Nürburgring files for bankruptcy

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This story is such a mess that I highly recommend some outside reading. Mike Frison of Save The Ring, a group known by anyone who goes to the Green Hell, has followed it closely (and with a heavy bias, granted) for a very long time.

I took the above photo after the 2011 German Grand Prix, and those signs are everywhere – if you look closely – dotted around the Nordschleife. They’ve been there some while.

This recent piece of Frison’s is a good introduction into the utter mess from the “it was never, ever going to work anyway” perspective. It’s well worth a read.

Frison first came to the English-language petrolhead’s attention here, talking to Jalopnik in 2010 when he launched the initial petition.

Now, to try to summarise the longer tale briefly, this is a little bit like Donington – but with several extra chapters, a lot more debt, and yet hopefully a little more left at the end.

The state government in Rheinland-Pfalz (Rhineland Palatinate) now owns 90% of the Nürburgring, and the complex around it, the other 10 belongs to the local municipality Ahrweiler. But that wasn’t the initial plan.

The new leisure complex was meant to be built (at least for the most part) by private investors, but only two turned up. Mid-way through the building process, already running way over budget, the state bought everything out in full – liabilities and all. Once it was built, though, they loaned it out to the same two investors again to run the whole thing as a business.

At first, the local government supported the business financially still. And that was the problem. The EU ruled last year that this funding was in breach of competition rules. It forbade the state from giving the track money, as it was an unfair advantage (for example, against the famous, long-standing and unsupported Dorint hotel on site).

So Rheinland-Pfalz had to request the money from Brussels instead, which still hasn’t decided but will quite probably refuse on a similar basis as in the prior ruling against local help.

Back in February, the leaseholders Nürburgring Automotive GMBH were threatened with eviction having not paid their rent. But the debt remains, in another company name, Nürburgring GMBH, owned by the local government.

The top political dog in the region, state premier Kurt Beck (a big fish, by the way: he was linked with running against Angela Merkel for chancellor in 2009, but didn’t in the end) has said this was a preemptive strike because he didn’t expect EU help.

He also spoke extremely critically of the EU on the matter in parliament today in Mainz (roughly: billions for Spain’s banks without regulation, no chump change for us on technicality), while the regional opposition have called for him to quit. And Beck wouldn’t be the new Nürburgring’s first political casualty if he did.

Presumably the government will either want to operate the circuit as an officially state-run enterprise (like in the past) while trying to ease it back into the black, or sell the assets without the debt and cut their losses. Either regain the authority to spend as titular owner, or get rid of the entire mess, right?

Though it is also possible that the regional courts, who have the final say, will bring in external administrators.

The circuit will still be there. And it will still be one of the most valuable 20+ miles of tarmac on earth – both for race fans and for the car manufacturers who test there. Presumably that has some future.

F1 is a very different question though – not least as that was among the initial cancer’s catalysts.

As for what Mike Frison and most of the locals not-so-affectionately call “Nuro-Disney,” the mostly-empty hotel, restaurants and casino, or the rollercoaster that doesn’t work, I suppose they will still be there too. If anybody wants them or can find a use for them.

The problem is that, for reasons most of us here know, they were all built with 3 days out of a year (now three days every other year!) in mind.

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