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[Newsmaker] Korea hits a wall with F1 Grand Prix race

South Korea has been dropped from the 2014 Formula One Grand Prix race program.

The International Automobile Federation eliminated South Korea, Mexico and the U.S. state of New Jersey from its official 2014 calendar of F1 GP races.

It also set the schedule for the 2014 season, which will feature 19 races, starting in Melbourne, Australia, on March 16, and ending in Abu Dhabi on Nov. 23.

The three eliminated venues had been listed on a provisional 2014 schedule issued in September, with the Korean Grand Prix set to move from October to April.

The Korean Grand Prix was being held under a seven-year contract, from 2010 to 2016. 

F1 Korea Grand Prix race in 2012
F1 Korea Grand Prix race in 2012

To hold the high-profile international car race, organizers constructed the Korean International Circuit in Yeongam, South Jeolla Province, some 400 kilometers south of Seoul

They faced financial difficulties, though, suffering operating losses each year: 72.5 billion won ($68.3 million) in 2010, 61 billion won in 2011 and 38.6 billion won in 2012. They expect 18.1 billion won in losses this year.

To lessen their chronic operating losses, Formula One Management, which acts as the agent of Formula One World Championship Limited, slashed hosting fees from $43.7 million last year to $27 million this year. Still, the organizers demanded a further cut to $20 million for next year.

Park Joon-young, governor of the province and chief organizer of F1 Korean Grand Prix, hinted in October that the race could be suspended until April or October 2015 depending on the progress of talks over the demand.

While F1 races are popular with millions of fans and TV viewers, they drew a lukewarm response in South Korea. The circuit attracted about 85,800 spectators in 2011 and 87,000 in 2012, but the number dropped to 79,000 in 2013.

The start of the Korean Grand Prix was rocky. The chief organizer was sacked in January 2010 for lax management and the construction of the circuit was delayed several times. It was completed only two weeks before the start of the race ― just 10 days before the FIA approval.

The provincial office plans to resume hosting the race in 2015 after renegotiating with FOM over hosting fees. But it is unclear how positively the agent will respond to the talks.

Local elections next year, among others, will likely decide the fate of the remaining races of the Korean Grand Prix. A new governor may decide to terminate the contract. Current potential candidates are said to be not as positive as Park is about the race.

“For now, we are preparing to host the 2015 installment of F1 Korean Grand Prix on better (financial) conditions,” an official of the provincial office said. “But our next moves will depend on the intentions of the new governor.”

“The race is not without good points,” another official said. “It has contributed to enhancing the international status of the province and stimulating its economy.”

By Chun Sung-woo