Financial Fiasco for Formula E in Montreal

Since its launch, Formula E has capitalized on its ability to integrate into the city centers of major metropolises with its electric cars, in stark contrast to Formula 1, which is relegated to tracks in far-flung outskirts.

However, the city of Montreal has chosen to focus on F1 rather than its electric rival. Mayor Valérie Plante announced that she was giving up on the event, initially planned for the end of July 2018: At the very least, a new Formula E race in Montreal in 2018 would have cost between 30 and 35 million dollars in subsidies and investments for the city. It is important to draw the line. Formula E will not return to Montreal under these conditions. The politician thus referred to a financial fiasco, openly criticizing the economic model implemented by the previous administration.

The major disadvantage of organizing events in the heart of large cities is that it precisely has a significant impact on the city in question. For instance, an entire neighborhood was enclosed for several weeks by the installation of large concrete blocks that surround the track. These cost the organizers a hefty $7.5 million. Local merchants thus complained about the decrease in their foot traffic and consequently their revenues.

An alternative solution was to move the event to the Gilles Villeneuve circuit, which is very easily accessible by metro. However, a $50 million construction project is already scheduled to begin following the F1 Grand Prix, planned for the weekend of June 8 to 10, in order to significantly modernize the paddock.

It would also have been possible to change the location of the event to another part of the city, but that would not have solved the significantly deficient financial equation. This is why the municipality requested a postponement of the event for a year, aiming for a return in 2018-2019, but this was refused by Formula E, which intends to make its events permanent and therefore does not want back-and-forth changes in the calendar.

The Quebec city thus draws a line under this event, whose popular success was not achieved since the promoter revealed last November that out of the 45,000 tickets issued, 20,000 had actually been given to suppliers and residents of the concerned area. According to information from the local newspaper TVA Nouvelles, the actual ticket sales would only reach 5,000 units. By comparison, Montreal was the event that gathered the most spectators in F1 during the 2017 season, with 360,000 people over the whole weekend.

The FE must therefore quickly find a new destination capable of hosting the two events scheduled in the calendar.

With the participation of www.racingbusiness.fr