Mexico will not renew the Grand Prix of Formula 1
The Grand Prix of Mexico will end its third stage in the country this 2019 after the federal, local and Inter-American Entertainment Corporation (CIE) did not reach an agreement to renew their contract with Liberty Media, owner of Formula 1, said sources to ESPN.
After months of negotiations, CIE could not convince the government led by President Andrés Manuel López Obrador to pay the 800 million pesos needed to maintain the Gran Circo during the next five years.
The non-renewal of the contract and the departure of Mexico from the calendar coincide with the arrival of two countries to it, Vietnam and the Netherlands, the latter announced on Tuesday and which will return after 35 years. In addition, they count on the grid with the presence of the young Max Verstappen.
Mexico is one of the two countries that will be left out of Formula 1 from next year and in the absence of confirmation of the calendar, other circuits that have not renewed with Formula 1 are Silverstone (England), Hockenheim (Germany) and Montmeló (Spain) ).
In the absence of the last edition in the AHR, Mexico became the best race of the circuit for four consecutive years, something that has not achieved any other during the calendar.
According to the federal government, the 2017 edition left an economic spill in the capital of the country of 14 billion 770 million pesos, which makes it the sporting event that leaves more money nationally.
Mexico City government offers 400 million pesos for Grand Prix Mexico
"We continue to see if with private resources this activity can be sustained"
After the past March 1, Mexico lost its right of preference to host the Grand Prix of Formula 1 next year, Claudia Sheinbaum, Head of Government of Mexico City, said yesterday that the federal government is willing to invest 400 million pesos for the event to be held.
"The problem is that the Grand Prize of Mexico was made with a financing of 800 million pesos from the federal government, then, today we have other priorities and there is already the possibility that it will be made with 400 million pesos, but in any case it is a lot of resources to make it public money," Sheinbaum Pardo told the media at the end of the Sports Ambassadors event, which she led at the Old Town Hall.
The president stressed that the Mexican capital earns a lot in the tourism field with the presence of the Grand Prix, but that the money is not infinite and therefore the Government would contribute 400 million pesos and not 800, as it happens since 2015, when Formula 1 returned to the Aztec nation after 23 long years of absence.
"The issue is that these are public resources. Of course, the city earns a lot in tourism and other areas, but these are 400 million pesos and the money is not infinite, we still see if with private resources this activity can be sustained; Obviously Mexico City does not want to lose Formula 1, " added the former delegate of Tlalpan.
"We have other priorities, but there is the possibility that it will be made with 400 million pesos; Anyway, it's a lot of resources to make it public money "
On the other hand, Sheinbaum said that if the government does not make a renewal with the people of Formula 1, other competitions such as Moto GP could replace the highest category of motorsport.
"We also look for other sporting events of international level that the Autodromo Hermanos Rodríguez can host, such as motorcycles and other subjects that we are already looking for," she said.
On March 1, the organizers of the Grand Prix of Mexico announced that the preferential right to preserve the event for next year's season was lost.
"We announce that the organization of the event has lost the preferential right to keep that date within the 2020 championship; nevertheless, negotiations with both F1 and the authorities of our country continue, with the best spirit of looking for viable alternatives for the permanence of this competition in Mexico, "the statement said, which means that if another country intends to organize one of the races of the campaign corresponding to 2020, will be given priority to replace the Grand Prix of Mexico, as long as it meets all the requirements of the International Automobile Federation.
So far, the Grand Prix of Mexico has been held 20 times, all at the Hermanos Rodríguez Autódromo. The first time the event was held in the building of the Magdalena Mixhuca Sports City was in 1962. However, this race had no official status, so it did not award points.
Mexico loses the preferential spot for the 2020 Grand Prix
Mexico lost the preferential right to keep its date within the Formula 1 calendar in the 2020 season, the organization of the Grand Prize informed, although it assured that it continues in negotiations with the government of the country to achieve an extension of the contract for five years, as the current, which expires next November.
The organization of the Mexican Grand Prize, owned by the Interamerican Entertainment Corporation (CIE), had until February 28 to sign an extension that would guarantee the permanence of the same date in the calendar that it has used in the last four years, which is the last weekend of October or first of November.
That date, which is now vacant for other applicants, had been part of the success of the Grand Prize, was awarded as the best calendar four years, because it coincides with the celebrations for the Day of the Dead, one of the most traditional celebrations in the country, which permeated the so-called Great Circus, combined with an impeccable organization and attention, as well as the passion of the Mexican public, which captivated Formula 1.
"We announce that the organization of the event has lost the perennial right to keep that date within the 2020 Championship; nevertheless, negotiations with both Formula 1 and the authorities of our country continue with the best spirit to look for viable alternatives for the permanence of this competition in Mexico," the CIE informed in a press release.
The government of Mexico, together with the CIE, signed a five-year contract with Formula 1, which expires after this year's race, which will run on October 27.
Mexico has hosted the Grand Prix from 1962 to 1970, as well as from 1986 to 1992, and brought it back four years ago with a contract for 413 million dollars and five years. Of this amount, 213 million dollars were paid by the federal government through the Ministry of Tourism and the rest by the aforementioned corporation.
The current administration of President Andrés Manuel López Obrador established the position of not contributing more public funds to carry out the Grand Prize from 2020 and that these resources will be integrated into the construction of the so-called Tren Maya, a project that seeks to connect tourist sites in the Eastern peninsula of Yucatan, such as Cancun and Tulum, with archaeological sites, including the ruins of Palenque.
Claudia Scheinbaum, head of government of Mexico City, said that other mechanisms are being studied to support the race.
"When news about the negotiation that takes place with the authorities, in a timely manner and only through the channels and official spokesmen, we will be making public knowledge.
"Meanwhile, we continue working towards the fifth race of this project that will take place from October 25 to 27, 2019 at the Hermanos Rodríguez Autódromo," notes the CIE communiqué.
Formula 1 will start in Australia, from 15 to 17 March, and Ferrari concluded the preseason at the Circuit de Barcelona-Catalunya, in Montmeló, with the conviction that it has an initial advantage in terms of speed to give Mercedes a fight for the Title.
The German Sebastian Vettel concluded the pre-season tests with the fastest lap for Ferrari, although the five-time world champion, Briton Lewis Hamilton, kept his Mercedes close. The lap of one minute and 16.221 seconds of Vettel surpassed the best record that the French Charles Leclerc, his new teammate in the team, had established on Thursday, as the best of the preseason.
Meanwhile, Sergio Checo Pérez of Sport Pesa Racing Point finished the pre-season tests with a productive day, completing 104 laps in the final session before the team moved to Melbourne.
"It was a positive last day in the car for me. We did a lot of work and I think we have a good idea where we are standing.
"Starting the season with some points would be good, but in the end, it's a long season, so we need to get to Melbourne and see how we really compare with the other teams," said Perez.
Could Argentina possibly be the next F1 host?
Last Tuesday at his morning press conference, the new Mexican president, Andrés Manuel López Obrador, announced that there will be no more money from the State to keep the date: "I do not know how the F-1 contracts are if they are not signed yet. We will not be able to. " Although he expressed his interest for the event to continue in his country. "If it does not involve money, I endorse, I agree," he admitted. "In some cases, these events were financed by the tourism development fund and that fund is committed to the construction of the Mayan Train," he explained. "We will continue to support all sports, but with austerity, without excess," concluded the Mexican president.
This panorama of uncertainty draws attention already in the last four seasons, Mexico was chosen by the International Automobile Federation (FIA) as the best Grand Prize in terms of its organization and with more than 300,000 people counting the three days of activity.
The contract for the five-year career was through a public/private investment: the State put 213 million dollars and the local promoter, Grupo CIE (Inter-American Entertainment Corporation) paid another 200 million. Both parties, in equal halves, also paid for the remodelling of the Hermanos Rodríguez Autódromo, which was 50 million. According to a study by Formula Money Aecom, the 2015 edition already left the Mexican economy 222.8 million dollars and 265.8 million in media investment.
The race next October 27 at the circuit of the Mexican capital could be the last if on Thursday, February 28 there is no news. That date is the limit that the CIE Group has, to renew the contract with FOM. In the last few hours, this corporation's efforts were known to get investors to guarantee continuity. Otherwise, as of March 1, they will compete with other interested countries.
Since Liberty Media bought for 4,400 million dollars the majority of shares (35.1 per cent) of FOM in September 2016, they set their sights on opening the market. During 2017 they negotiated dates in different parts of the world and their original idea is to have 25 races in a calendar that currently has 21 events in four continents. But one of them reveals: that America increases its appointments.
In Argentina, F1 has not run since 1998, when the German Michael Schumacher won with a Ferrari. That was the last competition of a four-year contract that was paid in its entirety privately. It was another country context with an exchange rate parity between the peso and the dollar.
Undoubtedly, recovering an F-1 date is a state issue. It is an old wish of Mauricio Macri who seeks that goal since his time as Head of Government when in 2013 he created the Pro F-1 commission, to try to get the city back to the Maximum. In 2014, he ordered the creation of a bill to add value to the Buenos Aires Autodromo Oscar and Juan Gálvez, which reached the local parliament in 2015. With his entry into the Presidency of the Nation, a rapid advance was expected.
Although there were security tasks, infrastructure works such as electrical and water connections, painting works and improvements in the grandstands (seating in three stalls and roofing of two corporate buildings), the Autodromo did not change much. To have the F-1 requires much more. It is a cost of 50 million dollars per year in a five-year contract. In turn another 45 million to put the capital road course in the Grade 1 of the FIA, the necessary to have a race of the Maximum. That is to say, almost 300 million of the North American currency. The GCBA and Nación are interested, but, in principle, they can not contribute money. Yes, they bet that it is put by a group of private companies. The negotiations existed and there were personal meetings between emissaries of GCBA and FOM.
According to a GCBA source told Infobae, the last talks with FOM were in September 2018, a few days after the dollar soared in Argentina. Consulted if the possible fall of Mexico would open the doors to Argentina, the official responded "I see it difficult. The situation of national motorsport is not the best and I think that if there were funds to help in that sense".
Imminent, the breaking up of Formula 1 in Mexico
Yesterday, in his traditional morning conference, President Lopez Obrador affirms that his government will not provide resources for the renewal of the contracts that link Formula One with Mexico and was blunt with the possibility of a renegotiation: "if it does not involve money, I endorse. ''
"If they are not already signed (the contracts), we will not be able to (contribute) because in some cases these events were financed with the fund to promote tourism and that fund is already committed to the construction of the Mayan Train," he said.
The first agreement between CIE and FOM expires on October 27, after the celebration of the Grand Prix of Mexico this year and a deadline has been set, which expires on the 28th of this month, to formalize or rule out a new agreement. for five more years. In each of its four previous editions, this event has been awarded by the FIA as the best of the year.
CIE, which has not issued a position on the matter, would be looking for alternatives to maintain the event in the country's capital.
5 years, the original agreement between F1 and Mexico
4 times that the GP of Mexico is awarded as the best
43 MDD per year contributed by the Federal Government to the Grand Prize
215 MDD are required to renew the agreement
The day that the companies that drive the Grand Prize of Mexico get public resources and the endorsement of the federal government to maintain the sports show for another five years is perceived farther away. Less than three weeks before the deadline for Mexico to achieve a place in the Formula 1 calendar, the López Obrador administration has not reversed its decision. "It is important to focus efforts on private initiative; maybe the solution is just around the corner, "José Sánchez Jassen, deputy chairman of the organizing committee, said in an interview.
Since his return in 2015, the Grand Prix of Mexico is for the fourth consecutive time the best-organized race of Formula 1 (F1). However, these achievements do not guarantee its continuity by 2020.
The permanence of the show is in suspense because the government of President Andrés Manuel López Obrador has not granted his endorsement, an essential requirement that Formula 1 requests to renew the contract for five more years.
The deadline for obtaining federal support expires next Thursday 28. Otherwise, the firm that owns the race will no longer be able to guarantee a date for Mexico.
F1 is the world's leading competition in motorsports, the International Automobile Federation (FIA) is the governing organization and the owner of the commercial rights is Formula One Group, which since September 2016 is operated by the American group Liberty Half.
The race that takes place in each host country is called Grand Prize and gives shape to the series called World Championship of Drivers and Constructors of Formula 1.
The wait is due to the president has publicly announced that his government is not willing to use the treasury to finance the company organizing the competition in Mexico: Inter-American Entertainment Corporation (CIE).
The company founded in 1990 obtained from the administration of Enrique Peña Nieto public resources for 4 thousand 237 million 380 thousand pesos (equivalent to 215 million dollars) to sign with the F1 a contract for five years, which expires next October in the frame of the Grand Prix of Mexico 2019, edition that is guaranteed.
Although the government of Peña Nieto proposed the return of F1 under the argument of projecting the Mexico brand, in reality, the benefits for the return of investment with public money are unknown. It has only been mentioned in a general way that the income is basically reflected in hotels and restaurants, among other service providers, for the concept of economic benefits.
While the official rejection has not been announced, the reluctance to race has permeated the National Commission of Physical Culture and Sport (Conade), whose owner, the ex-escalator Ana Gabriela Guevara, has also ruled against spending on the F1.
Last August 8, in an interview with the sports supplement Cancha, the former legislator also clarified that it was not closed to the continuity of the competition, but considered it costly.
Similarly, the head of the Government of Mexico City, Claudia Sheinbaum, questioned the completion of the Grand Prize in 2020.
On January 31, the official said that the federal government "has no longer contemplated this resource because it is allocating, most of the fund, to the completion of the Mayan Tourist Train."
In the contract signed in 2014, between Formula One Management, CIE and the government of Enrique Peña Nieto, the latter committed to allocating 43 million dollars annually for five years through the Tourism Promotion Council of Mexico of the Ministry of Tourism.
"We have sat down with Ocesa - subsidiary of CIE - to see if the amount can be lowered or if there are some alternatives to make the decision on whether to continue F1 in 2020 or is too expensive for the city," Sheinbaum added on the subject.
19 days after the expiration agreed between the Organizing Committee of the Grand Prix of Mexico and the International Automobile Federation (FIA), the renewal of the race is complicated because CIE, in addition to that, must get 215 million dollars, needs the endorsement of the López Obrador administration that the Formula 1 demands as a guarantee, as it happens with the International Federation of Football Association (FIFA), when it organizes a World Cup, or with the International Olympic Committee for the Olympic Games.
According to the National Commission for the Protection and Defense of Users of Financial Services (Condusef), an endorsement is committed to answering for the responsibility of the person who hires a credit, in case it fails to pay.
For effects of the permanence of Formula 1 in Mexico, the federal government, to accept, would be the guarantor of the Grand Prize.
On October 30, the CEO and general director of CIE, Alejandro Soberón, acknowledged that without the use of public money "it would be completely unviable to maintain Formula 1, practically it would be ensuring the disappearance of the great circus in Mexico.
"This is a public-private collaboration project in which each one must contribute the part that corresponds", justified before the journalist José Cárdenas, from Grupo Fórmula, the owner of the consortium that manages real estate, such as the Autódromo Hermanos Rodríguez, Palacio de los Deportes, the National Auditorium and the Hipódromo de las Américas.
The race can continue
José Sánchez Jassen, deputy chairman of the Organizing Committee of the Grand Prix of Mexico, talks about the future of Formula 1: "The company that manages the race initially requires the endorsement of the government of the Republic. That is the point".
In an interview with Proceso, he was also the former president of the Mexican Federation of Sports Motors AC, which formed part of the Organizing Committee of the Grand Prix of Mexico between 1986 and 1992 - together with the brothers José and Julián Abed -, recalls that at that stage of the F1 the show was made "without the economic support of the government, but with the endorsement of the authority."
Contrary to what Soberón expressed, Sánchez Jassen considers it important that the company that promotes the race focuses its efforts on private initiative, because otherwise "it would be a great sadness to miss the extraordinary accumulation of learning that F1 has left behind. all of the growth in the development of sporting events and international shows ".
The most important thing is that F1 stays in Mexico. It must say a lot, he assures, that an event of this magnitude wins four consecutive times the designation of the best-organized race of the serial.
Are Mexican entrepreneurs willing to rescue the Grand Prix of Mexico?
First we must recognize the final position of the federal government. Is it backed by the government? Is the promoter's intention to continue? Let's find all the protagonists of motorsport. Maybe the solution is just around the corner.
"They gave us the limit on the last day of February. Hopefully, it will be achieved so that the Grand Prize of Mexico is scheduled for the next five years. It would be wonderful and a great reward for all the people who have been involved in motorsport in this third stage, the first was with the Rodriguez brothers, from 1963 to 1970, and the second was from 1986 to 1992. Nothing else is necessary to wait for the president to ratify his endorsement for the race. "
The Great Prize of Mexico can survive without public resources?
I do not reach it to perceive. The race has been developed because the previous federal and Mexico City governments saw this show with good eyes.
"What I can see is that we have the capacity to continue organizing the Grand Prix of Mexico. We have the ways and the will to do it, but we must also see if we have the economic capacity.
"The important thing for Mexico is that something positive be achieved with the race, that international news talk about the good; not only talk about the huachicol, the caravans of migrants or crime. This is a sport and good promotion for the country, "adds Sanchez.