The times are certainly tough race circuits right now. On the MotoGP roster the Hungarian Balatonring has become almost the unicorn of the paddock, while the Jerez de la Frontera Circuit is in financial crisis. Similarly back home in the United States, New Jersey Motorsports Park is going through a bankruptcy proceeding that should see the track come out unscathed, but frames the picture nicely none-the-less (not counting the increasingly popular Motorland Aragon).
Add to this list now the Automotodrom Brno, as the Czech track is facing financial concerns of its own. While the Brno round is secure for the 2011 season, talk is beginning if the track can operate in the 2012 season without national support. While the Czech GP brings in substantial revenue for the area surrounding it and the Czech Republic as a whole, the latter entity gives virtually no support to the racing event.
Going by the numbers this seems like a fairly straight-forward business case for the Czech track, but it is unsurprisingly being mired down with national politics. Going by the numbers it has been revealed that the Autodromo Brno lost 79.7 million Czech Koruny last year (roughly $4.6 million). While Automotodrom Brno gets about 19 million Czech Koruny ($1.1 million) from the municipal council and regional Moravian government, there is an obvious gap to fill in making the Czech GP profitable for the circuit, which is owned by Karel Abraham, father to the MotoGP rider of the same name.
It’d be wrong to think that the Automotodrom Brno is looking for a government bailout though, as the national Czech government is the big winner in this current arrangement. Talking to David Emmett at MotoMatters, the Cardion AB spokesperson said that the Czech government makes 180 million Koruny ($10.4 million) alone in taxes, not counting the other intrinsic benefits of the Czech Republic hosting the race.
With Czech Finance Minister Miroslav Kalousek apparently having no interest in support Automotodrom Brno hosting MotoGP, the Czech government seems content to lose $10+ million from its annual revenue, when it could just have easily secured the race venue’s future, and ensured a healthy profit of $7 million per annum.
We of course only have one side of the story here, and surely there is some sort of negotiation going on between the two parties. With such an easy dollar and sense (pun intended) decision to be made here, it will be interesting to see if more details come out on the issues surrounding the Automotodrom Brno.
Source: MotoMatters
First of all, I’d hate to see some of the most attractive motoGP venues to vanish. It’s a great place to race and I have been there myself several times as a spectator (2hrs from where I was born). I love everything about it ….. but, the reasoning for government money is always a slippery slope. Especially if the country has had a huge deficit for years and quite frankly has much bigger fish to fry socially. Virtually all staple services employees like doctors, nurses or teachers constantly strike, because they are vastly underpaid compared to their EU colleagues. If the government wants to survive after election they must listen to the majority of people and what their priorities are, not to the needs of isolated group of fans or businesses positively affected by one motor sport venue.
I’d love to also see some math or reasoning behind the $10.4 mil the government reportedly rakes in. As far as I know, the people who come to these races either hang around in camp sites or drive in and drive out after the races are done (myself). 90% of them are ordinary Joes. I’ve always found the claims called “impact on local economy” debatable at best. There’s no easy accounting proof for that.
Thanks for writing the article. It’s closer to my heart than my reply could suggest.
I’d have to confirm it with the Cardion AB people, but it’s my understanding that the money quoted here is taxed income directly from the event, i.e. Automotodrom raked in X amount of revenue, and that figure represents the taxes the government walked away with from it.
I cant see a justification for local govts subsidising MotoGP.
Who makes more money out of the events, the local govts or DORNA?
I’m totally against government subsidizing a private sporting event. In the end, it is Dorna squeezing tax payer’s money. If my business doesn’t work, no one is going to bail me out.
Having said that, It would be really sad to lose one of the best races in the calendar.