Formula 1 News

South Korea Grand Prix stuck in the red

Once more the promoters are in the "hole" and trying to find solution to avoid retiring the GP from the calendar.
Wednesday, November 21, 2012

SEOUL, Nov 21, 2012 (AFP) - October's South Korean Grand Prix was hosted at a loss of 36 million dollars, organisers said Wednesday, raising questions over the future of the event which has been in the red since its inception in 2010.

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The only positive sign for organisers was that the 2012 version of the Formula One race haemorrhaged less cash -- 39.4 billion won ($36.3 million) -- than the previous two.

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The first race in 2010 ran an operating loss of 72.6 billion won, while last year's event showed a 61 billion won deficit.

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Although the event receives some central funding, the bill is largely born by the taxpayers of South Jeolla province in the country's southwest, where the annual race is held at the Yeongam circuit.

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"Just because the loss was reduced... I am not sure we can call this year's race a success," Seo Dong-wook, a member of the South Jeolla council, told Yonhap news agency.

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"We will need to take some fundamental steps to change it," Seo said.

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After the 2011 Korean Grand Prix, the organising committee warned it could be forced to drop the event because of losses, although Formula One boss Bernie Ecclestone at the time ruled out a cheaper contract.

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Negotiations did eventually lead to some concessions, but not enough to bring the event into the black.

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The organisers' original agreement with Formula One runs until 2016 with an option to extend for five more years.

High costs have caused friction for several hosts of Formula One, which has expanded aggressively from its traditional European domain with seven races now in the Asia-Pacific region.

Promoters argue that the longer-term benefits in terms of increased tourism and improved nation-branding outweigh the direct financial losses.

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