OllieF1
The Canadian Grand Prix Is Not Completely Dead, Yet

The Canadian Grand Prix Is Not Completely Dead, Yet

After the Canadian Grand Prix was rudely dropped from the 2009 calendar, the world gasped in horror at the largest automobile market on the planet not having the opportunity to showcase the very sport that the car manufacturers invest in. The North American fanbase were appalled, and I personally was disgusted at not only losing a great track, but also the way in which the cancellation had apparently been handled. However, it would appear that not all is lost for next season…

Government officials from Montreal are flying to the UK today to hold discussions with Bernie Ecclestone, all in the hope of saving the event with apparently adds $75m to the local economy at the start of the region’s summer season. This news comes just after the grand prix organisers denied claims that they had defaulted on payments to FOM for the past two years; the debts supposedly amount to “north of 20 million dollars” according to McLaren boss Ron Dennis.

If we are able to reasonably and responsibly save this event, we will do it. The grand prix is a big event, it’s the biggest tourism event, but how much does it bring in concretely, not only in spin-offs but in cash in our pockets as citizens, as taxpayers? I’m going to negotiate with Mr Ecclestone, so we will keep our cards to ourselves. Raymond Bachand, Quebec Minister for Economic Development.

The failure to include North America in the championship has upset most teams, primarily because for the manufacturers, the US is a very important market and Formula One allows them to showcase their technology and brand to millions more potential customers. However, even privateer Frank Williams sees the importance of America, having stated recently that many sponsors and potential investors are based in America, and by not reminding them that Formula One exists could add further consequences to the Formula One brand as well as the individual teams.

The government officials are due to speak with Bernie Ecclestone this week and any news or developments will of course be reported on BlogF1. Fingers crossed, everybody…

Oliver White

24 comments

  • Why is Ron Dennis commenting on the financial specifics? He’s a team owner, not part of Bernie’s band of bandits. Seems odd he would have those numbers…and even odder that he would talk about them.

  • As an F1 fan and a Canadian, I am pleased to hear that Canada might be back on the grid.

    However, as a Canadian taxpayer, I am not sure this is the best use of my tax dollars. Especially given that we are about to enter if not already in a recession. Personally, I’d rather they plow tax dollars into projects like high-speed rail between Toronto and Montreal ahead of saving the Grand Prix.

    (For the sake of full disclosure, while I am a Canadian taxpayer for 2008, I probably won’t be for 2009 as I will no longer be a resident. Furthermore, I am from Ontario, so I don’t pay taxes to the Quebec government… But that doesn’t mean I can’t complain about it. πŸ˜‰ )

    Tangentially but still on topic, I’m surprised that the Grand Prix is the biggest tourism event in Montreal. I would have thought that the Jazz Festival and Just For Laughs comedy festival bring in more money.

  • @donwatters: Yeah, I noticed your comment on the other post as well. It is odd, and I don’t blame you for questioning it. Maybe Ron is trying to side with the FIA and FOM for political reasons…?

    @Greg: If it’s any consolation, the UK is on the verge of being declared in a recession as well. If we have negative growth for Oct-Dec, that’ll be the second quarter of negative growth which means the ‘R’ word becomes official.

    And I should just say that I don’t think anyone said that the grand prix is the biggest tourism event for Montreal, just that it provided a lot of revenue for the start of the busy summer season. Apologies if my text makes it sound otherwise, or do you have other information/quotes? If you do, please share.

    And yes, while I would like the British Grand Prix to remain on the calendar, I can think of better things for the UK government to spend my (and every other taxpayers) money on. Unfortunately, Labour just spend it on crap all the time, like the Millennium Dome. Yeah, that was a worthwhile investment. πŸ˜‰

  • I hear the same argument here in Melbourne every year – why does the Government spend money on the race instead of hospital beds etc.

    Well the fact is that if the Government did it’s job properly, they would have money for both things. It’s hardly Bernies or F1 fans fault that you have to wait up to 3 days for a bed in an emergency ward in a hospital in Victoria !

    And correct me if I’m wrong, but even when times are bad – in fact especially when times are bad – people still need entertainment to spice up the drudgery of everyday life. And F1 brings that in spades.

    With regard also to Government spend and tax dollars, that is an extremely narrow way to look at it. Yes tax dollars are spent on the event, but the event earns the city hosting it millions in flights, hotels, transport, entertainment. Which, correct me if I am wrong, are all expenditures which attract some form of taxation? And therefore increase the Governments coffers? Not to mention bringing increased employment which – you guessed it – is subject to income tax. I myself have attended two international races, and spent considerable amounts in both those countries for not only tickets, but accommodation, train fares, food, entertainment, shopping – the list goes on. Money that I would not have spent there if it wasn’t for the race.

    I am no economist, far from it, but it makes perfect sense to me. To trot out the old ‘my tax dollars at work’ excuse is a populist and easy cop out, IMO.

  • Pink – If the government could provide a clear business case that any money they put into the GP would be paid back in additional tax dollars, then yes, I would be fine with that. However, in Canada (as in other places, I am sure), we have a history of government investments in infrastructure for sport that never really pays off.

    Montreal, host of the Canadian GP, hosted the 1976 Summer Olympics. It was only in 2006, 30 years after the event, that Montreal was finally able to pay off the last of the debt incurred in hosting those Olympics. The Olympic Stadium, called the “Big O” (or “Big Owe” due to the debt), is currently an empty stadium without any major sports teams as tenants. It is still owned by the government of Quebec. The previous major tenant, the Montreal Expos (baseball) left for Washington D.C. because there wasn’t enough money in Montreal.

    Similarly in Toronto, the governments of Toronto, Ontario (Provincial) and Canada (Federal) put almost $600 million into building the Skydome for the Toronto Blue Jays (baseball) and Toronto Argonauts (football) teams, completing the stadium in 1989. The stadium had only made $17 million in its first year of operations, while the cost of servicing the debt was $40 million. Less than 10 years later, the government sold the stadium to a private company for $85 million, a substantial loss. In 2004, the stadium changed hands again (between two private corporations) for a cost of $24 million. So the government never saw either an amount of revenue that matched the cost of paying the interest on the debt they took out to build the stadium, nor made back the money upon sale of the property.

    Given these two representative examples, I wouldn’t trust that the Quebec government can really judge what they can “reasonably and responsibly” afford to ensure a positive return on the public’s investment in the race.

    Other points:

    Oliver – actually, I am familiar with the UK recession, having moved to the UK this summer and being a job hunter right now in London. Luckily I work in IT and not financial services, so there is still some hiring going on.

    As for the comment about the biggest tourism event, I was responding to the quote you had from Raymond Bachand, who says in the text that “it’s the biggest tourism event.”

  • Ollie,

    The dome was a conservative invention and when Labour were elected there was pressure from the Conservatives not to scrap it. The origianl plan was for it to be flattened after a year. It was a bad idea originally and it got worse and worse the longer it ran.

    F1 should stand on its own two feet. The idea that the sport needs government money when the commercial rights holder has been made a billionaire is obviously wrong. Money is leaving the sport at a ridiculous rate. I always thought the idea was for a business to re-invest its profits not for them to be given away to one person while t=it goes cap in hand to government.

  • As for the comment about the biggest tourism event, I was responding to the quote you had from Raymond Bachand

    Whoops, probably should have that quote better! That is quite surprising though. I know Canadians love their motor racing, but for it to be the biggest draw!? I’m impressed.

    The dome was a conservative invention and when Labour were elected there was pressure from the Conservatives not to scrap it.

    Fair enough, but I’ll still blame Labour just because I want to. πŸ˜‰

    The idea that the sport needs government money when the commercial rights holder has been made a billionaire is obviously wrong.

    I quite agree. While I applaud Bernie for making so much money, as well as all the others who have or are doing well out of Formula One, you have to stand back and look at the bigger picture and realise it’s failings. Something all upper management in the sport desperately need to do.

    Regarding the possible help from the Montreal government though, and from a selfish standpoint, if it saves the race, I’m all for it. But from a longterm point of view, Steven is spot on when he says that F1 needs to stand on its own two feet.

  • You`ve got to remember that all politicians are crooks, the same building politicians ok for say 500 million they will then sell later on to there chums for 100 million. I dont vote because it only encourages them.

  • I am familiar with the UK recession, having moved to the UK this summer and being a job hunter right now in London. Luckily I work in IT and not financial services, so there is still some hiring going on.

    I forgot to say, welcome to these ‘ere shores. I see you arrived in the summer, so just in time for the bad weather! πŸ˜‰

  • Oh don’t get me wrong, the fact that Bernie has a 2.6 billion pound (or something) fortune means that clearly there is money to be made in F1, and it should not need Government contribution at all.

    Something sure smells fishy to me there πŸ˜‰

    I am just saying wrt to the Oz GP – well our Governments are sitting on HUGE surpluses – mainly because they have cut back spending on essential things like health, education etc. Total incompetence at all levels.

    Sure I can see that the priorities are skewed, but that is not the fault of F1 itself and no reason why the race(s) should be axed.

    Apparently our Auditor General does do a cost/benefit analysis on how much money the GP brings to town, and although the figures are confidential, I’d say that if they didn’t make enough on it, it wouldn’t continue to be run.

  • First of all, hats off to Ollie and everyone involved in this discussion- I think this is the best set of comments (among many very good ones) that I have ever seen here on BlogF1!!

    Greg- You bring back tremendous memories of the Expos- Aside from my beloved Yankees, they had the best logo/uniforms in MLB, and if it wasen’t for the strike in 94′ they would have won it all that year and would perhaps still be up north. Also, I was planning to go to the Rogers Center to see a Yankees-Jays game this season until the bus trip got cancelled, but I hope to get up there sometime in the next few years.

    Now, first of all, I very much hope the Canadain GP is back on the schedule ASAP- it is a great venue that is popular with pretty much everyone in F1. The sport is much better off with that race in the calendar- it produces fantastic racing, and it dose do the teams and sponsors well to have that presence here in North America.

    But, as a proud American who loves F1, let’s look at the consequences for those of us south of the Canadian border…….

    First up, from about 3 days after the Canadian GP was axed, I had a very strong feeling that the government would come in like a knight on horseback and save the GP from what, in this analogy, was the greedy little dwarf stealing the crown jewel of their kingdom. So this news is no real suprise. It’s very good to see the race apparently back in safe waters, but in my belief this development is VERY bad news for any potential revival of the United States Grand Prix.

    Why, you may ask? Please allow me to explain….

    If the potential promoter has the funds required by Bernie to stage a new USGP, fine, it will happen. But with the government up north pumping money into their GP in the same manner as Bahrain and Singapore, Bernie will demand the same from any promoter here in America who can’t pay every cent of the sanctioning fee on their own. The Canadain deal eliminates any potential wiggle room to negotiate a price for a new USGP, because Bernie will simply demand that the Americans do exactly the same- beg for taxpayer money. And there is no way that will happen, at any point in this nation, anytime soon.

    And quite honestly, it never should happen here, because Bernie and some of his people fail to understand that here in America we don’t need public financing for sports, because we are more than capeable of operating fantastic sporting leagues and contests via private enterprise. If he wants proof for himself, he can very simply take a taxi from the FOM offices over to Wembly Stadium this week to witness the National Football League staging their second annual contest in London, with the San Diego Chargers and New Orleans Saints being the competing squads this season.

    Sorry for the rant, but while I am very happy for the Canadians and F1 in general, this development will not at all help the causes of any potential USGP operation- Indy, Vegas, Laguna Seca, or elsewhere- in the near future. Bernie will tell them to stick it and shut out America again, the teams will get content with just having Canada, and fans such as myself will end up telling the sport to stick it. Because at the end of the day, the Canadain GP belongs back and should have never been removed, but it also dose not fufill the need for a USGP in F1.

  • You’re absolutely right, Gman. If the USGP can’t be staged without public funds, then it shouldn’t be staged…sad as that may be. If the mfgs are so keen on having a GP here, then they should step up and offer funding…or put pressure on B. Ecclestone to negotiate more reasonable fees.

  • I cant remember the excact years, but to stage a four car race event in front of the Americians is the best example of corparate suicide ive ever seen. To think they would understand that Ralf nearly dying was a enough for Ferrari to excuse a trye manufatures cock up,No No No we must race with the tyres. Hence the most boring race in history. And then the Americans relized what a crock of shite F1 is, and we wonder why people laugh at F1, ( Only Ferrari and Max complained about a mid banked final curve chicane ). I get the Impression the USA wouldnh`t touch F1 if it was giving it away.

  • Gusto, it was 2005 and there were six cars on the track (the Ferraris, the Jordans and the Minardis). And that wasn’t the only year when I think F1 shot itself in the foot with regard to the Americans:

    2000: Everything is fine. But then this was the honeymoon…

    2001: The Schumachers suggest that holding an F1 race in America so close to the 9/11 attack would be a “bad joke”. Went down pretty badly at the time, but swiftly forgotten when nothing went particularly wrong in the weekend itself.

    2002: Ferrari stage the end of the race, attempting to stage a dead heat. Eddie Jordan was right to say dead heats in races “went out with the Lone Ranger and the Wars of the Roses”, and Americans used to hard racing all race long went away disappointed.

    2003: Juan Pablo Montoya (crowd favourite) gets a controversial penalty for hitting Rubens Barrichello. Even Rubens didn’t agree with it, and it took Juan Pablo out of the championship.

    2004: Juan Pablo Montoya is disqualified after 57 laps for being on the grid on foot within 15 seconds of the race start, something that could reasonably have been spotted and ajudged upon considerably earlier.

    2006: Juan Pablo Montoya is involved in an 8-car pile-up. This might have helped attract some NASCAR supporters to F1… …except that he then gives up on F1, going to NASCAR “to go racing again”. The NASCAR supporters stay put.

    2007: Rumblings begin that the US Grand Prix may be taken away – due to money wrangles.

    I think the Americans were extraordinarily patient with F1 and the serial errors F1 committed indicate that it was F1 that didn’t “get it”. Especially when you add poor marketing on the part of the F1 community to the equation.

  • Gusto, first I hope you understand that F1 here in America is by no means unpopular and unappreciated. Your notion that after the 2005 debacle Americans “wouldent touch F1 if it were being given away” is incorrect- having just gained an interest in the sport in 2007, I am living proof of that. There are many fans of F1 here, and the sport has tremendous potential to grow and expand in the United States.

    With that said, the problem that has limited F1 growth and popularity here is that many outsiders expect the sport to come to the US and be as popular and widespread as NASCAR, or a range of other sports. I can tell you right now that there is no way F1 will ever rival NASCAR over here in terms of overall popularity, and if the F1 powerbrokers are smart, they will realise that and take a much different approach to marketing and promotion when it comes to America.

    Here in the United States, we are a well-developed country that has a very strong sporting history of our own, and there are a handful of sporting leagues- the NFL, NBA, MLB, NHL and NASCAR- that have ruled our sports culture and will continue to do so. In order for other sports to be sucessful here, the best appraoch to take is to aviod direct competition with the big boys, and instead create their own niche markets to expand on. In regards to NASCAR, F1 should not view itself as direct competition, but rather another very attractive offering that American motorsports fans can welcome and embrace.

  • Now, on to one of my least-favorite subjects to discuss, Indy 2005.

    First up, whenever I look at the list of bad occurances as outlined by Alianora, it enrages me because so many people seem to use those events as an excuse for why F1 cannot be a success in the United States. Let me ask this question- if the same string of events had occured in Melbourne, Suzuka, or Montreal, would the F1 powerbase complain nearly as much? Would so many fans complain that these countries just don’t get F1? The answer is no, and that’s how it should be in regards to Indy and the USGP. Now, let me break down each year mentioned in order…

    2001- It is obviously nobody’s fault that the tragic events of September 2001 happened when they did, and to blame anyone involved in F1 would be foolish and very wrong. However, in regards to the running of the race, I have always thought Tony Goerge made a misatke by insisting that the race take place in September in the early years, rather than be paied up with Canada early on. Had this approach been taken from the start, the issue would have never come up, but again it is wrong to blame anyone in my view.

    2002- The “fixed finish” was indeed a joke, but stop for a minute and think of all the other incidents involving such finishes- were the sucessfulness of any other venues ever called into question because of such finishes? Think back to DC and Mika at Melbourne years ago- were any of you calling for F1 to be pulled of Oz? Diden’t think so…..

    2003/2004- I diden’t see either race, but how many other drivers (just this season alone, for crying out loud) have been hit with unwarranted penalties? Have those penalties threathened to kill off the success of F1 in a particular location?

    2005- The manner in which events played out and eventually finished was horrible and a disgrace, but again, if this had happened in any other country, would the F1 community be giving up? If the cars had tire problems going through Eau Rouge, would the venue be under fire from FOM? Of course not!! And when you look at the next two races at Indy, the grandstands were packed with over 100,000-plus (yeah, I know about the free tickets in 2006, but the people still coming out just shows how much they wanted to see the event, free tickets or not)

    2007- When I look at this GP, and the lack of one in 2008, I see tremendous wasted potential. Having Lewis win at Indy created a mini-firestorm in the mainstream American sports media, and that’s exactly what F1 needs to grow over here- get publicity in the sports media. Like him or not, Lewis is fast becoming the face of F1, and he is far more likeable and promoteable than his predecessor- Schumi- was in that role. And again, you had 100,000- plus in the stands. The event could have been very sucessful in 2008, but short-sightness ruined it all.

    And about JPM, his move to NASCAR was probably a good thing, if anything, for F1 in America. It got the F1 name into NASCAR fan’s vocabularies, and I don’t think his leaving had anything to do with his lack of sucess at the USGP. The NASCAR lifestyle is far more relaxed and casual (and much more fan-friendly) than F1, and that’s the lifestyle he likes.

    So, Alianora, I think you hit it right on the head in regards to F1 not coming up with the right recipe. F1 in America CAN work, and it will work if FOM and others invest just a bit of time and money to make it work.

    In closing, I must reference a moment from the recent Chinese GP. I was watching live at 3AM local time when Peter Windsor grabbed Bernie for a comment on the pre-race walk of the grid. With the stands being much more full than in the previous years, Peter asked how Bernie felt about the apaprent boom in attendance.

    “Yes, it takes time, it takes time to grow events.” was Bernie’s reply.

    All I could think was “Yes, Mr. E, you’re right…….but you had over 200,000 in the first year at Indy, and it took four years to even come close to filling up that soulless pet project in Shanghai”

  • The other thing about Shanghai was that there were notably fewer people turning up on Friday and Saturday – to the point where an entire grandstand section was turned into a giant advert on those two days. I’m pretty sure the US Grand Prix was well-attended on all the days of its weekends. Partly this was due to cheap tickets (but they were priced that way because Tony George understood his market), but it does indicate that F1 will have a much easier time getting a following in countries where motorsport is already understood, rather than those where the foundations of the sport are yet to be laid.

    An even more prominent example of this than Shanghai is Bahrain. The 2008 figures given for the race were 45000. It was commented that many of these people came disguised as empty seats.

  • Typical Americans, turn a conversation about Canada into one all about yourselves! πŸ˜‰ <- just joking.

    At this point, I am wondering if dropping Canada isn’t all a run up to adding Mexico as the sole North American race. It would give F1 a second race in the growing Latin American market, and is easily accessible from both USA and Canada for F1 fans who want to travel to the race. Given the southern latitude of Mexico as well, they could also group it with Brazil near the end of the schedule.

  • Maybe… …but the last attempt to put Mexico on the calender in 2006 didn’t work out and I’ve heard very few rumours since. It could happen, but it would be a major surprise if Bernie pulled it off any time in the next few years.

  • Wouldn’t it be great to have an event in Canada, the US AND Mexico? Of course Bernie would have to ax a couple of events…I’d vote for Bahrain and Valencia.

  • Considering that the Canadian Grand Prix made a return of 350% on the Goverment investment suggests to me that Bernie is using any excuse to drop a non Asian fixture to make room for more Asian fixtures, how the French Goverment are letting the GP go is stange as they got a return of 1250% on there investment in 2007, throw in a standard engine and 10 years from now it will be the Asian Race Series.

  • Great points everyone!!! It is fantastic to see this kind of discussion and debate over the very important topic of the future of F1 racing in North America πŸ™‚

    Regarding Mexico, it would indeed be good to see a race there, but it is still not a replacement for what is lost with either the Canadian or US Grands Prix. In terms of current events, one of the FIA big shots, who had put together the Mexico City GPs way back when, recently said that he was hoping to lure an F1 race to his country at one of a pile of potential host sites. However, he also apparently could not count correctly, as he claimed that the FIA had authorised Bernie to “fix two new venues to the 2010 F1 calendar” in order to bring the calendar up to 20 races, and that his nation hoped to get one of those two spots.

    Assuming he was looking at the 2008 calendar when he said that, he apparently forgot that India and South Korea were both set to come aboard in 2010 at that time, as well as Yas Island in 2009. That would have put the schedule at 21 Grands Prix, assuming all the venues onboard then were kept, even without his pet project. So apparently, unless he knew that Canada and France were getting the ax, he either can’t do his math very well or dosen’t know how many races are set to join the schedule in the coming years.

    As Bill Cosby would say in this situation……Oops!!!!!

  • Bernie usually tries to have more projects on the go than he has expected vacancies. That way, he’s got provision in case some tracks aren’t ready in time, if some drop out or if he can squeeze more race slots out of the teams. Bernie doesn’t know how many races are set to join the schedule, but that’s deliberate to give him more wriggle room.

    The FIA does not have the power to authorise Bernie calender slots. Bernie already has that power, subject to negotiating compensatory fees to the teams if the total is more than 17 (the 17th race also has a compensation figure attached, but it’s fixed by the Concorde Agreement, which everyone except the FIA adheres to).

  • The mayor of Montreal is proposing to raise taxes on hotel rooms in a bid to bring the Grand Prix back to Montreal.

    According to a report in the Montreal Gazette:

    Montreal hoteliers, who benefit from a large part of the estimated $75 million in spinoffs the race brings to Montreal each year, had offered to add an extra percentage point to their three-per-cent occupancy tax to raise funds to keep the race in the city.

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