07/11/2016
NEWS STORY
Host circuit of the British Grand Prix is under increasing pressure as cash reserves fall to £9,000.
The latest accounts for the British Racing Drivers' Club, owner of Silverstone, reveal that cash reserves were just £9,000 at the end of last year.
When one compares this to the £650,000 held just a year earlier, far less the £21.8m at the end of 2008, one can see the perilous situation the iconic race track finds itself in.
With Jaguar Land Rover (JLR) and entrepreneur and Ginetta car company owner Laurence Tomlinson both walking away from the negotiating table, the heat is on to find new investment.
JLR's plans, which are understood to include developing a heritage centre for its marques at the circuit, had its plans scuppered by Porsche which has an agreement in place whereby rival manufacturers are not allowed to use the track for more than 45 days a year.
Talks between JLR and the BRDC ended on Friday, the manufacturer concluding that a deal "did not fit" with its requirements.
As for Laurence Tomlinson, a source told The Telegraph that these negotiations had come to nothing also, revealing that the entrepreneur "had extended his offer on numerous occasions and October 31 was his final extension.
"He had been very clear that for there to be any realistic chance of saving the circuit business, a deal needed to conclude before the end of the year," added the source.
Consequently, the only hope would appear to be Jonathan Palmer, whose company MotorSport Vision (MSV) owns Brands Hatch, Oulton Park, Snetterton and Cadwell Park.
Despite net current liabilities of £20.4m, the accounts reveal that BRDC to be a going concern because it "relies on cash received from advanced ticket sales to fund its operations."
These came to £10.8m at the end of 2015 and in a recent letter to members BRDC chairman John Grant said that "early sales for the 2017 GP are up strongly compared with this time last year."
This year's event saw an all-time attendance record with 140,000 fans heading through the turnstiles to watch Lewis Hamilton win – the Briton's post-race celebrations with the crowd providing headline images for the world's media next day.
However, being the only event on the 2016 calendar that receives no government aid the entire $25.5m hosting fee comes from ticket sales.
For his part, Bernie Ecclestone has a special agreement with the BRDC which sees the hosting fee rise by just 5% each year, compared to 10% for most others, and receive a slice of the corporate hospitality revenue at the British Grand Prix
Nonetheless, over the last five years the BRDC has witnessed net losses of £55.2m, while in the year to 31 December 2015 revenue increased 3.1% to £56.4m but still finished £214,000 in the red.
As it tries to stem the losses, the BRDC has been trying to sell a 249-year lease on the circuit and at its AGM in September the board revealed that it is considering remaining the landlord and raising funding from multiple partnership deals. A decision is expected in the coming months.