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Friday 3rd August 2012

Ringside Seat: state of play

Don't listen to the rumours, bankruptcy or not the 'ring is still thriving - but what does the future hold?



It's been a crazy couple of weeks here at the 'ring. Highs, lows and everything in between. On the face of it, business is booming. Every week has been a hectic mix of track days, training courses and public openings. Hundreds and hundreds of happy petrolheads doing laps every day.

Crowded public days equal money in the tills
Crowded public days equal money in the tills
But despite the amazing numbers of visitors and ample track time this year, technically the Nurburgring just went bust. It's a sorry and confusing state of affairs, but not one affecting the day-to-day running of the business. Not yet. The circuit is still operated by the unpopular Nurburgring Automotive GmbH, who are supposed to pay rent to the state-owned Nurburgring GmbH. And it's the latter, the holder of the land and a whopping 400m euros of debt, that has finally gone bankrupt.

You could be forgiven for thinking the gates are chained shut right now, such has been the over-reaction of some of the more ill-informed automotive tabloids. The reality is that while the track's future hangs in the balance, the day-to-day operation of the parts we love (the actual Nordschleife and GP circuits) is still running at full speed.

Is the sun setting over the 'ring we know and love?
Is the sun setting over the 'ring we know and love?
Even with administrators in charge, contracts have been signed for some big events. MTV's Rock Am Ring will definitely go ahead in 2013, while discussions for the 24-hour and F1 events will begin soon.

Track days to the end of this year are all either fully-booked, or close to it. The famously high-end Gran Turismo Evo event in September is boasting an entry list filled with Koenigseggs, Paganis and Ferraris. Proof, if proof were needed, that money is still flowing into the 'ring like never before in its 85-year existence. The question is, where is this money flowing, if not into the coffers of the track owners?

Nobody really has an answer right now, but a new grassroots movement called Ring-Region lays the blame firmly on the current leaseholders, and calls for all efforts at privatisation to cease.

If you open it they will come, in their hordes
If you open it they will come, in their hordes
They fear a cash-strapped government will drop this political hot potato and accept a cash sale to anybody willing to stump up the money. In my opinion it's a very real concern. Valuations of the property and business of the Nurburgring range from just 90m euros to nearly 200m euros, not counting the 400m euros of debt currently not serviced. But no matter which end of the scale represents the true value, there's bound to be somebody who'd consider buying one of the world's most famous race tracks.

Right now the world's uber-rich only visit the 'ring for specific events like Scuderia Hanseat, or Gran Turismo Events mentioned above. But if Bernie Ecclestone, or a similar flavour of investor, gets a hold of the track, the local fear is it could become a new Paul Ricard. While the French circuit enjoyed massive investment and a fantastic overhaul thanks to Bernie's dollars, most commentators agree that it's become a destination for the rich and famous. The Nordschleife, by comparison, has always been a track for the people (for better or for worse). Certainly it's impossible to imagine replacing any part of the Nordschleife's grimy barriers and woodland with acres of blue paint and run-off.

And the local businesses are set up to cater to a few thousand average petrolheads per weekend, rather than just a few dozen wealthy individuals.

But like I said, there's highs and lows. Many of us here in the village are looking on the brighter side. The chance that the state will finally open the books, and identify the parts that work (the Nordschleife, the GP circuit, the public sessions) and cut off the parts that don't (the arena, the roller-coaster, the NuroDisney village).

Only time will tell. In the meantime, we've started a Euro-millions syndicate here in Nurburg. If we can scoop that 156 million euros jackpot on offer tonight, our offer will be on the table by Monday morning. Count on it.

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Author Discussion

Greg 172

Original Poster:

174 posts

71 months

[news] 
Friday 3rd August 2012 quote quote all
Sorry to completely gloss over the entire article, but that tilt/shift shot of the Porsche is great! Is it real of digital?

Dale Lomas

135 posts

25 months

[news] 
Friday 3rd August 2012 quote quote all
Sorry mate, did it in the photoshop. It's actually f4.0 on about 200mm... smile

Greg 172

Original Poster:

174 posts

71 months

[news] 
Friday 3rd August 2012 quote quote all
Dale Lomas said:
Sorry mate, did it in the photoshop. It's actually f4.0 on about 200mm... smile
Well, it still looks good wink

Fingers crossed for the 'Ring too!

ArnageWRC

594 posts

29 months

[news] 
Friday 3rd August 2012 quote quote all
The N24 and the VLN races must be saved, the F1 doesn't bother me.

LaurasOtherHalf

6,468 posts

66 months

[news] 
Friday 3rd August 2012 quote quote all
Had a couple of lovely days in Brussels & heading over tomorrow mate thumbup

Can't wait for Sunday but particularly Monday afternoon if it's a little quieter, see you there dale

Craig
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agtlaw

1,552 posts

76 months

[news] 
Friday 3rd August 2012 quote quote all
I've heard that despite the massive crowds the F1 meeting is run at a loss. This could be complete BS of course.

The Nurburging operation as a whole made a massive loss every year for many years (I have some official figures somewhere). If it were a private enterprise then it would have closed years ago; or at least closed non profitable aspects. The bigger picture is that the loss leader Nurburgring is a blip for a region that otherwise wouldn't register on the tourist radar.

It's hardly Richter or Lindner's fault that the Rhineland govenment borrowed a stupid amount of money for a development that was fundamentally flawed from the outset. The politicians' dream of an all weather all season global visitor attraction was ridiculous. A local shop girl told me that the Eifel region used to be known as the Siberia of Germany and i can see why. Its desolate. It snows three feet deep there in the winter! No-one in his right mind would travel there to see a boulevard of car related merchandising, a very average car museum and some themed pubs and restaurants. The Eifel region has nothing unique to offer but for its racetrack/s. Spending literally millions on a non operational roller coaster is unforgivable. Whoever authorised that should be given the Jeremy Clarkson treatment.

The german socialists want to see it run by the people for the people or whatever. Great, but ask yourself who pushed the spend button and put you where you are now?

Gixer_fan

176 posts

68 months

[news] 
Friday 3rd August 2012 quote quote all
Oh dear - classic moment on the 'for worse' video link at 7:10 where the Beetle fishtails around to a hault, the door opens and the driver falls out.... wtf!

samoht

113 posts

16 months

[news] 
Friday 3rd August 2012 quote quote all
How many of us, around the world, have an interest in the future of the Nurburgring?

Is there any way that 'we' could collectively act to ensure the future of the track?

Otherwise we're at the mercy of events - it might be taken over by a benevolent billionaire who makes it even better, or it might end up closed down, ruined by ill-considered changes, or with far less public access.

suffolk009

753 posts

35 months

[news] 
Friday 3rd August 2012 quote quote all
Winning 156 million euros on the lottery?

Sounds like a lot of money - more than I can imagine - but amazingly it's not even close to being enough to sort out this mess. Puts it in perspective, as they say.

Arun_D

1,691 posts

65 months

[news] 
Friday 3rd August 2012 quote quote all
I assume the chap next to the S1 Elise in the top-most photo of the 'ring car park is describing how he steers through a sequence of corners and not actually just about to start a fight with the other guy!

paranha

487 posts

112 months

[news] 
Saturday 4th August 2012 quote quote all
A subject that seems to have been overlooked by posters at this moment-----The POOL--the Auto manufacturers-BMW Audi MB Jaguar Porsche Aston +++ and Tyre-Fuel-Oil ++++++ approx 50 Members who all use the tracks for R & D.

They are "rumoured"to be paying a total of 1Million Euros NOT EACH-----but total per year.Make them pay this sum Each---on a 10 year contract--What debts????BUT first you bring in the ADAC and the sporting ONS?--to manage the goldmine.

The Crack Fox

8,169 posts

62 months

[news] 
Saturday 4th August 2012 quote quote all
€400 million of unsecured debts ?! Even if they can trim the fat and get back to the real business at the 'ring, it'll take an eternity to pay that back, what a mess !

agtlaw

1,552 posts

76 months

[news] 
Saturday 4th August 2012 quote quote all
paranha said:
A subject that seems to have been overlooked by posters at this moment-----The POOL--the Auto manufacturers-BMW Audi MB Jaguar Porsche Aston +++ and Tyre-Fuel-Oil ++++++ approx 50 Members who all use the tracks for R & D.

They are "rumoured"to be paying a total of 1Million Euros NOT EACH-----but total per year.Make them pay this sum Each---on a 10 year contract--What debts????BUT first you bring in the ADAC and the sporting ONS?--to manage the goldmine.
I think your info is years out of date. It was widely reported that the collective industry pool fee was raised to around €8 million p.a. by the new management team in about 2010.

RDMcG

7,139 posts

77 months

[news] 
Saturday 4th August 2012 quote quote all
Dale: Exactly what I fear. The worst possible answer is that it becomes a hugely expensive billionaire-only plaything as against a publicly-owned facility where all sorts of people can drive. Well said.

RDMcG

7,139 posts

77 months

[news] 
Sunday 5th August 2012 quote quote all
http://www.autoblog.com/2012/08/02/german-state-to...

Not sure how this loan will change things but hopefully a step in the right direection?

agtlaw

1,552 posts

76 months

[news] 
Sunday 5th August 2012 quote quote all
RDMcG said:
http://www.autoblog.com/2012/08/02/german-state-to...

Not sure how this loan will change things but hopefully a step in the right direection?
Debt ridden business takes on more debt.

RDMcG

7,139 posts

77 months

[news] 
Sunday 5th August 2012 quote quote all
agtlaw said:
Debt ridden business takes on more debt.
Ah , I assumed it was refinancing of the existing debt

davepoth

20,186 posts

69 months

[news] 
Sunday 5th August 2012 quote quote all
It is pretty much a refinancing - The state is loaning the money to pay off virtually all of the loan. When Nurburgring GmbH goes bust a bit later on in the year, the major (possibly only) creditor of note will now be Rhineland-Palatinate rather than some banks, which is good news since they'll take the Ring back into public ownership.

agtlaw

1,552 posts

76 months

[news] 
Sunday 5th August 2012 quote quote all
davepoth said:
It is pretty much a refinancing - The state is loaning the money to pay off virtually all of the loan. When Nurburgring GmbH goes bust a bit later on in the year, the major (possibly only) creditor of note will now be Rhineland-Palatinate rather than some banks, which is good news since they'll take the Ring back into public ownership.
It's already in public ownership and always has been. Nurburgring GmbH is the owner and it's the state owned company which is bankrupt. Nurburgring Automotive GmbH is the operator. Public ownership isn't better than private ownership. Why would that possibly be so? Better to privatise the whole thing, sell shares and remove control from idiot politicians. Volkswagen has done rather well since the German government privatised it.

Some of the press reports are inaccurate. The money is actually for the state owned bank ISB which financed the development. It's all quite odd. The socialists approved this latest measure whilst the democrats were against it as they say it's further illegal State Aid. If you don't know already, the funding of the Nurburgring development is presently under investigation by the European Commission.

Edited by agtlaw on Sunday 5th August 17:28

jamespink

417 posts

74 months

[news] 
Monday 6th August 2012 quote quote all
agtlaw said:
I've heard that despite the massive crowds the F1 meeting is run at a loss. This could be complete BS of course.

The Nurburging operation as a whole made a massive loss every year for many years (I have some official figures somewhere). If it were a private enterprise then it would have closed years ago; or at least closed non profitable aspects. The bigger picture is that the loss leader Nurburgring is a blip for a region that otherwise wouldn't register on the tourist radar.

It's hardly Richter or Lindner's fault that the Rhineland govenment borrowed a stupid amount of money for a development that was fundamentally flawed from the outset. The politicians' dream of an all weather all season global visitor attraction was ridiculous. A local shop girl told me that the Eifel region used to be known as the Siberia of Germany and i can see why. Its desolate. It snows three feet deep there in the winter! No-one in his right mind would travel there to see a boulevard of car related merchandising, a very average car museum and some themed pubs and restaurants. The Eifel region has nothing unique to offer but for its racetrack/s. Spending literally millions on a non operational roller coaster is unforgivable. Whoever authorised that should be given the Jeremy Clarkson treatment.

The german socialists want to see it run by the people for the people or whatever. Great, but ask yourself who pushed the spend button and put you where you are now?
At last! Someone tells truth!

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