Brown says F1 and Long Beach are no longer compatible
McLaren CEO Zak Brown says that rumors of the Toyota Grand Prix of Long Beach being on Liberty Media’s list of potential U.S. Formula 1 events are wide of the mark for both financial and practical reasons.
Brown stated that although Liberty Media, who took control of the Formula One Group late last year, is scoping venues to expand F1’s footprint in the U.S., there was no reason to believe that the Grand Prix of Long Beach – which switched from F1 to Indy cars in 1984 – would be perceived as a viable option.
He told Motorsport.com: “The Grand Prix of Long Beach is obviously a fantastic event and has a wonderful 43-year history, initially with Formula 1 but most recently with IndyCar. It’s a great venue for IndyCar.
“But the economics that Formula 1 requires would need heavy subsidy from government, and from what I understand, I don’t believe Long Beach is prepared to pay that type of rights fee.
“The other very significant part is that to host an F1 race, the track would need to be FIA Grade 1, and that would need a longer track with much more run-off and a substantial pit complex. Well, the track is up against the harbor so you’re not really dealing with an environment that is easy to modify! Plus, the entire circuit resides within the jurisdiction of the California Coastal Commission so any circuit improvements such as the necessary pit/garage complex would be subject to their review and approval.
“So even from the construction point of view, the amount of capital expenditure that would be needed is tens and tens and tens of millions of dollars. On top of that, like I say, the rights fee for Formula 1 is infinitely more than IndyCar demands.
“Combine those two costs together and there is no economic model where private investors can get any return on that investment, so therefore it all comes back to the state of California and the City of Long Beach coming up with the funding. I know KPMG has been hired to conduct a study, but that study is going to say it will cost hundreds of millions in commitment.”
The nearest point of comparison is the Circuit of The Americas, which hosts the United States Grand Prix in Austin, Texas, which is paying a rights fee agreement of $250m over 10 years.
“Right,” said Brown, “and the fact is that if you look at every single Formula 1 race – the Circuit of The Americas included – that gets a government subsidy, they are still financially challenged. So I don’t see any economic model that would make F1 at Long Beach work.
“That’s not a negative towards Formula 1 nor a negative towards Long Beach. They’re just incompatible and suggesting that isn’t the case is very much trying to fit a square peg into a round hole.”
Brown said that as a general motorsports enthusiast, he didn’t like the speculation and rumors around F1 and Long Beach hurting the Verizon IndyCar Series’ second most prestigious event after the Indianapolis 500.
“I want to see all motorsports succeed, and it’s a real shame to see a big race for IndyCar being regularly distracted by this kind of thing. I think the end result is going to be IndyCar remains at Long Beach, so why waste time, money and political resources on this?
“Honestly, if I thought this concept had any validity, I would say so. You know, if this was a new event, I’d give my opinion to Liberty and encourage them; I’d say, ‘Yeah, go for it; do a viability study.’ But while I think Formula 1 at Long Beach was a great concept, I don’t think it’s close to being viable.”
To that end, Brown said that he doubted Liberty Media even had Long Beach on its radar for potential F1 venues.
“I’m not aware of every market that Liberty is reviewing,” he said, “but I’m aware of some, and I can honestly say that as far as potential venues in North America are concerned, I have never heard Long Beach being mentioned as one of them.”
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