Ecclestone gives a gift of 40 million dollars to Bahrain

One of the main questions that arose following the announcement of the Bahrain race postponement concerned the organizational fees that Bernie Ecclestone charges to host countries. Today, he stated that if the race did not take place in 2011, he would not charge the Gulf Kingdom the required $40 million.

In an interview with the Telegraph, the Formula 1 supremo was very clear: «The fees normally paid for the event are not being paid. I am not charging them for a race that is not taking place.» He also confirmed that the amount demanded was close to the 40 million dollars mentioned in the press. Moreover, he will not receive financial compensation from his insurers because Formula 1 is not insured for this type of event: «It’s like an earthquake. No one could have predicted it a month ago.»

On the other hand, he claims that the additional 20 million dollars to host the first event did not exist: « The 20 million dollars that Bahrain is supposed to have outbid to host the first event of the year have been widely and incorrectly mentioned. There were never any additional fees to host the first or the last event. We set the calendar to please the sport.

This detail is somewhat surprising since one might wonder, if this were truly the case, why the championship starts (Bahrain) and ends (Abu Dhabi in 2010) in the Middle East when this increases logistics costs. These races enjoy substantially more media exposure than other races, thereby increasing their value. It would seem surprising for Bernie Ecclestone to grant such a favor to his clients, given that he is not known for his generosity in business.

All parties involved therefore have every interest in finding a new calendar slot due to the economic consequences at stake: Bahrain may not be insured against the cancellation of an event and will therefore lose a significant source of revenue (according to the state-backed fund, Mumtalakat Holding Company, the 2008 edition generated 600 million dollars), Bernie Ecclestone will not receive his 40 million dollars championship entry fee. This amount is then redistributed to the teams based on their sporting results, which would therefore reduce their budget for the 2012 season accordingly.

Everyone is therefore losing in this situation. Undoubtedly, as soon as the country regains its calm, everything will be done to ensure the event can take place in 2011…

With the participation of RacingBusiness.fr