The Formula 1 Canadian Grand Prix will be cancelled this year for health reasons. However, the governments and F1 have reached an agreement in principle to extend the event in Montreal for two more years, until 2031, La Presse has learned. The official announcement is expected this week.
According to our information, the governments and F1 first agreed to cancel the Grand Prix for the second year in a row for health reasons. The two parties then agreed to resume the two race presentations cancelled due to the pandemic at the end of the current agreement in 2030 and 2031. The governments and the owners of F1 (Liberty Media) are currently negotiating the final financial details of the agreement.
But here's the thing: the amount of money the governments pay to F1 (Liberty Media) increases a little each year - as is usually the case in this type of contract, especially to account for inflation. So for F1, it is not enough to simply extend the contract by two years, because the years 2030 and 2031 are "worth" more than the years 2020 and 2021, in terms of rights.
From 2015 to 2024, Montreal, Quebec City and Ottawa will have paid an average of $18.7 million per year to F1 (this is an average over the period; the amount increases slightly each year). From 2025 to 2029, the price paid was already expected to rise to an average of 19.7 million per year, a 5% increase over the previous contract (2015-2024).
If the parties agree on a 5% increase like last time (in 2017), the annual amount paid by governments to F1 would increase from 19.7 million to 20.7 million. This would be an increase of 1 million per year, or 2 million for two years.
As part of the F1 contract, Ottawa, Quebec City and Montreal (the City of Montreal and Tourisme Montreal through a tax on accommodation) generally split the bill into three equal parts.
No official decision from public health authorities
In recent weeks, F1 has been waiting for a response from public health authorities in Ottawa, Quebec City and Montreal on its plans for a closed-door, spectator-free Grand Prix. F1 was requesting an exemption from health regulations to reduce the quarantine period for the 1,600 team and F1 personnel arriving in Montreal from abroad for the Grand Prix from June 11 to 13.
F1 never received a formal response from public health authorities in Quebec City and Ottawa, who have been passing the buck in recent weeks.
Faced with the obvious (but unofficial) conclusion from public health authorities that a closed-door Grand Prix would probably not be authorized, the governments and F1 then agreed to cancel this year's race for health reasons, according to our information.
Under this scenario, F1 could move its planned Montreal event in mid-June 2021 to another city this year.
F1's first choice: Istanbul, Turkey. Istanbul hosted a Grand Prix in 2020 when the F1 calendar was disrupted by the pandemic. Turkey hosted a Grand Prix from 2005 to 2011.
Istanbul also has the advantage of being geographically close to Baku, where the Azerbaijan F1 Grand Prix will be held the week before, from June 4 to 6. According to the European motoring press, F1 is also evaluating Germany's bid.
To hold a closed-door Grand Prix in Montreal in 2021, F1 initially asked governments for $6 million to pay for the expenses of organizing the race, usually paid for by the revenues generated by spectators.
We understand that the total additional cost to governments for the rights to host a race in 2030 and 2031 (rather than 2020 and 2021) is expected to be less than $6 million. However, negotiations are not complete.
In 2020 and 2021, governments will not pay F1 any race fees ($18.7 million per year on average) because the event was cancelled each time for health reasons.
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