Would Formula 1 Race Promoters Really Quit Sport over Lack of Engine Noise?
Australian Grand Prix chairman Ron Walker announced his retirement last weekend. Instead of riding quietly off into the Australian sunset, though, he has decided to take a few parting shots at Formula One.
Specifically, Walker—like many others—is miffed at the lack of noise produced by the new, hybrid F1 engines.
He chose an interesting way to voice his displeasure, though, first saying that the quieter engines are, "clearly in breach of our contract," per Michael Lynch of The Age in Melbourne.
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Now, according to The Independent's Christian Sylt, Walker says, "You will find promoters dropping out. They will go and get an IndyCar race or something like that to keep the fans."
This is certainly an interesting, though ultimately unrealistic, possibility. As Sylt points out, it would be much cheaper for the sites of the current F1 races to host an IndyCar event—but there is a reason for that. IndyCar's audience is primarily American (17 of 18 races this season are in the U.S., the other is just across the border in Toronto).
F1 showcases its host cities and countries to a truly global audience. In 2014, the series will race on every inhabited continent except Africa.
For the right to host an F1 race, the promoters—often backed by local and national governments—pay a substantial fee to Bernie Ecclestone's Formula One Group. The promoters' revenues come from ticket sales.
That is why Walker is worried. If the fans stay away from the track, the individual races will lose their only source of income.
Maybe some fans will decide F1 is no longer worth watching if the engines are too quiet. But fans were already tuning out last year due to Sebastian Vettel's dominating performance. If F1 can still showcase the best drivers and the fastest cars in meaningful, competitive races, the fans will follow.
The talent and the speed are already there. The competitiveness of the championship will depend on how quickly the other teams can close the gap to Mercedes.
Income from ticket sales is not the only reason (or even the main reason) cities decide to host grands prix, though. The exposure and spin-off revenue from the fans watching the race on TV or attending live is substantial.
According to a study commissioned by Tourism Victoria in 2011, the direct economic impact of the Australian Grand Prix on the state of Victoria is approximately $50 million. This does not include secondary impacts, such as revenue generated from the exposure Melbourne receives from hosting the race.
Similarly, in discussing the possibility of bringing F1 back to Long Beach, California, former promoter Chris Pook cited the financial impact of the U.S. Grand Prix on Austin and the state of Texas. He told the Orange County Register that, "The net tax gain for Austin in 2013 was $4.9 million, and the net gain for Texas was $17.2 million."
Those types of numbers, plus the exposure to millions of TV viewers worldwide, are the reasons why F1 seems to have a constant backlog of countries looking to host races. In the last year alone, there have been rumblings of new or revived races in Argentina, Mexico, Azerbaijan, Thailand, New Jersey (for a second U.S. race) and France, per Caroline Reid of Racer.
Meanwhile, the 2014 calendar sees F1 travelling to Russia for the first time and the return of the Austrian Grand Prix.
No matter what Walker says or thinks, all these countries would not be lining up to host races if there was not something in it for them.
“The value of F1 is that it provides new money," Pook continued in the Register. "F1 racing draws a worldwide audience. You would be tapping into new consumers."
If IndyCar were really a viable alternative, as Walker suggests, why have the countries waiting for an F1 race not already approached IndyCar?
Here is one reason: While F1 averages over 20 million global viewers per race, IndyCar averaged less than a million viewers in the U.S. (by far its largest market) during the 2013 season, according to Sports Business Daily.
Is F1 changing? Yes. Are all of the changes for the better? Maybe not (although it is difficult to judge after only one race). A shake-up in the competitive balance of the grid and an increased reliance on driver skill are certainly positive developments from the new regulations, though.
Even Mr. Walker agrees—I think. After all, just before blasting the engine noise, he told The Age, "I was absolutely delighted with the whole weekend."
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