Canadian Grand Prix of Montréal - Update from the Government Representatives


    MONTREAL, Nov. 16 /CNW Telbec/ - Gérald Tremblay, Mayor of Montréal,
Raymond Bachand, The Minister of Economic Development, Innovation and Export
Trade, Minister of Tourism and Minister responsible for the Montréal region,
and the Honourable Christian Paradis, Minister of Public Works and Government
Services Canada and responsible for the greater Montreal, have given an update
on their efforts with the Formula One Administration Limited and its
president, Bernie Ecclestone, to keep the Canadian Grand Prix in Montréal.
    "We were constantly guided in our negotiations by principles of
responsible management. However, despite our endeavours and those of the
business community, the unreasonable demands of Formula One exceeded the
taxpayer's ability to pay. I would like to thank my colleagues from the
federal and provincial governments and members of the business community who
joined forces in an attempt to save the Grand Prix. Their concerted efforts
attest to Montréal's vitality and could prove an opportunity for creating a
development fund for new events of all kinds that would stimulate the economy,
tourism and employment," said the Mayor of Montréal.
    "Whenever the Grand Prix of Canada needed help from the Government of
Québec, we were there. We worked very hard over the past few weeks to ensure
there would be a Grand Prix in Montréal, while staying fiscally responsible.
We cannot meet Mr. Ecclestone's unworkable demands. Unless he eases his
requirements and adopts a different approach, there will be no Grand Prix in
Montréal in 2009," said Minister Raymond Bachand.
    "This is a loss for Greater Montréal and for all Canadians. The Grand
Prix was a window on the world for Montréal and for the rest of Canada. I
would like to salute my predecessor, the Honourable Michael Fortier, for his
efforts to save this event-efforts that were unfortunately unable to meet the
unrealistic demands of Mr. Ecclestone. As I recently said, 'yes to a Grand
Prix, but not at any price,'" said the Honourable Paradis.

    A bit of history

    On October 7, we learned that the Grand Prix of Canada was no longer on
the 2009 Formula One schedule. Representatives of all three levels of
government became involved at that point in finding ways of ensuring that the
event would be salvaged.
    On October 23, the three representatives went to London to meet with
Bernie Ecclestone and discuss the financial situation of the Grand Prix of
Canada.
    On October 28, the three representatives received a final contract offer
from Mr. Ecclestone. This offer also required an eventual promoter of the
event to put up a government or bank guarantee of some $175 million over the
next five years.
    Because of Normand Legault's retirement, the government representatives
actively sought a solid promoter who was experienced in organizing major
events and had the financial capacity to sustain Grand Prix operations.
Ultimately, no private promoter expressed interest in taking on such a great
risk, considering the limited revenue generated by the event.
    In view of this fact, the government representatives envisioned setting
up a non-profit organization (NPO) that would provide a new organizational
structure.
    On November 4, another contract proposal based on the creation of such an
NPO was sent to Mr. Ecclestone. The proposal included participation from the
government and tourist industry valued at some $10 million per year over five
years.
    Despite this fresh constructive proposal, Mr. Ecclestone refused to budge
in his demands, particularly with respect to the length of the contract and
its financial guarantees. Faced with this intransigence, he was presented with
an enhanced proposal for the 2009 edition, but Mr. Ecclestone would not alter
his position.Données financières
    Grand Prix du Canada

    Les termes du nouveau contrat proposé par
    Formula One Administration Limited (FOAL)  - le 28 octobre 2008

    1. Frais de Plateau fixes

    2009 :   25 928 313 US$ =  31 413 027 CND$
    2010 :   27 224 728 US$ =  32 983 678 CND$
    2011 :   28 585 964 US$ =  34 632 861 CND$
    2012 :   30 015 262 US$ =  36 364 504 CND$
    2013 :   31 516 025 US$ =  38 182 729 CND$
    Total : 143 270 292 US$ = 173 576 802 CND$

    Ce nouveau contrat comporte l'exigence d'une garantie gouvernementale ou
    d'une lettre de garantie bancaire.

    Il est à noter qu'en plus des Frais de Plateau, la FOAL est bénéficiaire
des revenus liés à la visibilité sur le circuit et aux loges corporatives
situées dans les paddocks.
    On estime ces revenus supplémentaires entre 16 M$ et 20M$

    (*)A la clôture des marchés le jeudi 13 novembre 2008, le CND$ valait
       0,8254 US$

    Les termes de la contre-proposition des trois paliers de gouvernement -
    le 4 novembre 2008

    1. Frais de Plateau minimums
    ----------------------------

    2009 :  16 508 000 US$ = 20 000 000 CND$
    2010 :  17 333 400 US$ = 21 000 000 CND$
    2011 :  18 200 070 US$ = 22 050 000 CND$
    2012 :  19 110 073 US$ = 23 152 500 CND$
    2013 :  20 065 576 US$ = 24 310 125 CND$
    Total : 91 217 112 US$ = 110 512 625 CND $

    2. Paiement d'un frais supplémentaire
    -------------------------------------
    75 % de la 1ere tranche de 10 M$ CND de profits retournés à FOAL
    25 % de tous les profits supplémentaires retournés à FOAL

    Contributions des partenaires gouvernementaux et touristiques :
    ---------------------------------------------------------------
    Gouvernements:     5 M$
    Tourisme Montréal: 5 M$
    Total :           10 M$Click on the following link to view attached document:
    http://files.newswire.ca/643/F1correspondance[1].pdf



For further information: Renée Sauriol, Press Officer, Office of the
Mayor and of the Executive Committee, (514) 872-4894; Anne-Sophie Desmeules,
Press Officer, Office of the Minister of Economic Development, Innovation and
Export Trade, Minister of Tourism and Minister responsible for the Montréal
region, (418) 691-5650, (514) 499-2552; Mary-Ann Dewey-Plante, Press Officer,
Office of the Honourable Christian Paradis, Public Works and Government
Services Canada, (819) 956-5325