Rescue or Requiem for Noisy Engines in Francorchamps

A very uncertain future overshadows this weekend’s Grand Prix 1 of Francorchamps. The stature of F1’s legacy is well balanced with places where there is a lot of money to be made.

#Hahahahahahahahaha Before Sunday’s race, drivers and team bosses are publicly calling for Spa-Francorchamps to remain on the Formula One calendar. It’s like an agreed-upon support attack.

F1 chief executive Stefano Domenicali continues to insist that it is not certain that the race will be the last in Francorchamps and that the mass is premature. Since the rumor mill started spinning this spring—Francorchamps wasn’t on the leaked draft of the 2023 calendar—it’s been a rollercoaster ride. After Domenicali indicated for weeks that it would be difficult for a number of European races, Francorchamps is now back in action.



Francorchamps will retain a place on the calendar. Although it may become a future in rotation: once every two years or even five years.

The company that tops Formula 1 – the Formula 1 Group – is planning a future with eight more races out of 24 in Europe, eight in Asia and the last third in the Middle East and the United States. It’ll be musical chairs: Las Vegas will definitely be there next year, and China and South Africa may also be back in the race.

This season, 10 out of 22 races remain in Europe. Francorchamps, France and Monaco were on the brink as their contracts with F1 expire after this year. France certainly became known outside. In principle, it will move between Monaco and Francorchamps for the only remaining European place on the calendar.

Recent developments have changed things. China’s return is highly uncertain and there are logistical uncertainties surrounding South Africa. Francorchamps would jump into dancing as an alternative. There are no other guarantees in the future. “Francorchamps will somehow retain a place in the calendar. Although it may become a future in rotation: once every two or even five years. Formula One bosses no longer want to sign long-term contracts, so uncertain times await Francorchamps on any case.

The greatest show on earth

The head of the Belgian Grand Prix, former minister Melchior Wathelet, has been knocking on the door of the Formula 1 CEO in recent months, weeks and days. Francorchamps is also mentioned as F1’s legacy with Monaco, Britain’s Silverstone and Italy’s Monza, among others. The Belgian Grand Prix was already on the schedule for the first world championship in 1950. Moreover, Francorchamps is a favorite among pilots, with the famous and technically challenging Raidillon folded as the crowning jewel.

100,000

tickets

Francorchamps sold 100,000 tickets — without that cap for safety reasons, according to the organization — each of the three days.

In addition, there is Max Mania. World champion Max Verstappen – also a reason why Dutchman Zandvoort returned to the F1 calendar a few years ago – caused an orange crowd in the Ardennes. Francorchamps sold 100,000 tickets — without that cap for safety reasons, according to the organization — each of the three days. Half of the ticket buyers are Dutch, and the other half are foreigners as well. Only one in ten is Belgian.



Throughout our history, there have been investments that we have cleverly bought and investments that we have cleverly built. There is no better example of the latter than Formula 1.

Liberty Media Annual Report

F1 was good for $2 billion in 2021 revenue, about $0.5 billion in pre-depreciation earnings and $40 million in net profit. This half-billion gross profit is a big chunk of Liberty’s 3.3 billion profit.

Throughout our history, there have been investments that we have cleverly bought and investments that we have cleverly built. There is no better example of the latter than Formula 1, reads the wonderful letter to shareholders in the latest annual report.

Liberty marketed F1 in good American tradition as the greatest show on earth. The symbol of the new cycle – with a strong online push – is the “Drive to Survive” Netflix series. This soapy documentary about life in the track has set a new standard for sports marketers to attract new fans especially youngsters, and even audiences who aren’t even F1 fans. It shows the genius of the Formula One marketers, who even got paid for a long-running commercial. Season 4 was the most watched on Netflix TV in 33 countries in its opening weekend.

global growth

The global growth of the F1 brand explains why Francorchamps is behind. The $20 million paid annually to Formula 1 to be part of the World Cup circuit is one of the lowest on any circuit. Saudi Arabia more than doubled.

It is not that a large increase in initial funds will simply secure Francorchamps. In business terms, there are bigger gains for F1, with global economic power shifting eastward. At the same time, the new race in Las Vegas is proving that Formula 1 is reproducing a different style, with no local organizer paying the money initially and trying to get that money back through ticket sales and local sponsors.

F1 expects to be able to raise €100 million per race in Las Vegas alone in tickets, TV money, sponsorship and promotion. This is not possible for Belgium. This year, Francorchamps is trying for the first time to associate its wagon in the new Formula 1 style with DJs, concerts and fireworks, but it is also heading towards the fact that it is stuck in the past for a very long time. The fact that F1 may remain anyway shows it is more accurate than financial greed. You earn more with a high-end product and sporting traditions and culture play a role as well.

Walloon government

Should the disenchanted Belgian lose sleep after exiting F1? Not right. The Spa Grand Prix, which is 100 percent owned by the Walloon government, states on the basis of a study by consultant Deloitte that F1 racing generates €30 million a year for the economy through catering and tourism, among other things. But it is not backed by strong economic evidence.

70 million

government money

Since 2009, the Walloon government has pumped €70 million in tax money to keep the Spa Grand Prix going.

A look at the accounts also indicates a parasitic rather than a symbiotic relationship between F1 and Francorchamps. The company above GP incurs annual losses of 6 to 8 million euros. This is not surprising given that 20 million of the seed money is only absorbing the total volume of business for 2021.

As a result, since 2009 Wallonia has spent at least 70 million euros in taxpayer money to keep the Grand Prix spa afloat. A new capital operation is on the way, now that the piggy bank has fallen below €4 million due to a loss of another €7 million last year. Wallonia takes this option, as motorsports are very popular, unlike Flanders, against the background of a government that sees the bottom of its treasury.

Disturbingly, a Formula 1 exit threatens to undermine Francorchamps’ only additional mark. The owner of the circle, who is also a Walloon government affairs, is profitable. “Because of the Corona years loss, 2 million euros in 2021, the Walloon region requires an infusion of capital, but in normal times there is an annual cash flow of 4 million euros,” says Wathelet, who is also chairman of the board. Circle.

For Rent

The circuit is rented nine months a year to race promoters such as F1 or the company behind the famous 24 Hours Championship and other events. But profitability is tied to the popularity and prestige of F1.



The new investment plan should make us less dependent on F1.

Melchior and Athelite

President Circuit de Spa-Francorchamps

This facilitates the political will to invest: 50 million euros of new infrastructure are being implemented. This allows Francorchamps to maintain its position of choice for all major motorsports in the wider region, including France, the Netherlands and Germany. Wathelet: “The new investment plan should make us less dependent on Formula 1 and bring more diversity, including through the arrival of the MotoGP Championship.”

Driver support for Spa-Francorchamps

Due to the difficult and unpredictable course – the sun can shine, while fog or rain is elsewhere on the road – Spa-Francorchamps has been popular with pilots for decades. This is again evident from the growing rumors of an exit. Both Dutch world champion Max Verstappen and Briton Lando Norris call it one of the circuit’s coolest, even though it plays the part of both a Flemish mother and Verstappen is acclaimed by 50,000 citizens. “They are turning more and more to street circuits, like Miami this season and Las Vegas next year. While we should cherish more and more the F1 rings with history.” The question is whether it’s more than just talk. F1 is a place of frivolous vibes and prime rivalry where securing the individual position and the pay slip is paramount.

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