How could F1 risk losing Monza for Baku?

As Formula 1 decamped to Sepang ahead of Malaysia's grand prix, the prognosis for the first of F1's new breed of Asian races was not good.

The government would refuse to carry future events, went the line, having been forced to subsidise every edition since 2001 after only the first two Malaysian GPs broke even before the race was moved from the back end of the season to March/April.

Indeed, speaking to the media on the Friday of the final race under the prevailing contract, F1 CEO Bernie Ecclestone was hopeful that an extension would be agreed, but added it would "probably not happen this weekend".

He departed for London late on Saturday evening, and the word was that he had been unsuccessful - no surprise given that Malaysia's government is under enormous pressure due to falling oil prices and fall-out from the two air disasters that last year hit the state airline in quick succession. Plus the circuit's MotoGP contract costs a fraction of F1's deal, yet pulls in sufficient punters that the race breaks even.

Not only have the airline disasters hit Malaysia's tourism figures - not that the race enjoyed much international support - but the costs of establishing MH370's fate are eye-watering, while Singapore's glamorous night race, first run in 2008, has hit Malaysia hard despite being run six months later during the season. All in, things looked worse than simply not good.

Against expectations, Malaysia extended its F1 deal © LAT

Lo and behold, during the podium ceremony on the Sunday, Malaysian prime minister YAB Dato' Sri Mohd Najib announced that terms had been agreed for another three years, securing the future of the race until 2018. True, five years would have been ideal - but, equally, zero was also on the cards...

"How does [Ecclestone] do it?" asked an incredulous paddock figure, while another was taken aback by the alleged hosting fee: $47million per race, albeit without escalator.

The first source suggested it was closer to $36million; whatever, even the lowest number is up on the average hosting fee of around $30million after Monaco, which is widely believed to get its race for free on account of its blue riband status, is removed from the equation.

The higher figure would represent, of course, an absolute coup for a grand prix that struggles to pull 20,000 paying punters at an average of £150 each - most spectators head for general admission, where the cheapest three-day passes come in at £20, or are on title sponsor Petronas (or similar state-subsidised) freebies - and thus the "How does Ecclestone do it?" question lingered.

"Think Gillette or printers", ventured the first insider, an F1 marketing man of many years standing. "When you buy a fancy shaver they charge a pittance for a fancy razor or a printer and throw in a couple of blades or some ink in the hope of hooking you. Then, when the blades/ink runs out, replacements cost a fortune.

"So it is in F1: promoters, usually governments, build massive stadiums at enormous cost as tourism initiatives.

"Then the price goes up because Bernie has them hooked: they either write off their circuit investments, which is usually a political disaster, or keep paying.

The Turkish GP at the Istanbul Park facility proved shortlived © XPB

"In many instances the ongoing annual losses are less painful than constant reminders of failure, and staging a grand prix can always be justified internally on tourism or country grounds, whereas an empty monstrosity is a white elephant..."

Think Turkey and Valencia, for starters, then the fates of Korea and India - and wonder about F1's ability to attract tourists.

Ecclestone himself admitted as much when he blamed "lousy German fans", not hordes of foreigners, for the demise of their country's grand prix earlier this year.

Our talk turned to Azerbaijan and its proposed street race in Baku. Said sources were adamant the race would be canned, not least because depressed energy prices have hit the transcontinental oil-rich country situated on the Caspian Sea in the Caucasus, straddling the cross-roads of eastern Europe and western Asia.

This location endows it with the marginal right to host the first (athletics) European Games, scheduled for June, having hosted the 2012 Eurovision song contest. Azerbaijan did, though, fail in attempts to snare the 2016/20 Olympics.

As is then often the case in such chases for sporting contests - Sydney/Melbourne and Beijing/Shanghai immediately spring to mind - Baku gleefully accepts the consolation prize provided by F1, in which money and not legacy is the overriding consideration.

The race, allegedly to be dubbed the 'European Grand Prix' after Valencia relinquished its right to the name in 2012, was announced just over a year ago with a target date of 2015 before being pushed out a year. The plan is to stage it on a street circuit cutting along the Caspian foreshore, taking in as many of the city's landmarks as possible.

Sepang's MotoGP event draws the crowds

Indeed, reasons given (off-record) for postponement is that even an extended version of the street circuit that hosted GT racing was too short, too bland and did not feature sufficient sights - forcing F1 circuit architect Herman Tilke to add a couple of city blocks. Then all went quiet.

Over the years the number of street races has grown in leaps and bounds, and the reason is simple: MotoGP established a foothold at permanent venues originally planned for F1, and regularly shows up the latter, particularly where hosting fees and fan interest are concerned, while two-wheeled racing generally delivers a thrill a minute.

"That is why Bernie is increasingly targeting street or inner-city circuits: he knows they can't stage MotoGP due to safety considerations," said one source. "Imagine bikes racing at Albert Park or Singapore - can't happen. So there is no comparison. F1 must be a hard sell at circuits that host both, such as Sepang."

When it was announced ahead of last week's Bahrain Grand Prix that Ecclestone and FOM are "committed to respecting internationally recognised human rights in [FOM's] operations globally" after signing an accord with Americans for Democracy and Human Rights in Bahrain (ADHRB), it seemed Azerbaijan's grand prix was dead in its Caspian waters, for the host country is hardly a paragon of human rights.

Indeed, in its 2015 report, Human Rights Watch states the Azerbaijani government escalated repression against its critics, marking a dramatic deterioration in its already poor rights record. That alone should be enough to make FOM (and majority owner CVC Capital Partners) sit up and take notice.

Yet it seems the agreement with ADHRB marks yet another example of the expediency to which F1 increasingly subscribes: while wandering through the media centre in Bahrain, Ecclestone confirmed that the race was very much on next year's provisional calendar, and that he had no issues with Azerbaijan's human rights record.

"Baku? No problem," he told a throng of outlets, including AUTOSPORT. "That's going to be another good race."

Baku's first forays into the international motorsport scene came with GT events © XPB

Asked if he had checked out Azerbaijan's human rights record, Ecclestone replied: "We have. I think everybody seems to be happy. Doesn't seem to be any big problem there..."

Then, in the same breath, he confirmed Formula 1's worst fears: that its high temple of speed, Monza, faced the axe after its current contract expires in 2016.

"They don't have an agreement [after next year's race], so we have got to wait and see, haven't we?" he said, adding, "It's a bit like Germany really."

Except it is not: Germany fell off the calendar after the Nurburgring plunged into liquidation, meaning all the iconic Eifel circuit's existing contracts were annulled by court order.

Its precarious situation was compounded by FOM's unrealistic hosting fees - as Ecclestone discovered when FOM promoted the race for its own account in 2013 - while its rotating deal (with Hockenheim), means circuit upgrades and other F1-related capital costs are amortised over a two-year period.

This time-share deal also means marketing continuity is effectively non-existent; whereas Monza has hosted its race continuously since 1950, save for a single interlude in 1980, when it underwent major upgrades.

Monza's F1 future is now in jeopardy © XPB

Once Ecclestone realised that the Nurburgring, now in private hands, was unable/unwilling (delete as applicable) to pony up big numbers, he switched focus to Hockenheim - which predictably did not wish to carry Nurburgring's losses. So, where is the similarity with a circuit whose current contract is coming to a natural end, and is simply pushing for a better deal?

In an exclusive interview with this writer during last year's Monza weekend, former F1 driver Ivan Capelli - now president of Monza's tripartite promotions committee - outlined the situation: "2015 and '16 are secure for the future. We need to work hard for 2017, and to open the possibility from '17 to 2020, four years of contract.

"But I said even more to Mr Ecclestone. I said: 'Look, in 2022 here we will have the centenary, so we are actually already thinking there. We don't want to have a short-term deal. We want to go further.' This is showing to Ecclestone that it's a new project, it's something that is starting completely new."

Again the similarity question, particularly as the former Ferrari driver believes a Monza centenary without a grand prix to be "unthinkable, there is no other answer".

But, clearly Capelli provided Ecclestone with a powerful negotiating tool by mentioning Monza's centenary - which would be the first such celebration for any existing circuit - for the octogenarian is an ace at seizing such emotions. The implication is clear: Pay Baku-style money, or no 100-year anniversary in Italy.

In Bahrain Ecclestone batted away concerns that it was would be a disaster for F1's calendar to exclude Monza saying: "I'll tell you something - I was told that when we didn't have a race in France. And Germany. Now, we've got some good replacements, haven't we?"

Yes, dwindling TV and crowd numbers nicely prove your point, don't they...

Possibly Baku is all a bluff - as, so far, talk of a race in Cape Town, which was not mentioned in Bahrain, seems to be - and simply a means of pushing Monza into paying up. The circuit is believed to cough the lowest hosting fee (£7million) of all payers, and so could well survive this latest onslaught, particularly with tough Fiat boss Sergio Marchionne now taking an active interest in matters Ferrari and F1's Strategy Group.

But, with Mr E one simply never knows, and that uncertainty is hardly doing the sport, currently under siege from many quarters, a world of good.