British Grand Prix a money loser

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It wouldn’t be proper if commercial rights boss Bernie Ecclestone didn’t take a shot at Silverstone and the BRDC. Just hours after announcing the new home for the British Grand Prix for seventeen years, Ecclestone says that staying at Silverstone is actually a losing proposition for the commercial rights holder.

Ecclestone

According to the Daily news paper, Ecclestone says that other countries were clamoring for a grand prix and that keeping it at Silverstone is a losing proposition. As we mentioned on Podcast #136, it seems to be down to the fact that the BRDC is making money on the grand prix as evidenced by Ecclestone’s snarky comment:

‘I got fed up with the whingeing and moaning. It has taken too long, but now Silverstone can get on with it for years to come and make a fortune.’

A hint that Ecclestone only likes deals if they remove any prospect of profit from the track owners or a break even scenario at best? Well that probably isn’t news to anyone but it seems to be hinted at in these words. As always, I could be misunderstanding the context of Ecclestone’s comments but he does seem frustrated with the notion of the BRDC making money.

This brings up a point that perhaps the economy and lack of a real plan for the Donington circuit to host the GP has caught Ecclestone on his heels. The celebration must be sweet for the BRDC to have had the cards and trumped the fleecing skills of Ecclestone.

In the math, the Times has estimated that it will cost £300 million to host the race while Ecclestone waived £60 million in fees. One would assume these are the escalators per year for hosting the event. With the economy in such a stale position, asking for any gaurantee in escalation is a crystal ball moment and I doubt anyone can, with any assurance, commit to a escalator greater than 3-5%.

The world economy certainly must have had a hand in negotiations and as business is expected to perhaps have a modest 3% increase in 2010, this is from an already desperate 25-32% decrease in overall performance on average. For the BRDC to commit to an exhorbitant escalator would make little sense.

Many, like me, are wondering if indeed Hell has frozen over as Ecclestone historically isn’t known for waiving fees. The press is perhaps suggesting that the veteran of F1 is whimsical and patriotic to do so but Ecclestone says no:

‘I didn’t have any special sentiment because it was Britain, but if people think I helped then that’s nice.’

Charming…to the last.

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