Baku denies F1 race threatened by oil and currency woes

Thu Jan 21, 2016 12:32pm EST
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By Alan Baldwin

LONDON (Reuters) - Race organizers have reassured Formula One fans that Azerbaijan's inaugural Grand Prix in June will go ahead as planned despite a slump in global oil prices and the weakness of the local currency.

"The devaluation of the manat will have no impact with regards to the staging of the first ever Formula One race in Azerbaijan," Baku City Circuit (BCC) said in a statement in response to media speculation.

"When the budget for the Grand Prix of Europe was approved, it was initially calculated in U.S. dollars. As a result, we are not expecting any changes to the current event budget."

Hosting fees paid to Formula One's commercial rights holder vary, with traditional European venues paying less than exotic newcomers, and contract details are a closely-guarded secret.

Media reports, however, have suggested that Bahrain and oil-rich Abu Dhabi pay in excess of $40 million a year for their races.

There are also infrastructure costs, with organizers in Baku erecting temporary stands and resurfacing roads for the street race around the old city and along the Caspian shore.

Revenues from ticket sales will be negligible, with Baku planning for a maximum capacity of 28,000 -- sure to be the smallest crowd of the season and tiny in comparison to the 135,000 that attended last year's Mexican Grand Prix.

Azerbaijan's parliament approved a package of measures this week to prop up the oil producer's falling currency.   Continued...