Sharing the British Grand Prix – nice idea but not economically sound

Will the 2009 British Grand Prix be the last at Silverstone?

Will the 2009 British Grand Prix be the last at Silverstone?

The moving of the British Grand Prix from Silverstone to Donington Park in 2010 was discussed in Parliament yesterday. Mark Lancaster, MP for North East Milton Keynes, had this to say:

Although I realise that this is not a matter directly for the Government, the Minister concerned has recently had meetings with Bernie Ecclestone. All I ask is that we perhaps move to a system whereby the British Grand Prix can alternate between Silverstone and Donington Park.

It’s a logical idea in theory and I like the idea of having a choice of venues in my home country where I can see F1 cars in action. But the reality of the situation is rotating the Grand Prix would do nothing to guarantee the future of a race in Britain, and might actually do the opposite.

The German Grand Prix example

The British Grand Prix is one of only two races on the calendar whose country’s government does not provide any kind of financial support for the race.

The other is the German round of the championship. Since the retirement of Michael Schumacher at the end of 2006 instead of holding two races (the German GP at Hockenehim and the European GP at the Nurburgring) Germany holds one, rotating between the N???rburgirng in odd-numbered years and the Hockenheimring in even-numbered years.

Predictably the race makes a loss – every event on the calendar is believed to except for the Monaco Grand Prix which is the only race where the organisers take the money from advertising at the circuit, instead of Bernie Ecclestone’s Formula One Group. This year’s German Grand Prix is expected to lose ??3m (??2.36m).

If the rotation system isn’t working in Germany, which has two F1-standard circuits already, how could it work in Britain? As far as Ecclestone is considered, Silverstone is not of a high enough standard, and the Donington Park owners are talking about spending ??100m to bring their track in line with F1 specifications.

The Japanese Grand Prix is due to begin rotating between two venues. After this year’s race at Fuji Speedway F1 will return to Suzuka next year, and then switch between the two each year. But that event is understood to receive financial support.

How can the government help?

If the British government (whether the current Labour government or the Conservative opposition which at present look likely to succees them in a few years) wish to help the British Grand Prix, I can think of two ways it might happen.

The obvious way is financial support – and I wouldn’t bet a penny on it. Regardless of the huge losses made by F1 circuits on Grands Prix, Formula 1’s public perception is that it is cash rich, and giving public money to it would not be popular with the majority of voters.

On top of that Labour has the lingering memory of getting its fingers burnt with Bernie in 1997, when it was alleged he gave the party ??1m in order for the government’s support for an exemption from a ban on tobacco advertising for F1.

Perhaps more realistically, the government might be able to bring about an agreement with Eccletone whereby the race can stay at Silverstone at 2010 and beyond if, as seems likely, Donington is not ready to hold a Grand Prix by then.

Here’s a video of the session in which the point was raised – fast-forward to 2:15’18 for the statement:

More on the British Grand Prix at Donington Park

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15 comments on Sharing the British Grand Prix – nice idea but not economically sound

  1. Robert McKay said on 23rd July 2008, 21:45

    Doesn’t having two tracks alternating mean that each of them has to spend the same amount of money to upgrade the facilities to host the race as they would have had to to individually anyway? With the drawback that you only get to actually “make” (and I use the term advisedly) money every other year? I suppose you get to split the crippling FOM fee in two, which is presumably the real problem here.

    The Hockenheim people say that they make enough money on all their other events to cover the losses they inevitably make on the Grand Prix. Which begs the question why they don’t just NOT have the GP and make even more money.

  2. Matthew said on 23rd July 2008, 21:56

    What about a “Welsh Grand Prix”?

  3. It all seems like a ruse to kill the British Grand Prix. Donnington will probably not be ready. Why would Bernie let Silverstone take back the grand prix. He’ll offer Britain a year to get up to speed, and we’ll miss a year and then we’ll never be back.

    The lack of concord agreement for a few years might be very helpful for Bernie (it guaranteed certain grand prix).

  4. Matthew makes a good point, but I was thinking further North. With Alex Salmond looking towards Scottish independence a Grand Prix of Scotland would be a bit of a coup for him.

  5. AndyWolf said on 23rd July 2008, 23:58

    Never mind Wales or Scotland, at this rate there won’t be a GP in the UK at all beyond 2009! In fact, if Napoleon, sorry Bernie, has his way, there won’t be any F1 in Western Europe! Night racing in Asia, indeed…RIP F1

  6. michael counsell said on 24th July 2008, 0:14

    The only reason FOM charges so much to hold races, is that the teams seem to be willing to pay and sign up for contracts tha tsees them paying more and more each year i nreal terms. The contracts are never up for renewal together so the tracks have no chance of sticking together to force prices to drop.

    Maybe the FOM need to promote the sponsors of the race more which would in theory incraese the money coming to the tracks. Otherwise by limiting the money going to the tracks, the FOM are limiting the ability of tracks to improve their facilities.

  7. Gman said on 24th July 2008, 3:01

    Indeed, the alternating GP idea seems a good one…but I wonder just how long these arrangements will last in either Germany and Japan? I suppose in Japan, with the car companies owning both locations, it’s got a good chance of sticking. But in Germany…what if a change in track management, or something along those lines, puts one venue out of the picture?

    Looking at the British example, the race at any of the tracks mentioned would be perfectly fine if not for the overwhelming sanctioning fee forced on all circuits. And thus, we find ourselves back at the same old dilemma…the government-funded circuits in the Middle East and Asia can easily build/upgrade to Bernie’s standard, and easily pay every year for the annual F1

  8. Gman said on 24th July 2008, 3:07

    Sorry, hit the wrong button too soon- I meant to say “annual F1 visit.” Continuing…

    This is the mode of business Bernie preferrs, and it’s not at all helpful to promoters/owners/management at circuits in Europe, North America, and other places such as Australia. If F1 dose indeed lose it’s GP in Britain, it will be a tragety for the sport and fans around the world. Hopefully this will not happen, but the deal with Donnington dose seem shaky, and who knows what will be the deal if that falls through…

  9. the limit said on 24th July 2008, 4:02

    I have only been to Donnington Park once, probably a good three years ago now, and I think $200 million is a conservative estimate. No offence to those Donnington fans out there, as the track itself is fantastic. The location is good, close to a major airport, M1 nearby, in the centre of the country.
    Its just the pit facilities were awfull, truly awfull.
    I never thought it would be as bad as that. If they are really serious, then they should invest that kind of money. Please, please, please don’t give F1 those kinds of facilities as I saw back in 2005.
    Good point about the German Grands Prix, and how alternating between Hockenheim and the Nurburgring has not been the greatest of successes. For Silverstone to have a secure future, as always, it needs government aid.
    For me, personally, I don’t care which venue is overhauled. Just give the British F1 race fan what he or she deserves. Good facilities, good access, at a good price, and they will come! It will make money.
    Give them something to be proud of and stop taking the piss.

  10. It’s not an overall bad idea i think.

    Like you said, every GP works at a loss, and hockenheim said that they cant afford to loose 3m every year, but 3m every 2 years is ok.

    It’s the same issue with Australia, they cant afford to lose something like 5million every year, but if it was melbourne 1 year, sydney the next, then it’s only a 2.5m a year hit and australia keeps a race.

    and it adds an additional track to the 2 year rotation, more things for drivers to learn, more opportunities for people to visit a race and a boost for local business in 2 areas not 1.

    Race tracks are used for more than just f1, so upgrading them isn’t a bad idea, it works out well for all the other events that visit the circuit, i’m sure fuji attracts more race events now that it’s in an f1 rotation then it did after it was dropped.

    and I’m sure donnington will become more popular among drivers and teams once it has upgrades.

    @michael counsell

    I dont agree that FOM should promote the sponsors of the track more, because i think they are doing it too much already, have you seen the last 2 trophy’s? they aren’t trophy’s anymore, they were both santander logos… pathetic

  11. Noel said on 24th July 2008, 6:26

    Talk about tracks losing money per race… I live just six miles away from the Silverstone circuit and I can confidently say that local towns, villages, farms, hotels etc all benefit massively from having the Grand Prix every year. My town literally buzzes for a week and the financial input it produces is definitely our largest single source of tourism income.

    If the government can’t/don’t subsidise the race, or redevelopment of the facilities, the local economy around the circuit will suffer immensely, to the tune of millions of pounds. Surely it makes sense to subsidise a race to and stabilise local (taxable) income than let it disappear altogether and let small communities suffer the consequences?

  12. Alex Cooper said on 24th July 2008, 9:04

    My biggest concern is that, like a few have already mentioned, Bernie’s using this as a way to drop the British Grand Prix altogether. If this happens then the UK loses a major industry. With our car industry disappearing over the last 40 odd years many of those highly skilled and intuitive engineers went into motorsport.

    With no British Grand Prix, why would any of the teams based in Britain’s ‘Silicon Valley’ stay here when every GP will be further East?

    This is the point that I think the British Government is missing when it criticises FOM’s regard of the British Grand Prix and why they should have put their hands in their pockets. Silverstone would have only needed a fraction of the funds poured into the farce that already is the 2012 Olympics, to be held in London.

  13. I do hope that a solution will be found to keep the British GP both on the calender and on the British soil (I mean, the Swiss GP was held in France in the 80’s and there was the Luxembourg GP some years ago at the Nurburgring). I am Ukrainian, but I do care about the British GP, because I love the sport and realize how important the British GP is for F1. Hopefully, those people at the helm of the FOM love the sport just as much as I do.

  14. Rohan said on 24th July 2008, 11:49

    Surely teams would still test at Silverstone though, seeing as it is nearer to most of their bases than is Donnington. Hence it might still be the case that one can see F1 cars at two separate venues in the UK.

  15. Bernies argument has always been that the British Government doesn’t support F1 the same way that other countries do, and supply the extra cash needed to provide a circuit with all the Pits, Hotels, Girls etc that are on his wish list.
    No doubt at the meeting with the Minister of the week, he would have said as much, and won’t mind if the GP is at Silverstone or Donnington, or Cardiff or Bognor Regis as long as its on a circuit which meets every one of his specifications.
    Keith – is there a definitive list of these anywhere? I get the impression it changes every month!
    I think unless something happens this year to make a British GP a certainty in 2010, we will be in for a shock announcement. Either that or Bernie will wait for the value of Silverstone to plummet over the next 2 years, then buy it and say ‘Hey look, its a lovely circuit! We can hold the GP here!’

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