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British Grand Prix ticket sales dented by downturn

NEWS STORY
18/06/2013

This time last year the organisers of the British Grand Prix were trumpeting the fact that less than 5,000 tickets were remaining to be sold. It was no exaggeration because on race day a record 127,000 spectators were in attendance. This was despite downpours which transformed car parks into mud baths and forced organisers to turn spectators away for the qualifying session on Saturday. There was bound to be some fallout from this and it is revealed warts and all in an article in today's Independent by Pitpass' business editor Christian Sylt.

As many as 30,000 ticket-holders were told to stay away from the circuit for qualifying last year as car parks were water-logged and local roads were left groaning under the weight of traffic trying to access the circuit. To prevent this from being repeated the race organisers have invested in improving the non-tarmacked car parks and expanded both park and ride and shuttle services. However, it doesn't look like traffic jams will be a problem this year.

According to Sylt's article, attendance at this year's British GP, which takes place next Sunday, is expected to be significantly down on 2012 as tighter purse strings have put people off buying race tickets which start at £145.

At close of business yesterday, Silverstone's website showed that 22 ticket categories are still available whilst only 11 are sold out. As Pitpass has reported, three F1 teams, Marussia, McLaren and Williams, recently took to Twitter to try to drum up support. In a co-ordinated approach they all wrote “Only #28days to go until the 2013 Formula 1 Santander British Grand Prix! Have you got your tickets yet?”

Only races in Abu Dhabi and Brazil are more expensive than Britain, while Malaysia is cheapest with tickets starting at £13. At £60, the cheapest tickets to last month's Champions League final were less than half the price of those for the British GP. Likewise, tickets to the men's final at Wimbledon, the Grand National and the final day of The Open can all be bought for less the cheapest option at the British GP.

The high-octane ticket prices are down to F1's business model which is unlike other sports. Circuits generally do not get any revenue from the television broadcasts of the race or the corporate hospitality and advertising hoardings at the track. Money from this goes to the sport's rights-holder the F1 Group, whilst the circuits' sole source of income from F1 is usually ticket sales. This barely covers the annual hosting fee with running costs often covered by investment from governments. The British GP gets no state subsidies which is why its ticket prices are so high.

The organisers of the race are forced to increase ticket prices due to an escalation clause in their contract which boosts the hosting fee by an estimated 5% annually. It currently stands at around £14m and the cheapest ticket prices have accelerated by 43.5% since Silverstone signed a 17-year contract to host the race in 2009.

An increasing fee isn't the only cost which Silverstone has had to cover. Prior to signing the contract F1's boss Bernie Ecclestone demanded that the track upgrade its facilities. In 2011 it opened a new pit and paddock complex largely funded with loans from Lloyds. This left the British Racing Drivers Club (BRDC), which owns Silverstone, with £26.1m of net debt in 2011, the most-recent year for which its accounts are available.

The narrow margins on the race give the BRDC little free cash to pay down the debt and interest alone came to £842,000 in 2011. This pushed the BRDC to a £4.5m net loss and the combination of declining ticket sales and the increasing fee could be a perfect storm this year.

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