Why timeshare race deals are not a good idea

What is it about Formula 1's obsession with timeshare race hosting deals?

This column has consistently argued against such a structure on the basis that a race every two years (or even three if the proposed plan to rotate the Nurburgring, Hockenheim and Spa-Francorchamps had come to fruition) does not permit race promoters to properly develop their facilities, with hosting communities also suffering due to the financial peaks and troughs inherent in such arrangements.

The two German circuits entered into 'odds and evens' contracts with Formula One Management, with Hockenheim holding the even cards (2010/'12/'14/'16/'18) and the circuit in the Eifel Mountains committing to odd years (2009/'11/'13/'15/'17). Both stressed as the time that there were no mutual obligations should the one or other be in breach, so Hockenheim is under no obligation to step in should the Nurburgring default, or vice-versa.

Japan also suffered a similar timeshare deal, with Toyota's Fuji circuit agreeing to rotate with the Honda-owned Suzuka track on a two-year-on, two-off basis, but that lasted precisely half a cycle before the former departed after realising it could not justify F1's massive safety and infrastructural demands on the basis of hosting two grands prix in every four-year block. Suzuka has in the meantime invested enormously, suggesting there is a moral in there somewhere.

Then there is talk that Barcelona and Valencia - both loss-makers - will rotate from next year, particularly if F1 ringmaster Bernie Ecclestone manages to persuade the Turks to continue paying his companies enormous sums for the privilege of promoting loss-making races.

It is a matter of record that the 21-race calendar as 'confirmed' by the FIA's World Motorsport Council needs to be clipped by one to satisfy the terms and conditions of F1's Concorde Agreement, and although Turkey is most obvious suspect, Ecclestone's powers of persuasion are legendary - in which case another race will need to bite the bullet, with a Barcelona/Valencia deal providing Ecclestone with a short-term solution to what is increasingly becoming a long-term problem.

Yet, just as the Nurburgring faces possibly its last F1 grand prix due to the consistent losses recorded by the event, and the steadfast refusal by the 'Red-Green' political coalition to further subsidise the event as first predicted here in April this year, there is talk that Belgium's Spa-Francorchamps circuit may be heading for a similar arrangement, this time with Paul Ricard in southern France.

Nurburgring returned to the calendar this year © LAT

That the latter country, which not only hosted the first four-wheeled grand prix back in 1906 - and lent the sport the term, which means nothing other than 'grand prize' - has not had an F1 event to call its own since 2008 is down to a combination of two things: the rural location of the Magny-Cours circuit coupled with a total dearth of accommodation at anything approaching reasonable pricing, and the astronomical hosting fees charged by the Formula 1 Group, which during the pre-global economic crisis period operated very much on a take-it-or-leave-it basis, with none of the discounts offered recently to the likes of China even being considered.

France and Formula 1 are, of course, intertwined; with Place de la Concorde in Paris housing the FIA, the sport's governing body, and its current president Jean Todt being is one of only 250 Grand Officiers of the Legion d'Honneur, the country's second highest honour.

There are suggestions he may well be elevated to holder of the Grand Cross once a vacancy arises amongst the current 75 holders. Thus France surely feels an element of shame in being arguably the FIA Formula 1 World Championship calendar's highest profile absentee.

At the time of the French Grand Prix's demise various alternatives were mooted, including events in and around Paris, but all these projects came to nothing, and the country now stands out as the only one of Europe's four largest economies without a race to call its own; and that's Renault next year supplying exactly a quarter of the grid with engines and Total doing likewise on lubricants.

Spa, too, has been conspicuously absent at times, with a race in 2003 not being sanctioned over a tobacco row and the promoter going bankrupt ahead of the 2006 event. A five-year deal expiring at the end of 2012 was agreed with the Walloon region in 2008, but with the event annually posting losses in the vicinity of €4million, local politicians regularly talk of pulling the plug. In fact, watch for the speech made by the Wallonia's chief minister on the Monday after this year's edition.

Again the ratio between F1's eye-watering hosting fees (believed to be €20million this year) and gate income - compounded by rural location - is to blame, for the race itself attracts an acceptable number of spectators (60,000), but the topography and facilities dictate that the majority of tickets on offer are for general admission areas at around €150, whereas grandstands go for upwards of €400. This year Shell has stepped in as race sponsor, but the terms of the circuit's contract with Formula One Management mean Spa sees just 15 per cent of the headline sum with FOM trousering the rest - so no real relief there.

LMS race at Paul Ricard © LAT

A timeshare deal with whatever French circuit will, of course, mean the circuit's losses are reduced to €4m every two years; but by the same token the payback period on investments made in infrastructure - whether circuit or surrounding area - will be doubled. Spa desperately needs new facilities and a general tidying up of the place, having, for example, amongst the lowest ratios of grandstand seats to overall capacity (30,000:120,000). However, the circuit simply cannot justify additional (permanent) seating if placed on a roster.

Ditto Paul Ricard, owned by Excelis, a company in turn controlled by the Ecclestone family trust. Rebuilt as the extremely impressive Paul Ricard High Tech Test Track at the turn of the millennium - at a time when F1 teams' annual testing mileage exceeded total race distances completed by a factor of around five to one - the circuit has only been used sporadically since the testing ban.

Spectator facilities are particularly poor on account of said bodies not being welcome during tests, with the circuit's race schedule hardly justifying the building of permanent stands. Thus temporary facilities are erected as-and-when. Notably Ricard hosted last weekend's seventh round of the FIA GT1 World Championship, with Todt being very much in attendance - which can be no coincidence, although he did downplay his visit by stressing he had a policy of visiting at least one round of every major FIA series. That said, GT1 is contested in 10 countries, not only France.

"I was very happy to discover the track; I hadn't come here for a while,' said Todt after his visit. "I have had the chance to visit the different buildings and discover the circuit services, destined to various uses, entirely dedicated to motorsport. The work achieved here in terms of pit buildings, technical infrastructures and the means that were put together in order to welcome spectators are truly impressive." Sounds promising.

In the meantime, French prime minster Francois Fillon, notably born in the Sarthe region more famous for hosting the annual Le Mans 24 Hours race, has formed a working group to revive his county's grand prix, with Renault GP team principal Eric Boullier (also Sarthe-born) being amongst the luminaries called to serve on the body.

It helps, of course, that Monsieur Fillon is a life-long racing fan who not only attends every possible 24-hour race staged in his constituency in his dual capacities as executive committee and organising committee member, but has himself competed in numerous classic races and rallies. Thus it is to be expected that, given pressure from both the French prime minister and Todt, a grand prix will soon return to French soil, likely as part of a rotational deal with Spa.

Spa could also get a timeshare deal © sutton-images.com

However, the question must be asked whether F1 is best served by such an arrangement. With Fuji/ Suzuka and Nurburgring/Hockenheim having already proven the folly of such deals, the two Spanish circuits likely to further underscore the widespread pitfalls should they be forced into such an arrangement in the near future.

Either a country/region/circuit is worthy of hosting a World Championship round annually, or it is not - and to imply that (insert as applicable) is worthy of grands prix only during odd or even years smacks of desperate profiteering by a commercial rights' holding entity with a reputation for systematically sucking the lifeblood out of the sport.

The World Rally Championship was the first high-profile FIA series to adopt widespread rotation of events, and it can be no coincidence that its sudden loss of popularity can be, certainly in part, traced back to the implementation of 'rallyshare' in the middle of the last decade - resulting in the departure of, for example, the Monte Carlo Rally from the series.

Certainly, the timing fits to a tee, and as stated here regularly in the past: if it walks like a duck and quacks like a duck then it surely is not a peacock.