If you thought that tickets to the British Grand Prix were already expensive then prepare to think again. According to a report in the Telegraph by Pitpass' business editor Chris Sylt the price of the cheapest tickets are projected to double over the 17 years of the new deal which Silverstone signed with F1 boss Bernie Ecclestone earlier this month. It would see fans paying £249 just for admission to the circuit without a seat (see below). As ever in F1 all you have to do is follow the money to find out the reason for this.
Under the new deal, which guarantees the race until 2026, Silverstone agreed to pay an estimated £12m annually with the fee reportedly escalating by 5% per year rather than 10% as is common with F1 race promotion contracts. It is a good deal for Silverstone but fans will still catch the brunt of it because F1 circuits have to cover the cost of the race hosting fee from ticket sales alone. Ecclestone's F1 Group takes all revenue from trackside advertising and corporate hospitality which leads to circuits struggling to break even. It explains why Silverstone has made a loss as often as it has made a profit in the past four years.
When the new deal was signed the media started to speculate that ticket prices would have to rise to cover the fee but there was no suggestion of just how big an increase there would be. Until now.
According to research by F1's industry monitor Formula Money, the cheapest tickets to the British GP, which cost £125 this year, will rise 22.5% to just over £150 by 2014 - five years into Silverstone's new contract. Ten years into the contract, the cheapest seats are projected to cost 50% more than they do now and by 2026 the research shows that their price will have doubled to £249. By then, the price of the most expensive seats is expected to have increased by £142 to £530 and the average ticket will cost £425.
Although the British GP attracted the biggest crowds of any F1 race this year, with 120,000 spectators turning up on Sunday, it is the only event on the calendar which has no government support. The fans pick up the slack but if it wasn't for the new deal they would be paying an even higher price.
The research shows that if Silverstone's fee was increasing by 10% annually the average ticket price would be £692 by 2026 with the cheapest rising nearly four fold to £485 and the most expensive being £721. So the fans will make a hypothetical saving and so will Silverstone itself.
The lower escalation amount will lead to the circuit paying around £310m to host F1 for the next 17 years - £176.5m less than the total which would be due if the fee was rising by 10%. Despite the looming hike in ticket prices, the £12m fee to host the British GP is one of the lowest in the sport. Only Monaco and Monza pay less and the average hosting fee is £17m with Malaysia, believed to be the biggest-spending race, paying more than double Silverstone's amount.
The big question is whether Silverstone has bitten off more than it can chew. After all, with increasing ticket prices the crowds are likely to fall which could then lead to more years of losses. If so, its deal to secure the British GP could end up being somewhat of a Pyrrhic victory. Its sole silver lining is that by 2026 one imagines that F1 will no longer be run by Ecclestone and its new boss will presumably put Britain on the same status as Monza and Monaco which pay next to nothing to host their races. Ironically for a circuit which hosted the first round of the world championship in 1950, Silverstone may have to scrape through until 2026 to truly secure its status in F1 for good.
Source: Estimates from Formula Money