First, a history lesson.
Back in 2008, before the global financial meltdown, it seemed like a really good idea to build a theme park next to the old Nürburgring, based on the fame of the circuit.
The idea was to attract people from far and wide and generate the kind of revenues that a modern racing circuit requires if it is to host a Formula 1 Grand Prix in the modern age. The theory was that tens of thousands of visitors would be willing to trek to the ‘Ring each year to be entertained by something other than racing cars. There would be hotels and a conference center as well.
It all sounded fabulous.
The Rheinland-Pfalz state government was willing to provide subsidies, as long as these were matched by private investment. Work began and was well-advanced when it became clear that the promised private money was not going to appear. This left the politicians with a problem. If they stopped the work, they would be blamed for wasting taxpayers’ money. If they went ahead, they risked paying for the whole project.
They hoped that the theme park would live up to expectations. But the estimates for the number of visitors was wildly inaccurate, and the government found itself having to subsidize the business, until word finally leaked out that the project had cost more than $500 million in public funds.
When that happened, the Rheinland-Pfalz’s finance minister Ingolf Deubel resigned. The government wanted to get rid of the problem and so it handed over the facility to a new company called Nürburgring Automotive GmbH (NAG). The only problem with this was that it was run by the same people who had run the circuit, and they had already proven that they could not make enough money.
NAG was given a lease until 2040, but it was not long before it defaulted on lease payments and the whole business began to unravel. Then followed a damaging political scandal in 2012 which resulted in the state’s Minister-President Kurt Beck having to resign after nearly 20 years in the job.
New leader Malu Dreyer agreed to fund a Formula 1 race in 2013, but it was not well-promoted and attracted only 43,000 fans, which resulted in a big financial loss. The circuit was sold off in 2014 to Russian billionaire Viktor Kharitonin, who made a fortune in the pharmaceutical business. He made it clear that he was not going to waste money and that Formula 1 must be affordable if it was going to go on visiting the ‘Ring. The track proposed that the Formula One Group become the promoter of the event. Bernie Ecclestone declined.
Having already unloading of the financial burden of the Nurburgring, the local government now wants nothing to do with funding Grands Prix. For politicians, this is a risk that they are not willing to take. The German Grand Prix contract, which saw race alternating between Nurburgring and Hockenheim has now ended and the race that was held in Hockenheim in 2019 was a last-minute deal cobbled together thanks to a big push from Mercedes-Benz.
There is the additional problem of the competition between two rival German automobile clubs. The Automobilclub von Deutschland is older, founded in 1899, and owns the rights to use the German Grand Prix name. It runs races at Hockenheim.
The Nurburgring events are run by the Allgemeiner Deutscher Automobil-Club (ADAC)–Europe’s largest motoring association and dates back to 1903.
Races that are not run by AVD are not allowed to use the German Grand Prix title, except for a period when the two clubs did a deal to share the contract and the name. That agreement is now over and so the race this weekend has to be called something different–the F1 Eifel Grand Prix. For a period, races at the Ring rang under the European and Luxembourg Grand Prix names but this year the name of the Eifel region was chosen.
This follows a tradition that dates back to the years after World War I when ADAC wanted to run a race similar to Italy’s Targa Florio and chose the Eifel region because it was under-populated and had a lot of empty roads. It was a similar story to Spa, not far to the west, across the Belgian border. The early Eifelrennen (literally Eifel races) were dangerous affairs with some serious accidents, which was the impetus for the construction of the Nurburgring in 1925.
The Eifel Grand Prix is happening because the Nurburgring said that it could have 20,000 spectators. In reality, the number of spectators at the ‘Ring will be closer to 15,000 because the original plan was for 20,000 but in recent days the upsurge in COVID-19 cases in various “red zones” means that fans living in these areas are not allowed to attend. It is a bit complicated but that is from the circuit authorities.
Hockenheim lost out because it couldn’t get agreement from the local government for any spectators.
Will the German Grand Prix ever return to the ‘Ring? It is doubtful. With the two problems combined – the state government opposition and the fight between the AVD and ADAC – if there is a German Grand Prix it is more likely to happen at Hockenheim, but there are problems there because the government of that state is from the Green environmental party and does not want to fund any racing.
“Neither the Nurburgring nor Hockenheim can pay the fees that Formula 1 wants,” says Lennart Wermke, the F1 reporter, of Bild, Germany’s biggest newspaper. “The problem is that both tracks have had financial issues in the past and for them it is so important that they are not losing money – so they would never take any risk just for an F1 race.
“If they get a good deal they are happy to do it—as has happened this year—but I cannot see either of the German tracks paying a big fee to get a race. They have lots of different activities. They have smaller races, they have car manufacturers renting the track and that is more important for them than holding an F1 race. I can only see F1 coming back next year if we have the whole coronavirus situation again and F1 says: ‘We’re going to give you a good deal ‘with no fees.”
How important is if for Formula 1 to embrace its history by running at circuits like the Nurburgring? Join in he conversation in the comments section below.
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