Formula 1 News: Will Madrid race be a financial boondoggle?

(GMM) A highly-respected Spanish economist has put a dark cloud over the optimistic financial predictions made by organizers of the newly-announced Madrid GP.

It is widely believed that, as it committed to the calendar for 2026 through 2035, the Madrid GP will pay an annual fee to Formula 1 starting at EUR 40 million and increasing to EUR 60 million at the end.

That’s more than double the 26 million euros paid by existing Spanish GP host Barcelona.

Race officials, however, insist that the Madrid event will generate the necessary economic impact to justify the much higher fee – but economist Santiago Nino Becerra is not so sure.

“The big question, as far as I know, that no one has asked and to which I have no answer, is why in Barcelona it (F1) generates 250 million euros and Madrid it would be 450,” he told Marca sports newspaper.

Nino Becerra said the difference from Barcelona’s real numbers and Madrid’s optimistic projections is “brutal”.

“The race will really generate twice the GDP in Madrid than in Catalonia?” he exclaimed.

His statements come at a critical time for Barcelona’s established F1 venue, as the Circuit de Catalunya upgrades its facilities and tries to negotiate with F1 for a new contract.

“Liberty Media has to decide if it’s a business to create another such successful race (like Madrid) and, if so, negotiate the price,” said the doctor of economics.

Another possibility, said Nino Becerra, is that the Madrid GP ultimately fails – like another similar attempt on the streets of Valencia some years ago.

“It was seen in the very first year that it did not work, and then the second one was a disaster. Now we will have to see what happens in the first year in Madrid,” he said.

The economist is not the only early critic of Madrid’s F1 plans. Former driver turned broadcaster David Coulthard admitted to laughing at the announcement about the future event’s sustainability credentials.

“My takeaway was that 90 percent of the fans can go there by public transport,” he told Total-Motorsport.com. “That’s all very nice for the politicians and the greens, but I don’t think it’s the first thing race fans think about when they go to a grand prix.

“I had to giggle when I saw that one of the justifications for the Madrid bid.”

Spanish racing driver Dani Juncadella, meanwhile, was far from impressed with the early e-sports version of the new Madrid layout.

“I won’t say what I think about the circuit because they’ll take me to prison,” he joked.

Indeed, Spanish automobile federation vice president Joaquin Verdegay admits he has several reservations about the safety of the proposed semi-street layout.

He told Soy Motor that fans have been allocated spectator areas that are “dangerously close” to the F1 action, and predicts that the venue will need “five or six months” to get final track approval from the FIA.