Here's a good article from Dieter Rencken at Autosport in which he discusses some of the ongoing challenges and irregularities / instabilities of how the F1 calendar is structured (and races are awarded).
Dieter Rencken wrote:
It's been a subtle but profound shift in strategy on the part of F1's commercial rights holder, Formula One Management: where the six grands prix (Bahrain, China, Turkey, Valencia, Singapore and Abu Dhabi) added to the calendar between 2004 and '09 were all government-backed, the latest half-dozen (India, Texas, Austria, Russia and New Jersey) - with the arguable exception of Russia's race - have all been privately funded, with possible public subsidies being applied retrospectively.
True, the events in Spielberg (Austria), Sochi (Russia) and New Jersey (USA) have yet to be confirmed, but in all instances their promoters are adamant the events will be staged in 2014, to the extent that the first-named pair started marketing activities around dates they claim to have been granted by FOM - despite no draft calendar having (as yet) been lodged with the FIA's World Motorsport Council, F1's ultimate authority.
The state-supported trend is widely believed to have been instigated by Malaysia in 1999 - not coincidentally within a year of Bernie Ecclestone and his family acquiring control of F1's commercial rights, initially for 13 years before being extended by the FIA for a full century at no additional cost.
After numerous transactions - some highly controversial - the rights-holding entity mutated into FOM, ultimately controlled by CVC Capital Partners and managed by Ecclestone as five per cent shareholder and CEO.
Malaysia perceived a sport with a global following measured in hundreds of millions as providing a perfect platform for its expanding tourism industry, with the added bonus that a grand prix would project the nation as being progressive and 'First World'.
However, it was far from the first, for F1 and state propaganda had long been bedfellows, albeit slightly uncomfortable ones.
South Africa's apartheid-era government, for example, controversially bankrolled a host of grands prix, using front companies as 'sponsors', while Argentina's junta aimed to buy respectability with its grands prix in the '50s.
Argentina's brief return in 1995-98 was none other than a clumsy attempt at rebuilding its battered post-Falklands image. Hungary, then a socialist satellite state, replaced South Africa in 1985, again for propaganda reasons.
Melbourne adopted a different tack, dipping into state and city funds to polish its marble after arch-rival Sydney stole its strap-line of 'Australia's Sporting Capital' by snaring the 2000 Olympics, announced in September 1993.
Three years later Australia's grand prix had switched from the streets of Adelaide to a park-based Melbourne circuit - in exchange for a hefty fee, most of which went to the teams under terms of the then-prevailing Concorde Agreement's provisions.
However, in the main, races were promoted by entrepreneurial impresarios or motor clubs. Then, with ownership of the sport's commercial rights firmly in Ecclestone's sights after his long-time friend Max Mosley was elected to the FIA's top job, the F1 tsar no longer had the appetite to deal with promoters and mega-enthusiastic members of circuit-owning car clubs who relied upon gate money to settle their fees.
Thus he switched tack, going, instead, for government funding on the back of promises of increased tourism, global recognition and the opportunity of joining his elite club: less than 10 per cent of the world's countries hosted a grand prix, and generally these were so-called First World nations.
Unlike the quadrennial Olympics and FIFA World Cup extravaganzas, literally anyone could join in - provided they paid. And, in the (Middle) East they paid best of all.
No facility, sir? "We have Mr Hermann Tilke and his pencils on stand-by. He can advise on the pros and cons of street circuit versus permanent track; our broadcast department can provide TV numbers and our travel company is itching to book rooms. Whatever floats your boat, Mr Minister; simply sign on the dotted line for five years (or 10). Rest assured the contract will remain confidential..."
Thus Sepang International Circuit has since hosted 15 grands prix (plus MotoGP). It is, though, fair to record that attendance - and by extension tourism spend - has not exactly been in line with expectation, what with around 40,000 payers in recent years. A total capacity of 150,000 bums bears testimony to this.
Bahrain and China followed five years later, both building state-of-the-art circuits in the middle of nowhere ahead of their inaugural 2004 races. Again, paid attendance has been far from scintillating, while Turkey rapidly pulled the plug on its F1 aspirations despite the circuit having Istanbul's 14 million population right on its doorstep.
That Bahrain continues to find itself on the calendar confounds most folk, for only the desert kingdom's Ring of Steel keeps protesters from disrupting the race.
That said, eye-watering annual hosting fees of £40m surely salve the collective consciences of the commercial rights holders, which ultimately include venture capitalists, a US teacher pension fund and a family trust paying stipends to socialites.
The Chinese are known for copying, and Shanghai certainly excelled itself, being quick to take a cue from Melbourne after Beijing was (in July 2001) announced as 2008 Olympics venue. Within three years the coastal city had not only signed for a grand prix, but built a futuristic 150,000-seater complex for an estimated £360m at a time when most Chinese putted about on mopeds.
However, like the country's space programme, which first sent a man into orbit a year before the circuit opened for business in 2004, the circuit has been slow to take off.
The event is regularly subject to rumours that each race may well be its last, and four years ago Ecclestone took the unprecedented step of heading for Beijing on the morning of the race - allegedly to open discussions with the capital city after Shanghai's extension talks stalled.
The deal was eventually extended to 2017, but only after a hefty discount was granted.
Istanbul dropped out despite virtually every budget airline offering affordable (three-hour) flights from Europe's main centres to the only city straddling two continents, having an extremely hospitable climate for three-quarters of the year and reasonable hotel rates.
Tellingly, last year its sports/tourism ministries refused a third chance of a race after Bernie had previously stepped in personally to salvage it after just three years.
Valencia is as good as gone despite the city's fathers (and mother) scurrying about like headless chickens, waving contracts left, right and centre as the Circuit de Catalunya outside Barcelona vows it alone will host races on Spanish soil.
Again, attendance had not been up to scratch despite the Mediterranean city's tourism potential. Valencia's councillors had failed to comprehend that F1 fans are averse to being burned to tinder while cars circulate on bumpy streets cutting through a disused container port. Four down; two to go.
Singapore's race is funded via a public-private partnership the details of which are closely guarded save that the total project initially cost £75m (plus annual hosting fees), with the city-state's coffers picking up 60 per cent.
When the race's contract expired last year, there was much huffing and shuffling on the governmental side before the deal was renewed through to 2017 at, say insiders, a discount of 30 per cent on the 2012 fee.
At the time Ecclestone would only quip: "A gentleman should not talk about money, nor last night," which is telling in itself. It's worth recording that at the time CVC was still bullish about floating F1 on Singapore's Stock Exchange, and vivid memories of a defunct night race would hardly have aided the cause of said IPO.
In 2010 Abu Dhabi's emirate-funded, glittering Yas Marina Circuit - situated on an exotic island - paid heavily for the privilege of hosting the season's finale, an event that eventually turned out to be a historic four-way title showdown featuring Spain's Fernando Alonso (Ferrari), Australian Mark Webber and Germany's Sebastian Vettel (both Red Bull), and Great Britain's Lewis Hamilton (McLaren).
Given the plethora of cost-effective Middle Eastern airlines servicing the region, the UAE's status as European/Australasian hub and availability of hotels to suit every budget, the country's sophomore race should by rights have been a sell-out. In the event it sold just 30,000 of its 40,000 seats.
Against this background, any wonder that governments across the world are shying away from sponsoring grand prix projects, particularly when times are tight?
When governments change, as they are more regularly than at any time since the Second World War, incoming administrations are quick to highlight failed and/or extravagant projects instigated by their predecessors.
Once the facts are published, critics invariably refuse to extend contracts lest they be tarred with the same political brush. Thus it is little wonder that two of the new grands prix to have fallen away - in Spain and Turkey - have been staged in democracies, while prospects appear thin on the ground: during the past five years Mexico, South Africa (Cape Town) and Argentina have all shied away from underwriting grands prix.
Thailand's mooted event is unlikely to see the light of day (or night) after the local government refused to amend its statutes. Qatar seems content with MotoGP, and the closest Dubai gets to F1 is as hoarding sponsor via Emirates Airline and a potential test deal at the Autodrome in January.
When the Nurburgring, on a timeshare deal which means it rotates with Hockenheim, recently plunged into liquidation, both the Ahrweiler region and Rhine Palatinate state refused to fund the 2013 edition. Did Hockenheim step in? No, its city fathers were not prepared to lose money every year.
France, which hosted motorsport's first grand prix over a century ago - giving the sport the term - made a derisory offer of state support when approached by Magny-Cours, while the sport's (and Ecclestone's) widely published travails (and the extravagance of his offspring) hardly provide inducement for government ministers to reach for their pens, particularly during pre-election time.
Ecclestone's disciples point to the scandals and controversies that have afflicted the IOC and FIFA, but this overlooks the fact that they need find but one city every four years. F1 needs to sweet-talk more than 20 a year, and contracts with parties facing various well-documented legal actions hardly reflect well on election manifestos, while £12m weddings don't sit well with the taxpayers who ultimately bankroll grands prix.
Thus the shift away from publicly funded races to, initially, Korea and India, and more recently westwards, to wit Russia, Austria and the USA (x2). Intriguingly, four of the sextet involve property developers - one is Sochi's Winter Olympics legacy project.
The race at the Red Bull Ring outside Graz is said to be privately funded by drinks magnate Dietrich Mateschitz, but benefits from an effective 15 per cent discount off the going rate on account of Red Bull Racing's, and Toro Rosso's, commercial deals with Ecclestone, the former team in particular enjoying highly preferential terms. Given F1's revenue distribution structure, around 15 per cent of the fee comes straight back to Red Bull.
But, does going private solve the overall problem? Nope...
Korea is said to have defaulted on its contract at every turn, with virtually every guideline being bent to stage the race on its allocated date, while India is just the latest to fall off the calendar. Its promoters, the Jaypee property group, vow that its absence from the 2014 fixture list is a temporary hiccup. Others in the loop dispute that. Either way, Budh International Circuit has needed to drop ticket prices to £25 to find takers.
Things aren't going swimmingly across the Atlantic, either. Austin's race was dropped from the 2011 calendar over a fees dispute. New Jersey's contract has again been renegotiated and still New York's skyline is no closer to having a firm grand prix date than it was 12 months ago.
Closer to Europe, things are no better: Sochi's promoters, JSC Omega, missed the July 31 application deadline for lodging applications for a grand prix date due to a contractual dispute with the Russian Automobile Federation, the FIA-delegated authority in the country.
This alone suggests the Russian Grand Prix is not a fully-fledged state project, for would the RAF argue with President Putin?
Finally, as pointed out here a fortnight ago, the Red Bull Ring faces an uphill struggle with local and government authorities on the noise and crowd fronts, and it will be intriguing to see whether officials grant the necessary exemptions in time.
Public or private, FOM patently has issues with the full spectrum of promoters - pointing to a deep flaw in the selection process. The cost of entry, whether for governments, or entrepreneurs or circuit owners, is simply too high and the demands on them even higher.
The recurring theme in the foregoing is hosting fees and subsequent discounts, and no sustainable business is built on price reductions, but on ongoing support.
Where once hosting fees started low and gradually increased, they now start high, then reduce as races come under pressure, which surely is a cock-eyed way of going about business. Any wonder F1's calendar is an ongoing mess?
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