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Old 5 Mar 2013, 01:36 (Ref:3214312)   #1
BobHWS
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Montreal GP future: Bernie demands $40M in renovations & a fee increase

Ten days ago there was an article in the Montreal French language daily, La Presse, about the future of the Montreal Grand Prix. Below is my translation of the article.

The Montreal race currently has a contract good through the 2014 race. News reports indicate that Montreal's sanction fee is only $15M per year, which is very reasonable compared to the fees paid by places like Singapore and Bahrain (maybe $40M+). It is reasonable even when compared to Austin (about $28M) and Melbourne (about $35M).

The Montreal sanction fee is funded jointly by the Canadian government, the Quebec provincial government, the city of Montreal and the Montreal Tourism board. These governmental bodies would have to be the source of the $40M now needed to upgrade Montreal's infrastructure. The promoter does not make enough money from the race to make such an investment.

The article indicates that there is optimism that the authorities will come through with the money. There is fairly broad public and business support for the race and the subsidy for the sanction fee. But will the public support a $40M investment in the track plus some increase in the sanction fee? On verra.

Another bill for the Grand Prix of Canada
La Pressse
Sebastien Templier
21 February 2013

The renovations that would allow the Circuit Gilles Villeneuve to keep the Montreal F1 race beyond 2014 would cost more than was initially anticipated, forcing a reevaluation of the project. As a consequence, there has been no definitive agreement signed with Bernie Ecclestone to extend the contract for the race.

According to what La Presse has learned from a source very close to the negotiations, the total bill for the renovations, estimated to be CDN $25 million at the end of last year, will be higher, based on an initial estimate requested by the government. The new estimate is approximately CDN $40 million, which is a matter of “concern.”

The new estimate has necessitated a reevaluation of the costs and a request for new estimates. Each of the government bodies involved in the renovation project obviously wants to have precise estimates of the real costs of the infrastructure renovation project before agreeing on how to share costs and responsibilities and before signing anything.

The upgrading of the facilities at the Circuit Gilles Villeneuve is one of the main conditions to be fulfilled in order for Montreal to continue hosting the F1 race until the year 2024. The control tower needs to be renovated, the track surface needs to be repaved, a track hospital must be made available, and the garages and the paddock must be greatly improved. These are the things that account for most of the total cost of the renovations.

The other big condition that would assure the continuation of F1 in Montreal is the acceptance of an increase in the annual contribution made by governmental bodies. The next agreement to be made between governmental bodies and Bernie Ecclestone would probably include an annual increase of 4% over the current amount of CDN $15 million. The governments of Quebec and of Canada, the city of Montreal, and the Montreal Tourism Board have agreed to this annual increase.

The question of the renovation work remains to be decided: how much will it cost and how will the cost be shared? Nevertheless, authorities are not pessimistic and do not want to drag their feet. "This matter is apolitical," said our source.

An agreement on these two points--the indexing of the sanction fee and the track work--between Bernie Ecclestone and his F1 management company, Formula One Managment, on the one hand, and government bodies on the other will not happen before spring. Then it will be up to the race promoter to reach an agreement with Bernie Ecclestone.

There's hope for an announcement of good news, ideally on the occasion of the next Grand Prix of Canada in Montreal.
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Old 5 Mar 2013, 02:03 (Ref:3214318)   #2
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Well, it's going to cost Sao Paulo an estimated 60 million Euro (Euro = 1.3 US dollars) to renovate their venue. Ouch! But it desperately needs doing.

http://www.yallaf1.com/2012/11/28/ne...-brazilian-gp/

This is the sort of thing that Montreal has got to compete with.
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Old 5 Mar 2013, 02:15 (Ref:3214320)   #3
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With the US race, Bernie is playing hardball and Monty is expendable.
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Old 5 Mar 2013, 02:40 (Ref:3214326)   #4
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Was in Canada last year and went for a drive round the circuit and it is looking pretty tired. In a great location thought.
Why is their fee so low, here in Australia we're on $35m and going up every year.
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Old 5 Mar 2013, 02:55 (Ref:3214328)   #5
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money and contract aside the track facilities and the island itself is in major need of upgrades and modernization. mainly the track surface which has frequently been problematic and there is the casino, also owned and run by the province, which is old but does offer a very good buffet during a race weekend.

the island is important to Montreal and its history but mainly i hope we dont lose our race again. spend the money!
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Old 5 Mar 2013, 04:09 (Ref:3214342)   #6
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Was in Canada last year and went for a drive round the circuit and it is looking pretty tired. In a great location thought.
Why is their fee so low, here in Australia we're on $35m and going up every year.
Directly to Bernie, but $87 million in total, and they can't afford to pay the teachers. But what the hell whose counting!
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Old 5 Mar 2013, 04:33 (Ref:3214345)   #7
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Directly to Bernie, but $87 million in total, and they can't afford to pay the teachers. But what the hell whose counting!
They can. They just don't because teachers are a weak target.
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Old 5 Mar 2013, 04:49 (Ref:3214348)   #8
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Read the other week that Bernie would sign a 50 year contract with Melbourne tomoz - really smart by him, he is in his 80's, 1 final grab for cash, greedy turd...
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Old 5 Mar 2013, 15:19 (Ref:3214588)   #9
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I'd love for all the track promoters to get together and tell bernie to go **** himself.
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Old 5 Mar 2013, 16:00 (Ref:3214605)   #10
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Why is their fee so low, here in Australia we're on $35m and going up every year.
The fee is low because in 2008 Montreal called Bernie's bluff. That was when Montreal said Non to a proposed fee increase and Bernie would not agree to renew the old contract. So there was no race in Montreal in 2009.

At the time Montreal was the only race in North America so the teams and the big sponsors were not happy about not visiting the North American continent, one of their best markets. They demanded that Bernie make a new contract with Montreal.

Under pressure from the teams and sponsors, Bernie grudgingly signed a new deal for about the same amount as the old one, i.e., $15M/year for five years. This contract started in 2010 and runs out in 2014. The only thing Bernie was happy about was that he got the various governmental bodies to underwrite his fee.

Now it's time for another challenging negotiation among Bernie, the governmental bodies and the promoter. I'm hopeful, but I don't think it's a sure thing that Montreal will keep the race. Bernie has more cards to play in this game now that he has Austin in place and the possibility of new races in New York and/or Mexico. While Bernie has sometimes said nice things about Montreal in the past, I have always had the impression that he doesn't like it as a venue, or maybe he is tired of it. He must also resent getting out-negotiated after the 2009 cancellation.

I agree that the renovations are needed for the track infrastructure, but public support for spending $40M in government money on the Circuit Gilles Villeneuve plus an increased annual sanction fee may be tenuous. Most Quebeckers support the use of government money to help keep the race, but there's a vocal minority that has never really liked it. Recall that last year radical students protesting a proposed increase in tuition made the race a target of their protests. It's a good idea to keep the negotiations quiet. If things go well, there will be an announcement in time for this year's race. If not, then anything could happen, including the loss of the Montreal race.
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Old 5 Mar 2013, 20:33 (Ref:3214739)   #11
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actually what is more worrying then the student protest is the ongoing and widespread political/construction corruption scandal (the mayor had to resign back in Nov) which has hit Montreal in the past several months.

citizens of the city, the province, and even the feds may have some serious doubts funding a project that could include granting contracts to local companies which may have been involved. so it will probably be harder to keep these negotiation quite this time around.

really its not a good time anywhere in the world to be asking for public money but in this case the people of monty will be more sensitive to it then they have been in the past.
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Old 5 Mar 2013, 20:59 (Ref:3214753)   #12
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I'd love for all the track promoters to get together and tell bernie to go **** himself.
Yes indeed! Greedy *******.
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Old 5 Mar 2013, 21:41 (Ref:3214767)   #13
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I'd love for all the track promoters to get together and tell bernie to go **** himself.
That is exactly the approach Bernie took when getting the teams together when the organisers were screwing the teams.
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Old 5 Mar 2013, 22:02 (Ref:3214776)   #14
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actually what is more worrying then the student protest is the ongoing and widespread political/construction corruption scandal
...citizens of the city, the province, and even the feds may have some serious doubts funding a project that could include granting contracts to local companies which may have been involved.
Chilli, that's a good point. The huge ongoing investigation into the construction industry could prove to be another barrier to getting the F1 deal done.

For those who haven't heard about this story, here's a link to a summary from the NY Times:

Latitude - Views From Around the World
Latitude February 21, 2013,
The Sopranos of Montreal
By FRANCISCO TORO

MONTREAL —

...For years, journalists had been picking up clues that a small syndicate of firms with links to the mafia were colluding to carve up lucrative construction and snow-removal contracts among themselves, forming an illegal cartel that jacked up costs at the taxpayers’ expense. Many also suspected the racket could only be sustained through kickbacks to well-placed city officials.

After years of stalling, the provincial government finally agreed to set up a powerful and independent commission of inquiry with broad powers to look into corruption. The Charbonneau Commission (headed by the retired magistrate France Charbonneau) has electrified the province for months now, its work unfolding like a movie, as it questions one gangland figure after another and links them to crooked municipal construction deals.

This week the commission released hidden camera footage of one construction entrepreneur calmly counting out piles of cash and divvying them up with Nick Rizzuto, the now-deceased godfather of Montreal’s Sicilian mob. The entrepreneur, Nicolo Milioto — now retired, himself born in Sicily — was nicknamed Mr. Sidewalk, for the lock he’d long enjoyed on municipal sidewalk-construction contracts...

For years, Montrealers had settled into a kind of learned helplessness when faced with stories of corruption at city hall: a feeling that the people involved just had too much power and too much money ever to be called to account.

The Charbonneau Commission is starting to change that by picking at the local mob’s mantle of invincibility. With power players facing the very real prospect of long prison sentences, the old fatalism is starting to lift.
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Old 6 Mar 2013, 14:07 (Ref:3215080)   #15
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Well, it's going to cost Sao Paulo an estimated 60 million Euro (Euro = 1.3 US dollars) to renovate their venue. Ouch! But it desperately needs doing.

http://www.yallaf1.com/2012/11/28/ne...-brazilian-gp/

This is the sort of thing that Montreal has got to compete with.
Actually this is a non-issue for São Paulo... they won't give up for Rio.
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