Racer - Fall 2013

71 RACER.com No. 1 / THE SPORT

Unlike most other major sports, F1 race promoters don’t generally get to keep any of the revenue from trackside advertising or corporate hospitality. Neither do they get a share of revenue from TV broadcasting.

A race promoter’s primary source of income from a grand prix is usually ticket sales, and this typically barely covers the hosting fee paid to the Formula One Group.

According to F1’s industry monitor Formula Money, national or local governments invest almost $450m in races every year.

On average, ticket sales comprise

$22m of the $27m average revenue for permanent circuits and $29.5m of the

$32.5m brought in by street races.

With hugely popular races such as Singapore and Australia, street circuits attract a higher average attendance.

Venues get around 25 percent commission on food and drink sold at track outlets. This brings in around $1m, while premium parking makes around half that.

Less obvious is that helicopter take-off and landing slots at permanent tracks can bring in $1.5m. The world record for most commercial aircraft movements in a single day is Silverstone’s heliport during

Neither is cheap, but how do F1 road and street track costs compare?

G ett y Im a g e s/ Re d Bu ll Con tent Pool

the 1999 British Grand Prix, with 4,200. It now averages 1,500 per race, with each slot charged at approximately $1,000.

Race costs differ significantly between permanent and street tracks, with the latter more costly to organize. The biggest cost is the hosting fee, averaging around $27m for both track types. However, street tracks average $8m to rent portable pit buildings, another $8m for safety fencing and barriers and $14m on grandstand rentals.

This gives permanent circuits total race costs estimated at $48m, whereas street races pay $87.5m on average. It leaves permanent venues with an annual deficit of $21m, with street races losing $55m.

Singapore’s government invested

$66.9m in its race last year, but the latest trend comes from the U.S., where Texas has an innovative scheme which could mitigate much of the risk for governments investing in a grand prix. The state is investing up to $25m annually in the U.S. Grand Prix at Austin’s Circuit of The America’s via a fund which makes a payment to the race promoters based on the amount of tax income generated by spending as a result of the race.