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Fresh setback for Donington as £2.5m law suit comes in
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Fresh setback for Donington as £2.5m law suit comes in
Posted By:   |  23 Apr 2009   |  2:20 pm GMT  |  28 comments

I’ve just received the item below in my inbox. It relates to a law suit which veteran Donington circuit owner Tom Wheatcroft has filed against the Donington Ventures company of Simon Gillett, who has a contract to stage the British Grand Prix from 2010 onwards.

“Wheatcroft & Son Limited, the owners of Donington Park motor racing circuit, have issued legal proceedings against Donington Ventures Leisure Ltd, the operators of the circuit, seeking £2.47m in rent arrears and forfeiture of the circuit lease.

Lawyers at Browne Jacobson LLP, acting on behalf of their client Wheatcroft & Son Limited, issued the proceedings at Derby County Court earlier today (23rd April).

Wheatcroft & Son Limited awarded Donington Ventures Leisure Ltd a 150-year lease back in January 2007. Donington Park, has since been awarded a ten-year contract to host the British Grand Prix from 2010.

Kevin Wheatcroft of Wheatcroft & Son Limited said :
“It is with great reluctance that we have taken this decision. Donington Ventures Leisure Ltd owe us nearly £2.5m in rent dating back to September 2008. Despite receiving numerous reassurances over a number of months they have consistently failed to meet their financial obligations under the terms of the lease. We have held off taking legal action for as long as possible but have been left with no choice but to commence proceedings to recover the outstanding rent and forfeit the lease.”

I posted on the accounts of Donington Ventures earlier in the year. There have also been some problems with circuit licences.

Gillett was due to announce details of a debenture scheme for funding the works to bring the track up to F1 standard. This will add fresh material for the sceptics.

The timing of the issue of the press release was interesting as Donington Management and Lord Astor were begging for government support for the Grand Prix in the Houses of Parliament this afternoon..

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28 Comments
  1. Tim says:

    well, I did suggest a few days ago looking deeper into the silence from Donington. When someone can’t pay the rent there is usually underlying issues!!

  2. john g says:

    the rent is £2.5m for 8 months!? that’s a lot of trackdays!

    i need to get myself a circuit and rent it out! maybe out in india with some money that the government can’t really afford, then i can get someone else to operate it at a large loss, and not be personally screwed over by bernie :)

  3. Lauren says:

    For some reason this news didn’t surprise me one little bit. Ridiculous economic climate to take on a venture like this and now Bernie has the British GP over a barrel.

  4. Kirk says:

    Oh dear… doesn’t look good for Donington.
    Maybe we can carry on having the British GP at Silverst… oh… no… not while Bernie is in charge.
    Anyone fancy watching our GP being held in Timbuktu in 2010?

  5. Lee Grant says:

    I hope there is some good news coming from Donnington soon.

    It all seems a little ‘complicated’ doesn’t it?

  6. alistairblevins says:

    If the British Grand Prix is at Donnington next year I’ll eat my hat.

  7. Martin P says:

    Regardless of the Silverstone/Donington debate, I’m somewhat ashamed that we can’t get our arse in gear in the UK when Bahrain, China, Valencia, Turkey, India, Russia, etc. etc.

    It does need Government backing and Bernie knows this, so why get into bed with what are increasingly appearing to be long-shots at best?

    Ditch the current plans, get Boris Johnson revved up (and therefore the likely incumbent governing party) and put a street circuit in London to coincide with 2012 Olympics.

  8. Jason says:

    Basically – http://www.twitter.com/MacLaren put it perfectly:

    “So Bernie’s petulance in taking the Brit GP away from race-ready Silverstone and giving it to not-ready Donnington = FAIL”

    This about sums it up.

  9. PaulL says:

    I really like the inclines/declines aspect of the Donnington track. The historical value for Senna’s great win is something too. I really hope F1 makes it back there.

  10. LeighJW says:

    Almost £2.5 million since September 2008, that’s a maximum of seven and a bit months, call it seven.

    So we are talking of a rent of around £360,000 a month! (Or even more if part has been paid already).

    I find it hard to believe that any UK motor sport venue could generate enough income to pay that kind of rent.

  11. Dave H says:

    I suggest everyone who’s been planning to go to a British GP in the future should get their rear’s down to Silverstone this year since it’s going to be the last one on these shores for a long time.

  12. Mooks says:

    James, wasn’t the debenture scheme meant to be publicised this month, including prices and whatnot?

    From what the plan is, I can see how it will make money in the long term, but getting the money for building it all by the time the race is due, I’m even more sceptical, and I don’t want to be.

  13. Silverstone Geezer says:

    Are we alone in Silverstone (citizens of the village that is) in wondering why Bernie Ecclestone is so dogmatic regarding “the GP will never return to Silverstone” ?

    There’s no love lost between him and the BRDC, that’s for sure, but the latter have continued to make it clear they’re ready and able to hold the GP from 2010 onwards, and available to make a deal. Bernie needs to maximise revenue from the governments waiting in the wings to bag a GP for their country, but the majority of the F1 teams are based in the UK, and they and the drivers don’t like the idea of the British GP disappearing from the calendar.

    It now looks as though Donnington’s attempt to host the GP could end in failure – almost a self fulfilling prophecy. Silverstone can’t pay the same as Donnington were intending to, but they can come very close. Surely the loss in interest in F1 from the British (and Anglophone countries such as S.Africa, US etc) in the event of losing the GP will reduce the revenues to Bernie’s company to a much greater extent than the difference between Donnington’s fee and that Silverstone can afford to pay ?

    I think it’s going to be an interesting couple of months coming up in the sport’s politics, as well as on the track.

  14. Leo Allen says:

    @MartinP

    Though most of the time I’d agree with you, in this case it’s nothing to do with Brits getting their collective arses in gear
    over Donnington or Silverstone in general or the British GP in particular.

    But it DOES have everything to do with one B. Ecclestone and his recent ‘war’ with BRDC, owners of Silverstone. For whatever reasons, they won’t play the game his way, and he gets quite unpleasant when mere racing people dare to cross him.
    Ecclestone doesn’t give a damn about history, atmosphere, or anything that we all value. He just want his filthy money. Lots of it.

    Ecclestone almost certainly knew that the Donnington deal was ‘flaky’ to say the least. But they were a useful way of giving the unidexter salute to BRDC and taking the Britsh GP away from Silverstone. When he was later asked if the GP would return to Silverstone if Donnington failed he replied, ‘Never!’

    So the uneasy feeling we all had after last years race was well founded. Unless someone with a lot of money and a very big stick steps in pretty damn soon, we’ll lose our GP forever.

  15. Richard says:

    “The timing of the issue of the press release was interesting as Donington Management and Lord Astor were begging for government support for the Grand Prix in the Houses of Parliament this afternoon..”

    Thanks for that James, I didn’t read that bit in any of the other reports. I thought Bernie was quite quick with his response, but it all begins to make sense!

  16. rpaco says:

    Two lines of thought here.
    Firstly: I posted on this back last year, wondering why a company of the same name without the “leisure” was dissolved. Has anyone paid the pound and downloaded the files from companies house?
    It always looked uncertain since no finance was ever produced, only promises. The government is willing to print money for banks not for race venues. Although massive work was done on the Silverstone access routes.
    Secondly: I started to get very nervous when Berni said he would check on progress and if it wasn’t up to what he wanted then it was all off! No UK GP. This was his way of going around Silverstone, whose management would not kowtow to him. He wants nice easy compliant organisations. There are plenty of possible new venues, mainly in countries where labour is cheap and they do not have UK planning constrictions or financial rules. (ha ha as if we had rules!)
    Now we have a delaying tactic, likely to ensure Bernie’s required progress level is not met, did Bernie speak to Tom Wheatcroft recently one must wonder? I think we can write off the UK GP for the foreseeable future after this year.

  17. sean says:

    This is a bernie setup: give it to someone who can’t afford it then when they fall over take it away the outcry in britain will be massive say I could give it back but Iwant it in London the government bow’s to huge public pressure bankroll’s the whole thing bernie get’s what he wanted in the first place everyone happy.

  18. Antonio Carlos says:

    Well, there is no doubt that Ecclestone knew about Donnington’s difficulties.

    Then, his plan is simple: claim that is no Brit track capable to host a Grand Prix and ban Silverstone, Donnington, Brands Hatch or any other british track forever.

    I’m not a british guy but is a very sad situation for local fans.

  19. Jonathan says:

    First rule to stay in business is pay your rent on time, period.
    The ridiculous thing is the leaseholder is trying to tell us that he has the money to revamp the circuit in time for next years race, yet he can’t pay this months rent.
    What a waste of time.
    I blame Bernie for this. If he hadn’t demanded the BRDC make a loss on the GP at Silverstone, our national race would not be in danger. Now it is up to the teams to demand a home race at Silverstone.

    Shame on you Bernie and the FIA for allowing him to get away with it.

    James, if the FIA is supposedly making the teams adhere to a budget cap, why oh why can’t he do the same to Bernie in regards to what FOM charges to hold the race?
    It IS totally unaffordable, lets face it.

  20. Pete says:

    This is embarrasing. How did Donnington win the British GP contract if they did not even have the money to pay the rent?

    What is so wrong with Silverstone? We go to Brazil every year without any fuss and that track is in far poorer shape than Silverstone.

    I’m getting rather fed up of losing quality races because of Bernie and FOM charging insane fees. We have already lost 2 great tracks this year in Montreal and Magny Cours. I’m fine with these new tracks that keep popping up, but why do they all have to be designed by Tilke. With the exception of Turkey, the Tilke tracks are just not that exciting. I know you cannot conjure up another Spa, but why not try? I loved Imola and they got rid of that track too.

  21. john g says:

    geezer, i don’t think there’s much more to it… bernie hates the BRDC club with such a passion he would rather piss off a lot of loyal fans than let F1 race at their track. that plus the fact that silverstone won’t pay as much as bernie wants – it fits right in with the hopeless short term plan that he needs to screw as much money out of F1 before it dwindles and dies out somewhere between asia and the middle east.

  22. Martin says:

    The hole in the finances was obvious right from the first announcement. When you factor in the debentures at their expected price the figures didn’t add up, even in a normal financial climate it was always going to be a failure.

    If Bernie had any conscience he’d have funded the best circuit in the world here in the UK; maybe at Silverstone, maybe a new Spa or a Nordschleife, named corners after all the past and present British World Champions, and created a true centre of excellence for other countries to aspire to.

    As the Honda advert said… To Dream, The Impossible Dream…

  23. Delenn says:

    If we could all see this was doomed, Bernie could. But as Bernie is a friend of Tom Wheatcroft, I smell something in the air.

    I believe Bernie will take over Donington for the Grand Prix. The Wheatcrofts will run it the rest of the time.

    The one thing Gillett did do was get the planning permission. Bernie has £100 million lying around (remember, he was going to give it to Brawn), and enough time to the building work. Without a race season this year (as seems likely), he can go full steam ahead with the building, and could start the track mods ahead of time.

    This has worked out *perfectly* for Bernie. He gets what he always wanted, to “own” the British Grand Prix, and he will look like a saviour.

    A very clever man.

  24. Mattw says:

    WHY does it need government backing to hold an F1 race?

    OK, there have been a number of countries paying huge sums they cannot really afford to build some spectacular hospitality areas (plus dull Tilka track) – but is this necessary to hold an F1 race? To me this is all part of the elitism that James spoke of in an earlier post.

    Given the apparent moves to curb the elitism on the grid – how about curbing the elitism in the calendar!

    F1 should be about the best tracks – not about the best pitlanes (which is the better F1 venue, China or Brazil?)

    F1 should also remember it’s heritage – and (important in this financial climate) where the majority of the paying fans live!

  25. alistairblevins says:

    Don’t blame the government.

    They simply cannot spare any of the GBP500bn they are borrowing from the taxpayer over the next 5 years!

    Mind you – Bernie could pay for it out of his new top rate tax contribution!

  26. lower-case david says:

    anything but fail, mission accomplished surely?

    servicing the eye-watering CVC debt explicitly demands removal of these ‘politically awkward’ legacy events from the calandar, to make space for much more profitable, empty-granstanded, state-funded replacements.

    cancel france, germany goes bankrupt, bait and switch the british one, just leaves monza to deal with.

    see you under-lights somewhere in a desert.

  27. Antonio Carlos says:

    “What is so wrong with Silverstone? We go to Brazil every year without any fuss and that track is in far poorer shape than Silverstone”.

    Man, I’m Brazilian. I will be very honest and obvious at same time: He wants another race in anywhere, but always with the profit in mind.

    About Brazilian race, Bernie never will quit, because for european viewers is the best time possible to watch. You can do anything through the day, and watch it at night.

    I’m from Rio and this race happens in São Paulo. Really the track is one of the poorest of all F1, a good replacement would be Jacarepagua here, but it is completely destroyed.

    In addition, there are no other tracks available on Latin America. So, Bernie will never waste the chance to hold best ratings on TV.

  28. rpaco says:

    I may be wrong here but I don’t think Bernie even needs the fans to make his money, it all comes up front from the circuits and the race organisers.

    His hatred of the BRDC is borne of their unwillingness to fawn over him whilst handing him buckets of money and them making a loss. Silverstone has had massive investment over the last few years, but it would never be enough for Bernie however much they put in.

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