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What is behind latest German GP Crisis?

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What is behind latest German GP Crisis?
Jan 22, 2015, 6:49 PM

It seems hard to imagine, given that four of the last five world championships have been won by a German driver and Mercedes currently dominates th...

It seems hard to imagine, given that four of the last five world championships have been won by a German driver and Mercedes currently dominates the sport, but F1 is in crisis in Germany. The German Grand Prix currently has no circuit name allocated to it on the official calendar. And the latest development is that F1's commercial boss Bernie Ecclestone is questioning whether the race will happen in 2015.

So what is behind this situation?

Since the retirement of Michael Schumacher, German Grand Prix attendances have fallen and TV viewing figures have also gone down dramatically.

This year's Monaco Grand Prix, for example was 42% down on viewing audience compared with that race last season on German TV.

As a result, the two German circuits split the licence to host the race, with Hockenheim due to host again in 2016 and 2018, while this year is the turn of the Nurburgring. But there has been a change of ownership there and there's uncertainty about this year's race.

The FOM boss met with representatives of the Nurburgring on Wednesday for further negotiation on retaining the ailing event. Hockenheim struggled last year with only 52,000 paying spectators to see home favourite Nico Rosberg triumph. The Germans have fallen out of love with the sport. Last year was unusual because Germany won the FIFA World Cup and so all eyes were on that through the summer. But the trend has been downwards for some time, despite the widespread German involvement at the top level.

High ticket prices, due to the high sanctioning fee payable to F1, are also a perennial problem in Germany, as elsewhere.

The Nurburgring was scheduled to run the German Grand Prix this season but financial issues and a problematic sale of the circuit meant that no contract was in place for the event for this year and Ecclestone recently suggested that the race was likely to be run by Hockenheim.

Ecclestone has used the timing of the meeting to send the German representatives home with a clear message, which he delivered via media this week. It's a well-used tactic, to threaten that the race might not take place. Although this usually leads to a deal being sorted out, sometimes it doesn't and Spa could point to one year, 2006, when it dropped off the calendar before coming back on again once a deal was done.

Motor Racing - Formula One World Championship - German Grand Prix - Race Day - Hockenheim, Germany

When asked by Sky Sports TV whether he was confident that there will be a race in Germany this year, Ecclestone replied: "Not really."

Admitting that the German circuits current financial woes surprised him, Ecclestone added, "Maybe it's a little bit that the German people were very used to and supported Michael (Schumacher) and miss Michael when he wasn't racing any longer."

Hockenheim currently has a contract for 2016 and 2018 and is understood to be trying to negotiate a rate for a 2015 race with FOM that reflects falling revenues from paying spectators, almost the only source of income for an F1 race promoter.

Whether that negotiation also includes discussion about the price for 2016 and 2018 is not known.

"We're in a position where we've put together a contract for them to sign so we'll have to see what happens.

During his trial in Germany last year, Ecclestone suggested that he might buy the Nurburgring, but now suggests that the winning bidder has run into problems,

"I agreed to buy it, they agreed to sell it and someone came along and offered a bit more so they sold it that person who couldn't complete, lost an initial payment and now someone else has bought it.

"I've got them here this afternoon so we'll see," he added.

Motor Racing - Formula One World Championship - German Grand Prix - Race Day - Hockenheim, Germany

In March last year it was reported that the circuit had been sold to a consortium called Capricorn Group for over €100 million.

While Ecclestone negotiates the future of the German Grand Prix, he is also teasing out a new deal to secure the future of F1 on German TV.

RTL has broadcast F1 for more than 20 years but there is speculation that a split deal between a free to air and a subscription channel may be on the table.

Similar deals operate in the UK and Italy and Australia looks to be another to join this pattern where, as in the UK, 20 races can be viewed live behind a pay wall with 10 live on free to air plus highlights.

The loss of the German Grand Prix would represent a further eroding of Europe's status as the centre of the series following the loss of the French Grand Prix after 2008.

There has been a Grand Prix in Germany in all but three of the 65 years of the world championship and the last championship campaign not featuring a race on German soil was in 1960.

Hockenheim and the Nurburgring have shared the German Grand Prix on a year on/year off basis since 2008. Before that, during the Schumacher heyday years of 1995 and from 1997 to 2006, there were two races in Germany with Hockenheim holding the national title race and Nurburgring hosting the European or Luxembourg Grands Prix during that time.

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