Valencia Looks to Leave F1

[cosworth151]

Reports out of Spain indicate that Valencia has seen it's last F1 race. About the only question is how much they will have to pay Bernie to get out.

Ecclestone wants the full €33m ($43.8m) termination penalty. Diario Sport claims Valencia treasurer Juan Carlos Moragues Ferrer said recently that, amid the economic crisis, the government wanted to "meet our obligations without having to close schools or hospitals."

The Tilke designed street circuit was generally disliked by F1 fans and won't be missed.

http://www.givemesport.com/367962-valencia-set-to-give-up-on-formula-1-return

[Scott]

Note to Valencia...walk away.  I won't miss the track so much, but I really feel sorry for the community of Valencia.  Spain is virtually bankrupt, so maybe Santander and Vodafone can find a way to sort out Bernie's fee without leaving the town with such a big shortfall.  I'm sure the two of them could come to a more reasonable agreement with Bernie allowing  Valencia to just get off with their massive debt from building the track in the first place, but not the insult of the termination penalty.  I know Bernie wouldn't let them off on his own, as it would set a precedent for other tracks that are going bust.

[vintly]

Last I heard about a year ago, they had already stopped paying for security at the unused track and thieves had stripped the circuit of copper, cables and aluminium - it's been essentially derelict since then. Ironically enough, a friend lives in Valencia and works with specialised nylon cables and ropes. These are supplied to yacht makers, and F1 teams amongst others. They use them in their wheel tethers. He's gutted he won't be getting free tickets anymore.

[F1fanaticBD]

It was almost certain that Valencia had seen the last of F1. Audacious plan, with worst possible execution of the plan and then the whole country's debt problem all accumulated to punch out this Grand prix from the calender. People around such course should take notice & implement immediate plan to keep their races as they are.

[lkjohnson1950]

Bernie should be a bit more careful of the circuits that host F1 and find a way to funnel them a bit of money. Valencia has collapsed, Korea looks to do likewise, Russia is dithering about money and location, New Jersey and both German circuits are teetering on the abyss. The line of people ready, willing and able to hold races is growing shorter.

[Jericoke]

Bernie should be a bit more careful of the circuits that host F1 and find a way to funnel them a bit of money. Valencia has collapsed, Korea looks to do likewise, Russia is dithering about money and location, New Jersey and both German circuits are teetering on the abyss. The line of people ready, willing and able to hold races is growing shorter.

I can't help but wonder if Bernie is playing a game within a game. By bringing tracks/promoters to the brink, he sets himself up to 'grudgingly' give them a break.  Then he quits, and leaves CVC holding the bag, while F1 has been 'saved' by  Bernie

[Scott]

Only flaw in that is that Bernie won't quit until he's dead or demented.

[lkjohnson1950]

I doubt it. Bernie is used to having a waiting line of people who want to ohost races. Many people think he was deliberately forcing the older circuits out to make room for the "Taj Mahal" tracks in places like Bahrain, Abu Dhabi etc. Then he decided street races were the future. He has been working overtime to get races in the center of the world's great cities. I don't think he cares a lick about the current tracks and won't until he can no longer come up with 20 races.

[Willy]

I can see the reasoning behind street circuits over dedicated race tracks when you come at it from Bernie's myopic cash fueled point of view.
A street circuit will be funded by the city, municipality or country while a track is usually operated by a committee of individuals who are race fans and raise money to bring an F1 race to their circuit. Whom do you think will have deeper pockets and pay Bernie's outrageous prices to hold an F1 race?

I did not like the Valencia circuit and am glad it is no longer on the calendar but not at the expense of the city  etc.
Bernie needs to pay attention to an economic situation that he is not a party to, but many of those he must deal with daily, are currently having to weather.
Bernie is most definitely one of the 1% and most of the every-man who supports F1 are part of the 99%, so it would be smart of him to not totally alienate his treasured fan base.
Forgiving Valencia it's cash obligations would go far in sending a supportive message to the fans that he understands the current situation worldwide.
 

[lkjohnson1950]

I don't think Bernie really understands the current situation, because it hasn't really touched him beyond the loss of a couple of races. And I don't think he gives a damn about the fans because they don't directly put money in his pocket. I don't think he cares if there are fans in the seats as long as the tracks continue to hold the races.

[cosworth151]

Very true, Lonny. Remember back a few years ago when he was making noises about having a "VIP Only" race, where only VIP's would be allowed at the circuit?

[Ian]

Every fan that attends an F1 race is a VIP in my books.

[Willy]

Any person in business knows that without customers for your product you quickly go out of business.
Most of Bernie's money comes from the tracks and the teams.
But where do they get the money.........bums in seats!
Loose the fan base by being indifferent to the global financial situation and think you can continue to live in the economic bubble and eventually it will burst.

[Jericoke]

Any person in business knows that without customers for your product you quickly go out of business.
Most of Bernie's money comes from the tracks and the teams.
But where do they get the money.........bums in seats!
Loose the fan base by being indifferent to the global financial situation and think you can continue to live in the economic bubble and eventually it will burst.

I'm Bernie's biggest fangirl around here.

He's so many steps ahead of anyone else, he looks crazy.

His current legal troubles stem from the last time he did a pump and dump on F1.  I presume he's doing the same thing now.  Anything that 'devalues' F1 means that it can be sold easier.  Who profits most from a sale of F1?

Bernie knows which 'fans' are putting money in their advertisers pockets, and which ones aren't:  all bums in seats are not equal. 

I agree he's playing a dangerous game, but he's the one who wrote the rules.

[Alianora La Canta]

Bernie gets more money from a fan who watches on TV (even if they're watching free-to-air) than one who shows up at the circuit - unless said fan buys the F1 series merchandise (as opposed to team, driver or circuit support gear). So it's in his interest to make fans stay home (and, by extension, to force high ticket prices), unless people complain enough that it puts off TV viewers.

The tracks, for the most part, get their money from governments as part of "tourism budgets"*. This makes it very difficult to say who is paying for it (except that "taxpayers" in each country directly pay), as the government probably thinks the person who cares nothing for motorsport but was attracted to go shopping in a "F1 locale" there because a friend said the place looked cool on the news (assuming it was on the news to decorate a F1 results update) is as valuable to repaying the F1 expenditure as someone who turned up for the actual race. In some ways, that fan is more useful because it sustains employment and income across a year, rather than causing a monsoon influx for a weekend that dries up for the other 51 weeks of the year.

In short, the money Bernie gets from tracks has more to do with the national tolerance of F1's continued existence than it does to whether people pay any significant attention to the series. Similar thoughts apply to pay TV - the money is mostly from people buying the package that happens to contain F1, not from people actually watching F1. So not only is F1's profits largely from the casual viewer, but a large proportion is now from people who don't view F1 at all...

The trouble is that circuits, for a variety of reasons, are not buying Bernie's new vision. Mexico was considering it but now seems to have put the concept on the back burner. Russia's messed up the paperwork and by regulation cannot be on next year's calendar - which could derail the entire plan. New Jersey's looking more bemused by the week by the requirements. India's decided it likes F1 people to meet their financial obligations. Korea and Valencia just plain can't afford F1's price tag. Bahrain (and Korea) could explode into violence at any moment, which would make it awkward for F1 to go. Brazil's in an odd situation regarding circuit upgrades - it doesn't want to do them (despite obviously needing at least some of them), but F1 can't afford to drop the track.

Austria got pulled out of the bag at relatively short notice to take advantage of Red Bull's success. While Red Bull is likely to be a reliable payer, I have a sneaking suspicion that it may have been manipulated into plugging a gap. Even after that happened, we are looking at 19 races at most for 2014 (assuming Korea pulls a miracle out of the bag and finds funds for its race), and possibly as few as 16. This in an era where pay TV is causing the loss of a lot of income on the TV side and where CVC demands results off its representatives - and has the power to sack underperformers.

In short, Bernie's plan is already failing and unlikely to improve. It's possible his plan is to make himself look good by giving his successor a nightmare start to his or her tenure. If that is his plan, then I'd agree with Jericoke - he is far ahead of the rest of us in his ideas. Otherwise,

* - Which is part of the reason Bernie doesn't like India defining F1 for tax purposes as X Factor on wheels. Tourism gets more government help than TV entertainment.