Loss-Making Korea GP 'Under Threat'

Korean Grand Prix organizers have warned that the loss-making event is under threat of closure unless Formula One boss Bernie Ecclestone gives them a cheaper contract, a report said.

Promoter Park Won-Hwa said the grand prix, held at Yeongam in rural South Jeolla, had made a "big financial loss" and was unpopular with the local community since joining the glitzy Formula One circuit last year.

Park told Autosport magazine that South Korea was keen to keep its grand prix, but he said the event's future depended on whether Ecclestone would let them negotiate a new deal.

"We are trying hard, but we need the cooperation of Mr. Bernie Ecclestone. We certainly want to continue with this event because it is a big event, even though we have losses," he said, in an interview released on Tuesday.

"We want to give this region momentum by holding this event to help boost its economy and to boost the image, and to change our farming background in this region."

Park added that it was "too early for me to say" what would happen if there was no change to the contract. When asked if the race's future depended on a better deal, he said: "Yes. That is right. But we wish to continue."

"He (Ecclestone) knows perfectly well our current situation, and I hope he is more co-operative," Park added.

South Korea became Asia's sixth Formula One host last October, seeking the boost to its prestige and tourism associated with the widely televised event. India will also debut on the circuit next week.

But Park said the event had quickly run into trouble because of the large hosting fee agreed with Formula One before he took up his post this year, with a mandate to slash costs.

Local media reports quoted by Autosport said Sunday's race cost about $82 million, including a $55 million fee for hosting and TV rights, against $25 million in ticket sales.

The current contract runs until 2016.

"My main focus has been on reducing the costs as much as possible," said Park. "This is the core issue. Some local people in this region are against the race because of a big financial loss in hosting the race and organizing this event.

"Those citizens, who have a background as farmers and are normally poor, want to have the funds distributed for other purposes rather than be used for this so-far unpopular event."

Similar concerns have been voiced by grand prix organizers in China and Australia, while speculation has also been raised about the night race in Singapore where officials are yet to extend their initial five-year deal.

Source: Agence France Presse

Copyright © 2012 All Rights Reserved.