Is Mega bucks the secret for F1 Madrid GP race?

[John S]

Have big money private backers enticed Liberty with an eye watering yearly race fee to secure the Madrid GP?

Spanish media outlet TV3 has reported that the figure Madrid could be about to pay F1 is €48 million euros a year, which is $52.1 million USD at current exchange rates.

Over the course of the 10-year contract with Madrid to run the race at the IFEMA complex, that could net F1 over half-a-billion dollars if the figure is accurate.   

If true that's Middle East type race fee not usual European cost. 

All circuits with 1 or 2 years left on contracts must now be a bit worried.

[cosworth151]

Liberty's motto has always been "It's all about the Benjamins!"

[Jericoke]

I suppose F1 is a business, and you make the choices that make the most money.  Naturally there is debate if a big pay day up front will lose revenue in the long run, or taking a smaller payment up front will open bigger opportunities in the future.

My question though is... how can a temporary street circuit possibly be a better business deal than a dedicated race track?  Like Silverstone doesn't have to constantly add and remove barriers and grandstands.  They can do repairs to track/facilities on their own schedule instead of cramming everything in quickly (i.e., expensively)

Is it just that the racetrack itself is a loss leader expected to make up the difference with restaurants and hotels?

[Alianora La Canta]

Because it's deemed a better political deal. Catalonia is very unpopular with the Spanish central government and there is encouragement (I think all verbal at this point, though I stand to be corrected) for business to specifically support Madrid's projects rather than anywhere else in Spain's projects, to demonstrate "national unity".