BRDC: Silverstone not alone in feeling the pinch
Silverstone is unlikely to be alone among European circuits in deciding it can no longer afford to host Formula One, according to British Racing Drivers’ Club chairman John Grant.
SILVERSTONE - Silverstone is unlikely to be alone among European circuits in deciding it can no longer afford to host Formula One without a better deal, according to British Racing Drivers’ Club (BRDC) chairperson John Grant.
“It’s reasonable to assume we generate more revenue than any other European Grand Prix and we still can’t make the numbers work,” he said on Tuesday after announcing that the BRDC-owned British Grand Prix circuit was breaking its contract.
The decision means Britain risks having no race after 2019 unless a revised deal is agreed.
“We believe that we run the event quite efficiently and our costs of delivery we think are low,” added Grant. “So the economics of the other European circuits must be equally challenging.
“I’m sure they are asking themselves the same sort of questions that we are asking.”
Germany’s Hockenheim, which returns to the calendar in 2018 after a year’s absence, has struggled financially while Belgium’s Spa track and Italy’s Monza have also had difficulties.
Grant said Silverstone lost £2.8 million ($3.60 million) in 2015, £4.8 million in 2016 and faced a similar loss from this weekend’s race.
He blamed the ever-increasing hosting fees for the situation.
“The cost of running the event is actually quite small relative to the amount of money it generates. The thing that puts the cost up is the promoter’s fee that we have to pay,” he told Reuters.
Formula One’s business model under former supremo Bernie Ecclestone was heavily based on annually escalating hosting fees and television revenues.
The sport’s new owners US-based Liberty Media have said they want to safeguard the traditional European races but Silverstone’s move will be seen as a test of that.
Grant said the promoter’s fee for hosting the British Grand Prix increased by 5% annually, growing from £11.5 million in 2010 to £16.2 million this year. By the final year in 2026, it would be £25 million.
That is still a lot less than places like Baku, Bahrain and Abu Dhabi, which can count on state funds and attract far smaller crowds, have to pay.
Last year’s race, a home Grand Prix for triple world champion Lewis Hamilton and seven of the 10 teams, attracted 139,000 people on the Sunday but Grant said only about 100,000 were paying ticket holders.
McLaren executive director Zak Brown has said Liberty should buy Silverstone to secure the race’s future but Grant said the BRDC had a duty to fulfil.
“We see ourselves as the guardians of British motorsport... so we feel that having the BRDC retain ownership of Silverstone helps to achieve that long-term objective,” he said.
“Selling Silverstone is not actually on our agenda at this moment.”