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Silverstone bosses to activate break clause?

NEWS STORY
01/07/2017

As expected, the British Racing Drivers' Club (BRDC), which owns Silverstone, looks certain to trigger a clause in its contract with Formula One Management (FOM) which will mean the 2019 British Grand Prix is the last held at the iconic track.

The circuit currently has a deal which sees it host the race until 2027. However, late last year, BRDC chairman John Grant warned members of the 'elephant in the room', namely that in continuing to host the event, with hosting fees rising by 5% each year, the circuit faced a "potentially ruinous risk".

It was subsequently revealed that a clause in the contract allows the BRDC to terminate it after the 2019 race, but that the clause must be triggered before this year's race on July 16.

While all this was happening, of course, F1 changed hands, with Liberty Media purchasing the sport and appointing Chase Carey to replace Bernie Ecclestone.

While Carey has said he is keen to keep Britain on the F1 calendar, and the event at Silverstone, from the outset he has made clear that there will be no reduction in the hosting fee.

Consequently, the BRDC has two choices, either it continues with the current contract until 2027 but raises ticket prices accordingly (do the math), or exercise the clause in its contract.

Just days before the deadline, it appears the BRDC has opted for the latter.

Philip Walker, a director of the BRDC, told the Mail on Sunday: "It is highly probable we will have to activate the break clause."

Another senior figure, who asked not to be named, added: "It has come too early for Liberty. They do not yet know which races they want to help keep on the calendar. For example, Chase has never been to a grand prix at Silverstone.

"It is not Liberty's fault," they added. "They would like to be of assistance but time has been too short and we will now give ourselves a longer stretch to sit down with them again and plan for the future."

The bottom line is that Liberty needs to start seeing a reward on its 6bn purchase, and that isn't going to happen by agreeing new terms with the likes of Silverstone, not when other circuits would then want similar deals.

While some always questioned the original deal, which was largely the work of Damon Hill whilst BRDC president, the fact is that such as it is, the deal is indeed a "potentially ruinous risk". Though the fee for the first race under the contract cost 12m the year-on-year increase means that by 2026 the BRDC would need to find around 26m.

To further complicate matters, Carey has made no secret of his desire to see more street races, and one of the cities at the top of his wish list is London.

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READERS COMMENTS

 

1. Posted by Spartacus, 05/07/2017 16:39

"Operating costs are going up everywhere but so should the profits as well! Its really unfortunate to see great venues built and then abandoned. Korea, Turkey are a couple and we see this same occurance with the Olympics. Silverstone is an Iconic track and race that should not be in jeopardy. Its history and location is the heart of F1 and to even talk about canning it is tragic to say the least. At least it will still be used in Moto GP and British Touring and many other classes. If those races still occur why can't the F1 race still happen?Are these people bluffing to get a reaction? Bernie Ec usually says, "Well, we want the race, but if they don't want to come up with the money. C'est la vie". "

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2. Posted by mickl, 03/07/2017 16:21

"@Spindoctor. Unfortunately Indycar uses V6s...guess V8s won't step on copyright toes.............."

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3. Posted by Spindoctor, 03/07/2017 6:59

"The death-knell of "old" Formula 1 continues to sound.
Let's get all the grief over in one hit: Lots of street circuits, Standard Chassis, a couple of engine makers making rorty V8s, banked circuits.
What's that Sooty? It's called IndyCar? OK well it makes money so....."

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4. Posted by TokyoAussie, 03/07/2017 3:35

"The "come too early for Liberty" bit is BS. I imagine they are trying to keep Liberty in the good books. If Liberty were truly interested in F1 as a sport, it would have known full well which races to support and which to bilk. Everyone else knows, and has known for decades."

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5. Posted by Canuck, 02/07/2017 15:57

"I don't understand why the teams do not chip in, in order to keep some of their home Grand Prix. With teams spending Millions of or $ on developing a front wing, how large of an impact would it be for Williams, Mclaren, Red Bull and others, based in the UK, to throw in 1M each to offset some of the cost of hosting the British GP. Or for Mercedes to back the German GP, Renault the French. And if the show improves, the fan base will also grow and maybe bring profits to the individual GPs. Then the teams could maybe recover some of their investment in the GP.

F1 is completely out of control on costs from all aspects, Team spending, Rule changes which increases tems costs, Event locations, Event costs for hosting. The whole picture of F1 needs to come under severe review."

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6. Posted by F One, 02/07/2017 14:13

"This all makes me glad in some ways that F1 is going behind the paywall as it'll give me an excuse to stop watching it being killed off slowly. Carey is as mentally deficient as Bernie if he thinks that street races are anything other than awful."

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7. Posted by GrahamG, 02/07/2017 7:42

"You have to agree that F1 is just a drain on Silverstone finances and they are entirely right to look at the long term health of the circuit for everyone, not just hazard everything for a couple of days a year of not very interesting racing. I hope this encourages the other classic circuits who don't have (and shouldn't have) government picking up the bill to do likewise. Malaysia took the first brave decision to say "it's not worth it" and I hope others will follow.
Until F1 realises that 20+ events at places no-one has ever heard of or wants to go to and are only available at high cost on pay TV is not a clever commercial model then the sport will continue to die slowly. "

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8. Posted by Kennyk, 02/07/2017 5:14

"I think that if there only going to hold only a cupple off f1 races at silverstone and no longer hold them there I think that ever weekend ticket holder should just automatic get pit walk passes "

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9. Posted by stackvideo, 01/07/2017 23:43

""Carey has made no secret of his desire to see more street races" Going the way of indycar, 90 degree after 90 degree turn etc etc. Borrrrrring"

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