Start, Silverstone, 2018

BRDC: Liberty realise Silverstone is only choice for British GP

2018 British Grand Prix

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Formula 1 owners Liberty Media realise Silverstone is the only realistic choice of venue for the British Grand Prix according to the chairman of the British Racing Drivers’ Club.

The BRDC, which owns the circuit, activated a break clause in its grand prix contract last year. Its current deal expires at the end of the 2019 F1 season.

BRDC chairman John Grant told RaceFans the two parties are not close to agreeing on terms for a new contract yet.

“We’re making progress,” he said. “We’ve had a number of discussions with them. But we’re not there yet, we’re some way apart.

“I think they’ve really come to recognise that they need a British Grand Prix. They recognise, although they might not admit it in public, Silverstone is the only realistic option.

“And we both want to do a deal to keep it there. We both recognise we’ve got different objectives and we’ve got to have a deal that works for both of us.”

RaceFans understands gate receipts from this year’s race will amount to £18 million, leaving the BRDC with a £6 million shortfall to meet its current fee. It is seeking a reduction in its fee from Liberty Media as part of a new deal which could include a revenue-sharing arrangement.

“We’ve offered various things which they have not been particularly receptive to,” said Grant. “We think it has to be some sort of sharing element to it.”

With uncertainty over Formula 1’s future rules beyond the end of 2020 and F1’s only British driver Lewis Hamilton yet to commit to the sport beyond this season, Silverstone may consider a short-term extension on its current deal.

However Grant said there is no immediate need to reach an agreement. “We have time,” he said. “We don’t need to do anything just now.”

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11 comments on “BRDC: Liberty realise Silverstone is only choice for British GP”

  1. “gate receipts from this year’s race will amount to £18 million, leaving the BRDC with a £6 million shortfall to meet its current fee.”
    Really? There are no other operating expenses associated with and/or attributable to the Grand Prix? I’d say their shortfall is far more than £6 million assuming your gate figures are correct.
    The fundamental problem is that the business model Liberty Media purchased was not structured in a way that is economically rational, nor sustainable, for track-promotors and most race teams. They based their purchase price on an unsustainable business model and must now deal with the consequences. Like Daimler buying Chrysler based on peak margins and peak volume. Liberty Media’s due dilligence was not; they started with the answer (“yes”) and worked backwards. I was in the business (investment banking) and I have seen this happen.

    1. Liberty Media’s due dilligence was not; they started with the answer (“yes”) and worked backwards.

      Very interesting point, and one that I’m more inclined to agree with, seeing as how many public/visible actions by Liberty operated on similar principles (the F1 logo rebranding – rushed to meet the season finale, F1 TV – rushed again out of beta and into a paid service), not to mention announcing intent to bring races to specific venues like Miami without getting all their ducks in a row.

    2. @Gary There is indeed more to the cost of the British Grand Prix, but the income being being 25% short of the fee is itself telling.

  2. jamesluke2488
    6th July 2018, 13:52

    The british grand prix is the centre of everything about F1. Silverstone is within 100 plus miles of most of the F1 teams homes and even then the likes of Ferrari and Torro Rosso have engineering basis in this area. It was where F1 began in 1950. It really is in comparison to the Indianapolis 500 of Indy Cars or the Le Mans 24 Hours of the WEC. Without a British GP F1 wouldnt feel the same.

    1. jamesluke2488 ”even then the likes of Ferrari and Torro Rosso have engineering basis in this area.”
      – Ferrari have where exactly? I was aware that Toro Rosso has an aero-department base in Leicester, but have never heard of or read about Ferrari having a separate smaller base in England as well.

      1. @jerejj, whilst they did once have a small office in Guildford when Barnard worked for them in the 1980’s and 1990’s (Ferrari GTO, for Ferrari Guildford Technical Office), but I was under the impression that, when Barnard parted ways with Ferrari, the GTO became his own independent consultancy (B3 Technologies).

        Now, it is quite probable that there will be some suppliers in their supply chain who are based in the UK – for example, there may be components produced by SKF, which supplies their ignition systems, that come from production sites in the UK. That may mean that there are some UK based technical staff who are on secondment with those outfits, and some limited facilities in the UK to co-ordinate development work, but I am not aware of anything which would amount to a proper development team in the UK.

  3. I would not speak for LM if I were them… My guess is if a London GP materialises LM would prefer that if they were forced to choose…?

    1. The point is that neither London, nor any other alternative, is going to appear in a plausible timeframe, unless Liberty’s been playing its cards much closer to its chest than it has regarding places like Miami and Thailand.

  4. The economic model for F1 seems to be akin to bernie (when he set these deals up) basing it on being a mini Olympics.

    You are paying for the prestige of world sport coming to your neck of the woods. You may get some economic boost, but it will either be at a loss of hosting the event or require public finance to break even.

    The problem is that this model is ludicrous for F1. It is already a ludicrous model for the Olympics. Especially when they travel to developing countries with less than ideal economic stability.But, at least the Olympics is every 4 years and at one venue.

    With F1, not that I need to spell it out, this mini-olympic model means that venues have to go through this every year. Slowly getting sucked dry (if they have no subsidy) or relying on the tax payer to bank-roll it for no other reason than Bernie managed to convince said government it was worth it. Other than the tax payer if ends up being Oligarch/Ruling family funded.

    Something needs to change and I hope Silverstone makes a stand. With the attendance they get, they should at least be able to make a profit. Anything short of that and the venue and the fans are being taken advantage of. There should not be any government funding.

  5. Well knowing liberty media they’d probably be happy to dump Silverstone and replace it with a garbage street race in London. Don’t know why any circuits would want to pay over £20 million for a f1 race all it means is actual fans get stuck with paying the bill.

    1. London, on the other hand, is not so happy with that idea, hence why Silverstone does not believe Liberty will go there any time soon.

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