16/08/2013
NEWS STORY
A member of the British Racing Drivers Club (BRDC), which owns Silverstone, has told Pitpass that they "cannot not go on as they are" due to the accelerating fees paid to host the British Grand Prix.
In 2009 the BRDC signed a 17-year contract to host the British Grand Prix after Donington failed to secure enough money to fund the redevelopments required for the race. Under Silverstone's deal, the hosting fee escalates by 5% annually and currently comes to around £14m. That's just the tip of the iceberg.
As a condition of signing the deal F1's boss Bernie Ecclestone demanded that Silverstone's facilities were updated. In 2011 it opened a new pit and paddock complex which was funded with loans from Lloyds and this left the BRDC with £26.1m of net debt at the end of the year. Interest on the debt came to £842,000 fuelling the BRDC's £4.5m net loss.
For years the BRDC has been trying to sell a 150-year lease on the track so that it can use the proceeds to clear the debt and get out of the spiralling losses. However, this plan has hit more than its fair share of speed bumps.
It all started in August 2009 when the BRDC members allowed the club's board of directors to sell a lease to the land. The club then signed up accountants PricewaterhouseCoopers to contact possible buyers and it then entered into exclusive talks with one of them.
The talks came to nothing and in May last year the BRDC revealed that it was back in contact with multiple parties. The member says that he would "love to see the club out of Silverstone" but hoped that it would still be able to "use it and benefit from its heritage."
Four years down the line there still hasn't been an announcement about a new lease-holder despite lots going on behind the scenes. "In the last few months due diligence [on Silverstone] has been done five times," says another BRDC member.
The BRDC Annual General Meeting in October, postponed from 5 August, is likely to shed more light on the situation at a time the club is due to celebrate its 85th anniversary.
The club has a lot to celebrate this year and a resolution to the long-running issue of the lease would be the icing on the cake. Rest assured that when the lease is finally sold Pitpass and its writers will tell you all about it.