Circuit of Wales Gets 5-Year Deal for British MotoGP Round

08/14/2014 @ 2:52 am, by David Emmett12 COMMENTS

Circuit of Wales Gets 5 Year Deal for British MotoGP Round circuit of wales 635x420

The British Grand Prix is to move, if everything goes to plan. At a press conference held today, Dorna and the management of the Circuit of Wales announced that a deal had been reached that will see the track, to be built in Ebbw Vale in South Wales, will host the race for the next five seasons, with an option to extend the contract for another five years after that, until 2024.

The only problem is that the Circuit of Wales does not exist yet. The track is part of a £315 million project aimed at regenerating the Blaenau Gwent region, a once-prosperous region that has lost most of its employment since the coal and steel industries closed.

The Heads of the Valleys Development Company have set up a scheme to create a major motorsports industry hub centered around an FIM and FIA homologated race track, capable of hosting world championship racing.

So far, however, the ambitious project has run into a series of delays. First, it faced problems over the purchase of common land needed to complete the project. More importantly, there are still major financial question marks hanging over the project.

Michael Carrick, Chief Executive of the HVDC, has said that less than 10% of the project funds will come from public sources. So far, however, the HDVC has been cagey about investment from private sources, telling reporters only that talks with potential investors are ongoing.

These delays mean that the circuit will not be ready to host the race in 2015, with some concerns that it could be 2017 before the first race can be held on the circuit.

In the meantime, the Circuit of Wales will have to strike a deal with either Donington or Silverstone to host the race next year. A decision on where that race is to be held will be made within the next month, Dorna CEO Carmelo Ezpeleta told reporters.

Silverstone put out a press release saying that the Northamptonshire circuit was sorry to lose the British round of MotoGP, but said it had no choice given the sanctioning fee being asked by Dorna. That, the statement said, was at an ‘unsustainable’ level, and that Silverstone were keen to continue hosting the race if agreement could have been reached over a lower fee.

There is also disagreement between Silverstone and the Circuit of Wales over the use of public funds to build the Ebbw Vale track. The Circuit of Wales is looking for substantial public investment, promising returns for the region in terms of tourism, employment and tax income.

The experience of other circuits around the world confirms their projections: the Circuit of the Americas has calculated that the MotoGP race there generates around $50 million for the Austin region.

The Brno race generates around 1 billion Czech crowns for the Moravian area, and the Aragon regional government claims returns of between 50 and 60 million euros from MotoGP at the Motorland Aragon circuit.

This article was originally published on MotoMatters, and is republished here on Asphalt & Rubber with permission by the author.

Comment:

  1. KSW says:

    Jens,

    The numbers really need further scrutiny. In my conversations with COTA they aren’t making money. $50 million to the area is a nice number, so why are the tax payers having to fund the race? It’s already public that the track is receiving tax payer dollars to pay the high fee’s Bridgepoint/Dorna want and the arrogance of the Dorna staff when they’re on site at COTA.

    Personally, I think that the UK has it right that tax payer dollars shouldn’t go to fund the track or the races. The burden needs to be put back on Bridgepoint/Dorna. There is no track that can afford a MotoGP race. There is also no sports team that can afford the salaries they pay if they had to be responsible for the cost of the Stadiums. The business model is one of tax payers handing over money that could go to schools and infrastructure for the likes of Bridgepoint/Dorna to fill there pockets and live above there otherwise means at the tax payers expense.

  2. Westward says:

    KSW

    I disagree. Steve Ballmer of Microsoft fame just dished out one billion to buy the Clippers of Basketball in the NBA. If they really want to they can find a way to build a stadium. I remember some time ago, a private group wanted to build a stadium in California to attract an NFL team to the Los Angeles area. It was fully funded with private money or so they said. One official hurdle that prevented that from happening was that the NFL required that a certain dollar amount be from taxes. The only reason I remember is because I was personally offended by that notion.

    Somehow or some way it can be done, and I am certain some financial institution will give them a loan, and if it generate some economic benefit to the area then I am all for it…

  3. Westward says:

    I meant I agree.

  4. Keith says:

    I agree funding should not come out of taxpayers pockets, but I just checked out the Dorna homepage–one of the major shareholders is the Canadian Pension Plan. WTF!!!?? I always knew that money wouldn’t be there when I needed it.

  5. KSW says:

    Keith,

    Luckily we pulled our money out from when we lived there. Trust me, MP’s aren’t happy about it either I know some members of government. HUGE mistake. They should be pulling those funds back soon. Bridgepoint will get the “call” for funds in 12 months and then it will be there turn to pay or be gone.

  6. For what it’s worth, pension plans are often limited partners in private equity funds investments.

  7. idrive says:

    KSW,

    really straightforward, sensible and yet poignant comments, about how Dorna is a greedy little so and so actually.
    I agree a hundy with you. Schools and infrastructure are critical.
    Dorna’s ongoing greed is not sustainable and the lengths they continue to go to in their pursuit of total control over motorcycle racing is almost embarrassing. There is no end to rule making and rule changing and frankly it seems from the outside at least, that the FIM was emasculated many many years ago and is nothing more than a whipping boy for Dorna.
    Dorna will increase its demands every year until people go bankrupt and it is a shame for the industry that the monoply has no curb anywhere.

    Also how does one establish 50 million revenue in connection with the COTA event to the local economy ?
    What a ridiculous number, someone is sniffing glue here although I doubt anyone would believe that sort of figure, so vapid is the claim.
    Wales looks like a good proposal but really, public money ? no, no way should they get that.
    Private supporters should fund it and run it and win or lose on it, then let’s see for how long it all stays afloat – you can bet Dorna won’t lose a cent win or lose and if Wales goes belly up, Dorna will shrug and sign up the next one.

  8. smiler says:

    I thought this article was about a new track in Wales not COTA.
    If Dorna were actually serious about diversifcation they would hold 2 rounds in the UK. One at an established track, the best of which would be Brands then another in Wales.
    Thus reducing the number of rounds in Spain.
    The new track would be allowed to develop and even better split the TV rights between one upcoming company like BT which has no subscribers and another that at least has a few.
    5 years down the road then they could review the contract with each party and decide to give one track and TV Co the exclusive rioghts.
    However Dorna are too greedy, self serving and nationalistic to consider this.
    The new track is all wsell and good but the existing tracks in the UK are not exacyl making a fortune and this track is in the back of beyond.
    Well done Dorna another blow to the continued decline of MotoGP in the UK.

  9. KSW says:

    Jens,

    Very true on pension funds & PE’s. What’s different here is this is the Canadian Government. Canada benefits in no way from this i.e. events in Canada, MoSport receiving anything or other tracks. They’d have been better off and more secure investing in say, a public company on the exchange or some bonds than Bridgepoint’s Dorna. When it became public MP’s and others saw it the same, what? why?

  10. ksw says:

    Oops…. and so now Dorna talks of the need for a North American series with Canada involved. Hmmm. Under pressure?

  11. singletrack says:

    If race tracks were profitable, Canadian companies would be building them. Governments around the world prop up tracks on the sketchy premise of ‘tourism dollars’ and ‘national branding’. The Provincial and Canadian governments paid the ransom (sanction fees) for the Montreal GP to get back on the calendar.

    Generally, the Canadian Pension Plan is well run, and quite conservative. So the managers likely see good returns coming. As an investor, Dorna looks good – with a monopoly on a global sporting series, with plans to expand the series (extort money?) in developing nations around the world.

    The real kicker for Canucks here, is that there’s no way to even watch MotoGP in Canada. Of course, unless we pay Dorna for the web streaming service, $90 a year. No thanks. Since Fox killed off (absorbed) SpeedTV, Fox motorsports coverage is no longer available on Canadian cable networks.

    FIM and Dorna will follow the money. To hell with real fans on the ground.

  12. HateUK says:

    Even though its just a squiggle on a computer screen, you can already tell it’ll be cold, boring and miserable. A new fan favourite for sure. Hopefully they get someone with their land’s highest honor like Sir Cliff Richard to do the podium presentations.