Despite the fact that the World Superbike series kicks off on Sunday, the provisional calendar is still very much in a state of flux. Rumors emanating from the WSBK paddock, gathered at Phillip Island for the 2013 season opener, suggest that major changes could stilll take place to the calendar.
The biggest change is that the UK round, set for Silverstone on 4th August, could be dropped altogether, and replaced with a round in Turkey, at the spectacular Istanbul Park Circuit in mid-September.
The rumors, reported by German-language website Speedweek, and confirmed by other WSBK sources, state that Silverstone is to be dropped because the circuit cannot afford to pay the sanctioning fee previously agreed with Infront, and now being demanded by Dorna.
Crowd numbers at Silverstone for World Superbikes were always low, in part because the flat nature of the circuit made viewing difficult, and in part due to relatively high ticket prices, which meant that ticket sales did not generate sufficient revenue to cover the circuit’s costs.
The round scheduled for Silverstone could now take place at Istanbul Park in Turkey. The circuit, once run by F1 boss Bernie Ecclestone, is under new management since Ecclestone withdrew at the end of last year, and is in need of events to host at the $200 million dollar facility.
While the new management is negotiating with Ecclestone over a return of Formula One, adding a World Superbikes round would be logical, given that Turkey has a reigning champion in the World Supersport class in Kenan Sofuoglu, and a candidate to repeat in 2013. Acording to Speedweek, the Turkish round of WSBK could be held on 15th September.
The rest of the calendar is also far from finalized. The round scheduled for 23rd June and marked as “to be announced” is now certain to be dropped, with the Brno circuit already having confirmed that they will not host a round of the series.
Both Imola and Portimao are still marked as being subject to contract, and given the economic situation in both Italy and Portugal, still under severe doubt. The Portimao circuit continues to teeter on the brink of bankruptcy, while doubts remain over the future of Imola.
The disappearance of Silverstone reduces the Superstock season – run at European rounds only, to keep the series cheap – to just 8 races. With both Superstock 1000 and 600 classes set to be scrapped for 2014, several riders and teams are taking a look at the rival series being set up in Central Europe, and based around the Brno circuit.
The problems at Silverstone highlight a key concern at the center of the business of hosting motorcycle racing. Crowd attendances at motorcycle racing have been historically good, and as tobacco advertising was still allowed at motor sport events, the circuits had extra ways of generating revenues.
But a combination of the ending of the loophole which allowed tobacco sponsorship, the decline in attendance as the sport became more clinical and professional, and the global economic collapse in 2008 meant that circuits started to struggle to pay the sanctioning fees charged by both Dorna and Infront (or FGSport, as it was then called) to organize MotoGP and World Superbike rounds.
The iconic WSBK round at Brands Hatch was one of the first casualties, the circuit being dropped from the WSBK calendar in 2009, after a dispute between the Flamminis and the MSVR, who run the circuit, over the level of fees to be charged.
The situation has grown worse since then. Several circuits, both on the WSBK and MotoGP calendars, continue to complain of the cost of hosting rounds, with several rounds under threat as a result. The Sachsenring circuit has struggled to pay the sanctioning fee for the German round of MotoGP for several years now, and is subject to constant negotiation with local government over subsidies.
Despite its history and the existence of a contract, the Jerez round of MotoGP has been in doubt for the past three years. Even the iconic Assen circuit has struggled to pay the fee required by Dorna, and is looking at ways of increasing crowds and building revenues again.
The problem is very much a chicken-and-egg situation: to recoup the sanctioning fees, the circuits need to set ticket pricing at an uncomfortably high level. But those higher prices are keeping some fans away, who simply cannot afford it. Finding the right balance between ticket prices and attendance number is extremely complex, and not entirely under the control of the circuits.
That the demand for racing is there is certain: at the Estoril round of MotoGP last year, the circuit – knowing it would be losing MotoGP – set its prices at extremely low levels – between 2 and 20 euros, in comparison to 90 euros and upwards for most other circuits. They filled the circuit, something which had not happened for many years at Estoril, which has traditionally had poor attendance. However, the revenues generated with such a low ticket price are simply not enough to cover costs.
Getting out of this precarious situation will be difficult. For Dorna, the way forward may not lie in continually raising sanctioning fees for both motorcycle racing series. Instead, they may have to try and capitalize on the intangible assets, raising income from sponsors by selling higher crowd attendances, and generating higher crowd attendances by lowering ticket prices.
But with Dorna under pressure from their owners, Bridgepoint and the Canadian Pension Plan Investment Board, to generate income to pay off the loans which the private equity firm has burdened it with, the Spanish company has little room to maneuver.
Source: Speedweek; Photo: WorldSBK
This article was originally published on MotoMatters, and is republished here on Asphalt & Rubber with permission by the author.
I’ve never understood the “Circus” like business model of racing. You can’t charge the rates being charged in the current economic climate to try and recoup a bad business decision in a false economic climate like what we just came out of. It’s like trying to sell a house at market rates pre market collapse in a depressed market. The house will never sell and so goes it with Dorna and Bridgepoint.
IMHO, the Canadian Pension fund should never have issued loans to a private equity to fund Dorna. The pensioners are surely going to loose on that one. This is a lesson of “stick to what you know” and Bridgepoint clearly didn’t have the necessary background or experience on their board to know how to run Dorna themselves. If you have no knowledge to do something yourself you have no ability to supervise someone who says they can. This is simple stuff and where failure happens. In good times Bridgepoint had plenty of money to “play with” and now that they have to actually earn it they find themselves in a bind. This is a repeated theme in business especially private equity when ego exceeds ability or reality.
Shareholder capital…. Money, profits, year on year increases.
Sanctioning fees are killing racing.
TV rights, sponsorship, attendance… all ever increasing costs.
Money is the goal. This is so wrong.
I’d love to see Melandri pull off a win at Istanbul, giving another peace sign while sliding towards the finish line!