Written By Juan Arroyo, Edited by Sameena Khan
Valencia's infamous street circuit remains just a few hundred meters away from the sunny beaches. However, the 5.4-kilometre-long track is a wasteland these days: dirty kerbs, torn fences, debris all over, and a few advertising boards that are surprisingly yet to be stolen.
The pit straight is perhaps the most recognizable part of the circuit after all these years. Grid slots and rubber are still visible on the asphalt, and the pit building remains intact despite its neglect. But unfortunately, the rest of the track is mostly a shadow. The white lines and markings are still there, but the rest has been vandalized, stolen, or destroyed for good.
For television viewers, the circuit looked terrific. They had a beachside race with beautiful weather and stunning scenery. The bridge section alone made for some incredible cinematic shots. But Valencia didn't have much else to offer, and the seating sections offered mediocre views of the track at best.
As is often the case in Formula 1, insufficient funding meant the facilities never got the upgrades required. Even after reducing seating capacity, organizers couldn't sell out the event. They couldn't make enough money to upgrade their facilities but said facilities needed upgrades to sell enough tickets.
A corruption case involving public funds plunged the Grand Prix's legacy even further. It likened it to Hanoi's Formula 1 campaign, though the latter failed to run a race in the first place.
Financial struggles are just about the norm for circuits disappearing from the season calendar. The disappearance of many Grand Prixs can be attributed to the enormous amounts the race organizers are forced to pay to host an event. The recent addition of Saudi Arabia is backed by the state. Unfortunately, tracks like Spa and Silverstone are left to fend for themselves.
It's become increasingly clear that running a Formula 1 race is not profitable. Thus, organizers need a fallback and/or someone to cover their losses. Some tracks like Bahrain are privately owned by consortiums or investment firms. Still, they are the exception rather than the norm. Others resort to their country or city governments for funding. They will often happily cover the costs of hosting the Grand Prix because they know its value. The tourism and economic boost make the hassle worth it.
A good example is the Australian Grand Prix. In return, it loses tens of millions of pounds each year, but the city of Melbourne's revenue is enormous. The race is even reported to have lost £42 million one year. Any privately owned track can't afford this; it's simply not sustainable. However, the Victoria state government supports the race yearly because they see it as an investment in the city's growth.
Despite its proven success, this method doesn't work everywhere. Some governments aren't willing to throw money repeatedly at an event that yields low returns. Moreover, Formula 1 keeps the funds from track advertising, broadcast rights, hosting fees, and corporate hospitality. Ticket sales are the promoters' sole source of revenue, a pretty risky profit strategy.
This is why circuits like Sepang, Istanbul Park, Buddh, and Yeongnam have disappeared: low ticket sales, sky-high hosting fees, and nothing to show except a ton of debt.
That's not to say some organizers haven't brought it upon themselves. On the contrary, Korean organizers had enormous ambitions for their inaugural 2010 race. Still, their half-baked planning severely cost them in the eyes of fans and Formula 1 higher-ups. The event seemed like a good idea given the number of regional car manufacturers. However, having your journalists stay in "love hotels" while racing in one of the most desolate regions was a massive hit to their reputation (and sales).
Sadly, some of these circuits may never come back to entertain us. By either strained relations or lack of funding, it’s unlikely any of these tracks will make a return soon. Instead, these failed projects and abandonments serve as a constant reminder that cash is king in this sport, and bad planning can cost all sides of the equation big-time.
It’s tough to organize a race independently, so we’ll likely see circuits like Spa and Silverstone sell or go to the government for help covering these costs soon. Formula 1 allows them to host races at a reduced fee because of their historical significance. Still, promoters have come out to say the well is running dry. Meanwhile, the Middle East is pumping hundreds of millions into the sport each year to boost its image and tourism.
So long as people with funding realize the importance of holding these races, Formula 1 fans’ beloved circuits will remain on the calendar, and most of the current controversy will be avoided.