Silverstone has triggered its break clause with Formula 1 owners Liberty Media citing losses over its last two years as host of the British Grand Prix.
The break clause in its contract with F1 has now been formally triggered meaning that 2019 will be the last year that the British GP takes place at Silverstone unless a new contract is agreed.
“This decision has been taken because it is not financially viable for us to deliver the British Grand Prix under the terms of our current contract,” said British Racing Drivers’ Club Chairman John Grant before a press conference at the circuit on Tuesday.
The BRDC owns and operates the circuit having invested £50 million over the last decade to develop Silverstone, which attracts over 350,000 spectators over the GP weekend.
The British GP boasts the highest attendance of any race in the calendar and the highest attendance for a British weekend sporting event.
“The net revenue is not enough to cover the overheads let alone turn a profit,” said the BRDC President.
“We sustained losses of £2.8m in 2015 and £4.8m in 2016, and we expect to lose a similar amount this year.
“We have reached the tipping point where we can no longer let our passion for the sport rule our heads. It would not only risk the very future of Silverstone and the BRDC, but also the British motorsport community that depends on us,” continued Silverstone’s Sporting Director Stuart Pringle
Silverstone has hosted the race since 1950 and its current contract has been in place to host the GP since 2009, agreed with the previous owners of F1 under Bernie Ecclestone’s tenure.
Its losses stem from a 5% annual increase in promoter’s fees; the fee has increased from £11.5m in 2010 to £16.2m in 2017.
Had the fee kept in line with UK inflation, it would have increased to only £13.6 million this year (£2.8m less). By 2026, (the last year of the contractual obligation) the fee will have risen to £25m.
“The 5% inflation rate might have looked quite a reasonable bet back in 2009. nobody then remotely would’ve expected inflation to be as low as it’s been,” said Grant.
“To some extent there is a sense of relief that we have that break clause because then it can bring that to a stop, and stop the situation becoming even more dire for us in the future.”
The race will run in 2018 and 2019 as normal and discussions between Liberty and the BRDC will continue over the circuit’s future as host.
“Ongoing discussions with Liberty’s new F1 team secure long term financial viability of the event [shouldn’t take] more than a few months.
“We share [Liberty’s] vision for putting fans at the heart of the sport and we’ve made it clear that we’re open to working with our friends at Liberty.
“We’re basically open to considering all alternatives with Liberty to find this sustainable and viable future for the GP. Having said that we’ve also said in recent month that it’s the BRDC’s strategic direction not to sell the circuit”
“I think there’s a sense of relief that the guys who negotiated the contract had the sense and foresight to put a break clause in.
“It’s only one [clause] but they had the the foresight to put a break clause in and presumably that was in the event that things didn’t work out as either side anticipated. It could’ve been one way or the other.”
“We have no choice today but to exercise the option, that we have done this morning. This is something that we’ve been giving a lot of thought to over the last couple of years. We don’t take this lightly.
“We recognise that one of the possible outcomes is that there will not be a British GP here after 2019, and that would be a monumental shame.” said Pringle.
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