Splitting off some good discussion from the F1 2024 topic since this is always an interesting one…
F1 hosting costs - do we have the balance right vs grassroots motorsports funding support and should there be a coordinated pushback against Liberty Media’s financial objective?
Last Friday I had the opportunity to spend all day at the Australian Grand Prix with my youngest child (19). We only had general admission tickets - so, no grandstand seating for us (I’ve done that previously and the cost is now eye-watering). Despite it just being practice day, it’s a sellout. There’s people at the gate begging to buy our basic GA tickets. Nope, we didn’t sell.
The weather is stunning. The place is buzzing with people. Great atmosphere. And despite the hordes of people (over 120,000) we still manage to get some outstanding trackside viewing just metres from the circuit (particularly T13). Absolutely no complaints - we had a super time. As for the rest of the weekend, it was perhaps the most successful race meet to date in Melbourne. Sensational weather for the weekend, more sellout crowds (about 450,000 went over the three days) and circa 40% event participation by women.
So, what’s the problem? Well, let’s talk about cost, where the money comes from, hosting fees, and diversion of hard earned taxpayer funds from other endeavours, including grassroots motorsports. Do we have the balance right?
Now, I can’t talk to any other jurisdiction in the same way I can about Australia. I’ll leave that to others. Moreover, it really shouldn’t be called the Australian Grand Prix. Rather it should be called the Victorian Grand Prix, my home state, because it is Victorian tax payers who are copping the bill. As we have since 1996. And now with a new “deal” (read being screwed) with Liberty, for the next 14 years.
Because the Victorian taxpayer is footing the bill and owns the event organiser, and despite “commercial in confidence” handwaving by the event organisers, we do get access to some basic revenue and cost information. Below is a the latest graph in the public domain detailing the Victorian taxpayer subsidy over time. It started bad, has got much worse despite a recent surge in revenue, and is likely to get (materially) worse (particularly if you have some insight into the “deal” that the Victorian Government has just struck with Liberty).
Now, I’m not for a moment suggesting there are not a whole lot of downstream and upstream economic multipliers/benefits. There are. There is no doubt the Victorian economy gets a big boost. Plus, there’s all the longer term promotional benefits. But, is it value for money? Is the balance right? Are we just bidding against other great hosting cities to the benefit of Liberty shareholders and are diverting funds from grassroots motorsports where the economic benefits could be higher again (particularly in regional areas)? Alternatively, is Liberty doing the right thing by grassroots motor sports, on-track female participation, etc, and reinvesting its take for the greater good? Do they have a societal obligation as well if they are taking from the public purse?
I’m far from convinced and think we need to push back. Of course I want F1 to stay in Melbourne. But, a AU$100 million cheque per annum (US$65 million) and growing (from 2023) is one hell of an “investment”. Imagine if just 30% of that pool was being ploughed back into your regional motorsports. Thoughts?
Astute observations and something I’ve considered myself. I happen to object to state funded races, full stop. This artificially drives up the price of hosting fees way above real market rates, and means races like SIlverstone, that have no government subsidy, struggle. Only recently has the GP become somewhat stable due to the unusual level of demand F1 now holds, but there’s no guarantee that’ll last. But it got so bad they cancelled the contract a few years ago.
I do find it very strange how other sports will have funding models, yet motorsport doesn’t for the most part. A fair chunk of F1 has relied upon British karting for decades. A scene and community staffed by volunteers and clubs who get very little in return for helping to produce billion pound assets.
I am not sure I’d want F1 extended their tentacles any more into karting, because I think from an tacit influence perspective it’s been terrible, but it does raise questions how karting creates these drivers, yet gets no support, at all.
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Not just the drivers, there’s a large contingent of ex-karters in journalism, engineering and other F1 supporting trades.
But I agree, I’m not sure I’d want F1 extending into karting. Although I wouldn’t be against funding that started at F1 and worked it’s way to grassroots through Motorsports UK or something like that (maybe like the old school British team).
Anytime finances come into play, there are strings attached. If you want F1 money, prepare for F1 influence on the sport as a whole.
Karting has a lot of fundamental challenges surrounding it that throwing money at won’t fix alone.
F1 has had that, albeit tacitly, and it’s come for free. The FIA now don’t even advertise OK as anything other than a feeder catagory for F1. Which is laughable considering Turney is 22 and Gomez is around 18 now.
Aren’t we just better off accepting that F1 is part of our karting reality (which it is whether we like it or not) and trying to work with it/them to improve grassroots karting, most particularly participation (promotion, access, club support etc via the likes of Motorsport UK and Motorsports Australia (and similar in other jurisdictions, albeit not sure how that would work in the USA))? If families want to fund little Johnny/Johnyette with EUR200k plus per annum running OK, good luck to them. Who cares, as long as we have solid sustainable growth at the Club level. Are we too pre-occupied with what is happening at a “National”/regional competition level (sure, with costs completely out of control - just insane), rather than a focus at the Club level where surely the people numbers are at (or should be, with unlimited potential, if we could do much better with promotion/accessibility/support and just having fun etc)?
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I think you’re spot on, and you’re hi-lighting what others have lamented for years.
Unfortunately the issue we see currently across the globe is a catering of the industry to the national level and to the clients pursuing a gateway to F1.
It makes local participation stagnate and enthusiast karting struggle and in some spaces die off.
If karting can maintain solid regional and local participation then F1s ‘ladder’ or presence becomes a nice to have rather than something detracting from the sport.
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Who is doing the catering to the national level and/or are we really being honest with ourselves? In other words, is the national level focus and participation doing well (leaving aside insane Team support costs) because they have a product that some want but “we’re” failing at a Club level for all the others (young, old, male, female) in a broad universe that should/could be racing (and helping). Sure, the issues at a Club level are multi-faceted and, at least in part, systemic/entrenched, but if we keep blaming the F1 ladder, we may be just distracted and not looking to leverage off the threat, whether perceived or real. I’m thinking we need to do a much better job at making this a circle not a means to an end. Of course easier said than done, but a least understand and accept the (new) playing field, and then develop multiple strategies to constantly strive for the end game (no matter the setbacks). Having an international karting community on this site (thank you James) does have reach.
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F1
You don’t ‘work’ with F1. It’s a multi-billion dollar enteprise who will do absolutely nothing to aid anything that doesn’t improve its bottom line. This is business, and for F1 there’s absolutely no reason to support something that in anyway cuts into the integrity of F1. Their investment into karting will always be to the betterment of F1, not karting.
Also regarding OK. The FIA class used to represent the pinnacle of karitng. A unifying goal for all karters around the world. Now it isn’t. That’s a big loss. You can’t fault F1 for that, because Rotax etc… have as much responsibility, but the extreme costs and lowering average ages of the drivers can be.
From my viewpoint, at least here in the USA, the majority of the “talented” members of the karting community are focused on about 5-600 clients. All HNW, all focused if not initially at least rather quickly fairly quickly on national or high regional karting.
So, newcomer industry members in the sport see that, race in that, and then start their own versions of that locally. So from an upper echelon and downward it becomes the business model.
Because it is the business model for the SME, to cater to HNW individuals, to make things easy and plug and play rather than a focus on enabling or encouraging individual competitors to own their own competitive experience, it drives up the wall to entry for local racers.
This has always been the case to a certain aspect, but I think things like D2S and how F1 aligned groups in karting market the sport outwardly to newcomers have further exacerbated it.
Go to your local kart race. Chances are it’s 60-150 entries, with a variety of backgrounds and motivations.
You’ll have some guys there that are kart shops, engine shops, local kart shops, and few race teams. Among those they have tents, and cater to a service oriented type customer. That’s all well and good, but even at the local level it creates participants, rather than community members.
Walls go up, data gets privatized to smaller groups, tent teams gain traction, and they start influencing groups of racers to go certain places, race certain classes, etc. etc.
In many ways this is fantastic, and is so great for the sport. But what it doesn’t encourage is long term community members, because the individual competitor sees the karting as a weekend hobby rather than an integral part of their lifestyle and week.
So, when you step back, you see 4-5 community members, typically older than they should be to do the work, doing the work to keep an event with 2-400 attendees going. They’re the guys and gals that have been around the sport for a period of time and still love it for what it is, and want to be at the track to hang out with friends rather than for their kids expensive club karting habit.
There’s a place for both local and national karting, but in the last 10-15 years it’s become harder for regional and local kart series to feed the overall ecosystem because there aren’t as many engaged community members at the local level. F1 alone isn’t to blame for that, but the vision of karting as the foundational aspect to become an F1 star can definitely be linked to challenges karting faces today.
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To expand on this point (apologies for the scattered presentation of ideas), it’s evident that the UK, given its high population density and affinity for Formula 1, may be farther along this trajectory than other regions. However, the focus here is on the decline of Superkarts. The UK had a distinctive scene where long circuit karts raced on short circuits, even utilizing 125s with long-circuit chassis. This created a vibrant environment. While Formula 1 isn’t solely responsible for the decline, it has contributed to a system that has lowered the average age of kart racers on short circuits. Consequently, adult-oriented classes suffer, and the transition from short to long circuits, which used to be strong for Superkarts in the UK, has become a significant issue.
Once upon a time, you could turn up to my local track and see an enormous range of diverse individuals. If you were a man in your mid-30s, you’d see other men in their mid-30s. I don’t think I’ve seen a woman race short circuit karts above 18 for what feels like decades. They do exist, but rare. It used to be a brilliant environment to find the sport as an adult. Now? Not so sure about that. They money is there, I see it within the sim racing community.
This decline is particularly impactful for the Superkart scene. The short circuit scene previously served as a major growth and sustainability driver. Despite appearances, with around 50 karts on the grid at Donington last weekend across four classes, behind the scenes, club membership isn’t as robust as before. While Formula 1 isn’t solely culpable, its influence, both implicit and explicit, has begun to manifest itself. People haven’t really seen the signs, but I think it’s clear. Can’t see the wood for the trees type thing.
As the average age of kart racers decreases, attending a club race now might give the impression that it’s not an activity for adults anymore. While the introduction of Bambino karts has somewhat offset overall club losses by attracting new participants, it has also introduced additional insurance costs. Moreover, the exorbitant spending in cadet and junior categories has altered the culture of karting.
Certain markets may currently thrive due to the influx of new parents, but the long-term sustainability of this model remains uncertain as these people burn out or go cars. Culturally, karting has lost many media outlets, reflecting a reduction in one aspect of the market. Publications like Vroom Magazine have ceased print editions, while tKart’s status is ambiguous. Karting Magazine went ages ago. My stuff isn’t reaching a big audience. Despite the rise of social media, there isn’t a substantial demand among karting enthusiasts for specific karting content, which in my view represent a measurable decline in a market that was big enough to sustain these things. Several dirtbike outlets continue and they’ve faced the same online challenges as karting, except one - the driving down of age perception.
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All indications point to that being something that backfires. It’s all about the money, to them, and always has been. This is not the support we are looking for. Also, F1 is gross, and partners with even grosser governments. I would expect them to further cheapen and demean the sport as they destroy it. Let them make a ludicrous spectacle of car racing, but stay away from karting please, Liberty.
Split this off from our 2024 topic since it’s a good one.
I’m open a better title for it too.