27/10/2009
NEWS STORY
Just when you thought the situation regarding the future of the British Grand Prix was already complicated enough along comes a story which throws it all into the air and contradicts previous pieces written by the same newspaper to boot. Over to Pitpass' business editor Chris Sylt to get to the bottom of it...
In today's Times there are some surprising revelations in an article written by the newspaper's F1 correspondent Ed Gorman entitled 'Bernie Ecclestone convinced Silverstone can deliver British Grand Prix in long term'. At the top of the list is the claim that "Donington Ventures has until midnight on Tuesday - not midday Monday as widely publicised - to come up with the money or it will be in breach of its contract to stage the grand prix from next year."
Of course we all thought that Donington's chances were already written off since it had until yesterday to get its funding together. So it seems did Ed Gorman's colleague Kevin Eason who wrote in the Times on Saturday that "Simon Gillett, the Donington chief executive, has until noon on Monday to try to remedy the breach of contract with Ecclestone."
In the same article Eason also wrote that "executives at Donington Park could be faced with paying Bernie Ecclestone up to £15 million as a result of their aborted attempt to take over the rights for the British Grand Prix." It seems that Gorman disagrees with this view too since he writes today that "contrary to suggestions in the media at the weekend, Ecclestone... will not be pressing for damages." Ouch!
Interestingly Gorman's comments are based on quotes from none other than Ecclestone himself which raises the question of why he might want to muddy the waters regarding Donington. One thing that's for sure is that the longer the decision on Donington's fate is delayed, the longer it will take for Silverstone to know whether it will host the British GP next year and, given that it would normally expect to have sold around 30,000 tickets by now, every day counts.
The bigger question is which version of events in The Times is the accurate one. Well, the irony is that the questions about Donington's deadline and the penalty if it defaults on funding are answered in the black and white of the prospectus for the loan which Donington hoped to get.
The prospectus clearly states on page 72 that "if we default, FOA [Formula One Administration] is entitled to liquidated damages, which could equal £18.0 million in the first year, increasing by approximately 7% per annum thereafter."
Then, on page four it says that "in respect of the 2010 event, we were granted an extension until 9 October 2009 to obtain the Letter of Credit...we failed to meet the deadline, which prompted FOM [Formula One Management] to notify us of a breach of the Race Promotion Contract. We are required to remedy the breach within 14 days of the date of the notice, failing which the FOA will be entitled to terminate the Race Promotion Contract."
Clearly, 14 days from 9 October was Friday 23 October with the next working day being yesterday. It leaves us with an interesting question - is this a flaw in the prospectus or has Bernie extended Donington's deadline yet again? Time will tell but maybe not in The Times.