Monday, November 17, 2008

Bernie's Greed, Leaves Canada Speechless...

Montreal admits defeat in rescue bid

The Canadian Grand Prix's chances of returning to the 2009 Formula 1 calendar appear doomed after Montreal officials said they were unwilling to meet Bernie Ecclestone's “unreasonable” financial demands.
Montreal's mayor Gerald Tremblay admitted at a press conference on Sunday that organisers had failed in their attempts to strike a deal to reinstate the race, with the government unable to justify the cost of keeping the event at the current asking price.
Tremblay and officials from various government levels had hoped that a fresh injection of money from both public and private sources could help keep the grand prix after it was axed from next season’s schedule last month.
But the mayor says a rescue deal couldn't be agreed, with F1 supremo Ecclestone asking for a guarantee of CND$175 million over the next five years and the government only willing to pay $110m.
"We were constantly guided in our negotiations by principles of responsible management,” Tremblay said in a statement.
“However, despite our endeavours and those of the business community, the unreasonable demands of Formula 1 exceeded the taxpayer's ability to pay.”
The Canadian race had been a permanent, and popular, fixture on the calendar since 1978 before it was surprisingly dropped from the provisional 2009 schedule.
Montreal authorities dismissed claims that the axe had fallen because race organisers had defaulted on payments to Ecclestone over the past three years, but did admit to a commercial disagreement over the 2008 event.
Government chiefs quickly expressed their desire to find a way back onto the list and a Quebec delegation flew to London to meet with Ecclestone at the end of October, leaving to return to work on a rescue package.
Details of the contractual deliberations between the two parties have now emerged in the statement, with Ecclestone demanding a promoter put up a government or bank guarantee of $175m over five years in what it says was a final contract offer to the government on October 28.
The statement says Montreal was unable to find a private promoter willing to take on such a guarantee given the limited revenue generated by the event and instead envisioned setting up a non-profit organisation to act in this role.
This was included in a final proposal sent to Ecclestone last week which offered to pay $110m over five years to stage the race, with Formula One Administration to also receive 75% of the first $10 million of profits from the race and 25% of profits thereafter.
The three levels of government also committed to making a combined $5m contribution to each grand prix, with that total to be matched by the local tourist industry.
However, Ecclestone replied in a letter last Wednesday stating that he was “unable to yield” on his stated request to have “the performance of the race promoter be fully guaranteed or underwritten by the Government, the City and/or institution of sound financial repute”.
He added that he felt the terms proposed “are not economically viable” in other major aspects.
He concluded the letter by saying: “I know we have both done our best to explore all the options to save the race, but I think we must both admit defeat on this occasion.”
Tremblay said that the city explored all possible avenues in its quest to broker a deal with Ecclestone.
"We did everything that was humanly and financially possible and responsible to try to save the race," Tremblay was quoted as saying by the Montreal Gazette.
"I'm very very disappointed for Montrealers, for Quebec and Canada.”
Quebec economic development minister Raymond Bachand admitted the only way back for the Canadian GP now was for Ecclestone to lower his demands.
“We worked very hard over the past few weeks to ensure there would be a Grand Prix in Montreal, while staying fiscally responsible,” he said.
“We cannot meet Mr Ecclestone's unworkable demands. Unless he eases his requirements and adopts a different approach, there will be no Grand Prix in Montreal in 2009."
The breakdown in talks will come as a blow to Formula 1’s manufacturer teams after many expressed unhappiness that there would be no North American round in 2009 considering it was an important market for car sales and many of their major sponsors were US-based.

Please refer to our previous article some month back, when we first heard the news about the Canadian GP:

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