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Brawn fails to understand Silverstone's rationale

NEWS STORY
12/03/2019

In all honesty, it was a deal that should never have been signed.

However, when the British Racing Drivers' Club, owners of Silverstone, were presented with a deal in 2009 that guaranteed the circuit the race for 17 years, after years and years of uncertainty and wrangling, it jumped at the chance... though like so many of us in similarly desperate situations it failed to read the small print.

For that small print, other than the basic cost of the hosting fee, included the fact that said fee would increase by a fixed percentage year after year.

Fast forward to late 2016, when 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".

The following summer, on the eve of the British Grand Prix, the BRDC duly exercised a clause in its contract which meant that it comers to an end after the hosting of the 2019 event.

Since then there has been plenty of talk - on both sides - but very little else.

On the one hand we have a circuit that has to rely solely on ticket revenues while on the other we have F1's management, which insists that if it cuts a deal with Silverstone other promoters will want similar deals.

Though keen to recognise the circuit's place in the sport's history, other than the fact that the sport's management is unwilling to reduce its price, there is the little matter of it seeking a race in London.

In recent days, doing the media rounds, F1's technical boss and managing director, Ross Brawn, has continued to insist that Silverstone is important to the sport, whilst admitting that an alternative venue is being considered, and with no other circuits really viable, that would appear to suggest a street race in London.

However, talking to i News, Brawn blames Silverstone for the lack of progress insisting that the BRDC should have sought a better financial model. That said, in the wake of the signing of the deal in 2009, projected figures produced by Formula Money and Pitpass in terms of future ticket prices were widely criticised, though, in reality, we under estimated the costs.

Asked if F1 wants to see Silverstone remain on the calendar, Brawn replies: "We would...

"We have a long history at Silverstone," he continues. "But we're struggling a bit with their rationale for why they should get the race for less money.

"Silverstone's logic as to why they want a reduction we don't think is correct," he admits. "We think they should maintain their fee close to what we've been receiving for a number of years now.

"We believe they can make a viable commercial model out of what they're paying now. But they want to reduce it. So we're stuck.

"I do believe there will be a British Grand Prix in 2020," he adds, "whether it's at Silverstone or somewhere else."

Of course, Silverstone was one of the 16 circuits that issued a statement in January critical of the sport's management, one particular gripe being the revenue sharing deal that was on offer to the potential promoter in Miami.

Other than Silverstone, this year sees four other races in the final year of their current contracts, and if all five fail to renew this could cost the sport around 99m in lost hosting fees.

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READERS COMMENTS

 

1. Posted by TokyoAussie, 13/03/2019 3:46

"I agree partly that Silverstone is at fault. They should be actively working with other venues to negotiated hosting fees as a group. Until they do, this story just gets repeated 20 times every year."

Rating: Positive (1)     Rate comment: Positive | NegativeReport this comment

2. Posted by VC10-1103, 12/03/2019 16:28

"Mad Matt - In a 40 yr career in civil aviation I have seen this situation many, many times. The level headed chap gets promoted to a certain level than has the company chip inserted and from then on just tow the company line no matter what."

Rating: Positive (2)     Rate comment: Positive | NegativeReport this comment

3. Posted by GarH, 12/03/2019 16:03

"Silverstone didn't only sign a stupid contract, they lost millions in other ways too. They've sold off land around the circuit just to keep up with the FOM fee and were forced to build a new pits complex that's beyond a joke. To the best of my knowledge it still relies on generators to produce electricity and it disappears into the ground at one end.

F1 in London. Brawn hasn't got a clue. There won't be any accommodation, there's no possibility of camping near any circuit, parking will be impossible and Londoner's will not put up with the disruption. Brands Hatch is out in the sticks and has noise limits. They won't be relaxed in London. I believe the RB Air Race had to move from Docklands due to the noise.

As for any UK council paying for F1, Brawn is living in cloud cuckoo land. "

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4. Posted by Canuck, 12/03/2019 14:35

"Silverstone may have signed a bad deal, at the time maybe 5% seemed sustainable but now inflation is lower. The other side, Liberty, also signed a bad deal, having overpaid to own FOM. To keep Silverstone would they just pay the fee to the track owners for Liberty to host the GP and collect all the revenue?"

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5. Posted by Anthony, 12/03/2019 13:01

"A street circuit in the centre of London would never get the go ahead. So the alternative would be docklands, which would be dire. Silverstone is the only suitable venue for the British Grand Prix. Having attended the race for almost 50 years, I am as keen as anyone for it to continue but clearly it needs to at least break even and I think that the ticket prices are already at the point where many families struggle to afford them."

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6. Posted by Ted Baker, 12/03/2019 12:49

"Silverstone doesn`t need the British GP to lose them money, it has so many other fabulous races like the Silverstone Classic, VSCC, Superbike, Silverstone Spectacular, British Touring Car, British GT, FIA Endurance and many more that are so spectator friendly. I have been to 17 British GP`s and many other assorted races and was lucky to be on the corporate side of the fence for most of them with friends in the F1 business. That was a privilege I enjoyed only once did I go to a GP as a normal spectator which to me was just a waste of time and would be better watching it on the TV. You could not get near the cars, drivers, paddock or pits save for a crowded pit walk for a few minutes if you were there early enough in the morning.
Anything other than the GP`s you could always get close to the action and the cars and drivers who didn`t hide like they do if F1. The spectacle has deteriorated over the last few years.
I would rather go to the Silverstone Classic than a GP now where you can rub shoulders with some of the greats of Motor Racing and guess what................there is exciting racing and OVERTAKING even though some of the cars are priceless and irreplaceable!!!
I admire Ross but he is now on the other side of the fence and of course he comes at the problem from a different viewpoint.
Silverstone "stick to your guns" we don`t want to lose all your fabulous race entertainment just for one boring race in July!!"

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7. Posted by Rock Doc, 12/03/2019 12:40

"""But we're struggling a bit with their rationale for why they should get the race for less money.""

Perhaps because F1 management were going to offer that kind of deal to Miami !!!

I'm totally loosing all respect I had for Brawn. Not the man I once thought he was."

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8. Posted by Mad Matt, 12/03/2019 12:39

"Ross Brawn has always struck me as a level headed chap but in this case he seems to either be losing his mind a bit or he's being forced to repeat the party line.

A 5% per annum rise is not sustainable. Silverstone can't keep putting up ticket prices at above inflation, only train companies can get away with that! People will simply not go and audiences will continue to decline.

What really needs to happen is a dramatic drop in ticket prices... but that's another story..."

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9. Posted by FQITW, 12/03/2019 12:29

""But we're struggling a bit with their rationale for why they should get the race for less money”.

Really?

Struggling to see that the world has changed, that there are less sponsors/premium group A partners, sub prime punters with more money than sense etc?
Teams on the edge of the financial abyss?
Is this the same struggle you don’t recognise with peoples’ reluctance / inability to pay for SKY?
Struggling with the fact that Liberty take all (apart from ticket sales) worthwhile revenue streams from Silverstone and leave them only the crumbs?
Ordinary Punters just cannot afford to go to watch a GP no matter how good the show, funfairs, pop groups and air displays are.

This is the rationale Silverstone is struggling with.

Yes they signed a stupid deal but at least they have got the balls to admit it and take the plunge to drop the race before it’s too late for them.
A decision which should hopefully inspire all the other promoters who will be out of contract at the end of the year.

Come on Ross before you lose all credibility and people forget your pre-Liberty achievements


P.S. Message to Silverstone:

Don’t bottle it now you have done all the hard work.
"

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10. Posted by Malemoi, 12/03/2019 11:30

"In fact it should be the circuits that charge the sport owners for use of the tracks. No circuits no races !!"

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11. Posted by GrahamG, 12/03/2019 11:17

"Walk away Silverstone, F1 needs you more than you need F1, concentrate on being the "Home of British Motorsport" with access for all and a wide variety of events.
F1 in London in 2020? Purest fantasy, there would be hundreds of protest groups wherever anyone was daft enough to think they could construct a circuit. Look at what's happened to the "certainty" of a race in Miami"

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