Scandal adds to Chinese GP financial bloodbath

UPDATE (GMM) The Chinese grand prix will go ahead in October despite the Shanghai circuit general manager's implication in a major corruption scandal, an official says.

Last October, Yu Zhifei was put under investigation for alleged 'illegal operations' at the formula one circuit and the misuse of more than $400 million in city funds.

In a news conference on Tuesday, however, the Shanghai F1 promoter's chairman Mao Xiaohan – referring to the scandal – suggested that "some people acted completely alone".

"The (circuit), as a corporation, is not involved in the investigation at all," he is quoted as saying by the newspaper Shanghai Daily.

"Major (events) like the MotoGP and formula one Chinese grand prix will all go ahead as planned."

09/29/06 Recall that we told you that Beijing was very unhappy with Shanghai because the Chinese F1 race was a financial bloodbath, that Bernie is charging $30 to $50 million per year for the rights plus the track costs an enormous mount of money. Every F1 race promoter loses money. In addition, the ticket prices are so high very few Chinese can afford to buy grandstand seats, and the grandstands would be empty if not for free ticket giveaways.

Now comes this article that substantiates these claims – Formula 1 in China has an unusual problem, according to reports in the China Daily newspaper. People in China want to see the Formula 1 racing but the tickets are so expensive that they cannot afford to buy them. In order to avoid having empty grandstands the circuit has taken to giving away a lot of free tickets in order to ensure that the grandstands are full so that advertisers are happy and the race has the right image.

The problem with this idea is that the free tickets are then being sold on the black market at a cheaper price than the official tickets.

According to the newspaper last year the Chinese racing magazine Formula One Race polled 100 spectators and discovered that 98 of them had bought black market tickets. Only two people had paid the full ticket office.

"We must take serious action against it, or the Formula 1 race will be greatly impaired," says Yu Zhifei, general manager of the Shanghai International Circuit Co Ltd. "It has become a matter of to be or not to be for the race in China."

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