First off, let me state that I am a huge supporter of the Save the Ring movement. I agree 100% with Mike Frison that things have been completely mismanaged by the German regional government as well as by the most recent management. That being said, I don’t believe that things are as necessarily as gloomy as we keep hearing. Here are my 10 reasons why I think that the sale of the Nürburgring could be awesome.
1) Governments suck at running things
Ok, I lied, I have more to say. Basically what everyone is up in arms about is the government botching the sale of the track, but yet they want this same deal-botching government to go back to operating it? To me that’s like complaining that the Hulk keeps destroying your furniture and then hiring him to be your interior decorator.
2) Crooks suck worse at running things
When you leave the barn door open, the foxes will raid the hen house. Everyone on the inside of the last deal that brought Richter and Linder (i.e. the foxes) to the table got paid, pure and simple. Millions of Euros with no real due diligence or oversight in one of the worst deals in the history of bad deals. Those guys are gone and the company in control has a solid track record of turning around failing companies.
3) Private ownership brings much needed investment
Because the ‘Ring is being sold at such a discounted price (it cost $400 million USD to build the COTA F1 track. The entire Nürburgring including the F1 track will be purchased for less than a third of that!) it is no longer being saddled with the massive overhead (€400million EUR) its been struggling under for the past several years. This gives the new owners a huge amount of freedom to operate under. It also behooves the new owner to make investments in order to bring all of the facilities up to modern standards and maximize the value of their purchase.
Profit (20% is not reasonable short term profit but we’ll get to that in a second) will only come with additional investment in the track. Something that isn’t going to happen under continued public ownership.
4) Corporate investment will help regional growth
The management (pre Richter/ Linder) of the track was adequate. Things ran but not efficiently or profitably. Yes, local companies did ok but not to the degree they could if things were being run efficiently.
Richter and Linder absolutely screwed the locals, but that was mainly because they so overinflated their numbers in pushing for the deal, that they had to do what they could to bring in revenue to survive. That meant screwing over everyone that wasn’t them. Just because these two goons were evil it doesn’t mean that anyone new coming in will necessarily be the same.
Investment firms are not usually into holding their investments for the long term. My guess is HIG will not own the track in 10 years.This means that they will have to make the Nürburgring is legitimately profitable in that time frame. They also will, I’m sure, realize that if they drive away their customers and alienate local businesses then it will make any future sale more problematic.
5) Tourist drives
Tourist drives are part of the lore of the Nürburgring. Removing them would create an uproar with automotive enthusiasts worldwide and would substantially diminish the value of the track. It is the awe we have of this track, the pedestal we put it on, that creates the value here. If we lose interest the track becomes a really expensive highway to nowhere.
Right now, however, tourist days are like the wild west (yes, even still). The fact that more people aren’t killed on the Nürburgring every year is more a testament to modern automotive safety features then any massive improvement in the safety standards of the track. Lining the entire track with expensive safety barriers was a stroke of genius, as it has proved not only to be effective in improving safety but highly profitable as well (you break it, you brought it).
Now as cool as it is diving into the Karussell under a tour bus filled with dozens of wide eyed, picture taking passengers, its also probably one of the dumber things I’ve ever done on four wheels (which is saying something!).
The reason most other tracks don’t offer such
free for all relaxed track days is because they realize that the first rule of business is, “Don’t kill the paying customer,” or in this case “Don’t let the paying customer kill himself.”
Yes, high end VIP track days make a bunch of money, but that is assuming that you can get enough rich guys who are willing to transport their cars half way around the world on a consistent basis to make having exclusive track days replace Tourist drives. The annual super car extravaganza Gran Turismo events sell out every year, but just. I don’t think you could fill ten of those a year let alone enough to replace Tourist days.
Also if you do the numbers, on the busiest of the Tourist days, I would estimate that there are over 5,000 laps being driven. At €27 a lap that means your daily take would be close to €150,000. Yes more effort than a private track day but more profit too as 1000 people eat and drink more then 20.
You want quick profit? Redevelop the tourist entrance with quadruple the parking, triple the size of the restaurant and put TV’s everywhere inside with the live hi def video feed from the track. I would spend hundreds of Euros a day just sitting in the bar watching guys decorate the landscape with their cars.
I feel tourist drives will go on long into the future, but they will be better run and far safer then they are currently.
6) MOAR Motorsports!
I see motorsports as a huge profit center for the new owners. The VLN offers some of the best racing anywhere in the world (I know from experience) yet when was the last time anyone outside Germany has seen a race on TV? I live there and I can hardly find coverage. But what coverage there is, is awesome!
Upgrading the antiquated (notice that word popping up a lot?) TV camera system and production facilities will go a long way to getting a lucrative TV deal which brings with it sponsors. Selling the global broadcast rights to 10 VLN races a year plus the 24 Hour race in hi def would bring millions of Euros into the new owners coffers both through the sale of the TV rights and also from corporate sponsor branding.
More then half of the VLN races I did this year were full capacity fields (210 cars at €1500 a pop for entry fees). Any series in the US would kill for grids this size. Why would anyone kill this off? 300,000 spectators for the 24 hour race? Thats not going anywhere. The smaller RCN and GLP might have to be restructured but I think both of them will still be able to find a place going forward.
The heritage of the Nürburgring is being protected by the sale as there is basically zero heritage in a closed, bankrupt facility (Detroit’s calling they’d like their heritage back).
The real value in the Nürburgring is that it is the Holy Grail for automotive enthusiasts worldwide. It is #1 on bucket list for any one that considers themselves a petrol-head. Where else can the average Joe (or Günter) try to measure up to the legends of the sport on their own turf? Take on Jeter at Yankee Stadium? No way! Manning at Mile High? Nope. Beckham at… you get my point.
If you take the accessibility to the enthusiast away then you’ve lost all of the true value of the deal with almost no way to get it back. The reason that manufacturers spend millions to be there is that it gives them an instant connection with enthusiasts. I feel that HIG will have done their homework to see what makes this place tick and will, I think, do their best not to upset the apple cart too much.
Lastly don’t mistake heritage for status quo. Yes, things will most likely change at the ‘Ring but that doesn’t mean that is has to be worse.
As I’ve mentioned before, while the ring has been maintained very well, it hasn’t been brought up to fully modern standards. From the minuscule parking area at the Tourist entrance resulting in massive crowding on the roads leading in, to the lack of modern safety warning features during the VLN or track days, the Nurburgring is outdated and no one wants to (or can afford to) spend the millions in additional Euros needed to upgrade it.
The new owners have promised a new Hi Def Camera system throughout the ring which will help monitor traffic and warn of danger as well as increase the value of the TV rights. Additionally, they have also mentioned an in-car warning system which sounds similar in nature to the Delphi system we used in Grand Am (IMSA) that can alert drivers to upcoming danger long before they would see a traditional flagger (especially as there are no flaggers on tourist days!)
One of my favorite cars of all time is the Lancia Delta Integrale Evo II and I finally got a chance to drive one (coincidentally at the Nurburgring) and… it was the slowest, most unstable bitch of a car to drive. My point? As much as we like to look back on history with a certain fondness, sometimes, history is just old.
After years of instability, having a global company with a proven track record take over, will bring a legitimacy (on the business side) to the ‘Ring that it hasn’t had in years. Manufacturers and other companies in the industry will now look with far more interest in investing in the region then they would have with the track under government control or the control of couple of goons with Euro Disney fantasies.
10) It’s Immortal
If the Nürburgring can survive a couple of World Wars and countless numbers of idiots trying to throw themselves off into the countryside at high rates of speed, it can survive this.
In this shaky global economy I don’t think continued reliance on tax dollars to support the Nürburgring is a viable solution. All it would take is another Euro Zone crisis to hit before someone high up in food chain realizes that there’s an easy way to slice several million Euros a year off the tax payers burden and poof, there goes our playground.
And as much as I love the concept of a non profit running the show, I don’t believe it’s sustainable in the long term. Most non-profits survive off of donations. Who donates to the Nürburgring? Manufacturers are already spending millions of Euros a year to own facilities and test their products at the track and most of the enthusiast/tourist drivers I know have spent their last nickel to put one more lap on their ring card, while praying they have enough gas to make it back to whatever country they drove in from.
The Nürburgring costs a substantial amount of money just to keep it running smoothly. It might turn a profit if separated from the money draining overhead of the Ring Walk and associated hotels, but it wouldn’t be a huge profit. If there are no donations and only small profit then how do you pay for the millions in upgrades needed to keep the facility relevant?
That all being said, the one piece of advice that I would give to HIG or whomever the new owners are is: “Ignore the locals and enthusiasts at your own peril!”
These are some of the most die hard, passionate and driven people it has ever been my pleasure to encounter. They live, eat, and breathe the Nürburgring. It is more than just a passion for them, it is their way of life. And they will fuck your shit up if you cross them.
This is the real reason I think that the future of the Nürburgring is in good hands. People like Mike Frison and the hundreds of thousands of other people that feel so passionately about this place. People who will go to the ends of the earth to ensure it lives on.
So what are you waiting for? The Nürburgring is dead! Long live the Nürburgring! Get your ass out here and drive!
Robb Holland is a professional race car driver for Rotek Racing and basically lives at the Nürburgring most of the year. He’s also the tallest man in Germany.
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