Formula 1 asking for $6 million to hold 2021 Canadian GP without fans

Formula 1 wants a compensation of around $6 million more if the Canadian Grand Prix will take place without spectators this year due to COVID-19, according to French-language digital newspaper published daily in Montreal ‘La Presse’. F1 asks for this amount to cover the expenses of the local promoter to organize the race, expenses usually covered by the income generated by the spectators.

And time is running out: last week, F1 indicated by letter to the three levels of government that it needed an answer by April 12, next Monday, about the financial package for the 2021 edition. In total, the bill for the three levels of government (Ottawa, Quebec, Montreal) would amount to around 25 million for the Grand Prix this year.

First, there are the usual revenues of around 18.7 million per year paid to the owners of F1 (Liberty Media) for the right to present the event.

And if the Grand Prix takes place behind closed doors for health reasons, by far the most likely scenario even if no final decision has been taken by Public Health in Quebec, F1 is asking for additional compensation to cover expenses from the local promoter, the Octane Racing Group, to host the event. These expenses are approximately $ 6 million. The local promoter pays them through the local income generated by the presence of spectators (sale of tickets, food, drinks, local sponsorships on the site). In the case of a Grand Prix behind closed doors, you cannot count on this income.

According to its proposal, F1 would therefore not assume any loss of revenue linked to the pandemic in the event of the Canadian Grand Prix.

Ottawa, Quebec and Montreal declined to indicate on Friday whether they were ready to add additional sums to ensure that a Grand Prix was held behind closed doors this year.

“The City [of Montreal] is ready to host the event and we want Montreal to be at the circuit. We reiterate our call to higher levels of government to find solutions that will allow the Grand Prix to be held in Montreal. We must unite our efforts. That said, pending a response from the health authorities, it is premature to discuss a fee formula.” – was the message from the office of the mayoress of Montreal, Valérie Plante.

On the Ottawa side, the same story goes. “Since the start of the pandemic, the Government of Canada has been there to support businesses and tourist events in Quebec which have been severely affected by the economic consequences of the current situation. […] Ensuring the health and safety of Canadians remains our priority and we will ensure the dissemination and effective application of public health directives”, indicated the office of the federal Minister of Economic Development, Mélanie Joly, also in writing.

The Quebec government has confirmed that discussions will be held, but has not commented on the matter.

The Octane Racing Group declined to comment on the matter.

An alternative in Turkey for F1
If no deal is reached soon, Formula 1 would consider moving the event exceptionally this year to Istanbul, Turkey.

Istanbul hosted a Grand Prix in 2020 when the F1 calendar was turned upside down by the pandemic. Turkey hosted a Grand Prix from 2005 to 2011.

F1 needs a quick answer: in case Montreal misses its turn this year, F1 should also give Turkey enough time to prepare for the event from June 11 to 13, the dates set aside for the Montreal event.

So far, no Grand Prix for the 2021 F1 season has been canceled for health reasons. In 2020, several events were canceled or moved due to the pandemic, including the Canadian Grand Prix, which did not take place.

Whether or not the Canadian Grand Prix takes place in 2021, the long-term future of racing in Montreal is not in question by F1. The future of the Canadian Grand Prix is therefore not threatened.

F1 and all three levels of government have a valid contract to host the Canadian Grand Prix in Montreal until 2029.

Find a financial package
Even if the Grand Prix is going to be held behind closed doors this year, F1 has indicated to all three levels of government that the usual fees of $ 18.7 million will not be scaled back.

Usually, these are divided as follows: 6.2 million from the Government of Canada, 5 million from the Government of Quebec, 1.3 million from the City of Montreal and 6.2 million from Tourisme Montreal through a special tax on the income of hoteliers.

But here it is: as there would be no tourists this year during this Grand Prix which would be held behind closed doors, Tourisme Montréal could have difficulty arriving with its contribution of 6.2 million, normally generated by the hotel tax. To this uncertain sum of 6.2 million, must be added this year the additional costs of around 6 million requested by F1 to compensate for the absence of spectators. In total, up to $ 12 million could therefore be missing from the financial package of the three levels of government.

What quarantine for F1?
In addition to financial issues, health issues are also crucial for the holding of the Grand Prix du Canada.

As a first step, Ottawa must rule on the quarantine rules that would apply in the case of the Grand Prix. F1 requires a quarantine adapted to its situation. The Canadian Grand Prix is scheduled for June 11-13 on the F1 calendar. However, five days earlier, F1 will be competing in its previous Grand Prix in Baku, Azerbaijan. F1 usually races on Sunday (June 6 in Baku and June 13 in Montreal).

Currently, it takes 14 days in mandatory quarantine to enter Canada. Ottawa recently gave an accommodation to NHL teams: foreign hockey players must spend seven days in isolation, then can spend the last seven days “in quarantine” with their team if they test negative.

Secondly, Quebec must also approve the health protocol surrounding the Grand Prix. In the current context, it would be extremely surprising for Quebec to allow a Grand Prix to be held with spectators, even in limited numbers. Although no final decision has been taken, the question seems to have been heard: if there is a Grand Prix, it will be behind closed doors.