05/01/2017
NEWS STORY
Silverstone's owners are considering dropping the British GP as losses mount.
Last year's British Grand Prix attracted almost 140,000 race fans, and the post-race scenes as winner Lewis Hamilton crowd-surfed in celebration will have had fans looking forward to this year's event in anticipation of another home win.
However, the BRDC, which owns the circuit, is seriously considering dropping the race as it considers the cost of hosting the loss-making event to be a "potentially ruinous risk".
Writing to members last month, BRDC chairman, John Grant, spelled out the clear warning that while keen to retain the event the club could no longer ignore the "elephant in the room" as he put forward the idea of a contract break.
"It is widely recognised that no European circuit makes money from running a Grand Prix," he wrote. "We believe Silverstone does better than most, regularly attracting a large and enthusiastic crowd and putting on as good a show as we are allowed to do.
"Although even in a good year the GP does not generate enough cash to cover its share of the site overheads, our major concern has always been the risk of a bad year.
"We see the arrival of Liberty Media as having the potential to bring changes which could enhance F1 in a number of ways and, over time, could maybe lead to a more equitable balance for promoters such as ourselves, We expect the BRDC and Silverstone to play an active role in how this develops over the coming months.
"Your board would like to preserve the GP at Silverstone for many years to come, but only if it makes sense to do so," he wrote. "And we have to protect our Club against the potentially ruinous risk of a couple of bad years.
"Without some change in the economic equation, the risk and return are out of kilter, and so we are exploring various ways in which this might be altered.
"Among other alternatives, the Board is considering whether we should give notice before the 2017 BGP (as required) of our intention to exercise the break clause in the BGP contract at the end of 2019. This is not a simple decision, and we will consider fully all the implications before coming to a conclusion by mid-year."
The host circuit to the first ever round of the Formula One World Championship in 1950, in recent years Silverstone has had a torrid time in terms of the event.
Other than its much publicised money issues, the circuit was consistently under threat of losing the Grand Prix not only due to money issues but because Bernie Ecclestone considered the track "third world" and a poor advert for the sport. Indeed, at one stage Brands Hatch appeared to have won the Grand Prix back only for Donington to become the prime contender. In the event neither happened, and despite the threats not only did Silverstone keep the event it agreed a new long-term deal.
However, in agreeing to the terms of the deal, and having spent heavily on updating the circuit and its facilities, including the new £50m 'Wing' which many consider a vanity project, the event, and the circuit continues to lose money.
In 2015 the company reported losses of £5m, but as Grant admits; "even in a good year the GP does not generate enough cash to cover its share of the site overheads".
"If they want to activate a break clause, there is nothing we can do," Bernie Ecclestone told ITV when asked about the threat to the future of the race. "Two other tracks have contacted us and we are keen to keep a British Grand Prix, there is no doubt about it, we want to have one. As far as Silverstone is concerned, it's not in our hands."
In recent years Europe has lost a number of events from the calendar, and while France returns in 2018, the German round has been dropped from this year's schedule.
Much of this is down to money, European circuits unable to secure funding from governments which - in the eyes of voters - have far more worthy things to spend their money on.
However, the BRDC must accept its own share of the blame, its business practice and some of its recent decisions leaving a lot to be desired.
Furthermore, despite John Grant's optimism in terms of Liberty Media, the company is not buying the sport for altruistic reasons it is doing so to make money for its shareholders and pay off its loans, therefore there is nothing to suggest that its GP licence terms will be any more generous than Ecclestone's.
Either way, the British race fan loses... the fans always do.