24/02/2008
NEWS STORY
Around this time of year it's become almost traditional to read stories about how the British Grand Prix is under threat. Usually because F1 boss Bernie Ecclestone wants Silverstone's owners the British Racing Drivers' Club (BRDC), to pay an even higher race hosting fee or bring the circuit up to scratch.
This year has been no exception with Ecclestone saying just a few weeks ago that "really and truly, what we want in Britain is government support. Most F1 events now are supported by governments and it (Silverstone) needs that support." So it comes as a bit of a surprise to read a report in today's Independent newspaper, written by Pitpass contributors Christian Sylt and Caroline Reid, that the Northamptonshire circuit made a £13.6 million gross profit in 2006 and had earnings after-tax of £1.3 million - up from a £2.6 million loss the previous year.
As Pitpass previously reported, the combined profits of Ecclestone's F1 Group itself hit just £1.5 million ($3 million) in the same year due to it making massive debt repayments.
Clearly the BRDC is doing a better job of running Silverstone than even industry insiders expected and, definitely a better job than the advertising company Interpublic which broke its contract to promote the race in 2005 and paid the BRDC a £22 million severance fee.
Many F1 circuits struggle to break even on hosting one Grand Prix. Silverstone's feat is all the more impressive since its accounts are for the 18-month period to the end of 2006 which covers two races. Its turnover hit £52.6 million and, after the race hosting fee, its next biggest cost is likely to be the £5 million spent on paying 110 staff. Despite this the BRDC has still built up cash reserves of £12 million.
Silverstone's next set of accounts could be even better. Interest in Lewis Hamilton in Britain has led to an unprecedented demand for tickets, with the 2007 race drawing record spectator numbers for Friday and Saturday practice and a capacity crowd for Sunday's race.
Silverstone's F1 contract runs out after next year's race and it is still under threat, largely due to astronomical hosting fees being paid by new races such as those in India and South Korea. They are believed to be paying up to £20 million per year to the Ecclestone's companies yet, in contrast, Silverstone's fee is reportedly 'just' £8.5 million.
Who knows, given Ecclestone's recent comments about Silverstone, maybe it won't be too long before the billionaire is asking the government to give him money too.