Nearly eight million euros in losses for Spa in 2012
The years follow one another and look alike for Spa-Francorchamps: after a loss of six million euros in the fiscal year 2011, the Belgian circuit recorded a new loss of nearly eight million last year.
Before concluding that a Formula 1 race is a financial drain for a region, one must delve into the details of this loss as revealed by the local newspaper L’Echo.
Thus, even if the loss did indeed deepen for the 2012 fiscal year, it can still be credited to the organizers that they were able to increase their revenue related to the race, since it went from 13 to 13.683 million euros. This increase is only possible due to the rise in ticket sales, the only source of revenue left by the FOM. However, the turnover of Spa Grand Prix does not include all the hotel and restaurant revenues that such an event can generate, which benefit both local merchants and the region.
However, on the other hand, the event faces a number of expenses, the first of which is obviously the fee to be paid to Bernie Ecclestone. The Belgian fee is estimated to be around 20 million dollars, which constitutes the bulk of the event’s losses. Furthermore, the 2012 event was marked by the bankruptcy of the ticket seller The Ticket Enterprise just a few days before the event. In the rush, the organizers were forced to reissue 5,600 tickets to compensate the buyers from this intermediary, resulting in both a loss of revenue and additional costs.
To cope with these losses, the Walloon region, the sole shareholder of the event, has decided to increase the company’s capital. This increase is substantial, amounting to 12.5 million euros, of which eight million is in cash. This brings the total to 15.7 million euros. Once this increase was completed, the extraordinary general meeting decided to carry out a capital reduction of 7.86 million to cover the loss incurred in 2012. As a result, the company’s capital amounts to 7.92 million euros.
We must also not forget that F1 only occupies the circuit for one week. It therefore generates revenue through many other activities. In the 2012 fiscal year, they increased by more than 9% to reach 7.16 million euros. More importantly, the Spa-Francorchamps circuit made a profit of 612,000 euros from these ancillary activities, which eases the financial burden of the circuit on the region.
With the participation of www.Racingbusiness.fr
