May 25, 2018 / 12:16 PM / 25 days ago

Baku wants a June race date and revised F1 contract

MONACO (Reuters) - Azerbaijan wants to return to a June slot on the Formula One calendar and is trying to renegotiate its contract post-2020 so that it pays less in race-hosting fees and gains more commercial benefits.

Promoter Arif Rahimov told reporters at the Monaco Grand Prix that the current contract was a binding commitment for five races from 2016 but with a break clause before a subsequent five.

That clause has to be activated before the end of June.

“We haven’t triggered the break clause, we’re negotiating on the second part of the contract,” said Rahimov.

Azerbaijan pays more than most for its race in Baku and any reduction in fees would hit commercial rights holders Liberty Media’s balance sheet.

Rahimov said he hoped his bill could be closer to the average for long-haul ‘flyaway’ races.

Although contracts are confidential, the global average fee of the current 21 races’ is around $30.6 million, and some $40 million for those outside of Europe, according to the racefans.net website.

Baku’s bill, thanks to an annual escalator clause, is estimated to have climbed to more than $60 million.

“We do definitely want to be there in the average of the flyaway races. That’s not the only thing we’re discussing with FOM (Formula One Management),” said Rahimov. “It’s most of the other commercial terms in the contract too.

“They (Liberty) want to try the new approach too so its a bilateral effort to make this viable for all of us.”

Rahimov hoped everything could be sorted before the end of June: “I think we’ll come to some agreement,” he said.

A recent economic study carried out by PricewaterhouseCoopers showed Azerbaijan gaining a net economic impact of around $280 million from the race, over two years. The media value was put at an additional $100 million.

This year’s race was held in April and for the second year in a row served up a thriller with Mercedes driver Lewis Hamilton winning.

The 2016 and 2017 grands prix were in June, when the weather is warmer, and Rahimov said that remained the preferred date because three or four months were needed to set everything up on the city streets.

“If we are in April, then really we have to start in the winter and you have adverse weather, all the rains and winds that stops you from working effectively,” he said. “Ideally we would like to hold the race in June.”

Reporting by Alan Baldwin, editing by Christian Radnedge

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