Will Gray

Cut price future for Formula One?

Will Gray

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South Korea is the latest nation to secure its place on the Formula One calendar having been included for 2010 - but as anticipation builds for next month's debut in Abu Dhabi could the harbour-side track could be one of the last of the sport's 'super circuits'?

The new Abu Dhabi track around the Yas Marina was contracted out for build at $350 million and promises to be the most advanced circuit ever seen in Formula One. It is the latest and greatest of the recent arrivals on the F1 calendar, but there are suggestions that once Korea is completed such levels will never be reached again - and it appears Formula One may now be on sale at a much reduced rate.

Back in 2005, a jam-packed season saw 19 races with talk of 20 or more races per year becoming the norm. Five years on and although an 18-race calendar was circulated not long ago there are plenty of doubts on the horizon as circuit owners face up to the fact that Formula One is a tough way to make money.

The global credit crunch has not only trimmed available cash flow for investments around the world - including the Middle East - it has also reduced the available funds in the fans' pockets to afford the high ticket prices most venues are forced to charge to cover the high fees of running a race.

Although that seems not to have affected the completion of the Abu Dhabi circuit, it will certainly throw out some question marks over the potential of the future promised lands that have offered up their plate to Formula One.

India was slated for 2011, but may be delayed while the Indian government have not been making the kinds of noises expected of a nation that is keen to embrace the sport. South Africa was in the mix, as was Russia, but both seem to have dropped off the radar.

The commercial rights holder, CVC, needs to bring in significant annual revenues to service the debt incurred to buy the rights back in 2006, let alone make a profit, and although Abu Dhabi is believed to have paid top dollar for its place this year it appears the potential revenues from circuit fees are reducing.

Germany's government is shying away because of the cost of running an F1 race, while Spa has looked into the option of sharing with their neighbours to reduce the cost in future years.

Reports have also suggested Istanbul, which failed to draw in the crowds this year, and Shanghai, which only recently came on the calendar, could be looking at the balance sheets and scratching their heads.

Meanwhile, Canada has capitalised and looks set to regain its place on the calendar at a bargain price after failing to afford the cost estimated at $175m over five years that was on the table last year. Reports in the country's Globe and Mail newspaper suggest that a new deal has been done for just $75m over the same period - an incredible $100m less than the offer made one year ago.

So while F1 should be on solid ground, its rights holders may just have to do their own credit crunch reality check to ensure the healthy grids promised from 2010 are matched by a healthy number of races in the years to come.

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