course, a modern circuit and safety is synonymous. With collective efforts from the FIA, FOM (Ecclestone) and the whole of F1, we can ensure a revival. In the domino of overcharging fees and jagged distribution of prize money, small teams suffer the most.

Schumacher has won multiple races at both the German tracks

The German GP cancellation talks a lot about how things run in F1

Even though this (the event in Germany) is a matter of one single race, it lays the implications of Formula 1’s money structure and Ecclestone’s constant draconian attitude towards F1 in general. The money-man from UK has never been supportive of the sport’s heritage and has always opted for making financial decisions over emotional ones. The failure of German GP this year adds up to that list.

There is no doubt that it makes him look like a good businessman, and a shrewd one at that. However, the fans of the sport are the ones who are losing the most in this money-based tug of war. If you are a skeptical or a pessimistic type, then you can also keep worrying about the health of a few more ‘Classic Grand Prix Tracks’. I dare say, about a current F1 team or two.

Doing business by Ecclestone’s unfathomable style

Fact still remains that the sport is depending on countries and governments that have the money to fund races and teams. For example: Abu Dhabi and United Arab Emirates are strong supporters of F1 and hence a race there is guaranteed. Many previous venues have faded off from the calendar in the past thanks to financial issues. South Korea, India and Turkey (where the racing was appreciated by everyone) are the places that come to mind instantly. 

This is a sport where more than a billion dollar worth of profits is generated every year. However, saving a small team like Caterham or Marussia becomes impossible. In fact, the trio of Force India, Sauber and Lotus are facing the same music. Hence, saving a race venue is completely out of the equation.

Ecclestone’s take on a team’s plight is: control a team like business, not as a hobby. That is absolutely true, but Formula 1 is not a corporation, economy, or a money market at the end of the day, it is a sport. It touches human lives, yours and mine. Hence, Mr. Ecclestone should be reminded that we are not customers, we are a part of the whole circus which has made it a success. Besides, if the grid shrinks down, the whole sport will get impaired because of the ramifications. In the end, there will no new street race at Baku, Azerbaijan.

The money siphons off in the direction to fill up the already full coffers

Well, the financial climate in most countries around the world is not splendid. The local organizers at many race venues are facing problems to negotiate a suitable deal with Ecclestone. However, money in Formula 1 has not dried up at all. In fact, the sport, it’s promoters and some teams are in top financial shape. This is a classic form of F1 capitalism where the rich are getting richer, and the teams and tracks, well, you get the gist. 

For example; a top F1 team spends about 200 million plus pounds over a season, while a small team has a budget less than half of that. However, a top team is guaranteed kickbacks from the FOM, whether they are first or last because of their individual creamy agreement with Ecclestone. This is why some small teams are realizing the pinch.

With the introduction of the new V6 and Hybrid Power Units, these small teams are getting worried about finances. This is common with every sport. I mean, a football team down the leagues cannot be compared with the mighty top clubs at the premier divisions, in terms of anything. However, there is no relegation or promotion, or even a certain organized team elevating chain in F1 if a team fails. Therefore, the current grid is what we have and it should protect itself.

The whole structure is very fragile for some teams and tracks

We are in a position that every team (apart from the last year’s top 5 constructors) and many race circuits are just hanging by the thread thanks to Formula 1’s unique way of distributing money and looking after one-another. Even though, as a whole, F1 bosses may deem these things to be trivial, it is certainly hurting the overall tenets of the sport. However, top teams and parties that are not interested in supporting anyone are happy to maintain status quo, as they generally lose nothing from it.

Example: Mercedes has not bothered about stepping-in towards saving the German Grand Prix (their home race) at the last moment, which speaks a lot. 

Well, we still might have German race in 2016, but his blemish again speaks a lot about F1’s current financial catch-22 and non-cooperative acceptance. In fact, there might come a day when all the teams and circuits are told by Bernie Ecclestone – to man for themselves. 

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