The Weekly Grapevine

Calendar Blues

It has long been known that Formula One Management is putting the squeeze on teams to accept 19 or even 20 grands prix per year. In the past the maximum number of dates the teams were obliged to accept was 17, where after Bernie Ecclestone's then-group of companies was forced to substantially compensate teams for their extra travel costs.

But, with the expiration of the 1997-2007 Concorde Agreement, Formula One is acting in limbo on many fronts - not least on matters pertaining to the calendar - and thus Ecclestone has no contractual power over the teams to accept 20 dates.

This places the 79-year-old impresario in somewhat of a quandary, for his paymasters - CVC Capital Partners, which holds 75 percent of the Formula One Group through a Byzantine company structure - have a debt worth approximately $2.4bn to service at an annual rate of approximately ten percent of the capital amount, meaning $230m in clear bottom line profit has to be recovered before black ink can even start to flow.

Bernie Ecclestone © LAT

Adding to the need to maximise revenues is the content of a Memorandum of Understanding struck on 26 May 2006 between FOM - saliently represented at the time by CVC top man Donald McKenzie, and not Ecclestone - and the team collective.

This MoU grants teams 50 percent of all F1's revenues, well up from the average of 23 percent they received during the tenure of the now-expired covenant by which the sport was ruled.

There is, though, a spanner in the works, one which is indicative of the seemingly widening rift between FOM and the sport's governing body, the FIA. The intricacies have yet to surface fully, making it a subject for another day.

Suffice to say that should proposals confirmed by an FIA spokesperson in Magny-Cours that the governing body is advocating that teams receive up to 92 percent of certain revenues and 75 percent of others, averaging at around 75 percent being disbursed - with, by extension, FOM retaining 25 percent - then the overall effect on CVC (and its lenders) could be nothing short of catastrophic.

However, back to the known: with promoters' fees fixed well into the future, generally for five or even ten years on the basis of a fee agreed at time of agreement plus a 5-10 percent annual escalators, there is little more to be squeezed from race organisers.

Ditto the sport's TV viewerships, which are declining or being reported more accurately than before, either way negatively affecting broadcast rights costs.

Working on the (informed) basis that FOM's operating cost : gross profit ratio is 20:80, it follows the company needs to clear at least $460m just to break even, which translates to a total turnover of at least $600m per annum. And, there exists but one easy way for FOM to achieve those numbers: increase the number of races by at least one, preferably two.

On cue a provisional 19-race calendar - one more than this year's list - arrived as this was written, and the relief in Magny-Cours must have been palpable, for the circuit has found itself back in the frame despite being told even before last year's race - and again ahead of last weekend - that its hoteliers had fundamentally zero chance of ripping off F1's fans, only to have received reprieves twice over.

(Then, no sooner had this column been started upon, than confirmation of a date arrived from Nicolas Deschaux, President of the French Motor Sports Federation:

Storm clouds gather over Magny-Cours © LAT

'I've anticipated the decision of the FFSA General Assembly by confirming the entry of the French Grand Prix on the 2009 FIA Formula One World Championship calendar as of 28th June. Of course, the General Assembly, which will meet tomorrow, Thursday, will have to confirm this decision, and also determine the future of the French Grand Prix from 2010 onwards.')

Ecclestone, of course, needs Magny-Cours - but not for traditionalist or historic reasons. Very simply he needs as many compliant venues as he can find, and he has a contract with the place. According to the circuit, this is due to expire after next year's race and prohibits Ecclestone from listing French Grand Prix on tarmac other than on Magny-Cours'.

Thus, even if he occasionally sabre-rattles about Mickey Mouse's Parisian home and its facilities, Disneyland has no chance until at least 2010 - meaning Magny-Cours will be the place for F1 to race in France next year.

Even here Mickey faces a challenge, for the circuit amongst the cows in rural France last week announced Magny II - a 40m euro upgrade programme funded by the provincial Burgundy and local Nievre governments.

However, Abu Dhabi is, as expected, listed for 2009, bringing the count up to 19 - and its date (15 November) makes substantially more sense than the slot rumoured during the Magny-Cours weekend, namely late September/early October, for as anybody who has visited the United Arab Emirates at that time knows, temperatures can be pretty uncomfortable.

The later date also makes sense from an operational point of view: during the Monaco Grand Prix Ecclestone's renowned Mr Fix-it, Phillipe Gurdjian, who was sent to the desert state to oversee circuit preparations, allowed that the total project had had to be 'revamped'.

He declined to provide further details save to say that an announcement would be made in due course, but rumours have it that plans for a half-street/half-permanent circuit - like Singapore, in fact - have been dropped, and that it will be a full street circuit, or even vice-versa.

Still the nagging doubt remains that the calendar should contain 20 fixtures, not only for the financial reasons outlined, but also to fill the burning need for a race in the largest auto market in the world, namely the United States.

(Africa, as the only inhabited continent without any FIA World Championship rounds, is equally conspicuous for its lack of date, but that is a separate issue completely.)

Ecclestone's stance, though, is simple: he makes no or little money out of the race, for so low is F1's perceived image amongst US race goers that the Indianapolis Motor Speedway charged $150 for a covered, four-day Penthouse Suite seat when last F1 raced there (2007) - about what a one-day ticket to sit on Silverstone's grass costs.

The revised road course at Indianapolis © LAT

And, on that basis, coupled with a dwindling live audience on race day, the IMS refuses to pay more than $10-$12m for the rights. So the teams are between a rock and a hard man - they need the prestige of a grand prix to sell more cars, but Ecclestone understandably refuses to cut his fee to enable them to do so.

However, should the difference between Ecclestone's fee and IMS' top offer be covered by a third party - to wit the team collective - then F1 will surely bolt a second race onto its visit to Canada.

One team boss admitted to discussions in this direction, but said that splitting the amount had proved a stumbling block. It was pointed out that the solution was simple: the amount was deducted from the total due to the team before disbursement according to the terms and conditions of the MoU.

So, the financial means for a race in the US exists; the next question is whether a suitable slot is available. For obvious reasons, not least to ease the burden of cost on Canada, it makes sense to twin the US race with Montreal, as has been the case since 2002.

Perusal immediately after Wednesday's World Motor Sport Council meetings suggests this to be the case. For ease of reference the calendar is outlined below:

Provisional (19 race) 2009 calendar:

29 March        Australia
5 April         Malaysia
19 April        Bahrain
10 May          Spain
24 May          Monaco
7 June          Canada
21 June         Great Britain
28 June         France
12 July         Germany
26 July         Hungary
9 August        Turkey
23 August       Europe (Valencia)
6 September     Italy
13 September    Belgium
27 September    Singapore
11 October      Japan
18 October      China
1 November      Brazil
15 November     Abu Dhabi

By moving the British race, coincidentally the 60th anniversary of F1, back to its more usual slot of the first Sunday in July, space is made for a USGP on 14 June.

Yes, it makes for a fraught three-in-a-row period, but with the events being less than a 1000 kilometres apart and the calendar easing back to normal thereafter, that is no great shakes.

Silverstone © LAT

After all, if the sport can remove the traditional three-week break in August without notice, what is a hectic fortnight between friends? The period from Canada to Germany would look thus:

7 June          Canada
14 June         United States
28 June         France
5 July          Great Britain
12 July         Germany

That would provide Ecclestone with the 20-race calendar he and his cohorts so desperately need whilst giving the teams - certainly the manufacturer operations and Red Bull's two outfits - their much-desired exposure in a major market.

Almost as an aside, it would complete IMS's portfolio of blue riband motorsport events - the self-proclaimed home of world motor racing presently has the Indianapolis 500, a NASCAR event and MotoGp, but no F1.

What chance all this happening? That depends upon the width of the rift alluded to above.