Romain Grosjean, Haas, Silverstone, 2016

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

2017 F1 season

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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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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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  • 115 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. Umar A (@umartajuddin)
          11th July 2017, 15:32

          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. Martijn (@)
        12th July 2017, 9:57

        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.

        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. Lee1