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Silverstone makes biggest loss of any circuit in F1 history

NEWS STORY
04/10/2013

Silverstone, home of the British Grand Prix, has rocked the world of motorsport by revealing that it has made the biggest loss of any circuit in the history of Formula One.

Writing in the Daily Telegraph, Pitpass' business editor Christian Sylt reveals that in the year to 31 December 2012, Silverstone's owner, the British Racing Drivers Club (BRDC) made a net loss of £54.4m which accelerated a staggering 1,200% on the previous year. This astonishing development can be seen in all its glory in the relevant page from the BRDC's accounts here (pdf).

Perhaps the most surprising thing is that the turbo-charged loss was not down to a slowdown in business at F1's British Grand Prix. Overall revenue was down but not by much. It reversed 6% to £52.4m and the BRDC's chairman Stuart Rolt says that this was largely due to motorsport on two wheels rather than four.

Writing to the BRDC's 800 plus members on 24 September Rolt said "in 2009, in the midst of doubt over the future location of the British Formula One Grand Prix, we contracted to bring back the British Motorcycle Grand Prix (MotoGP) to Silverstone. The appalling weather we experienced for this event in 2011 significantly impacted our revenues for the 2012 event and this, together with weaker revenues than forecast for our other motorbike events, impacted our profits significantly."

The BRDC's headcount also rose from 130 to 137 giving a total staff bill of £5m. It left the BRDC with underlying profits (known as earnings before interest, tax, depreciation, amortisation and exceptional items) of £0.4m, down from £0.7m the previous year.

However the story doesn't end there. Next came a £49.1m one-off charge and this was the biggest driver behind the BRDC's huge loss. The charge is directly connected to the BRDC's recent decision to sell a lease on Silverstone and lease 280 acres of land surrounding the circuit to MEPC, a property group owned by the BT pension fund.

The biggest component of this charge was a £28.7m paper loss which resulted from the circuit lease being sold for less than it was valued at. The remainder of the charge is due to the fact that the land sold to MEPC had a lower value than it was previously estimated to have in the BRDC accounts.

Remarkably the one-off charge was nearly as large as the BRDC's revenue for the entire year including all the income from the F1 and MotoGP races.

However, it isn't all bad news. The proceeds of the sale to MEPC will be used to clear the BRDC's debt and give it surplus cash as well as rental income. Nevertheless, many of the members are not impressed as the loss has driven shareholders' funds down from £54.7m to £0.4m and has sparked threats of revolt at the BRDC's 2013 Annual General Meeting.

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