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Silverstone would benefit by dropping Grand Prix

NEWS STORY
12/03/2018

As British F1 fans worry about the future of their home Grand Prix, it has been revealed that were the event to be dropped, as planned, Silverstone's owners, the British Racing Drivers' Club (BRDC) could benefit from a 50m profit.

In the days leading up to last year's event, the BRDC, despite previous denials, triggered a break clause in its contract to host the race having decided that the event is "not financially viable".

The Silverstone event is the only race on the F1 calendar that doesn't receive any form of government support, and as the cost of hosting the event increases year on year and losses mount, the BRDC felt it had no option but to pull the plug.

While the bosses at Formula One Management, as recently as Ross Brawn's comments to the BBC last week, talk of solutions and their desire to keep the race on the calendar, the fact is that unless the hosting fee is significantly reduced Silverstone cannot continue to hold the race which is currently scheduled to drop from the calendar after 2019.

However, if FOM were to agree, such a move could trigger similar requests from other organisers

While the situation is dire for British F1 fans, things don't look quite so bad for the BRDC, whose membership includes most of the stars and legends of British motorsport.

Announcing the reasoning behind the decision to end its contract last year, the BRDC claimed "while we would hate to lose the British Grand Prix, Silverstone will have a bright future without it".

Indeed it will.

The Daily Telegraph reveals that the latest BRDC accounts state that "approximately half of annual revenue continues to be generated by a single event, the British Grand Prix".

In 2016 this amounted to 27.5m, with the remainder generated by all manner of other, lesser, events.

However, while the Grand Prix is currently set to be dropped, the numerous other events will be retained, and they are profitable.

The BRDC's announcement reveals that "by running the British Grand Prix we sustained net losses of 2.8m in 2015 and 4.8m in 2016", which, as the Daily Telegraph explains, means that in 2016, for example, the cost of running the Grand Prix came to 4.8m more than the 27.5m it made in revenue. "It gives the British Grand Prix costs of 32.3m with the BRDC's non-F1 costs coming to 20.8m as it had total expenses of 53.1m".

After dropping the Grand Prix, Silverstone would be left with 27.5m of revenue from its other events unconnected to F1, and deducting the 20.8m of costs that they entail still leaves a 6.7m operating profit, which over the course of the seven years that remained on the contract before it was cancelled would result in a 46.9m profit.

While there is no doubting the prestige in hosting the Grand Prix - Silverstone having hosted the first ever round of the Formula One World Championship back in 1950 - under the old agreement it simply wasn't viable, and with FOM still failing to offer a realistic glimmer of light, that annual 6.7m operating profit might be enough to convince BRDC members they made the correct decision.

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READERS COMMENTS

 

1. Posted by copy_dude, 14/03/2018 16:55

"Hmmm. So, no British GP in 2019. No free-to-air TV. No streaming. Is this some kind of 'cunning plan' ?"

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

2. Posted by Ro, 12/03/2018 15:39

"If silverstone is THAT important to Liberty Media, Then they should do their utmost to keep it. if Silverstone goes, so will Monza, Spa and Hungaroring...then F1 will be dead. Liberty must surely realise that, or are they so cocky to go their own way ? Would Ross Brawn realise it and tell Liberty ? lets wait and see ?
"

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3. Posted by Toffeecup0, 12/03/2018 13:42

"Yes it would be a great shame the only British Grand Prix probably lose a lot of fans"

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4. Posted by GrahamG, 12/03/2018 12:37

"Why should BRDC be forced to put its own future, and that of Silverstone as a resource for the whole UK motor sport fraternity in doubt just to contribute to the profit of a US based company which makes no contribution whatsoever to motor sport globally, just takes money out of the pocket of everyone it can."

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5. Posted by Nortim, 12/03/2018 9:30

"I would hate to see Silverstone out of F1, but if it makes you lose money to host the GP, then drop it, simple as that."

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