Romain Grosjean, Haas, Silverstone, 2016

British Grand Prix contract to end in 2019 as Silverstone triggers break clause

2017 F1 seasonPosted on | Author Keith Collantine

Silverstone’s deal to hold the British Grand Prix will expire after the 2019 race after the promoters told Formula One they will activate a break clause in their contract.

The track, which is operated by the British Racing Drivers’ Club, signed a 17-year deal in 2010 to keep the race on the calendar until 2026. However it has become concerned at the escalating cost of holding the race, prompting it to take advantage of the opportunity to end the deal after ten years.

The BRDC said it made a net loss of £7.6 million over last two years hosting Britain’s round of the Formula One world championship. F1 has had at least one race in Britain every year since the championship began at Silverstone in 1950.

“This decision has been taken because it is not financially viable for us to deliver the British Grand Prix under the terms of our current contract,” said BRDC chairman John Grant.

“We sustained losses of £2.8m in 2015 and £4.8m in 2016, and we expect to lose a similar amount this year. We have reached the tipping point where we can no longer let our passion for the sport rule our heads. It would not only risk the very future of Silverstone and the BRDC, but also the British motorsport community that depends on us.”

Silverstone paid £11.5 million to host the British Grand Prix in 2010. Since then the 5% escalator in the contract has increased the price to £16.2 million this year and would reach £25 million by 2026, the final year of the original contract.

“Despite being the most popular weekend sporting event in the UK, the net revenue from ticket sales and hospitality at the British Grand Prix is not enough to cover the Grand Prix’s share of Silverstone’s overhead costs,” the BRDC said in a statement.

Grant added he is hopeful a deal can be reached to keep the race on the calendar beyond 2019.

“I want to be clear that although we have now activated the break clause, we are fully supportive of the changes the Liberty team are making to improve the F1 experience,” he said. “Our hope is that an agreement can still be reached, so that we can ensure a sustainable and financially viable future for the British Grand Prix at Silverstone for many years to come.”

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114 comments on “British Grand Prix contract to end in 2019 as Silverstone triggers break clause”

  1. I wonder if avoiding the clash between Wimbledon finals and British Grand Prix would help the track get more revenues. Would it?

    1. Doubt it, the track is normally sold out is it not?

      Maybe if they serve Strawberries and Cream!

      1. I hope so. And I hope it means lower hosting fees and more freedom for the promoters to do what they want, Id love to see all this discussion from races about losing money end once and for all.

    2. No, I’m a fan of both events and have attended both evens in the past. They were traditionally held apart, and only came together last year, when the LTA moved Wimbledon event back a week to give players more time to adapt to the different surface i.e. clay to grass after the French Open. Now I just watch both on my 50 inch HD telly and if things are going bad for Andy on centre court I can switch to watch Lewis, basically toggle between the two. An Ideal scenario for me will be a win for Andy and Lewis like last year, I was in a good mood for a moth after that!!:)

      1. …much as I like moths they have never put me into a good mood. I meant month!

  2. Rick Lopez (@viscountviktor)
    11th July 2017, 14:53

    Absolute disgrace if Liberty don’t renegotiate. Silverstone must stay on the calendar.

    1. @viscountviktor As long as Brands Hatch doesn’t get Tilke-ised? :p

      1. I mean, for Brands Hatch not to get Tilke-ised?

      2. @davidnotcoulthard
        Isn’t it the case that Silverstone is already one of the worst Tilke-ised circuits on the calendar?
        (I know Tilke wasn’t involved, but I loathe the new layout, that essentially dumbed down the runoff of a lot of corners, creating one of the worst examples of the “arbitrarily painted track limits on a vast surface of tarmac” problem, where the fastest line around a corner is around the outside of that corner, i. e. by exceeding track limits, which leads to endless debates over which lap should count and which lap shouldn’t because some drivers put their wheels too far over an artificially meaningful painted line)

        I personally miss the pre-2010 Silverstone, and I’ve been missing it for over 7 years now, so if the venue eventually disappears from the calendar altogether, it won’t even make a difference in my eyes. If anything, it could open up a slot for a better-designed race track (not that I’d count too much on that happening, mind you), so that’d be a net gain for F1 at the end of the day.

        I’m fully aware that the article is meant to elicit a reaction of shock and outrage, especially from a British perspective, and that an angry mob brandishing their umbrellas (I’m sorry I couldn’t think of a more typically British improvised weapon for the persecution of heretics, but I’m open for suggestions) might coming to get me, but I’m in the Schangen area, so good luck getting there with the current state of affairs between your government and the rest of Europe. :-P

        1. Schangen

          And by Schangen I mean Schengen, of course …

        2. nase, the current changes to the circuit layout were driven by the MotoGP series, as they were adamant that the pre-2010 layout was unfit for motorcycle racing.

          1. The current circuit dur to motorbikes is funny. Motorbikes yse the Iselbof Mann TR course and no cars do. Shouldnof teplaced Rossi et al with Dunlop, Hutchinson… then the track could of remained. Also the old layout is still there. Why can’t they use that for F1 and the new version for bikes?

          2. It doesn’t matter why it was ruined does it. It still sucks for cars. They barely drive on the track. There is no need for precision which is terrible

        3. That was not why I talked about Brands Hatch but, well, you don’t want to see Brands Hatch Tilke-ised, do you? :p

          (that, and compared to a proper Tilkedrome I’ll admit to actually thinking Silverstone is OK)

        4. Some kind of blood sausage.

      3. Rick Lopez (@viscountviktor)
        12th July 2017, 16:02

        I think the redesign of Silverstone is great, some good fast sweeping corners and a slower section.

    2. It’s business, i’m afraid.

      Silverstone signed a deal that wasn’t feasible. Liberty can’t drop everything to appease one circuit, when they’ll have 20 other circuits wanting similar treatment.

      I strongly doubt they’ll drop the British GP – they’ll try and find a way to design a street circuit for a few years, if need be, i’m sure.

      1. But there’s not magic money tree!

      2. @ecwdanselby I think many would’ve said that about the oldest Grand Prix ever ca.2008 though.

    3. Why should it? It’s a very boring track. There are some better tracks in UK. Brands Hatch for example. Even Donington is better.

      1. Donington is much better than the current Silverstone layout
        and it works for MotoGP too ! Nevertheless, Silverstone is iconic
        and has all the F1 history to go with it. ( Yes, I know Brands Hatch
        has a lot of F1 history too )

        It just seems a great pity to me that it seems beyond the designers
        ability to make a relatively flat airfield-landscape ( where you can
        shape things pretty much as you want ) work really well for cars
        AND bikes at one and the same time.

      2. Neither of which are able to host F1 races without some significant development. Donnington was almost lost for good after their last attempt to upgrade for F1.

    4. Plenty of alternatives for Silverstone, the calendar being tight as it is. Can imagine Liberty is not so concerned

      1. Alternatives elsewhere, you mean? As there’s no ready alternatives in Britain… The only option would be a street circuit.

  3. Jack (@jackisthestig)
    11th July 2017, 14:55

    Ticket prices are extortionate yet they sell out pretty much every year and make a loss doing so, something has to change.

    1. They’ve got it figured out this year though. With a 20 litre bag size limit they’ll make a fortune on food and drinks!

      1. Have they got a bag size limit? Disgrace if so.

        1. Yes. Security related to keep us all safe, although not a great size bag for any of us with a camera or any families who usually bring cool boxes with their own food.

          The bit I find bizarre is that if you’ve paid extra for a seat it’s one 20l bag. If you’re GA then you can bring a chair as well.

          Overall if you’re going, get there early. This news is only on SilverStone feeds (FB, Twitter, etc). Haven’t seen it anywhere else yet. So we could end up with loads of people turning up and not being slowed in. If they do turn people away, it’s going to be chaos at the gates.

    2. I am pretty sure Australia has the same issue

  4. I’m not impressed at the weasely statement coming from F1 Group over this. Their attempt to cover up the mess by delaying the announcement failed and now they’re unhappy the issue is getting the attention it deserves.

  5. May not be the most popular opinion but I have very little sympathy for the BRDC because a lot of the problems they have gotten into the last 20 odd years have been totally down to them.

    The facilities at Silverstone have been well in need of an upgrade since the mid 90s yet the BRDC repeatedly ignored call’s for things like a new pit complex, improved drainage etc… & instead opted to focus on there own pet project’s such as the BRDC Club house they built in 1998.
    The money they spent on that could have gone into making improvements to the circuit/spectator facilities that may well have avoided a lot of the issues that happened in 2000 as a lot of those were things that had been brought up many times before.

    Bernie gets a lot of flack from fans/British Media for the way he treated Silverstone yet its important to know where a lot of that came from. He & the teams (Not just F1 teams either) had been calling out for improvements to be made well before 2000 & the BRDC had repeatedly promised upgrades which never came. In 1997 they told Bernie they had no money to improve the pit complex (Which at the time he accepted) only to then find a similar amount to build there club house in 1998 which is what began Bernie’s irritation as he felt he’d been lied to.

    After 2000 the BRDC did a great job at fixing some of the issues but again promised a lot more than they delivered. They were supposed to improve the pit buildings, They were supposed to fix drainage in the pits/paddock/TV compound yet did none of this. They promised it would be be done by 2003 yet never even looked like starting to do any of it.

    Bernie’s increasing frustration & repeated threats to pull the race from Silverstone were done to try & get the BRDC to do what they were constantly promising they would do. Eventually he had enough & did the deal with Donington in 2009 which finally saw the BRDC do most of what they had been promising to do for over a decade by that point.

    But even then a lot of the upgrades fell short. The new ‘wing’ pit complex is a poorly designed mess in which half of the pit garages can’t be seen from the grandstand with grandstand improvements that were going to fix that still not done 7 years later when they were supposed to be done for the 2011 race.
    Nothing has been done to the old pit/paddock complex which while not important to F1 is important to lower categories as they still have to deal with leaks & flooding which continues to damage electrical equipment/computers (Including in some of the cars).

    Silverstone as a circuit is great (Although the new loop is somewhat dull IMO), However everything else is well below par & in some cases downright embarrassingly so. The British media have given Silverstone & the BRDC a pass for years, Not reporting the facts & ignoring many of the concerns the teams & Bernie had as nothing more than a personnel vendetta against the BRDC/Silverstone which wasn’t the case. There were real concerns, Real things that needed addressing & very little of that ever got reported by a bias media who took any attack at Silverstone/BRDC as an attack against the British motorsport industry & that helped nobody.

    Also worth bearing in mind that the hosting fee was/is already the lowest of any circuit on the current calender & Bernie did them a massive favor with that deal as it was well below what anyone else was paying.

    1. Very well put. COTD.

      1. Darran Donald
        11th July 2017, 16:50

        Second that COTD

        1. Brilliantly honest piece !
          You would hope ( and that’s all we can do….HOPE ! ) that
          all Liberty’s clout and resources could turn Silverstone around.
          It’s a huge ask. There would need to be a precise list of
          guaranteed work finished within tight deadlines and meet all
          requirements ( fan experience, access to various parts of complex,
          parking facilities, drainage, drainage, drainage, both pit complexes )
          The list is endless !

          I wouldn’t want to be the person delivering the verdict to BRDC !

    2. Um… But the problem is that they can’t afford to make upgrades because they are making a loss as even with high ticket prices and sell out crowds they can’t turn a profit… How would upgraded facilities help here in any way shape or form?

      If you have a product and it sells out and you make a loss there is nothing wrong with the product (or at least not enough to be the thing causing you the financial issues) but there is something wrong with the pricing or costs of production.

      In this case it’s cost of production and spending MORE money on it is not going to help them turn a profit.

      1. @tdm At the time many of the upgrades were been asked for they were making profits. The losses are relatively new & aren’t as totally down to F1 as they like to claim.

        There has been a lot of mis-management & poor judgment that has cost them millions on top of over spending & under-delivering on things such as the new pit complex.

        The BRDC are not as innocent as they like to claim & if the british motoring media were not so desperate to defend them & make any criticism out to be some unfair attack a lot of that would have been outed & probably resolved years ago.

        1. @gt-racer, as others have said, it is interesting to hear things from the other side of the table, as it were, given that usually the only side that we hear from is that of the BRDC.

          That said, with regards to your earlier comments about the hosting fees for Silverstone being the lowest of any on the current calendar – for a start, I thought that Monaco had a deal that effectively meant they were being charged only a nominal amount to hold the race? Equally, I thought that the hosting fee for Monza was, at least in the past, also quite low (I thought that they had the lowest fee after Monaco).

          With regards to overall costs, I would be interested to know what sort of subsidies some other circuits are offered to give a comparison of their financial efficiency. IIRC, the owners of Hockenheim reckoned that they could break even on a race day crowd of 60,000; as for Spa, I have a recollection that they could break even on a crowd of about 50,000. It would be interesting to compare their hosting fees, level of state support, attendance figures and ticket prices to see how they compare against Silverstone.

    3. Thanks for this. But I don’t understand this, Silverstone has one of the highest ticket prices, has the most number of people buying them and has the lowest hosting fees; then how is it making a loss. Is the BRDC drawing excessive salary?

      1. The FOM business model is dependent on government payments to cover the chronic shortfall between (ticket revenue + food & beverage) and (hosting fee + operating expenses + overhead). In other words, the numbers don’t pencil without government subsidies.

      2. It is quite simple. No track (apart from Monaco which barely pays anything) makes money in F1 they lose astonishing amounts of money. However most are propped up by governments and so Bernie was able to squeeze more money out of them. Those in Dictatorship countries are ripped off the most as their leaders are not bothered as the peasants pay for it through their blood and tears or it is paid for from the proceeds of crime… Just look at the tracks that have pulled out of F1 due to cost issues…

        1. I can’t see how they aren’t making money. The average ticket price is £200 so they’re making 30 million just on race day and it looks like they’re close to making double that with the other days.

          It’s strange though because none of the figures given seem to add up.

          1. They have to pay for a lot more than just the F1 fee. They have to pay for security, insurance, wages to staff etc etc.

      3. Silverstone is very very cheap considering local incomes. Shanghai, Mexico, Sochi are significantly more expensive.

    4. I disagree. Silverstones issues are not due to one bad year of rain and difficulty parking as a result. They have constantly been under financial issues due to the cost of hosting F1. Now you could argue that the clubhouse did not have to be built but there is no way that it cost as much to build as Bernie wanted them to spend on the rest of the circuit.

      Bernie seemed to have been bullying Silverstone and using the facilities as an excuse to squeeze more money from them. If you have ever been to Spa it is pretty poor when it comes to facilities despite being a great track and its car parking is similarly prone to major issues if faced with huge rainfall and its access is not great. Yet I am not sure Bernie has ever publicly complained about it… Bernie also understood the importance of the British GP to F1 and hence was unlikely to have risked loosing it completely and hence was squeezing them as much as he could without losing them. Remember F1 is just a giant Bernie pyramid scheme where everyone lost but him.

      Also Silverstone does indeed pay less than most although as far as I know Monaco does not pay anything at all (it also has terrible facilities). Plus you have to put it into context. Bernie has been charging huge fees to tracks purely because their dictator owners are willing to pay due to them being vanity projects. The fact that Silverstones payments are less extortionate than the ludicrously extortionate fees other pay does not make it automatically a good deal. Imagine if your bank suddenly said that they want you to pay £1 million per month for your mortgage on a £100,000 house and when you complained they told you that it was a good deal because they are charging your next door neighbour £2 million. Would you say “Oh, fair enough….”? Or would you tell them where to go?

      If Silverstone can’t afford the F1 bearing in mind it is the most lucrative with regard to gate receipts etc, then something is rotten in F1. The fact that other tracks can pay due to their governments footing the bill does not mean that the sport is in a healthy place. The new owners need to transform the sport so that all the concerned parties get to share in its success from the teams to the tracks, owners and even fans. It will then be in a sustainable place to go into the future.

      1. Nothing wrong with F1 fees. It is a business if someone offers loads of money they get a race. To do anything else by capping yourself is bad business. Many dirty Arabs have nice cars and big houses in London. They are not denied that because they are not British artistocracy. France has not had a race for years, Germany alternates by year, US is never secure as funding is complex in terms of local government contributions and now this. Thats 4 very rich countries but politics in these countries does not allow for government help.

        1. It is a business. However the issue is that by creating this unsustainable model then the business might not be around for a lot longer. Why should tax payers be forced to pay for the owners of F1 to have large yachts and Mansions? It is a business and the tracks should be seen as businesses too not bottomless government money pots. As such the fees should be workable so that the tracks can make a healthy profit too.

    5. Some of their decisions have been questionable, at best. Which is a common problem with large big money sports organisations that too often operate like an old boy’s club, rather than the multi-million pound organisations they now are.

      Construction of The Wing was funded with a $17.8 million loan from British bank Lloyds as well as $17.3 million borrowed from the local council. According to the BRDC’s financial statements, “during 2010 the group invested significantly in fixed assets relative to its new pit and paddock facility and associated track works. In so doing it invested much of its cash reserves which have been further supplemented by longer term borrowings to meet its investment needs.”

      The construction depleted the BRDC’s cash reserves by $25.4 million and at the same time the increase in debt boosted interest payments which came to $4.4 million by 2012. To pay off the debt, in 2013 the BRDC sold a 999-year lease on 280 acres of land surrounding Silverstone. Property group MEPC paid $44.7 million for the land and although this helped to clear the BRDC’s debt load it also had other consequences.

      Firstly, it led to the BRDC losing $1.7 million of rental income from the land which put further pressure on the company’s margins. The BRDC’s plight has led to it paying the hosting fee for the British Grand Prix in arrears meaning that a letter of credit from bankers is necessary for the race to go ahead.

      In addition to reducing rental income, selling the land around Silverstone weakened the BRDC’s balance sheet. This hole was fortunately plugged in 2014 by a revaluation of the circuit assets which increased their worth by $11.5 million to $35.6 million. This pushed the BRDC’s balance sheet net asset value $6.8 million into the black which meant that the auditors could sign off its financial statements and the bank could issue the letter of credit.

      However, as every year goes by the pressure on Silverstone increases because the price of its F1 race hosting fee rises by 5% annually. It is a special agreement with Mr Ecclestone as the fee paid by most tracks rises by 10% every year.

      https://www.forbes.com/sites/csylt/2016/03/01/how-f1s-british-grand-prix-owner-burned-through-40-million-in-10-years/#74a6364a11dc

      1. Oh how we’ve missed Sylt’s sycophantic Bernie-kissing articles since Liberty took over…

    6. the BRDC sound like my former employer (one of the royal colleges in london…i won’t say which one). decisions are routinely perverted by the interests of the members, which do not routinely align with what is best for the future of the organisation. financially they sound shambolic, but i think this is symptomatic of ecclestone’s habit of treating the circuits like children, and also of saying one thing in negotiation and then another to the press.

      the 5% year on year rise in hosting fees is ludicrous. where is that money supposed to come from?

      it would weaken F1 significantly to lose the british GP, but as has been pointed out elsewhere, silverstone is not the british GP.

  6. The only red line on my list is that government backing should have no part in any future contract.

    Silverstone is unique with it’s long history and the fact that is has no state funding. I cannot think of many other tracks that manage that (COTA maybe?).

    If the track cannot make a profit, even with the size of the dedicated fan-base, sell out weekends and the fact that most of the manufacturers are based in the UK, it is a good illustration of how sick the sport is. The contract is rip-off and I am glad it is being torn up.

    If it does not come back, so be it.

    But it should only comeback with a reasonable contract, the ability of the track to earn a decent profit and no state funding.

    Not that the government have a money tree to give any out at the moment ;)

    1. You’re right, no magic money tree *NORTHERNIRELAND COUGH* The excuse we always give for no government money is that the general public would not be in favour of lining a rich sport’s pockets with money… but then look at London 2012. I know a lot of people were opposed to it but there was predominantly positivity throughout the country.

      I like Brundle’s suggestion – introduce a VAT reduction. VAT is currently 20%. So if there is no race then 20% of nothing is… nothing. However, 15% of the revenues from the race going ahead will be a lot more for the national coffers. What would the public prefer?

      1. Brundle is a good F1 commentator but he is no micro economist. The incremental tax revenue for the State from the British GP is not simply revenue multiplied by the VAT rate. That simpleton calculation inherently assumes that absent the British GP none of that money would be spent on other activities that are also subject to the VAT. What’s more, it makes no attempt to consider differential multiplier effects. For example, with the British GP a lot of the revenue goes to Liberty Media and therefore the multiplier is relatively low. The preponderance of the evidence from informed analyses are that public spending on private sporting events is a big loser for the tax payer.

      2. The public would prefer not to be ripped of by a poison dwarf…

    2. The Indian Grand Prix too was held without any help from the central government. The state government facilitated the race, however no tax payer money was spent.

      1. Really?

        I had the distinct impression that tax payers money was poured into that one……and now sits empty.

        It is probably just an assumption I made due to it being a Bernie era pet project where nearly every move into a new market was government funded.

        How did the state government facilitate it without spending tax payer money?

        1. maybe they loaned them the money

  7. Sundar Srinivas Harish
    11th July 2017, 15:03

    It seems like Liberty has finally entered the iceberg field that Bernie created. Negotiations like these will determine whether these guys really have what it takes to turn the sport around, and I’m pretty damn sure that there’s going to be more dissent among the organizers.

  8. kcpart@iinet.net.au
    11th July 2017, 15:15

    the silverstone track seemed a near perfect f1 track in its last iteration pre-current track… as such I don’t care if it goes!

  9. why is Silverstone charged £16 Million to hold the race? what’s the justification for that figure?

    1. The justification is that Liberty Media paid $8 billion for the business.

    2. It’s what the BRDC thought it was worth when they negotiated and signed the contract.

      Actually, £16M doesn’t seem too steep to me. I would pay that if I could host an F1 race. Especially now since Liberty is making a real show around it.
      I’ll see if I can lease a track and upgrade it to F1 status. Might even talk to those BRDC guys.

    3. In the U.S., for the last Super Bowl the venue was charged $5.5M by the NFL for hosting rights. How can the FIA charge nearly three times that for a Grand Prix?

      1. Edit: FOM not FIA

        1. Alot more people go to Silverstone than the superbowl, coincidentally about 3 times as much. Not that I think it’s the best comparison though. @g-funk

          1. Fair enough, but if we are just looking at ticket revenue per person, the average super bowl ticket is ~600% higher ($4000 in 2016) than the Three day Premium Ultimate grandstand tickets (£600). So Silverstone still seems to be getting a pretty raw deal.

      2. Super Bowl? NFL?

  10. “I want to be clear that although we have now activated the break clause, we are fully supportive of the changes the Liberty team are making to improve the F1 experience,” he said. “Our hope is that an agreement can still be reached

    So basically the British GP won’t continue with the Bernie-era contract after that (not surprising I guess), but Liberty may then still decide that it’s more profitable to still have a British GP afterwards (just with a deal BRDC actually agrees with, i.e. one that generates less loss for the BRDC (if at all) than now)?

  11. I’ve said it before and I’ll say it again: Liberty Media’s acquisition of FOM is going to ultimately have been a disaster for shareholders. They paid a peak valuation multiple on peak earnings for a business model that is fundamentally flawed and broken, e.g., Silverstone, and ahead of the most significant change in the automobile industry in over 100 years. Unmitigated disaster in the making. The NYSE:MPH disaster is going to be minor compared with this one.

  12. I dont understand the math behind this. If its correct that they pay £16million per race and the attendance figures are 350,000 then that means it costs each attendee £45.71 to cover the cost of the hosting fee.

    There is then the revenue made from food and drink sales, camping tickets, car parking, programmes, experiences and seat upgrades?

    Granted there are alot of costs on top of the hosting fee but still – to say no profit is made is staggering!

    1. The 16 million is before they’ve paid a cent to their staff/management etc. – it’s just for the right to host the race. I can easily see their running costs eliminating the balance after the above, and then some.

      1. Then consider they’re paying down debt they accrued to make the upgrades FOM demanded in exchange for the 17 year contract, coupled with short-term moves to bolster cash flow and the cratering U.K. economy…

        All adds up.

  13. Andrew Purkis
    11th July 2017, 17:17

    when despite have the best attendance of 139000 they still cant make money

    it just shows that F1 is a joke and not a business

    propaganda for 3rd world dictators

    1. Ahaha..
      Yes. F1 is just a mind control tool to influence the mass.

  14. It’s unfortunate that the situation for Silverstone has come down to this point. But by executing the break clause, doesn’t this allow another track or promoter to step in and offer up an alternative? I’m looking at the F1 demonstration show in London tomorrow. I suppose a street race through London could now be a viable challenge to Silverstone. I like @gt-racer comments-it is a tale with 2 sides and we have only heard one side for the most part. It’s your move, Liberty Media.

    1. Agreed. They’re playing a very one-sided game of chicken with FOM, with probably a dozen other possible applicants to fill the void.

  15. It would be interesting to see what is the percentage from ticket sales revenue that remains in BRDC’s hands. Excluding the VIP hospitality fees which I believe are being managed by FOM the rest of some 140,000 tickets must produce a revenue of about 40 million pounds. BRDC must also have a fair share from on-track advertising etc. I remember reading back in 2014 that their total revenue was around 85 million and more than half of it was generated by the British GP. So I wouldn’t say that their current host fee is unfair. I rather think they have been favored over most of the other circuits beacuse of the importance of the brand. Bernie has always had that policy when it came to F1 heritage. He would reward it handsomely. Actually back in 2004 when Interpublic walked away from the circuit’s management, Bernie brokered a settlement on behalf of the BRDC which ensured they were compensated by the Americans with an 8 figures sum. Most of which was spent recklessly in facilities that had nothing to do with racing. I believe they need someone that will take control of the financial aspect of things and run the circuit purely as business. As much as I love Stewart, Mansell, Andretti and co, I would say that they are not necessarily fit to run this type of business provided that they even perceive it as such.

    1. Not too sure I’d say there was no business acumen in the BRDC. Mansell bought a beat up old golf course in Devon, spent £10 milllion developing it into a top resort , then sold Woodbury Park for an estimated £18 milllion. Not too shabby…

      1. Maybe I didn’t make it clear enough. I was referring to the perception of running the specific circuit strictly as business. I didn’t mean to say that these people cannot do business in general. Many of them have been very successful as you’ve mentioned. But because they have raced there and have a special bond with the place they may not be able to function as they would do with something else.

  16. How do all “major ” sports make tons of money ? Simple: television contracts . It seems like a lucrative TV deal for the broadcast rights to all F1 races with a split of the revenue will take care of the money concerns of all of the hosts whether they ( like Silverstone ) need it or not .So all that is needed is such a contract .
    Oh, I forgot, outside of the UK F1 is viewed as a “minor” sport.
    I have NEVER seen a race highlight or even heard a single word uttered about a F1 race on ESPN ( or ESPN2 )with the lone exception of a passing mention of the Monaco GP this year and it was only mentioned to give context to Alonso’s participation in the Indy500.
    F1 can fix the money problems associated with all of its venues and set itself up in the black for years to come with the right TV deal the same as all of the other ” major” sports ( Note the NBA’s 24 Billion dollar broadcast deal and projected 200 million dollar individual player contracts ).
    Just make the sport palatable to the US sport consumer .
    How ? Run it like a true sport and not an exhibition. Put in measures to assure competition and a semblance of parity and cut out the bull ( and by “bull” I mean disparate treatment of drivers and teams) .F1 will also need better officiating ( most sport officiating is bad but F1 abuses the privilege) ,sensible rules and drivers that aren’t afraid to throw or take a punch but, if F1 can rise to that level ( I for one am not sure that it wants to ) the money is there for the taking .
    Look at what F1 has to offer :it has the best cars ( and Americans love cars) but, it needs to make sure more teams have competitive ones and with the exceptions of Monaco and Baku F1 has the best tracks ( an occasional day of follow the leader is not great but can be overlooked) . Make the playing field level ,tell the drivers to occasionally trade the Nomex gloves for boxing gloves and you have most everything you need .
    Add the right commercials and in a couple of years Vettel and Hamilton will be selling Nike and UnderArmour just like any other true sports stars .

    1. I disagree with your assertion that “outside of the UK F1 is viewed as a “minor” sport.”.
      It may be seen as a minor sport in the US, but that’s parochialism at play. The international TV audience was around 400 million people last year (per an article from this site).

  17. This really sucks. Silverstone is my personal favourite racing circuit of all time.

    Perhaps they could race at Brands Hatch or Donington? I would prefer the former as long as they don’t modify it so track limits become a big talking point.

    1. @mbr-9, if you look at footage from Brands Hatch when it was used for races in the 1980’s, some of the gravel traps were actually tarmacked over for those races (especially at the first corner).

  18. Though I understand the decision, I also agree with F1’s official reaction that the timing is an insult so shortly before the GP. Silverstone should have let the GP go ahead first, so the attention would be mostly focused on racing.

    And although I am a fan of Silverstone I can’t see Liberty negotiating a new deal. This would put them at such a disadvantage with other circuits who might also wish to enact a break clause, potentially costing Liberty a huge sum of money. I think in order to make an example they will have to either drop the British gp (Which to be honest for me as a non Brit is not actually a big deal) Or find an alternate venue.

    Again, I understand Silverstone’s choice, but I think they put their foot in their mouth. Also considering nobody forced them to sign the original contract in the first place. Bernie was a tough negotiator and apparently better then the one who represented Silverstone at the time.

    1. I think that the BRDC had to activate the break clause before the race – if they didn’t, they would have been bound by the contract for another year. The fact that they activated the clause with so little time remaining before the race would suggest that the decision was a fraught one.

      1. Mark Zastrow
        12th July 2017, 6:18

        Chase Carey said that Liberty offered Silverstone an extension on the break clause to keep it out of the headlines in the run-up to the GP. Triggering the break clause was inevitable, but the timing does put a cloud over the event. If what Carey says is true, then Silverstone’s move is a reminder of the Bernie era we could have done without. And given Liberty’s desire for a less fractious relationship with promoters, it seems like a misstep. Silverstone could have said something along the lines of “Everyone knows the economic challenge in our contract remains stark, but we’re focused on putting on a great Grand Prix and we look forward to continuing discussions after the race.” I hesitate to criticise without knowing the full extent of discussions, but on the surface, that seems like a more productive approach for all.

      2. I actually hadn’t considered that. But even so, wouldn’t you say that it might have been better that they activated the cause, but kept it to themselves until after the Grand prix?

  19. If I were Jonathan Palmer, I’d be trying to get Snetterton to host the British GP. It’s an interesting circuit that was upgraded recently with a number of very quick and interesting corners such as Riches and the Bomb Hole, as well as a couple of tricky braking zones.

    It might only be an FIA grade 2 circuit, but with just a few facility upgrades, that could become a decent home for the British GP.

    1. Alex McFarlane
      11th July 2017, 22:10

      I live fairly close to Snetterton and been a couple of times for British Superbikes and a few other minor events.

      The 300 track layout is superb, but as a venue it would need considerable work done to it to bring it anywhere near to being F1 standard, to the point you’d be better off building a new circuit elsewhere.

  20. The British Grand Prix will move to London and become another unremarkable street race.

    Tragic.

  21. if they cant make a profit on 100,000 plus ticket sales then the hosting fee is too high, in the same way the the TV broadcasting fee is so high that only sky can afford to pay it.

    This is a direct result of wringing every penny out of F1 by the shareholders before selling it.

    With so many F1 teams based in the UK, It is hard to imagine a future without a UK race.

  22. I’ll keep this short.
    Whenever a sport has come to a point where some participants are making insanely high incomes, while others barely scrape by, and where venues lose millions each time they host the event, that particular sport has essentially become a zombie; … it continues to move, slowly, but it is, for all intents and purposes, as dead as a door-nail.

    It is still not too late to pump some life back into F1; first by moving away from the “new stupid venues” (we all know who they are), and putting the focus back on the traditional venues, where F1 was born and bred, even if that means cutting income.

    1. F1 has priced itself to death. Glad to see the back of it. As I’ve said many time before. Making the sport so only the rich can afford to watch only works in the short term. Nobody knows or cares who the world heavy weight boxing champ is any more, because boxing is locked up and priced for only the few that can afford to see it. Sure the money is there but with no new fans it will become nothing. F1 is the same. Who cares if nobody can follow it? Sky and the top drivers get rich, while the masses are locked out. F1 needs to die and be reborn. It’s making great progress.

  23. It is a real shame but to be honest I never liked the 2010 modification to the circuit. The changes obviously were much smaller than those in Hockenheim and Osterreichring which were butchered, more in line with the 2002 changes in Nurburgring. So in essence the character of the circuit isn’t much different but the flow is ruined.

  24. The object for all is for the F1 group and the track make money out of the weekend…..if Silverstone is losing cash, then that has a knock on effect for the whole year at the track……
    Its a heck of a good contract that goes up 5% per annum when the cost of living goes up less…..and Silverstone may be looking ahead past 2019 when we only can watch the racing on Sky…..so that will have an effect on crowd attendances…{as I am sure I read has happened in Spain}

  25. I think we all know what the rights holders aye aiming for. They want public money putting in because then profit becomes secondary.

    If the best attended race on the calendar, at the heart of motorsports within spitting distance of the teams bases, with considerably more expensive tickets than a lot of the calender can’t make a profit while the teams, drivers, rights holders, broadcasters, and even McLaren are still making a profit then something is wrong with the business model.

    I don’t want a penny of the public’s money going anywhere near these rich boys and their hobby.

    1. Netball in the UK gets over £16 million per year from the government/lottery under sport England, there’s more than enough money in the pot for F1.

      1. @emu55

        Putting aside my issues with sports funding in this country and how they take the lottery-tax from the poor and stupid to fund the hobbies of the middle class, they aren’t a close enough equivalent to make that comparison.

        Netball and other physical sports are at a grass roots level, though they are dominated by the middle class at the competitive level, there’s little to stop any kid picking up a ball and getting some exercise. We have a benefit to society encouraging and promoting sports such as netball. There also isn’t sufficient funding from the fan base to maintain the required infrastructure, and people playing netball are worth hundreds of millions and living in Monaco.

        Contrast that with F1 which is a rich boys game. Hamilton is about the only guy from a normal background. There aren’t prospective Hamiltons in the waiting whizzing round housing estates, what there is are the like of Palmer with daddy paying for him to play big boys race cars. So investment in F1 my the state neither promotes exercise and health for our youth nor offers the opportunity to anyone other than the massively privileged.

        And then there is the fact that everyone involved in F1 are fricken millionaires living in tax havens. Hamilton alone could single-handedly pay the Silverstone race fee. Liberty is a multinational billion dollar company who I don’t my tax money going in the pocket of.

        Yes there is the money, but F1 offers both a terrible return on investment in terms of what it brings the community given its just rich kids, and is a sickening thought of a profitable enterprise going cap in hand for public money at a time when we don’t even have enough beds for children and we can’t recruit enough teachers and nurses due to working conditions and stagnant pay.

        I don’t think it’s fair that the lottery money our poor and desperate squander away each week goes towards the sporting hobbies of our middle-class athletes, but that is nothing compared to how disgusting an abuse of public money it would be to fund F1.

        1. Chip Hilton
          12th July 2017, 2:33

          If I were British I’d be really angry about Hamilton living in Monaco to avoid taxes and then wrapping himself in the flag when he wins at Silverstone. Come to think of it, I’m mad about it anyway.

          1. He was born and raised in Britain. He has every right to identify as British and to celebrate that fact if he feels proud of it.

            He doesn’t live in the UK so is under no obligation to pay taxes here. And he has every right to live in a different country if he prefers life there. You can be proud of Britain as a nation of people without liking the institution in power in Britain.

            His work sees him travelling for over 20 weeks of the year. I don’t resent him spending the rest of his time as a private citizen in a tax haven because I don’t see how any country can rightly claim he should pay tax given he earns his money in so many different locations.

          2. Chip Hilton
            12th July 2017, 16:15

            Is he a British citizen or not? Who can say “I love my country but I won’t pay a penny to support it?” An actor who goes on location to make movies isn’t exempted from income taxes because he was somewhere else when he did the work.

          3. Chip, Hamilton lives elsewhere. He doesn’t live in the UK so he doesn’t pay tax here. What is so hard for you to understand?

          4. He doesn’t live in the UK which is why he doesn’t pay tax. I didn’t carry on paying my parents housekeeping when I moved out and I don’t expect to pay taxes to a country I don’t live in. Hamilton probably pays more in various taxes for the week of the British GP while he’s in the UK than I do all year and he does considerable charity work in and outside the UK. If he doesn’t stay in the UK long enough to be liable for income tax here then there is nothing he can do about it. HMRC aren’t a charity, he can’t just drop them a voluntary check saying “thanks for letting me wave the flag, here have some of my money”. You can’t pay tax to a country you’re not living in.

            I think people need to get off their high horse about people that no longer reside in a country paying taxes to it. And just because he doesn’t live here doesn’t mean he can’t still be proud of the fact that he’s British.

  26. Bernie’s greed legacy is the reason that costs are so high.
    He even admitted to overcharging some venues.
    Greed has prevailed, and now the consequences will have to be dealt with.
    Hopefully Liberty can re-bargain a better deal for everyone.

  27. Was part of a whatsapp group chat earlier involving several people that are still in F1 at various levels in which it was flat out said that the BRDC’s figures are complete & utter BS & that one of the new Liberty people that is inside FOM now went as far as to call the BRDC people that he had been dealing with some of the worst people he’d ever had to try & deal with.

    It was also said that the BRDC gave Liberty assurances on Saturday that they wouldn’t do anything until they had met with Liberty over the British Gp weekend after Liberty had told the BRDC that they wouldn’t have to worry about the break clause activation deadline.

    It seems that more than a few people involved in talks on the Liberty side are frustrated & downright angry that the BRDC have taken this action as this sort of public sniping & politicking isn’t the way that Liberty want to do business.

  28. If Silverstone say’s it cannot afford to host the British round from 2019, this must be down to mismanagement, either by Bernie or the BRDC or both as the venue is usually sold out …… this really sucks.

  29. Purely from an everyday spectators view, if Silverstone lowered their prices just a little, more people could afford it and their revenue would go up. I stopped going when the tickets went up to £100 and that was years ago. I can’t even afford to look at the website anymore, let alone go to the races!

    1. Yes the £100 would get you a years subscription to Sky Sports F1, not just one event but all 20 to 21 and if you believe what the new owners say they want 25 races per year.

  30. There are certain race circuits that should be awarded special status for historical reasons or for the good of the sport. The British GP is one of those as the motor racing infrastructure is embedded here and the British GP is were all these good people can get together an show off the wares etc. I’m not saying it has to be held a Silverstone but there must be a British GP.

  31. If Silverstone wants a better deal than the other venues have or it ( Silverstone) will no longer host a F1 race I say ,”fine” and “good bye” to Silverstone.
    I am NOT impressed with the track’s layout and feel that all great road courses should have elevation changes anyway .
    It is best to let Silverstone go and replace them with a venue which has more to offer and can afford to host a race. A venue like NewYork/New Jersey.
    The NY/NJ course is already laid out on the streets of Weehawken and was driven and approved by no less a personage that Seb Vettel . Add to that the existence of a constructed paddock ,access to great night-life and dining , one of the world’s greatest backdrops and proximity to major airports .How can you say “no” to that .
    Additionally ,there is Las Vegas, they also want an F1 race . That site has been endorsed by Lewis Hamilton and Daniel Ricciardo . In Las Vegas , one ,again, has great night life and ( I have been told ) anything else one wants . .
    The US is certainly large enough to host three F1 races and the NY metropolitan area and the Las Vegas each areas have more money that all of Great Britain so the race finances will no longer be an issue .
    If F1 wants to rid itself of money concerns and bolster its sagging attendance ,drop Silverstone and add NY/NJ or Las Vegas or better yet, both
    .Liberty, are you watching ? Push the button .

  32. You know what… With this going on you’d l think Hamilton would have appeared at f1 live in London this evening to show his support. The crowd booed him earlier for not turning up. It looked awful that he was not there. Clearly he doesn’t believe in the marketing and image that his mgmt tell him to portray.

  33. I for one don’t bother with going to Silverstone any more. They got rid of the best corner on the circuit by missing out Bridge corner. The changes recently made are poor but comparison of the old circuit.

  34. If there is a promoter who can use leverage with FOM is the BRDC. No one “who matters” wants Silverstone out and a new deal surely will be cut now that Ecclestone is out of the way. However, this opens a precedent for other promoters to do the same and terminate their contracts early in order to seek better deals. Who would blame them? But no, it won’t work, for they won’t have the British media on their side making their case day after day until the a deal is set in stone. Sigh.

    We need a complete overhaul of the business model imposed to ALL venues in the calendar, not only the British Grand Prix. Liberty should do the right thing and start correcting all the wrongdoings and abuses made by the Bernie dictatorship. It won’t happen any time soon, though, I suspect. :/

  35. If Silverstone makes a loss from hosting the British GP they had to activate the break clause, it was the only sensible course of action.

    I know there is some criticism about how the BRDC have run Silverstone over the years and yes they have made mistakes, building a new club for the members when other areas should have been prioritised and the new pit complex wasn’t very well thought through. But this is a decision that had to be made.

    Despite all the history the British Grand Prix has that should not be a reason to continue hosting it at any price.

    There is talk of a London GP as a replacement, while I think that is unlikely to happen, my first concern would be could they come up with a decent circuit which I am doubtful of so the prospect of a race in London is not something I look forward to even if it was the only option for a British GP.

    I have said it before but situations like this just show how mucked up F1 finances are when one of the best attended races cannot make a profit, the only way for a circuit to make it work is to receive government subsidies which I am totally against for the British Grand Prix.

    The business model for F1 under CVC was all about extracting as much money out of the sport in the short term regardless of the affects it would have on F1 in the medium and long term.

    Liberty may prefer to do things different but they don’t have that much freedom to change things any time soon because of the contracts Ecclestone signed such as Sky getting exclusive broadcast rights to F1 in the UK in a couple of years.

    Even then Liberty paid a lot of money for F1 so they have to get a decent return on their investment somehow so they are unlikely to massively change things.

    Liberty and the BRDC may be able to come up with a sensible deal for the British GP to continue at Silverstone but I am not getting my hopes up. F1 is already set to disappear from free to air TV in the UK in a couple of years, which I think will be a bigger issue for the long term popularity of the sport in this country.

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