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Has Donington had its last chance?
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Has Donington had its last chance?
Posted By: James Allen  |  11 Oct 2009   |  6:11 am GMT  |  45 comments

No-one could accuse Bernie Ecclestone of failing to give Donington Park a decent chance of hosting the British Grand Prix.

But now it seems that the 79 year old’s patience is running out as the circuit once again failed to meet a deadline to produce a bank guarantee. Ecclestone had given Donington chief executive Simon Gillett an extra week past the agreed 28th September deadline, but on Friday night that expired. There is concern that the circuit will not be able to raise the £145 million it needs and in any case time is running out to build the infrastructure.

“It’s not good, is it?” Ecclestone told the Times newspaper. “Even if they get the money, I cannot see how it will all be ready in time to go. It is very disappointing – because we thought it would happen – but they cannot go on missing deadlines.

According to my colleagues on the Financial Times, Gillett is due to have a last gasp meeting with backers on Monday morning. If the final pieces cannot be put in place then, the great project may well hit the skids. Silverstone is poised to take back the race, but has said it would only do so on a long term basis.

The FT quotes a City insider saying that the problem for Donington is that Citigroup, Gillett’s advisers, have secured a loan of £120 million but the deal is being held up by Citigroup having to find a £12 million line of credit from a third party. There are concerns among backers that the time-scales are too short now before the British GP next July and that the circuit would have to complete building works at the same time as selling debentures and hospitality. The funding plan for the Grand Prix circuit, conceived in summer 2008, before the credit crunch struck, is based on a debenture scheme.

The last time I saw Gillett, at Spa in August, he said that he would easly make the September 28th deadline and that he had a consortium of banks in place to replace Goldman Sachs, who pulled out earlier this year.

“They could still come to us saying they have the money but there is no way the circuit would be ready at this late stage,” Ecclestone added. “It looks as though we will have to start planning again.”

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45 Comments
  1. Kenny says:

    Is anyone surprised by this? The project smelled from day one.

    I wouldn’t be surprised to learn that this development is part of the long term plan…Donington fails, Silverstone insists on a long term deal, and Bernie walks, achieving his long standing goal of getting F1 out of Britain, claiming that he tried, but no one would cooperate…

    Another date open…North Korea? Iran? Zimbabwe?

  2. Simon Pearce says:

    Simon Gillett should never be allowed to be involved in F1 or even in business in general ever again.

    He’s clearly a con man.

    1. Andy Fov says:

      Banks have tightened up their lending criteria incredibly, and it’s from his point of view the timing of the economic meltdown has been been disastrous.

      He’s not a con man, he’s a victim of circumstance.

      1. John says:

        Reading between the lines, Simon has probably had dealings with Gillett – I know people that have in the distant past and would say the same….

    2. rpaco says:

      Reminds me of the plot of “The Producers”

    3. davidturnedge says:

      How wise was the decision to award a 17 year deal (17 years!) to a guy while at the same time insulting the stakeholders of one of the foundation races of the world championship?

      Is that good business?

  3. Flugplatz says:

    James,

    Good insights from your new-ish chums at the FT.

    I would say, though, that SG and co cannot defend their predicament by bleating that the credit crunch hadn’t struck by summer 2008. We’d all had nearly a year to get our heads around it by then.

    Be interested to see how close SG was, or was not, to pulling this off. It was always very hard to expunge this sense that he was not far removed from the rather dodgy-looking ‘property developer’ that one could often find at the local Porsche dealer…Of course, he may not have been a charlatan at all, just provenance-free. Obscurity re-beckons.

  4. ChrisS says:

    So is Damon Hill’s statement that Silverstone will host the race but only on a long-term contract and not as a stop gap a negotiating tactic or a final position, do you think? I’d love the race to stay at Silverstone for the long term, but I’d rather they agreed to host it just for 2010 and negotiate an extension later than miss out on a British GP altogether in 2010.

  5. Rob says:

    It was always an accident waiting to happen,should never of been taken away from Silverstone.It`s bad enough that we have to watch to many races now on new and dull circuits,we need the likes of Silverstone,Spa,Suzuka & Monza etc,also lets go to back to one street track Monaco.

  6. Cliff says:

    James,
    As someone living close to Donnington Park I would have loved to see a GP held there. But I can’t help thinking that this was ‘wishfull thinking’, to hope to stage a GP in such a small timeframe. With the new season less than six months away, I would have thought that they would have wanted to be in a position to hold a few races (not to mention H & S Certificates) well in advance of the July GP date. I think in this current climate the question has to be asked, is the propose project viable? Donnington are also going to have the same problems with access in and out of the circuit that Silverstone experienced. We’re hearing that they intend to bus people in and out. If true, the M1,M42 & A50 will be gridlocked. Silverstone took a lot of pain with regards to access and Donnington will be no different. If the only way to keep a British Gp is for the Donnington deal to fall through, then so be it, but I would also like Silverstone to show some real commitment to upgrade their facilities.

    1. John says:

      Chicken and egg Cliff, if they had the deal for 15 years they would invest no doubt!

  7. I support Damon Hill’s comment that it’s Silverstone again with a multi-year contract or effectively no British Grand Prix (he didn’t actually say this bit). I don’t dislike Donington, BTCC and WSBK this year were great there. But it’s now clear that there is a lot more than just the track revamp. Infrastructure for parking, camping and all that goes with it also needs to be in place. The problem that Donington faces now, losing the F1 contract, means they will not have a major event next year apart from WSBK since MotoGP has also moved to Silverstone. These are really interesting times for them.

  8. Martin Collyer says:

    It’s about time to call, “Time” on Donington’s plans for the British GP, I am amazed that Bernie has allowed so many deadlines to be passed already.

    Hearing that Citigroup, one of the biggest causes/casualties of the credit crunch is the prime funder provides no confidence. You state, James, that they are stuck for £12 million, an enormous fortune to you, me and the readers of this blog, but weekend beer-money in the world of high finance.

    I wonder what/who these non-existent third-party backers are afraid of!! Gillett, Ecclestone, Citigroup, or just the whole plan. Anybody who has been paying attention these last few months/years knows that there is a problem with access and ballsy sounding claims from Gillett that he is going to take over the East Midlands Airport for the weekend don’t help. I wonder if he asked the airlines about that!!

    I hope that Silverstone get a sensible contract out of BCE, one that enables them to make a profit so they don’t have to subsidise the GP from other meetings.

    On Donington, I hope that Gillett and co. have not completely ruined the place with their scheme.

    1. Malcolm46 says:

      On the last point, they have already got rid of the Dunlop Bridge…..

  9. Jason C says:

    From my perspective, this is good news. The reason? Well, I’m not against change, but removing Silverstone from the calendar would be removing one of the gratest race tracks in the world from the F1 calendar.

    Also, Silverstone is closer to my house.

  10. Lee Bailey says:

    To quote a comment I saw elsewhere this morning – “Gillett is like Arthur Daly and Derek Trotter rolled into one”. As a fan looking from outside, that rings true with me.

    Donington was always going to struggle to pull this off, there are simply too many variables going against them – not least of which is the infrastructure around them.

    However, they might have done better had it not been Gillett behind it. His ‘over confidence but nothing to back it up’, together with pie in the sky ideas must surely have put a lot of potential investors off.

    I strongly suspect that this whole affair will be the end of the DVL – they’ll lose the GP rights, together with everything else they’ve already lost, and be faced with a huge bill to get everything back to where it was when they started.

    So, Silverstone gets a new 5 year deal, Gillett out and Bernie comes in to save Donington from becoming wasteland. He gets a track worth very little for next to nothing, puts some cash into it and we see the British GP move there for 2014.

    1. Peter Jones says:

      “So, Silverstone gets a new 5 year deal, Gillett out and Bernie comes in to save Donington from becoming wasteland. He gets a track worth very little for next to nothing, puts some cash into it and we see the British GP move there for 2014.”

      Add this to my comment below and it all seems like a master plan by Bernie to re-address his bank balance after his divorce.

    2. antonyob says:

      pretty much spot on Lee and what id heard from someone who had an insiders view on proceedings. He was staggered at the laissez faire attitude

  11. Carl M says:

    hopefully it has had its last chance then we can go back to Silverstone, the home of the british grand prix.

  12. Bo Amato says:

    Hopefully the grand prix is not at Silverstone or Donnington! The race should be at Brands Hatch! Spectators get to see the cars for more than one corner or a straight! Skeptics will say it’s Dangerous!

    However, my father who raced on a shoe string budget in F3 in the early 80′s tell me in a few conversations. The world is upside down. There was a time when motor racing was dangerous a sex safe, now it’s the opposite!

    Shame the break away series never came off. Much rather see 5 ferrari’s, 4 McLaren’s on the grid than two torro ross’s or whatever is tugging at the back next year as mobile chicanes!. Frank Williams trying to deny Ferrari three cars for next year and preventing Sauber to be the 14th team on the grid. Frank, was always the typical miserable Brit. But boy in old age bitter two!

    Best scenario. Break away series, remove politics, forget donnington and silverstone. Back to Brands! F1 finally gets it write with no fuel and Tyres for next year. Enough of glorifying mechanics in what is supposed to be a drivers speed sport. Le Mans has space for that.

    BRANDS HATCH 2010

    1. Although Brands Hatch is a great track, and has all the licenses apart from F1, it’s too narrow in my view for two F1 cars. The whole paddock infrastructure and grid would need to be revamped too. Same happens with access. The roundabouts out of the M25 are bad enough when is just BTCC and BSB. The advantage of Brands Hatch and Donington is the “bowl” structure which provides for better viewing. Silverstone is quite flat. But I’m afraid Brands Hatch cannot provide the grandstands and all the other infrastructure to host a F1 race without significant investment. Its proximity to London is its only advantage really but Silverstone is closer to most teams HQ’s.

      1. " for sure " says:

        “…too narrow …for two F1 cars”

        Monaco anyone?

      2. rpaco says:

        Having spent a lot of time (and money) at Brands I love the place and have to agree it’s a great track. It didn’t used to be too narrow, compared with some current street circuits it is much wider. ~Some runoffs are small but better than the concrete/armaco walls around valencia or Monaco.

    2. antonyob says:

      bo amato. You are definitely along way from being “write” sic. What you have painted is some sort of dystopian nightmare, 4 Mclarens ? are you serious? Hay, why not 6 ?

    3. iceman says:

      I must be a skeptic :)
      Brands is a long way off modern F1 safety standards (seems incredible that they still had F1 there as late as 1986) – and frankly it’s the better for it. Can you imagine being allowed to stand 30ft from the edge of the tarmac on the inside of Druids for a Formula 1 race today? It would ruin the track if it were “improved” for F1 or MotoGP.
      While it would be undeniably spectacular to see a full grid of F1 cars charging round Paddock Hill on the first lap of a Grand Prix, I wouldn’t want to be standing on the outside of the circuit there unless I was inside a concrete bunker!

  13. Jake Pattison says:

    James, Can you explain (for the naive like me) why tracks need to give so much money to host a race? And where does the money go to – Bernie Ecclestone I presume?
    It seems to be a very large sum and BE has no shame in demanding it.
    Do all tracks have to pay so much?
    Cheers,
    Jake

    1. James Allen says:

      Well the fee for the race is usually around $10- $25 million per year. The whole season nets the commercial rights holder around $300 million. The teams get a 50% share of that now. THe £145 million Donington is trying to raise is largely for development of its infrastructure.

      1. Mike from Medellin, Colombia says:

        And the FIA sold the commercial rights for $300m for 100 years?!!

    2. ChrisS says:

      Also, CVC loaded FOM’s parent company with a lot of debt in order to buy it. The reason circuits are having to pay such high fees, and why Bernie Ecclestone prefers circuits with lucrative government backing, is largely the need to service that debt.

    3. iceman says:

      One of the reasons for the high sanctioning fees is to service the multi-billion loan that CVC took out to buy the rights from Bernie.

  14. philipb says:

    During the FOTA standoff, many comparisons were made between the state of F1 and the debacle surrounding the CART/Indy split in the US. However, I venture that the current state of NASCAR points to a much stronger lesson that should be heeded by Bernie.

    In an attempt to increase revenues and add fans, NASCAR embarked on an ambitious program to broaden it’s mass appeal. Many tracks were upgraded to uber-facility status and the smaller, more traditional circuits were dropped in favor of these palaces. Races were added, prices rose accordingly and for a while fans (& TV revenues) soared. Life looked pretty rosy for NASCAR.

    However, they had overlooked the traditional fan in these bold new enterprises. The NASCAR faithful increasingly found themselves priced out of the game and racing every Sunday in the fall pitched the series against the mighty NFL TV coverage. To add “drama” they created a unified car design (Car of Tomorrow) which took most of the design (and cheating) innovation away from the teams. Sound familiar?

    And so the new fans moved on (as they always do) and the original die-hards were marginalized. Today, NASCAR is in a sorry state, not only are track attendances way down but so are TV viewers which is doubly worrying for NASCAR since the races are shown primarily on the free-to-air Fox network & it’s hard to blame that on the economy.

    Another prime example from US sports is the demise of the National Hockey League who also underwent a dubious expansion program and now lack even a national TV contract.

    Bernie needs to tread carefully. The jewels in F1′s crown are the iconic tracks and GPs. You can push the fan so far but I believe the loss of a British race may produce cracks that will not easily be patched up.

  15. Alex Yarnell says:

    As I understand it Silverstone is run by the BRDC and the perception is that they resist change which has frustrated Bernie. Do you think that the Donington has done anything to shake up the BRDC or is it more a case of Bernie trying to squeeze more money out of them?

  16. " for sure " says:

    ” No-one could accuse Bernie Ecclestone of failing to give Donington Park a decent chance of hosting the British Grand Prix”

    How about an alternative spin?

    “Ecclestone is so desperate to ensure that the British Grand Prix is not staged at Silverstone that he will go to any lengths to ensure that the race does not once again fall under the auspices of the men in blazers at the BRDC”.

  17. Peter Jones says:

    James,

    I have a question for you. Now it seems that Donington will not be hosting the 2010 British GP and it will be back at Silverstone, how much will Silverstone be paying for this privilege? Will it be more than they paid for the 2009 GP? I can’t help but wonder that this was a master tactic by Bernie to get more money out of Silverstone, knowing the problems they have had before and how desperate the BDRC are to keep the British GP. If this is true, I can’t help be disgusted by Bernie tactic as a Donington local.

    Using the oldest UK circuit still in use and placing it in the middle of a battle just to add to the already inflated bank balance of a man who seems to have lost his marbles many years ago.

    Donington has so much racing history, which many people forget, hosting Grands Prix in the 30′s before Silverstone was even an airfield. To loose all of this just because of some stupid, idiotic and selfish war would be the greatest travesty to hit the UK racing scene.

    Disgruntled Donington regular,
    Peter

    1. James Allen says:

      As far as I know they are offering what they offered last time when Donington outbid them. However they are saying that if they get a long term deal they will invest the money in the new facilities and remember they now have a mandate from the members to get a commercial partner for this deal.

  18. rpaco says:

    Much as I respect Damon I can’t see him getting away with a demand of permanent race or nothing with Bernie.
    Bernie will just say no UK race then,Afghanistan or Iran instead.

  19. Werewolf says:

    With Ecclestone/CVC’s obscene financial demands and the number of European circuits already saying they cannot afford F1, I find it hard to imagine anyone being willing to bankroll huge investment in a GP, with or without Gillett. Where is the significant return?

  20. Howard Hughes says:

    Blimey. Such insults directed at Simon Gillett. And such judgemental bleating too. Why?! I applaud the guy. We sit and admire F1 from afar – he actually got stuck in, and has come within a whisker of reaching glory.

    If the FT is true (and let’s face it, when it comes to matters of the City, they’re seldom wrong) then he managed to put all the pieces in place bar one relatively small line of credit, which was outside his control. Yet all anyone can do is carp about how they ‘always knew’ he was somehow dodgy?

    In 1991 Rupert Murdock was trying desperately to save his empire from foreclosure – he and his team had managed to get every bank worldwide who were party to his financing to agree to roll over their loans, except one tiny bank in a little town in the MidWest, who were owed 10 million dollars. They refused until literally minutes to the midnight deadline, and Murdock would have lost everything had someone not pulled a string and convinced them. NewsCorp lost and broken up, for a relatively paltry $10m.

    Sometimes things are beyond an entrepreneur’s control, and it seems like Gillett’s problems are too. Leave the guy alone. If he convinced an old shark like Bernie that he meant business, then that’s good enough for me.

    1. " for sure " says:

      Hardly anyone worth listening to believed Donington had more than a very slim chance of succeeding. The only reason it got that chance was that Bernie was desperate to win his long running campaign against the BRDC and Silverstone.

      If the money required to complete the deal is so small, a mere 12 million, why doesn’t Bernie and CVC step up to the plate and risk their money?

      Whilst part of me hopes that the 2010 British GP takes place at Siverstone, a voice in my head is saying I hope that the BRDC holds out for a decent contract, and that Bernie refuses to deal. The resultant fallout might just be the catalyst to topple Bernie and make CVC finally wake up to the fact that the people who really matter, the fans, need to factored back into the equation rather than being totally ignored as happens now.

  21. antonyob says:

    Even if they had the money they would not be able to build it in time. The owners begged an architectural firm, resposible for many sports stadia and facilities, to take the contract and they said no way, the deadlines were completely unachievable even 3-4 months ago. 100% it wont be at Donnington and i doubt if it will ever be. From what ive heard the owners thought they would just wing it and never fully grasped the enormity of the improvements they needed to make.

  22. Alistair Blevins says:

    Why can’t someone like Jonathan Palmer step in with one of his circuits or expertise?

    Maybe he’s done the maths and it doesn’t add up, but if there’s a motorsport entrepreneur in the UK who could make it happen I would suggest it’s JP.

  23. Rudy Pyatt says:

    Yet again, this proves proves the hostility of Bernie’s business model to private investors. Having said that, James, I have to ask: What happened to the old FIA/CSI rule, that any venue seeking a world championship round had to prove that they were ready by holding a race to international standards first?

    It appears that since Bernie’s Deal, that opportunity to dry run/rehearse has been replaced by an inspection and benchmarks system. And that in turn seems to pivot entirely on Bernie’s commercial considerations. I mean, correct me if I’m wrong, but getting the track to the required safety standards is the easy part. Getting it to Bernie’s facilities standards is something else.

  24. john g says:

    as much as i don’t like bernie or how he operates, you can’t accuse him of being a poor business man – killed two birds with one stone here. firstly there is to be no race at silverstone which makes bernie happy as he doesn’t like the BRDC (nothing to do with the actual racing or fans, he clearly doesn’t give a crap about either of them). donnington won’t be able to make in time, which most of us thought when the deal was announced, which means that in addition to south korea, we can fill the calendar up with another short term cash cow with little interest and zero heritage like india or russia! hurrah!

  25. Érico says:

    I don’t know about you guys, but I’ve never had faith in Donington pulling it off. In my mind, Benie wants no British GP in 2010 and then to have the gap filled in 2011 with any other Tilke-o-dome willing to pay him enough. All this together adds up to me wanting Moto GP at Silverstone to be a tremendous success and the renewed track and facilities to become memorable. Oh, and please, don’t let Silverstone bend over for Bernie and agree to a gap filling 2010 GP.

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