British GP an endangered species…again

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It seemed, for a few years anyway, that the future of the British Grand Prix at Silverstone was always at risk. Each year Formula 1 would suggest that the race could fail to make the calendar and each year a scramble to get a deal was done.

“If you put the price up you get less people,” he said. “It gets more expensive every year and there is a finite capacity that we can get into the circuit. So it is certainly increasingly difficult.”

Not long ago, the circuit engaged in some financing options and upgrades that seemed to suggest the race was secure on a multi-year contract though 2026 but now it appears the circuit could be financially in trouble and there are some concerns over it’s future.

Managing Director, Patrick Allen, spoke with the Telegraph saying:

“Can I guarantee the future? No I can’t,” said Mr Allen. “Could I hand on heart say to Mr Ecclestone,‘don’t worry, your money is absolutely safe for the next 10 years?’ No I couldn’t… to pull the contract would be a sad thing for Silverstone, it would be a sad thing for motor racing and it would be a very sad thing for Britain.”

There is a clause in the contract that would allow for the race to be terminated. The race is being paid for in arrears and this requires a Letter of Credit from a bank in order to ensure the race continues and F1 will get its money.

As F1 race deals go, Silverstone is getting a better deal than many with only a 5% escalator per year instead of the normal 10% and a sanctioning fee or $15 million instead of what has often been suggested as $20-25 million.

“They are paying next year for this year’s race because I have allowed them to do this otherwise they would have closed before,”

I’ll let you read the article for the detail but Silverstone certainly seems to have a concern over its ability to get a LoC from the bank that will sate Formula 1’s needs or at least that’s implied. Ticket sales are not covering the expense but it is a unique insight to the kind of deal F1 made for Silverstone.

I recall other circuits were keen to re-negotiate their deals a year or so ago when they found out what other tracks had been given but that was then, this is now.

Hat Tip: Telegraph

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Tom Firth

Not too surprised this has come up, SCL got new management in November 2014 after the BRDC failed in selling the circuit. Seems more revelations still to come. Guess this is the beginning of the end of the current management selling cheaper tickets for the grand prix, after next years race.

Negative Camber

You should apply for the job Tom. :)

Tom Firth

Heh, I’d rather have brands! ;-)

Junipero Mariano

How far above or below inflation does the 5-10% yearly increase cover?

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