29/08/2016
NEWS STORY
Regular readers of this site will be well-aware of the difficulties facing Silverstone, home of the British Grand Prix. The losses, the failed attempts to sell the track and the fear that Formula One boss Bernie Ecclestone will drop the race. They are themes which have been discussed for years. In the Independent Ecclestone tells Christian Sylt that "somebody is going to have to step in and save" Silverstone.
So what is different this time? Everything.
The British GP is now in the unique position of lacking a permanent boss, lacking expected investment and having no cash to fund development. So saying that it needs a saviour is no exaggeration.
Given the extent of Silverstone's troubles you'd be forgiven if you thought it was located in an emerging market which has no history in motorsport. But it isn't. It hosts F1's best-attended race, the British GP, which last month pulled in 139,000 spectators on race day. So why is it in so much trouble? The answer lies right at the top as the British GP is the only one of F1's 21 races which gets no government funding and this has fuelled its losses.
Silverstone is owned by the British Racing Drivers Club (BRDC) a group of 850 motorsport personalities including Jenson Button and Lewis Hamilton. According to the BRDC's latest accounts it has burned up £55.9m of net losses in the past five years alone and in February its chairman John Grant wrote to members to say "we have no cash reserves to fund future development of the circuit."
Ecclestone has pulled out all the stops short of giving Silverstone a completely free ride which would mean that he lost money on the British GP. Silverstone is one of the only tracks which gets a cut of F1's corporate hospitality takings during its race and its annual hosting fee increases by 5% every year rather than 10% as is usually the case.
This is revealed in F1 company documents which state that race hosting fees typically "increase each year during the term by varying amounts which are typically based on relevant consumer price indices or fixed percentages of up to 10% per annum. Payments are often received in advance of the event." Not at Silverstone. Its woes have led to it paying the estimated £17.7m British GP hosting fee in arrears and Ecclestone has let it get away with this too.
As Pitpass reported last year, Ecclestone could cancel the British GP because its fee is being paid late. But he hasn't. Montreal and Spa weren't so lucky when they were chopped from the calendar which again shows how lenient Ecclestone has been with Silverstone.
Its fortunes have begun to turn around thanks to low-cost tickets starting at £99 which were introduced in 2015. It gave a short-term boost but it is far from a long-term solution so it is little wonder that Ecclestone says "I don't know what is going to happen there. Somebody is going to have to step in and save it."
To put the brakes on the losses permanently the BRDC is trying to sell a lease on Silverstone and in April announced that Jaguar wanted to buy it to use it as a high-speed test track. The deal was believed to be worth £33m and was endorsed by the BRDC board. However, it now appears to have ground to a halt as it recently (http://www.pitpass.com/56982/Turmoil-at-Silverstone-as-Porsche-blocks-sale-and-boss-races-off) came to light that Porsche, which runs a driving centre at Silverstone, has got a veto over rival car manufacturers using the track for more than 45 days per year.
Compounding the problem, Silverstone's managing director Patrick Allen has been suspended on full pay for allegedly being "too close" to his former employer, the tycoon Lawrence Tomlinson, who has made a rival bid for the track.
Allen spearheaded Silverstone's financial turnaround and Ecclestone says "he has done a good job but they have got their hands tied behind their backs all the time, this is the problem. It's because of the BRDC. If they own the land they should lease it to somebody and they run the thing."
Time will tell whether they can pull it off and finally put the brakes on the uncertainty over the future of one of F1's most famous races.