The good news for racing fans is we get to keep our Grand Prix for another 10 years. The good news for taxpayers – whether they are racing fans or not – is we get to keep it at a bargain-basement price. Skeptics will disagree. But here’s the thing: The numbers on their own don’t tell the story. You have to put them in context.
Question: How do you justify spending $17 million a year to host an event in which millionaire drivers race million-dollar cars when our own roads are crumbling and our health and education systems need fixing?
Answer: When money generated from that event goes back into the local economy and, by extension, into our roads, hospitals and schools, in sufficient amounts to justify the investment.
The smaller the investment, then, the bigger the reward. On that score, the terms of the deal announced at Circuit Gilles Villeneuve on Saturday amount to a bargain in the big-money world of Formula One. The $17 million annual staging fee that will keep the Canadian Grand Prix here till 2024 is cheaper – by far – to what is being paid by most other host countries on the 19-race calendar.
At the top end of the scale, Abu Dhabi will pay an estimated $72.5 million for the right to host its season-ending Grand Prix in November, Reid said. No wonder one of the only questions posed by a foreign reporter during Saturday’s news conference zeroed in on the low-ball price tag.
“This is a cheap deal – how did you get Bernie to agree to it?” a British journalist asked, in reference to Bernie Ecclestone, F1’s tight-fisted ringmaster. “We’ll talk later,” Montreal Mayor Denis Coderre replied with a laugh. Denis Lebel, the federal minister responsible for infrastructure, interjected to point out, correctly, that F1 bestows special status on Montreal as the oldest Grand Prix outside Europe, hence the sweet deal. Only two other “historic” races pay less than Montreal, according to the 2013 edition of Formula Money: Italy, at $7 million, and Monaco, listed at “zero.”
So now we turn to revenues. Is the investment worth the payback? Here the numbers get fuzzy, or at least are difficult to quantify, as Coderre himself admitted. But there’s no question we are talking about much more than $17 million. Lebel said the F1 race creates economic spinoffs estimated at more than $70 million. Coderre put it at up to $90 million. Reid of Formula Money cited a Quebec-government figure of “more than $80 million annually.”
“Montreal benefits in a number of ways. The 100,000 raceday spectators bring money into the city in terms of spending on hotels, food and merchandise,” Reid said. “This is the direct spending only and doesn’t take into account the vast marketing benefit to the city of exposure to F1’s 450 million annual viewers.
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