Greece to spend an estimated €94.6m on race track.

Doctor McNinja

Doctor McNinja

Doctor McNinja

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*Checks date to make sure it's not April 1st.


I hope by the end of this post I'll have a point to make other than "WTF Greece?"...

http://www.telegraph.co.uk/finance/...o-spend-almost-100m-on-building-F1-track.html

How can anyone think this is a worthwhile use of funds? Greece, a nation with massive financial problems, a nation that's heading for another bailout in it's sixth year of a deep recession and a nation that has a practically non-existent motorsport culture pouring millions of what is probably someone else's money into a race track that'll probably never get used in F1... unless the pitlane is built into the Acropolis. There are large scale sporting events that turn a profit but in all the years I've been an F1 fan, I've never heard of a new track turning a profit and even a lot of the established tracks don't make money from F1 races (from what I've heard).

Oh, and "an estimated €94.6m"... what are the chances of it coming in under budget? I cannot imagine a way that a track could be built for that kind of money and come up to the standards demanded by that money grubbing midget, Ecclestone.

/rant
 
One thing to consider is that even if the track itself doesn't make profits in the short term, there will be plethora beneficial economic side-effects of having an F1 race in your country. Don't know enough about the specifics to say much more than that and not saying it's a good/bad thing.
 
Overslop said:
One thing to consider is that even if the track itself doesn't make profits in the short term, there will be plethora beneficial economic side-effects of having an F1 race in your country. Don't know enough about the specifics to say much more than that and not saying it's a good/bad thing.
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As I said, Greece has a a practically non-existent motorsports culture/history. The country is in ruins in so many ways, which is keeping tourists away. F1 races can and do have a positive effect on the local/countries economy but would the same happen in Greece? And, as I alluded to, for a new track to get an F1 race, it needs to offer something special and unique... in many cases, it also has to offer a fee to the rights holders. Bahrain has to pay about £25,000,000 for the right to host a race and I'd go out on a limb and say the same is true for Abu Dhabi (despite the fact they spent about £800,000,000 on their state of the art but thoroughly boring track). If Greece had a street circuit that snaked it's way past some of it's historical monuments, then maybe it could pull it off. The problem with newly constructed circuit though (such as the one being proposed) is that you'd need to build the infrastructure, transport links and all the other things that go along with sporting events attended by an international fanbase.

When you frame this against a backdrop of families who can't feed their newborn babies and doctors and nurses who aren't getting paid. It really mystifies me that this idea has even got to this stage.



[RANT]

Let's put it this way. Greece spends about £100,000,000 on the track. Add to that the seven digit absolute minimum race fee (which'd more likely be eight digits). The race (for the sake of ease) cost the same as the British GP each year to put on. That's about £50,000,000*. The race attracts the same kind of crowds as the British GP (one of the best attended on the calender in a country that has a strong motorsports heritage and no less than seven F1 teams based here). The crowds spend the same kind of money. At the end of the first race the track has made around £20,000,000* profit. GREAT!!! Now if you take the construction cost and the race fees and the ticket takings and the food sold and all the merchandise... it'll only take five years to recoup the cost of the track. It sounds so easy! I don't know why so many racetracks struggle to finance an F1 race.


*Figures are taken from Silverstone 2011 which was attended by 315,000 people over the three days.
 
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Looks like a good idea to me.

The long term benefits, if they can secure prescence on the F1 calander, would be enormous and massively beneficial for their economy.

This is the kind of stuff the UK should be doing - Spending on projects which will bring in the revenue long term.
 
Stone22uk said:
This is a good idea for long term revenue, but where are Greece getting the money from for the track ect ...
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If you read the article it tells you

"Mr Samaras will target pensions, benefits, and top civil service pay in a bid to unlock the next €31bn payment from the EU"

So there is his cash :)
 
This Thread disappoint. I so wanted to read about the Greek Prime Minister doing a '**** it... Put the whole budget on a horse in the 3.30 and hope for the best..' type thing. :o
 
BDEE said:
Looks like a good idea to me.

The long term benefits, if they can secure prescence on the F1 calander, would be enormous and massively beneficial for their economy.

This is the kind of stuff the UK should be doing - Spending on projects which will bring in the revenue long term.
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Problem is, a lot of F1 circuits, increasingly, are either being rotated or dropped from schedules. Which doesnt do much for a consistent revenue stream. See their neighbours Turkey for an example...
 
Makes sense to be honest.

If you take the 'F1 track' bit out of the equation, it's pretty basic Keynesian.

Government is 'borrowing' to inject money into the economy. They're spending money, that is effectively going to be earned by the Greek populous, who will then (hopefully) go and spend it on products. Money spent on products is then given to more people in wages etc... etc...

Basic Keynesian multiplier.

Theoretically it makes sense. Rather than arguing Keynes though, I'll just leave this here:
http://www.bbc.co.uk/iplayer/episode/b01mxpzv/Masters_of_Money_Keynes/

How well it's going to work is another question altogether. I expect the multiplier in Greece is low at the moment due to the lack of strength in their economy. The fact that they're borrowing huge amounts of money from the EU to fund this though is actually what Keynes would say is right.

Their have been some great examples of this in the past. Both from a stimulating the economy point of view, and from an improving infrastructure at the same time point of view. Example would be the Autobahn's. Huge amount of money injected creating massive amounts of jobs, and massively improving the German infrastructure.

Perhaps an F1 track wasn't the best thing for them to invest the money into, but the spending the money thing isn't the most idiotic economic concept. It's just not the one that the Western World is adopting at the moment...

kd
 
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I don't see the calendar stretching to 21 races any time soon. Given that teams are anticipating taking a big hit on new 1.4 turbo engine development costs for 2014 and the constant pressure to lower the budgets of F1 teams, adding more races to the schedule is not really an option.

Whilst I imagine few would rue the loss of bland races such as Sakhir, Sepang or Beijing (which are the real money-spinners in the long term) to make way for a Greek race meet as well as the forthcoming New Jersey street circuit, there are far better tracks that could be brought back into the calendar and probably for a fraction of the cost (Imola, Jerez, Paul Ricard, Esoril, Magny Cours, to name but a few).

**** it, I wish they'd never let that twit Tilke ruin glorious circuits like old Hockenheim...
 
Theophany said:
I don't see the calendar stretching to 21 races any time soon. Given that teams are anticipating taking a big hit on new 1.4 turbo engine development costs for 2014 and the constant pressure to lower the budgets of F1 teams, adding more races to the schedule is not really an option.

Whilst I imagine few would rue the loss of bland races such as Sakhir, Sepang or Beijing (which are the real money-spinners in the long term) to make way for a Greek race meet as well as the forthcoming New Jersey street circuit, there are far better tracks that could be brought back into the calendar and probably for a fraction of the cost (Imola, Jerez, Paul Ricard, Esoril, Magny Cours, to name but a few).

**** it, I wish they'd never let that twit Tilke ruin glorious circuits like old Hockenheim...
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I'm not really sure why Tilke is still allowed anywhere near F1 track design... Ok, he's done some safety stuff, but the number of drivers who have criticised him is massive.

kd
 
Come to the motor sport section, you'll love it, we chat about F1, we bicker about pointless discussions that usually end in who is the better driver, followed by more bickering and the serious business cat being produced to remind everyone they are going over the top.

As said in there the Greek GP just wont happen, there is no way in a frosty hell Greece will pull this off, people will turn up, it'll get done in time and that it wont end like Bahrain last season...
 
I thought it was only costing Greece 30m to make as their getting external funds from a company?

given that its a pretty fair deal , creating jobs yadda yadda.
 
I know this isnt anywhere to the same scale but perhaps this might be of use.

Im not sure how many of your know about the North West 200 (NW200) motorbike road race in Northern Ireland ?

Its the single biggest sporting event in the country and bringing up to 150k foreign nationals into the area. Bear in mind we are a small country so it does make an impact. The money brought in for this weekend of racing and festivities will generate enough cash for the restaurants and bars of the local area to survive the whole year. They wouldnt be able to live without this single point of income brought in.

Its also a great way to get away from bloody football and its associated sectarianism in this country :D
 
BDEE said:
If you read the article it tells you

"Mr Samaras will target pensions, benefits, and top civil service pay in a bid to unlock the next €31bn payment from the EU"

So there is his cash :)
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Ah indeed, that will teach me for not reading things fully :o
 
Overslop said:
One thing to consider is that even if the track itself doesn't make profits in the short term, there will be plethora beneficial economic side-effects of having an F1 race in your country. Don't know enough about the specifics to say much more than that and not saying it's a good/bad thing.
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not with the amount of money you have to pay f1 for a race.

its taken so many circuits into/close to bankruptcy even really famous circuits often complain the fee is to high.

the economy benefits from tourism seem to be a myth spread by FOM so they can charge silly high fees, just like the great benefits the olympics brought the uk utter BS
 
Muffin` said:
It a terrible idea, Keynesian is all very well for anyone but the PIIGS. They're on bailout after bailout as they can't get affordable loans to run the country, never mind start off massive government investment
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I'm not saying they're doing the right thing. But there's solid economic theory behind the options.

kd
 
There has been constant chatter about moving away from European races and going East & South. This just doesn't make sense. I can't see them basing a race in Greece, at least not a yearly race. I can't see how this will work.

Could it just be posturing by Greece, trying to convince us that things aren't that bad?
 
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