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British Grand Prix still awaiting green light

NEWS STORY
01/02/2009

The history of the British Grand Prix has more twists and turns than any circuit on F1's calendar. Every year it seems a ritual for the race to be put at risk and 2009 is no exception.

After last year's shock announcement of the event moving from Silverstone to Donington, it looked like the British GP had finally found some security last month when its new home got planning permission to make the changes necessary to host Formula One. However, news has come to light in the Express newspaper today, courtesy of Pitpass' business reporter Chris Sylt, revealing that the race now faces a financial hurdle. It has already become yet another casualty of the economic downturn.

Donington needs an estimated 40m of redevelopment work in order to bring the circuit up to scratch in time for its first British Grand Prix in 2010 but the downturn could put the brakes on it securing the necessary funding.

The 2007 accounts for the circuit's owner Donington Ventures, were signed off by its boss Simon Gillett on 21 January, and reveal that "the group is negotiating with financial providers and has at this stage not finalised facilities in connection with the development of the racetrack required to host the Formula 1 British Grand Prix from 2010." They add that "the current economic conditions create uncertainty particularly over (a) the level of demand for the group's services and (b) the availability of bank and other finance in the foreseeable future." Both could be crucial since Donington's plan is to get bank loans secured against the sales of over 6,000 seats to corporate customers.

With annual fees of around 5,000 a seat this would guarantee 30m a year from just 5-10% of the circuit's spectator capacity. Yet, even when the economy was in rude health it would have been tough to secure this level of corporate interest in a product which costs twice as much as a three-day ticket to the F1 Paddock Club for the British GP. In the current economic climate this plan seems fanciful to say the least. Donington's saving grace may be that the company involved with structuring the deal is ISG, which counts amongst its team a certain superstar banker called Robin Saunders who in 1999 helped the F1 Group's boss Bernie Ecclestone secure a $1.4bn bond secured on the sport's future revenues.

Donington needs this revenue stream not only to fund the redevelopment but also to pay an annual 18m fee to the F1 Group to host the race.

Ecclestone said earlier this month that Donington's work must be on track by September and added that "if it is not then we have four or five venues ready to stage a race." The implication is that he would scrap the race and instead give the calendar slot to a country which would pay even more than Donington. If this were to happen it would be the first time in F1's 60-year history that the British Grand Prix is missing from the calendar.

Sylt phoned Ecclestone about the latest development with Donington and he told him that "the government should lend them (Donington) the money... after all the money they have given to the Olympics." Ecclestone has strong views on this matter and recently told Sylt over drinks that he advised the Labour government's Olympics tsar Tessa Jowell to host the opening ceremony "underground… so nobody can see it because you ain't got enough money to do anything like the Chinese."

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