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Silverstone MD to urge BRDC to sell circuit

NEWS STORY
30/09/2015

Silverstone MD, Patrick Allen is to use today's AGM to advise BRDC members to sell historic track.

The news comes days after it was revealed that the Northamptonshire circuit, which hosted the first ever round of the Formula One World Championship in 1950, is in danger of losing the British Grand Prix due to its worsening financial position.

Silverstone is owned by the British Racing Drivers Club (BRDC), which comprises 850 members including current F1 stars Lewis Hamilton and Jenson Button as well as team bosses Ron Dennis and Frank Williams.

"I think the board are aware of the need for a capital injection," Silverstone MD, Patrick Allen tells Forbes. "I can put my proposals forward, whether they support them or have a different view or have a different solution would be up to the board."

In recent years the circuit has appeared to be continuously mired in difficulty, much of it involving its 'jewel in the crown', the British Grand Prix.

In its determination to keep the race it agreed to a hosting deal it was never likely to be able to meet, selling the family silver in the process.

The sale of the former airfield to New York-listed advertising agency Interpublic went disastrously wrong - Ecclestone subsequently negotiating a deal for the BRDC to regain control of the circuit which netted him tens of millions of dollars - as did an attempted management buy-out.

"What happened with the management buyout is that they tried to bring more debt into it and the balance sheet can't stand any more debt," admits Allen. "And the reason frankly it has not been saleable is because it has not been in a decent enough shape to sell.

"My job has been to fix the trading element and show people we can make money out of this circuit instead of wasting money. Then if, and it's a big if, the club decided that we still want to separate risk from the club at least they would have a circuit that was transacting positively and therefore has a value."

In his determination to turn the circuit's fortunes around, Allen introduced a ticket pricing scheme which has proved popular and successful. Indeed, ticket sales are currently 163% up on 2014.

"This time last year we had sold 9,000 tickets and we have sold over 25,000 now," reveals Allen.

"My job is to look after the trading element and the trading side of things has turned around dramatically from where we were eleven months ago when I came in here," he adds.

"The club would have to sanction any sale whether that was to a private individual or to another business," he continues, referring to his proposal. "I think the attraction of the separation of ownership from selling a lease to the circuit to a wealthy individual or individuals who have the sort of capital to deliver a bigger vision is that everybody wins. The BRDC would be secured, Bernie would be secure, the Grand Prix would be secured, the staff would be secured then they have got real momentum behind building the Silverstone brand into what it should be which is a global brand that has a value beyond what it is currently."

Previously described as "an old boys club" by Ecclestone, any decision regarding the running of the club has to be put before all 850 members. Consequently, apart from everything else, he can see the wisdom in such a move.

"If you got rid of the BRDC, Silverstone could do what they wanted to do without asking their dad every time," the F1 supremo told Forbes.

"It would be helpful," he admitted. "The minute you are trying to run anything where you haven't got anyone who can make the decisions and has to ask their grandmother, their father, their uncle, before they can do it, you can't do anything."

"The problem as ever is really more of a governance problem rather than an investment problem because the BRDC is a club," adds Allen. "In essence you have got hundreds of bosses which is never easy to manage. I think the speed of decision-making is critical. There has to be a mandate to carry out certain courses of action and that is easy to do when you have just got the management making that decision not a membership." Nevertheless, he believes that his proposal to secure new investment stands a good chance of getting the green light.

"The members supported the last three attempts to sell it and the only reason they didn't go ahead is that the people who looked at the trading element said that actually the numbers don't stack up. So I would say the mandate is arguably already there."

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READERS COMMENTS

 

1. Posted by Malbec, 30/09/2015 10:59

"Slverstone has been a financial disaster for quite some time bought about by poor management decision making, the'Wing' being a classic example as well as past investments approved by the members. At long last a change of management with the appointment of Patrick Allen hopefully will bring the BRDC members to their senses and allow the sale to an organisation that has the wherewithal to make Silverstone a world class Grand Prix venue. "

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