Ecclestone lost Canadian Grand Prix gamble - big time

The price to put on the Grand Prix of Canada F1 race in Montreal dropped $100 million because head honcho Bernie Ecclestone either overplayed his hand or misjudged the willingness of governments to pick up the tab, the promoter of this year’s event suggests.

Francois Dumontier, president of Octane Racing Group, Inc., said Thursday that when negotiations over last June’s Grand Prix broke down in late 2008, F1 commercial rights holder Bernie Ecclestone had been demanding $175 million over five years.

When agreement was finally reached in November on a five-year deal to return Canada to the Formula One calendar – this year’s race is scheduled for June 13 – Ecclestone settled for $75 million.

"He dropped $100 million," Dumontier said.

"That’s how much he wanted to come back to Canada."

The Octane Group chief flew into Toronto Thursday specifically to meet the city’s motorsports media and to drum up interest in this year’s race at Circuit-Gilles Villeneuve on Ilse Notre-Dame.

This has not happened in recent years, if ever. Does this mean the Grand Prix is having trouble selling tickets?

"Not at all," said Dumontier, adding that two of the circuit’s 11 grandstands – including a prized location at the hairpin – are already sold out.

"And when Michael Schumacher officially announced he was coming back to race again (on Dec. 23), we had a spike in sales then, too."

But the man who took over the Montreal promoting reins from long-time Quebec motor racing czar Normand Legault emphasized that the race and the city want everyone to come.

"This isn’t Montreal’s Grand Prix," Dumontier continued. "This is the Grand Prix du Canada and we want to share it with all Canadians."

He acknowledged, however, that the time to promote the event had been shortened considerably.

"When the ‘09 race was cancelled, it changed things dramatically," he said. "Instead of going from the race one year to the race the next, we didn’t sign the agreement for 2010 until the end of November and we didn’t start to sell tickets until December so we have less time.

"The Toronto market is very important to us and that’s why I’ve come today to talk about the Grand Prix."

Dumontier said that in 2008, in addition to negotiating a new agreement for the Grand Prix, Ecclestone and Legault were having personal business issues.

"I was part of the previous team," Dumontier said. "I was executive vice-president (of Legault's company) and I knew what was going on. It came out (in the media) that Bernie was the guy who took away the Grand Prix but it takes two to tango.

"In that case, they had a commercial dispute. They were in a business relationship for a long time – Normand was the promoter since 1996. It was a situation that just built up."

According to Dumontier, Ecclestone gambled that – at the end of the day – government would step in and save the 2009 Grand Prix.

"If you look at the 19 other races on the calendar, " he said, "we in Montreal were the only one where the government, at some level, wasn’t supporting it. Look at all the other races in the world. Government is in there somewhere – sometimes all the way in there."

When Ecclestone ran into trouble closing sponsorship deals with corporations, he turned his eye toward Ottawa and Quebec City.

"Bernie, in his mind, said a government cannot go bankrupt, a government cannot just walk away. So I’m pretty sure that at the end of the day, he was expecting the government would jump in and save the race."

Dumontier added that it very nearly happened.

"There were negotiations right up until the end of November (2008)," he said. "But then, I think our government was well-advised to pull the plug and tell him the money was just not there."

The 2009 Grand Prix of Canada was cancelled shortly afterward.

But Ecclestone came under intense pressure almost immediately from sponsors and the teams to get the series back to North America, particularly to Montreal.

Knowing that, Dumontier said he decided to wait out Ecclestone – to see if he would come to him rather than the other way around.

 "I wanted to see what he would do," he said.

What Ecclestone did was to contact the mayor of Montreal. Gerald Tremblay, in March of 2009. Dumontier still didn't bite.

"Then Bernie called me in May - it was a very short call, three minutes and he wanted to know if we could talk - and we met in London in June and several times after that," the new promoter said.

"We negotiated up until November and we signed the deal at the end of November. It was quite an experience, dealing with him."

As has beeen reported, the five-year agreement calls for Ottawa and the Montreal Tourism Office (an association of hotels and restaurants) to contribute $5 million each per annum, the Quebec government will pitch in $4 million a year and the city of Montreal will pay $1 million.

"It’s a good deal for everyone," Dumontier said. "F1 is back in North America and Bernie – who was under big pressure from sponsors and the F1 teams to get back to Canada – is happy and everyone in Montreal is happy.

"The hotels lost $22.9 million because the Grand Prix wasn’t there."

Comments

[allenparkpete]

There's a chance Jacques Villeneuve might be racing later this season with Stefan GP (which has the former Toyota F1 cars)if Campos and USF1 disappear. Rumor has it Campos has bought USF1 while another rumor has USF1 merging with Campos. Which means Bernie circus is one team short. Villenueve at the Canadian GP would sell a few tickets...don't you think, Norris?

[Bill Taylor]

Villeneuve going head-to-head with Schumacher one more time? Gotta love that rumour!

[jeff]

That will be a good boost for Montreal.