What other countries would normally do is enter into a commercial agreement. We would want a letter of credit to cover two years’ fees. They would then need to build a facility in the way we would want it built. If they didn’t build it for whatever reason, they would lose their two-year fee.
The BRDC reportedly paid £8m to host the Grand Prix last year, suggesting this two year fee would be £16m at the very minimum. Can they really afford this?
Ecclestone also said:
Assume the facilities are built and we like it. The next problem is the commercial agreement for [the Grand Prix] to be there. This has not been discussed other than the [BRDC] guy who came to see me some time ago saying there is no way [they] could pay you even what we have paid you in the past.
So there are two things to overcome. First they need to build the facilities, then they need to pay the market rate. There is no sentiment in this from my point of view. I want [the BRDC to do] only what we do in any other country, no more, no less. I sincerely hope they are in a position to deliver what they know they have to carry out to get the Grand Prix in 2010.
And when he says “market rate” I don’t imagine he is overlooking the fact that in Lewis Hamilton Britain has a potential world championship-contending driver for the next few seasons, and the circuit should expect to sell out race day and qualifying tickets. Its ticket prices are already the third-highest on the calendar, according to F1 Racing magazine.
Some estimates put the total cost of a new five-year contract for Silverstone at $135m (£68.4m).
It is not clear whether Ecclestone considers Silverstone’s proposed redevelopment sufficient to match the facilities he requires. Hopefully his demands don’t extend to whinges like ‘it’s too bumpy’.
The circuit owners are close to submitting plans to build a new pit and paddock complex to South Northamptonshire Council. Their requests to construct two hotels, a university campus, leisure complex, conference and exhibition centre, advanced technology park and residential housing are already being considered.
Without the potential extra revenue generated by these non-racing developments it is unlikely the circuit could afford Ecclestone’s asking price, regardless of how many fans turn up to cheer on Hamilton.
I do wonder why the race organisers can’t simply add further grandstands to increase race day attendance and revenue, as the Circuit de Catalunya has done since the Fernando Alonso-powered boost for F1′s popularity in Spain. But I suspect there’s a tedious explanation to do with insurance, policing, and health and safety requirements.
However I doubt anyone involved in negotiating for the British Grand Prix is under any illusions about Ecclestone’s bargaining tactics. The United States Grand Prix was reportedly dropped over a difference in price of just $10m (£5.06m).
More on Silverstone and the British Grand Prix