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New threat to British GP

NEWS STORY
05/01/2017

Silverstone's owners are considering dropping the British GP as losses mount.

Last year's British Grand Prix attracted almost 140,000 race fans, and the post-race scenes as winner Lewis Hamilton crowd-surfed in celebration will have had fans looking forward to this year's event in anticipation of another home win.

However, the BRDC, which owns the circuit, is seriously considering dropping the race as it considers the cost of hosting the loss-making event to be a "potentially ruinous risk".

Writing to members last month, BRDC chairman, John Grant, spelled out the clear warning that while keen to retain the event the club could no longer ignore the "elephant in the room" as he put forward the idea of a contract break.

"It is widely recognised that no European circuit makes money from running a Grand Prix," he wrote. "We believe Silverstone does better than most, regularly attracting a large and enthusiastic crowd and putting on as good a show as we are allowed to do.

"Although even in a good year the GP does not generate enough cash to cover its share of the site overheads, our major concern has always been the risk of a bad year.

"We see the arrival of Liberty Media as having the potential to bring changes which could enhance F1 in a number of ways and, over time, could maybe lead to a more equitable balance for promoters such as ourselves, We expect the BRDC and Silverstone to play an active role in how this develops over the coming months.

"Your board would like to preserve the GP at Silverstone for many years to come, but only if it makes sense to do so," he wrote. "And we have to protect our Club against the potentially ruinous risk of a couple of bad years.

"Without some change in the economic equation, the risk and return are out of kilter, and so we are exploring various ways in which this might be altered.

"Among other alternatives, the Board is considering whether we should give notice before the 2017 BGP (as required) of our intention to exercise the break clause in the BGP contract at the end of 2019. This is not a simple decision, and we will consider fully all the implications before coming to a conclusion by mid-year."

The host circuit to the first ever round of the Formula One World Championship in 1950, in recent years Silverstone has had a torrid time in terms of the event.

Other than its much publicised money issues, the circuit was consistently under threat of losing the Grand Prix not only due to money issues but because Bernie Ecclestone considered the track "third world" and a poor advert for the sport. Indeed, at one stage Brands Hatch appeared to have won the Grand Prix back only for Donington to become the prime contender. In the event neither happened, and despite the threats not only did Silverstone keep the event it agreed a new long-term deal.

However, in agreeing to the terms of the deal, and having spent heavily on updating the circuit and its facilities, including the new £50m 'Wing' which many consider a vanity project, the event, and the circuit continues to lose money.

In 2015 the company reported losses of £5m, but as Grant admits; "even in a good year the GP does not generate enough cash to cover its share of the site overheads".

"If they want to activate a break clause, there is nothing we can do," Bernie Ecclestone told ITV when asked about the threat to the future of the race. "Two other tracks have contacted us and we are keen to keep a British Grand Prix, there is no doubt about it, we want to have one. As far as Silverstone is concerned, it's not in our hands."

In recent years Europe has lost a number of events from the calendar, and while France returns in 2018, the German round has been dropped from this year's schedule.

Much of this is down to money, European circuits unable to secure funding from governments which - in the eyes of voters - have far more worthy things to spend their money on.

However, the BRDC must accept its own share of the blame, its business practice and some of its recent decisions leaving a lot to be desired.

Furthermore, despite John Grant's optimism in terms of Liberty Media, the company is not buying the sport for altruistic reasons it is doing so to make money for its shareholders and pay off its loans, therefore there is nothing to suggest that its GP licence terms will be any more generous than Ecclestone's.

Either way, the British race fan loses... the fans always do.

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READERS COMMENTS

 

1. Posted by LukeP, 10/01/2017 12:39

"Chris - fair points, in particular that Silverstone did sign the contract on those terms, but I think I read that the circuit pays ~£20 million *every year* for F1 to come there. This is massive for Silverstone, but not actually a large part of the F1 turnover. I would like to see the fee reduced (for all races, as necessary) to keep tracks like Silverstone on the calendar (I realise you are not arguing for the fee, but just pointing out to me that the fee is not the only reason)"

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2. Posted by Ro, 06/01/2017 20:36

"Im afraid that the list of possible venues is not what you think!

Brands - No way that the current pits will suit the F1 Circus....cant see BE walking thru the tunnel...

Donington - No infrastructure, no hotels and only one way in! Too narrow now for modern F1's, lack of run-offs...and planes flying right over the circuit hence no helicopters. From what I remember, When Senna won that epic race, they closed the airport during the race and practice.

Oulton Park - Noise abatement...

Cadwell - A bike circuit,so narrow so there would be no overtaking (but whats different anyway)

Rockingham - More like a cemetery...has no soul

Thruxton - Carnage at the last corner...

So Im afraid its Silverstone or nothing...more disturbing is the news that SKY will have 100% of the screening of races by 2018, nothing yet said about if they will allow Ch4 to screen highlights. Me for one, I will rather grow a third nipple before I fork out to SKY for programs that I will never watch....Only solution is going to a pub that has SKY....nice class of Premier Cru Chablis and pork scratchings....ho hum!"

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3. Posted by Editor, 06/01/2017 14:03

"@ LukeP

If the hosting fee is reduced for one is has to be reduced for all.

Also, it was Silverstone that signed up to the deal even though it was fully aware of the costs.

Sorry, but much of this is down to bad management at the circuit."

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4. Posted by LukeP, 06/01/2017 13:28

"Bernie says "If they want to activate a break clause, there is nothing we can do ... it's not in our hands"

Well, you could always reduce the hosting fee? This is the only reason the event makes a loss - and it is ludicrous to expect governments to prop up the sport"

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5. Posted by Spindoctor, 06/01/2017 12:53

"For an allegedly "smart" man Ecclestone says & does some pretty stupid things!

In this instance, he's quite correct: if Silverstone\ BRDC isn't prepared to pay him a fortune to run a loss-making event then he'll take his ball to someone who will pay. That's becoming harder, as there are fewer wealthy despots around who haven't already got a GP. Obvious choices like the Saudis, Dubai or Azerbaijan are already signed-up and the tempting (to Bernie) Raqqa GP is on hold as IS\ Daesh have lost control....

More seriously.... it's obvious that BE is convinced that the 'old world' offers no growth potential, and he's probably right. Only the hardest of hardcore fans in UK are going to pay to watch GP on TV and they are already doing so via Sky. His gamble is that ditching European GPs won't dent their enthusiasm......

F1 as a Sport is on life-support, but as a "spectacle" (a la US Football & Baseball) there's plenty of potential; which is why Liberty is interested. Alternatively F1 can become analogous to Indy-Cars running noisy V-motors with little or no scope for innovation, but cheap to participate.
Yer pays yer money....."

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6. Posted by ColliAle, 06/01/2017 12:23

"Outside F1, why would anyone put on an event if it were not going to make any money? Would a government be expected to fund the event that doesn't clearly make money or promote that country in a positive manner?"

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7. Posted by GrahamG, 06/01/2017 10:33

"Let it go - the TV audience will crash, "recruitment" of new fans will more or less cease. Until the money men are hit hard in the pocket nothing will change. No GB, no Germany, maybe no Italy, Spain fading, France possibly, the longer the core events pay up the longer before anything changes. Of course millions of Uzbeks will watch their event on pay TV won't they, why should anyone worry?
Oh and that spending cap, doesn't that just mean more profit retained by the "owners" as they will have to pay out less?"

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8. Posted by Motorsport-fan, 06/01/2017 10:21

"These lines from this story say the most "the BRDC must accept its own share of the blame, its business practice and some of its recent decisions leaving a lot to be desired"
Ruining an iconic track, who thought losing bridge corner was a good idea? wasting money on the "wing" which is only used a couple of times a year, lack of investment in the public facilities, some of the toilets are a disgrace, but they have nice shiny cladding round them! time for the BRDC to relinquish control?"

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