The timing of the news, which came a few weeks after Austria reached an agreement to host its race until 2030, may not have been a coincidence. These announcements demonstrate a noticeable trend among circuits to ensure their long-term existence.
There was seemingly no immediate need to prolong those contracts in both situations. Just a few months ago, Projekt Spielberg, a promoter owned by Red Bull, had already agreed to a contract until 2027 and then extended it for an additional three years.
Hungary had already secured a race until 2027 when it extended the agreement by an additional five years.
Both arrangements come on the heels of a series of extended contracts for flyaway races that have established a trend for looking at the long term.
One of the first was for Montreal, whose deal to run to 2029 was signed in 2017, early in Liberty Media’s ownership. The loss of two events to COVID has subsequently pushed that out to 2031.
That was followed by something of a lull, but on Stefano Domenicali’s watch, such arrangements have become more commonplace.
The current trend was perhaps kick-started by Saudi Arabia, whose 10-year deal running to 2030 was agreed in 2020.
Qatar came next, taking over as a last-minute substitute on the COVID-affected 2021 schedule. Around that time, they also finalized a 10-year agreement that will be in effect from 2023 to 2032.
Abu Dhabi quickly entered into a new agreement that extends until 2030. Singapore then followed suit, extending their contract until 2028, while Australia and Bahrain extended theirs until 2035 and 2036 respectively.
Las Vegas stands out due to its F1 promotion, however, the agreement with the city extends for a decade, ensuring the event’s occurrence until 2032.
Photo by: Alfa Romeo
Why is there such a hurry to agree on lengthy contracts? It is easy to understand why both parties find it attractive. F1 is currently experiencing great success, largely due to the significant impact of Drive to Survive. As CEO Domenicali and Liberty Media boss Greg Maffei frequently emphasize, there is a considerable number of countries and circuits eager to be part of the action.
In simpler terms, it is currently a market favoring the seller, who is Domenicali. He is providing the existing venues an opportunity to secure their spots on the schedule without the risk of losing out in a competitive situation, where the maximum number of spots available is currently 24.
F1, in return, has the ability to secure favorable prices for every deal, ensuring a steady income for the long term. One could argue that Domenicali is merely capitalizing on the current prosperous period and seizing the opportunity. However, he refutes this claim.
“The focus is not on the advantage,” states the Italian to Motorsport.com. “Instead, it emphasizes the remarkable moment we are experiencing, which the promoters also acknowledge. Therefore, it is an opportune time to consider the future in the long run.”
It is good news for Liberty and the teams to have secured significant deals for the future, as they contribute a substantial portion of income.
“I believe it is beneficial to have the ability to plan ahead and be aware of the existence of certain venues,” expresses Mike Krack, the CEO of Aston Martin.
“I am unable to reword.”
We now have to wait to see who is next to sign a long extension. A random sampling of current contract end dates includes Silverstone and Suzuka in 2024, Monaco, Zandvoort and Mexico City in 2025, and Baku, Barcelona and Austin in 2026.
Assuming that Austria and Hungary have both agreed to extend their existing deals until 2027, it can be inferred that most, if not all, of the aforementioned parties are already engaged in discussions regarding future plans, including the other races currently taking place.
The rest of the European locations will surely know that there are only a few slots left, and with countries like France and Germany expressing interest in coming back, along with Madrid stating they have an agreement, there is no time to waste.
In certain situations, ensuring the long-term safety and existence of a particular race is crucial, particularly when it comes to motivating venues to make investments in new facilities.
Montreal is a case in point – its extended deal was followed soon afterwards by the construction of much-needed pit buildings.
Photo by: Hungaroring
Hungary is in a similar situation. The circuit has been promising for years to upgrade its ageing pit and paddock facilities, and with the public investment required, it would have made no sense to commit to that project if the race was lost within two or three years.
Consider the white elephants, like the Indian and Korean Grand Prix locations, which were constructed during the era of Bernie Ecclestone with significant investment. However, they have since been largely neglected and forgotten after hosting only a handful of races.
Given that the Hungaroring has secured its event until 2032, it is logical for them to continue with the reconstruction project.
Domenicali states that it is crucial for everyone since as we progress, the promoter also has a requirement to invest.
“It is crucial to provide clarity on our collective long-term objectives.”
This demonstrates their strong dedication. You observe the crowd and their actions, which is impressive. It’s truly wonderful.
Why Hungary’s long-term deal works for everyone
Hungary’s recent long-term agreement is great news for fans, as it ensures that a beloved traditional European location will continue to be a part of the racing calendar for years to come, alongside the events in the Middle East.
The race, although it may seem like a recent addition to a schedule that consists of venues with a hundred years of racing history, actually made its debut in 1986.
Due to the impact of COVID on other events, Hungaroring has the second longest ongoing and uninterrupted streak among all venues in the World Championship schedule. This streak began in 1981, following a one-year break at Imola for the Italian GP, placing it ahead of Silverstone which started its streak in 1987 after the alternating arrangement with Brands Hatch ended.
The CEO and promoter of Hungaroring, Zsolt Gyulay, emphasizes that the extension of the agreement was not motivated by a desire to outperform any potential rivals.
“I am confident, self-assured, in our position,” he expressed to Motorsport.com. “As a longstanding European track, we aspire to remain within the racing community. Therefore, we prefer not to compete with others but rather focus on our own endeavors. A new circuit is necessary for us, and we have earned it!”
By that, he means the new pit and paddock facilities and grandstands that the extended deal has helped to guarantee.
Photo by: Hungaroring
The pit complex from 1986 has miraculously endured over time. Ecclestone had a fondness for the circuit, and similar to Interlagos, it managed to escape the need for improvements that other venues around the world had to undergo by tearing down and constructing new facilities.
Gyulay expresses uncertainty about the reason when questioned about why the track was not required to upgrade sooner. He acknowledges that it is an intriguing question regarding the nature of the particular relationship.
“Alright, the connection between Bernie and Hungary was unique. However, we also developed positive relationships with Chase Carey and Stefano. I am unable to explain the reasons behind it as I am unaware, but we have been putting in a lot of effort!”
The Hungarian government has recently approved the construction of a new pit complex after eight years of discussion.
“In the past eight years, our discussions have revolved around the idea of rebuilding,” Gyulay explains. “We are not investing such a significant amount of money into just any project, like a football stadium, despite our love for football in Hungary. Instead, it is a gesture of respect towards F1 and the teams involved.”
“It is a lengthy endeavor, and it required extensive effort to engage in discussions with government officials. However, I believe that now everyone can observe the upward trajectory of F1, and anticipate a prosperous future. Consequently, a substantial amount of funding was allocated, leading to the extension of the contract. This undertaking was indeed quite arduous and time-consuming.”
“It is reasonable to conclude that when the government allocates substantial funds towards constructing and maintaining buildings and facilities, it becomes imperative to extend the contract over a significant period. This holds great significance for both the government and the investors involved.”
After securing the essential public funding, the circuit has now made a firm commitment to proceed with the required construction tasks.
Gyulay emphasizes the urgency of completing the buildings and other tasks by 2026. This holds great significance for us as we have faced numerous challenges in recent years due to unfavorable circumstances surrounding the buildings and other factors.
“The tender has been released. I am hopeful that the tender will be concluded by the end of the year, allowing them to commence the reconstruction. However, it is challenging to demolish and construct amidst two Grands Prix, which presents a difficulty.”
Additionally, it is necessary to expand the paddock area due to insufficient space for the teams. Moreover, larger structures and a new grandstand are required.
Not just the structures, but everything is involved. The area spans across 130 hectares, making it a significantly vast space. Consequently, there is a substantial amount of work to be done.
The upcoming race next year is expected to be the final one held at the current pit complex. Shortly thereafter, the complex will be demolished to make way for a new one. Construction of the new complex, including the pit garages, will commence and is projected to be completed in time for the 2025 event.
In accordance with Gyulay’s suggestion, the remaining details will be provided in due time for the 2026 race, coinciding with the celebration of the event’s 40th anniversary.
The primary concern for the Hungarian government is that the race continues to attract a large number of international tourists. In the past, Germans and Finns were the most prevalent, and recently the Dutch have taken the lead, although there is a significant presence of other nationalities as well.
Gyulay states, “Our significant advantage lies in this aspect. It is the project’s strength. As a matter of fact, 80% of our audience comprises international visitors who contribute significantly to the economy by spending generously. Hence, it is advantageous for us.”