As the British summer (hopefully) approaches, the usual annual speculation about the future of the British Grand Prix rears its ugly head; will it stay on the calendar or won’t it?
What is abundantly clear is that when the circuit’s owners, the BRDC, signed the current 17-year deal with former FOM CEO Bernie Ecclestone back in 2009, it was Ecclestone who walked away with the spoils.
With Mr E’s built-in annual five percent escalator, far in excess of local UK inflation, the current fee, running at around $22m per year, will reach more than $35m when the contract is due to end in 2026!
Clearly if the race is not financially viable at today’s rate, the chances of the BDRC staying solvent much longer and operating the event are remote. But there is a get-out clause in the agreement for the BRDC to terminate the contract early, after 10 years.
The sting in the tail however is that if this early termination clause needs to be invoked by the BRDC, they need to give two years advance notice, i.e. before this year’s race!
Even though Formula 1 now has new, much more benign and supportive owners in Liberty Media, the chances of any quick fix for the BRDC and Silverstone look unlikely, given the fact that Liberty has only just settled in and there are clearly many more pressing matters that need their attention.
Speaking to the British Guardian newspaper yesterday, Silverstone’s executive director Stuart Pringle said a decision would have to be made before this year’s event.
“I sincerely hope it won’t be the end of grand prix racing at Silverstone, but we’ve made clear to the Formula One management we can’t live with the present contract beyond 2019,” said Pringle.
One of Liberty/FOM’s new priorities has been aimed at increasing attendances at races to help promoters cover their costs but in this case, that priority is moot as Silverstone always sells out, with nearly 400,000 people coming to the Northamptonshire track last year.
“Liberty have got some great ideas and we support their plans for a better show and fan experience," Pringle added. "But they will likely take years to produce a significant benefit to the circuits and we haven’t got the luxury of time. We need to deal in certainties [today] and not possibilities.”
With more than 140,000 fans expected on race day this year, it sends the wrong type of message to the sporting world that if an event that is so popular, with prices that are pushing the absolute top end of what fans are prepared to pay, cannot make money; then there is something fundamentally wrong with the business model of the sport to begin with!
But even if the early termination clause is invoked, British fans will still be secure in the knowledge that the 2018 and 2019 races will be safe. Hopefully in that two year period, the parties could then get together and quietly work out a new deal that does not constantly threaten to undermine what is arguably one of the jewels in the crown for the FIA Formula One World Championship!
