Rio invests in Formula 1 and offers R $ 250 million to secure Brazil GP

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The Formula 1 summit has in recent weeks received an official proposal from Rio de Janeiro with the schedule of bank deposits regarding fees and financial guarantees to ensure the signing of the contract to hold the Brazilian GP in the city from 2021, in Deodoro. The Rio de Janeiro candidacy guaranteed the category to pass up to US $ 60 million per year (R $ 250 million), about three times what São Paulo offers in the negotiation to renew the Interlagos competition. The deal ends at the end of 2020.

The newspaper O Estado de S.Paulo found that the proposal submitted by Rio foresees until March next year the payment of the first installment. Then, by June, a letter of credit will be presented with the bank guarantee for the transfer of the remaining up to $ 60 million. The official values ​​of these two operations are kept confidential. The deadline is set until the end of the semester, because for July is scheduled the meeting that defines the calendar of the 2021 events. The return of the F-1 on the proposal of Rio should be given in January.

Rio's $ 60 million annual commitment to the F-1 includes the GP promotion fee, plus VIP ticket income and profit sharing from official product sales. To pay the price, the company winning the bid to build the race track, Rio Motorsports, bets on R $ 302.4 million, approved in late November by the Secretariat of Sport, Leisure and Youth of Rio de Janeiro and will come from tax waiver.

The appeal will be forwarded to Rio Motorsports in four annual installments by 2022 on a non-cumulative basis. In 2019, the first combined transfer was R $ 30 million, then rises over the next two years to R $ 60.6 million and, finally, will reach R $ 151.2 million. These details are in the project entitled "Formula 1 Rio de Janeiro 2021-2030", approved by the State Sports Incentive Law. The money would come from companies interested in passing on up to 3% of the ICMS for collection for the project.

"For each year of the test, it is estimated that the direct and indirect impact on the economy of the state of Rio de Janeiro will reach US $ 160 million, around R $ 670 million at the current exchange rate, a value based on stages already occurred in the country and in the world ", said in a note sent to the State the Secretariat of Sport of Rio. Rio Motorsports informs that, having a confidentiality contract with the F-1, can not comment on the ongoing negotiations.

During the last leg of this year's championship in Abu Dhabi, the leader of the consortium trying to take the race to Rio, JR Pereira, the municipal secretary of public order, Gutemberg Fonseca, and Senator Flavio Bolsonaro talked with the head of the category, Chase Carey. At the time, a term was signed that guarantees Rio exclusivity in the negotiations with F-1 until March 2020.

In a statement, the city of Rio reported that city representatives had a meeting in Abu Dhabi with Mercedes driver Lewis Hamilton. Two weeks earlier, the six-time world champion had criticized the construction of Rio's new race track for forcing the Camboatá Forest to be cleared. In this conversation, the English pilot learned of the environmental counterparts of the venture, such as the project to replant six trees for each species that is felled. Sought by the story to comment on the meeting, Mercedes did not return contact.

The Rio racetrack, which does not yet exist, is expected to cost $ 700 million. The resources would come from private enterprise. The bidding for the work is currently suspended, as it awaits the approval of the environmental impact study. The city signed in October a contract to host MotoGP from 2022 for five years.

SAO PAULO – The state capital promises to strive to maintain the test. In order to renew with the F-1 for the period from 2021 to 2030, São Paulo intends to make the category accept to receive annual promotion fee of US $ 20 million (R $ 81 million). The intention is to obtain the appeal with private investors. The main hurdle is value, below the $ 35 million charged for most other stages of the year. Another issue is to resolve the outstanding issues related to previous years, when São Paulo could not afford to pay the fee. Since 2017 she is not paid.

At the Brazilian GP in November, Governor João Doria said he had a meeting in December with the F-1 command to discuss the new contact. The meeting was canceled due to mismatch of agendas.



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