Most Porsche motorsport fans are probably familiar with the plight of the world famous Nurburgring. For those of you who aren’t, I’ll try to summarize the position the circuit currently finds itself in. It’s fairly complicated so don’t yell at me if I miss a detail.
From 2007 to 2009 a development plan for the Nurburging was enacted by the local government that owned the ‘Ring (Rhineland-Palatinate “RLP” own 90% and the remaining 10% is owned by the county Ahrweilerthat). The intent was to bring in private investors to cover the construction costs of a large mall, car showrooms, a hotel development and even an amusement park. The original budget for this project was estimated at 215 million euro, but ended up coming in closer to 400 million euro. This huge development expense, coupled with less private money raised than expecte and overly optimistic revenue and attendance projections reated an unsustainable business environment where expenses far exceed revenue. In fact, the only part of the ‘Ring that does well at the moment is the Nordschleife -the circuit’s famous “North Loop” which covers more than 13 miles (this section produces a generous operating profit, but not enough to cover the massive payments on the debt created from the development plan).
What Happens When Expenses Exceed Revenues?
As a result, starting in 2011 the ‘Ring has been operated using a state subsidy (government/tax money). However, this Wednesday, RLP State governor Kurt Beck said the European Union’s executive commission was not expected to approve planned government aid of 13 million euro ($16 million) needed to continue operations by the end of the month. Without the money, there is no choice but to file for Bankruptcy.
What Does Bankruptcy Mean for the Rings Future?
Fortunately, the company that operates events at the ‘Ring (Nuerburgring Automotive GmbH) is separate from the State owned company that owns the ‘Ring itself and not affected by this announcement. It is expected that all events currently scheduled for 2012 will go on as planned -including this weekend’s Formula One German Grand Prix. After that, folks aren’t too sure.
Dale Lomas, the blogger who runs the ‘Ring centric site bridgetogantry.com said in an Autoweek story on the subject that he believes the track is so important to the region that it will be sold and continue to operate. In the same article, Sabine Schmitz, perhaps the most famous driver associated with the ‘Ring, said she thinks it is too early to make a call.
“At the moment nobody knows exactly what’s going on . . . [The Allgemeiner Deutscher Automobil-Club] might be saving the ‘Ring. We need to wait a few days to get better informations.”
Whatever happens, let’s hope the German government can find a way to save the ‘Ring. Not just for the region and their economy, but for the legions of fans and supporters the world over.
Other Porsche Posts Your Should Read
Rent a Porsche GT3 RS at the Nurburgring
Porsche’s Performance at the 2011 Nürburgring 24 Hours Compressed into a 4 Minute Video
[Source: Autoweek and MikeFrison.com]