Valencia TV told to pay 13.5 million euros over F1 contract breach

The Formula 1 street race in Valencia ran for the last time in 2012 but the financial devastation it wrought has yet to reach the finish line. A court ruling this week found in favor of Catalan media group Medipro, which is seeking 13.5 million in compensation from Valencia regional broadcaster RTVV for the breaking of a contract to air Formula 1 races for four seasons between 2010 and 2013. Canal 9, RTVV’s flagship channel, did not show any races over the past two years.

RTVV also faces a second front in the legal battle, with Formula 1 magnate Bernie Ecclestone’s Formula One administration also seeking damages under British legislation.

In 2007, when the deal to stage the European Grand Prix in Valencia was signed, former regional premier Francisco Camps announced it would not cost the regional coffers “a single euro.” Today, costs have run to 275 million euros, mostly in infrastructure and annual rights to stage the race.

RTVV paid 22 million euros for its four-year deal but failed to compete with national broadcaster La Sexta for audience share. Despite striking a deal to sell the rights to Antena 3, the former’s subsequent merger with La Sexta frustrated that exit strategy, leading regional deputy premier José Ciscar to announce that RTVV’s lawyers would seek to annul the deal.

RTVV intends to appeal against Monday’s ruling, but said that it had set aside part of its budget for last year to cover the damages if the ruling went against it. One card RTVV holds up its sleeve it a 2011 court ruling in its favor against Mediapro over the rights to broadcast La Liga matches, which ordered the media group to pay compensation for contractual infringements between 2006 and 2010.

The conservative Popular Party administration of regional premier Alberto Fabra announced on November 5 that it would shut down RTVV after a court ruling ordering the reinstatement of 1,000 employees laid off in a labor force readjustment plan (ERE). Fabra on Tuesday reiterated that RTVV would close, with the matter due to be debated in the regional assembly this week. “Do we really need a tool at the service of whichever government is in in power to show citizens what we are doing?” Fabra said during an interview with Europa Press.

Meanwhile, employees gathered at the broadcaster’s Burjassot headquarters on Tuesday to approve the viability plan put forward by the RTVV works committee and pledged to “fight” to continue broadcasting.