The Grand Prix Business Diary: Turkey

12 May 2011 | Posted in Features - Insights | By David Cushnan | Contact the author

The Grand Prix Business Diary: Turkey

After every Formula One race this season, SportsPro will provide a business summary of the weekend's events. Amongst other things, the fourth installment of David Cushnan's Grand Prix Business Diary focuses on the ongoing doubts surrounding Turkey as a future Formula One destination, Williams' disappointing start to the 2011 season, changes to the Yas Marina circuit and the possibility of Formula One's sale to the News Corporation and Exor consortium.

“Both sides are trying to solve this issue. Comparing before the race and the current situation, there is a 50 per cent difference”

• Istanbul Park might, technically at least, be the best of the new breed of Formula One circuits but the event itself is largely unloved and has never quite captured the imagination of locals since it made its debut on the Formula One calendar in 2005. Empty grandstands have been a feature of the race ever since and there was no change at the weekend. Local officials, who haven’t helped themselves by painting seats blue and orange, making them highly visible when empty on television, claimed 42,000 people attended the Grand Prix on Sunday; that seems more than a little optimistic.

 There is no doubt that Bernie Ecclestone would like Turkey to remain on the Formula One calendar. He is fond of the country and has holidayed there many times in the past. He also happens to - indirectly - own the lease to the circuit, part of a complicated deal struck to save the circuit and race organisers from bankruptcy in 2006. But Ecclestone wants to raise the annual race fee from US$13 million to US$26 million beyond this year, a fee Turkish officials, already faced with poor crowds, are unwilling to meet, prompting speculation that this year’s visit would be Formula One’s last. After meetings over the weekend, however, it appears a compromise isn’t as far off as some have speculated. Speaking to Reuters, the head of the Turkish motorsport federation Mumtaz Tahincioglu said: “Both sides are trying to solve this issue. Comparing before the race and the current situation, there is a 50 per cent difference.” Tahincioglu, who presented one of the trophies on Sunday, is credited with bringing Formula One to Turkey in the first place. He expects to find out whether the talks have been successful at the start of June when the FIA releases its draft 2011 calendar.

• It proved another difficult weekend for the Williams team, which has yet to score a point in 2011 and recently announced that technical director Sam Michael will depart at the end of the season. The team’s struggles have been well documented since the halcyon world championship days of the 1990s. Sponsors such as RBS and Phillips have departed and whilst the costs of racing have receded in the last five years, the financial strength of the competition has seen Williams slide back into the midfield. In the days before the Turkish Grand Prix the team announced solid financial results for 2010 – turnover dipping from just over UK£108 million to UK£91 million whilst profits increased by over a quarter, from UK£4.5 million to UK£5.8 million – and that was soon followed by the announcement that it has agreed to partner Tata Motors and Jaguar in its build of a hybrid supercar. The deal is the result of Williams’ investment in hybrid technology but more significant, perhaps, is the apparent change in philosophy of a company that always said it existed purely to go racing. The days of diversity have truly arrived, it seems.  

“It’s a big investment from the government of Abu Dhabi to actually take the initiative to improve overtaking and add the possibility of better racing"

• Turkey is fighting for its Formula One future, Bahrain is awaiting news on whether it can or will stage a Grand Prix at all this year, and in Abu Dhabi changes to the track layout are getting underway in preparation for the third Grand Prix at the spectacular Yas Marina circuit in November. The changes have been prompted, in part, by criticism over the lack of overtaking possibilities, which thwarted the progress of Fernando Alonso and Lewis Hamilton in last year’s title decider – although Formula One’s 2011 rules are almost certain to solve the problem this year anyway. According to Richard Cregan, Yas Marina’s chief executive, “it’s a big project.” The affable Irishman added: “It’s a big investment from the government of Abu Dhabi to actually take the initiative to improve overtaking and add the possibility of better racing. It’s a significant project in terms of logistics, operations and last but not least the actual cost. We’re still putting all that together. The project has kicked off, it will happen this summer.” Work will take place during the hottest period of the year, thus limiting the disruption to circuit activities – and between January and April Yas Marina has hosted 180 different events. “Because the track is divided into two sections, our target is to ensure that we keep the south loop open throughout that period for as long as we can. It does mean we’ll be able to continue with the track usage throughout the whole summer.”

• As the News Corporation and Exor consortium flirtation with Formula One’s majority owners CVC continues to gather momentum – news that was reported as ‘Murdoch buying Formula One’ by most media outlets in the week before the race – in Istanbul the teams and Ecclestone got to have their say. Following a regular meeting of the Formula One Teams Association (FOTA) over the weekend, Martin Whitmarsh, McLaren team principal and FOTA chairman, made the team’s position crystal clear: “Ultimately it is desirable to have team ownership of the commercial rights”. That comment was prompted by the involvement, to a greater or lesser extent, of Ferrari, whose parent company Fiat is 30 per cent owned by Exor. Ecclestone’s view? As well as insisting, as CVC have done, that the owners do not intend to sell, he said: “The teams should be happy to have somebody like CVC not selling to the wrong people, trying to maintain a good level for them and supporting me so that I can go to work and earn some money for the teams.” His full thoughts, well worth a read as ever, were posted on Formula One’s official website.

• No announcement was made beforehand but DHL, most likely as part of its overall sponsorship package as an official supplier to Formula One, was granted title sponsorship of the Turkish Grand Prix. It gained the company huge exposure, especially as its distinctive yellow and red corporate colours provided a colourful backdrop to the podium ceremony. The ceremony, incidentally, saw Sebastian Vettel take a well-earned swig from his bottle of champagne – illegally as it turns out; the legal drinking age in Turkey was recently raised to 24. Vettel was drinking from an unmarked champagne bottle too; Mumm had no presence in Turkey as alcohol sponsorship is completely prohibited. Similarly, McLaren replaced its Johnnie Walker logos with a responsible drinking message.
Aside from DHL other trackside sponsorship in Istanbul was provided by UBS, Pirelli, Allianz, plus extensive branding from Vodafone and Panasonic.

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