Increased state funding for Hungarian GP

According to an article in the Hungarian magazine Budapest Business Journal the 2005 Hungarian Formula One Grand Prix will receive Ft 2.65 billion (€10.7 million) of state funding, an Ft 0.17 billion increase over the amount it received in 2004.

From it’s inception in 1985 until 2001, the amount of state subsidies for the race varied between Ft 400 million and Ft 450 million but increased significantly to Ft 2.92 billion in 2002, but declined slightly to Ft 2.85 billion in 2003, and Ft 2.48 billion in 2004.

In the article a Hungarian government spokeswoman Boglár László explained how the state money is used, “Rather than subsidizing the Grand Prix directly, the state budget shoulders some of the fees payable by state-owned Hungaroring Rt to the license owner."

The article also explains that the state’s F1 profit comes not from ticket sales, but from the VAT content of tourist spending in Hungary. Gábor Galla, CEO of Hungarian Tourism Rt, the state-owned tourism development agency said, “Hosting the Formula One is profitable for several reasons. The race draws approximately 120,000 visitors who would not otherwise visit Hungary."

Referring to a survey carried out in 2000 by the Economy and ransport Ministry, Galla said that foreign visitors often combine the Grand Prix with a holiday and spend an average of six nights in Hungary.

“Calculating with daily average spending of Ft 20,000 per person, this amounts to Ft 14 billion every year, and bearing in mind average VAT of 20%, the state enjoys revenues of Ft 2.8 billion," said Galla. Source: Budapest Business Journal