18/07/2010
NEWS STORY
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From the outside it may look like Bernie Ecclestone has a plum job. Flying around the world in a private jet, meeting the world's most famous celebrities and signing on the dotted line countries which are beating his door down to host a Grand Prix. In reality it is not so straightforward.
F1's commercial rightsholder currently has revenues of around $1.3bn and race hosting fees bring in $450m of this - more than any other source. The quickest way to boost revenues would be to add more races to the calendar but F1's teams object to this due to the additional travel costs they would incur, not to mention the obvious strain this would place on employees and their families. There are 19 Grands Prix on this year's calendar and, writing in the Independent, Pitpass' business editor Chris Sylt says that Ecclestone has capped the limit at 20.
Next year India is due to join with Texas following in 2012 and Ecclestone says "Russia has also got to go on the calendar. We will do it the year after next in Sochi." So, at least two current races will need to be scrapped and it seems that not even the Monaco GP is safe.
"I think we can do without Monaco," Ecclestone says adding "they don't pay enough." The Mediterranean principality has been on F1's calendar since 1955 and is believed to be the only race which pays no fee. This could be what seals its fate.
"The Europeans are going to have to pay more money or we will have to go somewhere else," adds Ecclestone. He has no concerns that in its chase for the buck F1 is heading instead to nations with nearby volatility, such as South Korea. "There could be a war anywhere," he admits and cites a worrying example as justification. "I was told there was going to be four bombs planted in Valencia by the separatists," he reveals.
Television stations can also look forward to the prospect of paying more to broadcast F1 says Ecclestone adding that trackside advertising revenues are "gradually coming back again in all different sports." He adds that although "corporate hospitality was down about 30% in 2009, this year I think we have got a 10% uplift." It will be well worth it for finance firm CVC which owns the majority of F1.
CVC bought F1 for $2bn in 2006 but Ecclestone believes that the sport is now worth "six or seven billion." This value seems to be concentrated in two key areas as Ecclestone concludes that "the only two things in the business worth having are the name Formula One and Ferrari."