16/08/2009
NEWS STORY
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First it was football teams, then Formula One teams and now it seems even Britain's circuits may not be safe from being taken over by Middle Eastern wealth funds.
A report in the Express by Pitpass' business editor Chris Sylt reveals that at an upcoming Extraordinary General Meeting on 25th August Silverstone's owners, the British Racing Drivers' Club (BRDC), are to be asked to pass a resolution that will give the directors of the Company carte blanche in 'disposing' of the circuit, either by long lease or sale, without any ratification from the members.
However, what most of the members, indeed what a number of board members, are not aware of is that a deal is allegedly already in place which would almost certainly see a Middle Eastern wealth fund take over Silverstone for allegedly little financial benefit to the BRDC. Naturally some of the club's 850 members are none too impressed.
The BRDC's directors recently wrote to the members asking them to vote at a meeting on the 25th August on a plan to get Silverstone "capable of hosting Grands Prix should the opportunity arise." It is believed to be spearheaded by former F1 driver and team owner (Arrows) Jackie Oliver and it gives the BRDC's directors the power to lease Silverstone and its vast estate to a management company which will also heavily invest in the circuit. However the letter does not reveal who negotiations are taking place with and a group of members is uprising against the power that the plan gives to the directors.
John Fitzpatrick, former BRDC director and life member says "we absolutely want the directors to get an independent operator in to run the circuit." However, he adds that a significant number of members don't want to completely lose their say in the future of Silverstone: "We will not stand by and let the directors ask members to sign away their rights. They are being asked to give a carte blanche to the directors to do what they want."
BRDC president Damon Hill stresses that this view is not shared by all members. "That's a common comment and it is also a comment which contradicts a lot of the reactions in meetings we held in consultation with the members." However, Hill doesn't deny that the plan will put decisive power in the directors' hands. "You cannot enter into discussion with anybody unless you are empowered to do a deal...if you depended on everybody making a decision we'd never get anything done," he explains.
Fitzpatrick also claims that the upcoming meeting was originally scheduled to ratify general rights of members but "when the letter arrived on our doorsteps ten days ago the directors had slipped in these resolutions to give them carte blanche on the commercial side." However, Hill again rejects this saying "nothing has been slipped in. Everything has been painstakingly explained over and over to the members. This board has tried as best it can to explain to the members at every step of the way what has been going on and the board is continuing to do that to alleviate any fears." It doesn't seem to have had the desired effect on all the members.
Fitzpatrick adds that "the board have said to the members we are only asking you to vote on this in case we get a deal. However, privately, I have talked to Jackie Oliver and he let it slip that the board has been in advanced talks with people for quite some time. Jackie says this lease has got to be for about 150 years and anyone who takes over is going to have to invest £60m or £70m in the circuit. His own words to me were that it is only a sovereign wealth fund that could afford to do this."
Fitzpatrick is also concerned about the small amount which the members would allegedly receive from the deal. The letter states that the circuit operator would "pay the BRDC an annual index-linked sum to cover the Club budget," and Fitzpatrick describes this as "hardly any gain at all. Our income is about £1.3m at the moment and you're talking about us getting between £1.5m and £2m but that includes handing over all the property. There's still development potential in the commercial sites and once the economy picks up that rental income could be £2m or £3m."
Hill says he has "no idea of anybody who has been engaged in a deal at all," and comments that the alleged details are "all supposition. It is a perennial characteristic of a club that a lot of members purport to know something because they have heard someone say something." However, he stresses that the goal of the strategy is to "attract a significant investor to take on the risky part of running Silverstone. Obviously higher risk, higher reward."
Hill concedes that "it is a very difficult thing to persuade the BRDC as a whole to agree to something which may mean that they would ultimately have to step back from the management of Silverstone as a business." However, he stresses that the proposed plan is in the club's best interests.
"In this country currently we only have one venue capable of hosting a Grand Prix and Silverstone is it and the BRDC own it. We have to move forward with the development of this prime asset for motorsport in this country. If we don't move forward I don't think we are doing a proper service to the members," says Hill.
The plan to sell control of the circuit to wealthy Middle Eastern funds seems to be the missing piece in the puzzle of why F1 boss Bernie Ecclestone suddenly did a very public u-turn two months ago. After repeatedly saying that F1 would not return to Silverstone, Ecclestone commented that if Donington can't raise enough money to host the British GP next year, as it is contracted to do, "we'll come back to Silverstone." Ecclestone explained this by adding "there has been a big change with the BRDC. They have got more commercial people in and these people are prepared to do all the things we want."
Fitzpatrick says there has been no recent change in the BRDC management and the key development is the upcoming switch to a new operator. However, Ecclestone denies any involvement with this plan and says "at the moment I have not spoken to anybody about this but maybe they have got this in the pipeline to speak to me."
With only months to go before it becomes too late for Silverstone to start preparing to host the 2010 GP we will soon find out.