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Grand Prix Zandvoort received millions in fixed costs subsidy

Research by RTL Nieuws shows that the organization has received 1.8 million euros in TVL subsidies in recent years. This is in stark contrast to the words of sporting director Jan Lammers, who gave a flaming speech on the eve of the race in 2021 in which he claimed that ‘the facts are’ that DGP is organizing an event for 315,000 people ‘with a 0 euro subsidy ‘.

Also in 2021

In 2020, Dutch Grand Prix (DGP) received a subsidy of 140,000 euros in two stages. In that year, the first GP was to be held in Zandvoort, but that was canceled due to corona. In 2021, the event received a subsidy of 1.1 million euros and another 550,000 euros followed at the beginning of 2022. That last tranche was the late payment for the last quarter of 2021.

The subsidies for the year 2021 are particularly noteworthy. A Grand Prix was indeed held in that year, albeit with two thirds of the maximum number of visitors due to corona. In addition, the tickets for 2022 were also sold in that year, when no mouse could be added due to the great interest.

Fine print

A great year in which the state does not have to step in, you would think. But DGP seems to have benefited from the fine print of the scheme. For example, it applied for TVL for the period from April to June 2021.

To qualify for the TVL subsidy, companies had to demonstrate that they had at least a 30 percent drop in turnover in a certain quarter compared to a so-called reference quarter. That was price shooting for DGP, because the organization’s revenue comes almost entirely from ticket sales, and ticket sales did not take place in that quarter.

A spokesperson ignores the question of whether DGP has been able to benefit from the fact that it does not record any turnover in some quarters anyway.

“The Dutch Grand Prix organization, like many other companies, has used the TVL scheme in 2020 and in 2021, within the possibilities for which it was intended”, a spokesperson said. “That provision was there to ensure that companies could continue with their business operations, despite a lot of uncertainty.”

Which fixed costs?

A second advantage for DGP is that the subsidy was not paid out on the basis of the actual fixed costs, but on the basis of the average fixed costs per sector. For organizing sporting events, those fixed costs were set at 34 percent of turnover.

Fixed costs are, for example, the rent of a building or mortgage payments, costs of subscriptions and energy costs. But DGP lives on the Zandvoort circuit. For example, there is no question of a large office, with associated costs.

DGP does not want to give a clear answer to the question of whether the subsidy is in any proportion to the actual fixed costs. “Look, we need a large team of people, whether they are in the office or not,” the spokesman outlines. “We make commitments with suppliers and people. You plan it, and you have to execute those plans.”

The TVL was not intended to pay people anyway, because the NOW was created for that. And orders from suppliers for an event that takes place once a year are not fixed costs. The spokesperson does not want to dwell on the question of whether these are variable or fixed costs.

DGP emphasizes in particular that the race was not allowed to take place in 2020, and that only two thirds of the public was welcome in 2021 due to corona. “In both cases, the vast majority of the event had already been built and commitments made with people and many suppliers.”

From the start of the TVL it was clear that some companies would receive more subsidy than they actually have in fixed costs. That is not prohibited, but the government repeatedly appealed to the business community not to apply for support if it was not necessary.

Gain

The spokesperson also does not want to say whether the organization of the Grand Prix has ultimately made a profit in 2021. “I can say that we do not make any statements about financial figures of the DGP Organization.”

The annual figures filed with the Chamber of Commerce are also inconclusive. Because DGP is registered as a micro-enterprise, it does not have to file a profit and loss account.

It is clear, however, that Circuitpark Zandvoort, one of the shareholders of DGP, was able to record a profit for 2021 because events could be organized again: “Turnover in 2021 has increased considerably because there will be considerably less external and public events have been able to take place, so a positive result was achieved in 2021.”

Millions with shareholders

The circuit also does not disclose how much profit was made. The annual accounts show that more than 1.6 million euros of the profit has remained behind in the company. This does not mean that more profit was not made, because the part that was paid out to the shareholder as dividend remains unknown.

At parent company Chapman Andretti, another 3 million euros in profit appears to linger. The main source of income for that company is the exploitation of the circuit park, it writes itself.

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