Friday 22nd November 2013

Ringside Seat: Transparency and fairness

Following the 'ADAC buys Nurburgring' saga, Dale just want to know who the real bidders are

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Transparency and fairness are buzzwords when politicians and businessmen are caught with their hands in each other's pockets, but here at the Nurburgring we are struggling to see signs of either. It's leaving me with a sinking feeling that things are going wrong for the Nurburgring's future.

ADAC heavily involved in German motorsport

A week or so ago a few of the tabloid websites ran with the story that the ADAC (Germany's equivalent to the RAC, but bigger and more politically connected) had bought the debt-ridden Nurburgring. The story was totally incorrect. It was simply a mis-translation of a German story where the ADAC President Peter Meyer simply confirmed that the ADAC had tendered a bid. They've since back-tracked and edited the story that's online, but the headline in the URL was clear.

But why was this bid by the ADAC newsworthy in Germany in the first place? It was the first of the many bidders to 'go public'. Of course, lots of us already 'knew' that the ADAC had offered to buy the race tracks from the government, but we'd also heard that they didn't want to buy the museum, hotels, rollercoaster and that huge concrete boulevard.

Track won't be sold off separately

This, naturally, was an unattractive offer for the State. We all know the F1 track and the Nordschleife are sound businesses and great assets. The ADAC could run them brilliantly and make good money for us all. But who would pay anything more than buttons for that mass of concrete with no track attached?

For those in the know, the ADAC's bid of "mid-double-digit millions" was a tremendous low-ball. Combined with the cherry-picking attitude of plucking the best bits from the middle of the half-billion Euro mess, it was sadly obvious that it would never succeed. But it's indicative of the real processes going on behind closed doors.

Nearly five years ago all of us Nurburgring fans were up in arms because the track had been leased to a private company with no bidding process and no consultation. Of course, that turned sour like everybody said it would.

Testing generates great income for the 'ring

Now, to be brutally honest, we're not in a much different situation. At least this time we know there's a bidding process. But the only public bidder has been the ADAC, the others who are still in the game lurking in the shadows. And maybe they'll be good for the Nurburgring, or maybe they'll just dump a lot of cash into the politician's coffers.

I can give you guesses, but nothing concrete. And that's totally wrong.

In my opinion, the ADAC only went public with its bid as a pre-emptive strike against bad PR. It knew it had failed, it knew it could face future criticism for not trying to save Germany's biggest automotive landmark, so it spun the story out as "greedy state rejects enthusiasts bid".

Now I have this sinking feeling again, and the only way it will leave is when I see all the bidders laid out on one sheet of paper before the track is sold. Transparent and fair. Too much to ask? Probably, but I live in hope.

[MichelV]

If the state is so into debt for this Nurburgring thing it is "good" for the sale that there is no transparency. Ohterwise they would loose face when the winning bid would be lower then the outstanding total debt (which it will most likely always be).

As for the ADAC. It is a commercial organisation with poitical ties, so the press release fits the bill.

It is a hotel-sized L-shaped cock-up; whomever buys it will always low ball and concentrate on the things that make money/sense....

That is why I always book at Hotel Zur Burg ;o)

I believe we will be fine. Then again I have thought countless times I could recover the car, only to find myself facing the wrong way round.

Michel

[ringweekends]

Keep the faith, brother Dale

[Riyazc]

Richard Branson should buy it and christen it the 'Virgin Ring' ....

[Bionic Billy Nav]

I don't think it'll matter too much who buys it because whoever does and even if it is someone like Hyundai they can see how much money the Touristfahrten makes from the Nordschliefe and how popular it is so they won't change that , The ADAC offer was well low considering and there is probably bigger tenders in the mix willing to take the whole of the Nurburgring on but hey only time will tell and it's not going to stop me moving to the eifel in 18 months and counting!

[BenedictG]

I would have thought the automotive manufacturers would have rallied together and funded a bid. Not only to they all have a vested interest in the Ring as a 'proving' ground for performance, technology and development (we know several have invested already in the technology park area), but many have stakes in motor sport taking part there too.

And since the tourists, trackdayers, and race testing generates further regular incomes, surely a business plan could be hatched to see a return in 3-5 years - or less?!

[Motorrad]

Such a shame for everyone involved. Cost of a single touristfahrte is a fecking disgrace these days. I remember when you could drive on there for a few deutscehmarks etc etc, nothing was as good as it was in my day.

Sadly in this case it isn't/

[GC8]

DM12 for my first lap, IIRC, which was about a fiver.

[paranha]

I have been driving NS for nearly 40 years, and watching this pathetic ongoing charade continue, is a very poor reflection on the ability of the German "BigThree," plus the Tyre-Fuel conglomerates to get their acts together.

The Problems and Solutions ARE Political.

[nickfrog]

Motorrad said:

Such a shame for everyone involved. Cost of a single touristfahrte is a fecking disgrace these days. I remember when you could drive on there for a few deutscehmarks etc etc,

Inflation ?

[GC8]

Has the cost of everything else gone up by a factor of five since the nineties?

[samoht]

"they didn't want to buy the museum, hotels, rollercoaster and that huge concrete boulevard... who would pay anything more than buttons for that mass of concrete with no track attached?"

Isn't this a perfect case of the sunk cost fallacy?

The fact that the state spent half a billion building the ancillary 'attractions' doesn't meant that they are worth half a billion. Rather, their value is determined by how much operating profit they can make.

If anyone believes that they can earn money, then they would be willing to pay for them on that basis. If they cannot turn an operating profit, then the only sensible thing to do is bulldoze them - running them at a loss is only throwing good money after bad.

[Kolbenkopp]

IMO, no reason to be worried at all. To me, the whole bidding process looks like only a way to gain some time. In the end the local government will say that the bids were not sufficient and that they will have to change a law or two to keep funding the place via tax money. They just need some time because they have find a new clever way to sneak this state subsidy past the Eurocrats.

[Pumpsmynads]

Yes of course. What this situation really needs is simply a few sneaky lawyers to find some loophole so that the taxpayer can foot the bill for political and financial mismanagement. Good grief!

[griff7]

Riyazc said:

Richard Branson should buy it and christen it the 'Virgin Ring' ....

[Output Flange]

What am I missing here? Why should anyone have any interest in showing you who is bidding for the 'Ring?

[ExPat2B]

I was there in the summer, The concrete carbuncle was like a ghost town. that place is a joke. Everything inside was over priced by a factor of four. One tiny "museum" with an absurd entry price. Lots of ridiculous tat to buy, I mean a toaster that toasts bread with the shape of the nurbergring and pasta shaped like the nurbergring for christ's sake. And that was pretty much it. I can't see anyone making money off that. ADC bid is a sensible one.

[Gecko1978]

I went there the other year and whilst there watched the FIA truck racing, went round the museum, round the shops and of course the track.

The museum is poor and the roller coaster did not work but a museum to sporting heritage some bertter resturantes and maybe a few car dealerships etc might actually turn a profit in there own right (note i added car dealerships).

The Ring is one of the great motoring treats in this world a huge track that feels like the open road that anyone can have a go on in any machine what more could you want. I am surprised VW etc have not bid but then all the big firms have testing facilities etc so maybe just not work it. I would suggest selling shares in it might work but who knows.

[pagani1]

Same as any motor racing circuit except public driving access is almost unique. Would this be saved if it was in the UK? Probably not. Being in Germany, if Porsche was independent -a possibility but otherwise who else has the money and the interest? Bernie? Max?(tee hee) or Mercedes? What a conundrama.

[405dogvan]

Output Flange said:

What am I missing here? Why should anyone have any interest in showing you who is bidding for the 'Ring?

Because it currently belongs to the State - which in my head means it belongs to the public - which means they're entitled to know what's going on with it?

Any attempt to not publicise something is usually an attempt to keep dodgy dealing out of view - there's no reason for anyone bidding on anything to remain anonymous in both who they are AND what they're bidding (just one or the other)

[GC8]

And also because the last deal was done in secrecy, and look how that turned out. Public scrutiny is required to prevent a cosy deal being done which only benefits those making it.