KNUTSON: The Root Cause

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Dan Knutson.

While not exactly new – it dates back to 2004 – the Chinese Grand Prix is one of the modern Formula One races in a championship with its history deeply planted in Europe.

Now, Liberty Media and Formula One CEO and chairman Chase Carey says that a second race in China is under consideration.

Meanwhile, many of the traditional tracks are struggling to stay on the F-1 schedule. In April, Spain, Britain, Germany, Italy and Mexico still needed to agree with Liberty on contracts from 2020 onwards.

The root cause is money.

Carey has stated that Liberty wants to maintain the “historic core of F1” races, but the question remains how much income is Liberty willing to lose to keep those events.

The Automobile Club d’Italia president says Monza cannot continue to hold the Italian Grand Prix unless it gets 10 million euros a year from the Italian government. Furthermore, the club says it urgently needs 60 million euros for a major renovation of the circuit prior to celebrating its centenary year in 2022.

The British Racing Drivers’ Club (BRDC), which owns the Silverstone track, used a clause to get out of its contract to host the grand prix after the race in July. The BRDC hopes to negotiate a cheaper price with Liberty to continue to host the race from 2020 onwards.

Now the Financial Times says that the sides are very close to agreeing on a new deal. It reported that Liberty is demanding to be paid $23 million a year, while the BRDC has offered $20 million a year for the rights to host the race at Silverstone.

Formula One is at a crossroads between history and business with his calendar of races. (Steve Etherington photo)

There are problems in Spain as well where the government is withdrawing funding for the Circuit Barcelona-Catalunya.

Meanwhile, opposition from various local groups in Miami is keeping the F-1 race on the city streets in limbo. That U.S. race has already been postponed from 2019 to 2020, and it may not happen then either.

Delegations from Vietnam have attended the first three F-1 races of this year as that country prepares to host its first F1 race in 2020. As per the Formula One Group’s policy which requires hosting fees for new races to be paid one year in advance, the Vietnam organizers were due to pay the remaining balance of $27 million by mid-April.

The plan is to hold the Vietnamese Grand Prix in conjunction with the Chinese race in April. Work has begun on the facility that will host the street race in Hanoi, and it now needs to be completed within 12 months.

All in all, there are a number of events in limbo for 2020 and beyond, and most of them need money to survive. It remains to be seen if there will be 21 races on next year’s F-1 calendar.