12/03/2018
NEWS STORY
As British F1 fans worry about the future of their home Grand Prix, it has been revealed that were the event to be dropped, as planned, Silverstone's owners, the British Racing Drivers' Club (BRDC) could benefit from a £50m profit.
In the days leading up to last year's event, the BRDC, despite previous denials, triggered a break clause in its contract to host the race having decided that the event is "not financially viable".
The Silverstone event is the only race on the F1 calendar that doesn't receive any form of government support, and as the cost of hosting the event increases year on year and losses mount, the BRDC felt it had no option but to pull the plug.
While the bosses at Formula One Management, as recently as Ross Brawn's comments to the BBC last week, talk of solutions and their desire to keep the race on the calendar, the fact is that unless the hosting fee is significantly reduced Silverstone cannot continue to hold the race which is currently scheduled to drop from the calendar after 2019.
However, if FOM were to agree, such a move could trigger similar requests from other organisers
While the situation is dire for British F1 fans, things don't look quite so bad for the BRDC, whose membership includes most of the stars and legends of British motorsport.
Announcing the reasoning behind the decision to end its contract last year, the BRDC claimed "while we would hate to lose the British Grand Prix, Silverstone will have a bright future without it".
Indeed it will.
The Daily Telegraph reveals that the latest BRDC accounts state that "approximately half of annual revenue continues to be generated by a single event, the British Grand Prix".
In 2016 this amounted to £27.5m, with the remainder generated by all manner of other, lesser, events.
However, while the Grand Prix is currently set to be dropped, the numerous other events will be retained, and they are profitable.
The BRDC's announcement reveals that "by running the British Grand Prix we sustained net losses of £2.8m in 2015 and £4.8m in 2016", which, as the Daily Telegraph explains, means that in 2016, for example, the cost of running the Grand Prix came to £4.8m more than the £27.5m it made in revenue. "It gives the British Grand Prix costs of £32.3m with the BRDC's non-F1 costs coming to £20.8m as it had total expenses of £53.1m".
After dropping the Grand Prix, Silverstone would be left with £27.5m of revenue from its other events unconnected to F1, and deducting the £20.8m of costs that they entail still leaves a £6.7m operating profit, which over the course of the seven years that remained on the contract before it was cancelled would result in a £46.9m profit.
While there is no doubting the prestige in hosting the Grand Prix - Silverstone having hosted the first ever round of the Formula One World Championship back in 1950 - under the old agreement it simply wasn't viable, and with FOM still failing to offer a realistic glimmer of light, that annual £6.7m operating profit might be enough to convince BRDC members they made the correct decision.