British Racing Drivers’ Club (BRDC), the owners of the Silverstone racing circuit, has announced today that it has formally triggered a break clause in its contract with Formula 1. This means that unless a new contractual arrangement can be reached with Liberty Media, 2019 will be the last year that the British Grand Prix takes place at Silverstone – the only viable venue for a British GP.
The BRDC has been the custodian of Silverstone for almost 70 years – owning and operating the circuit, which is the only venue licensed to run a Grand Prix in the UK. The organisation has invested £50m over the last 10 years to develop Silverstone – creating a world-class venue for fans to enjoy one of the great global sporting events. Today, the British GP attracts over 350,000 spectators – making it the best attended Grand Prix in the world – and draws a TV audience of over 400 million people.
However, as has been widely reported, the BRDC’s current contract to host the British Grand Prix – agreed in 2009 with the previous owners of Formula 1 – requires the organisation to pay a Promoter’s Fee to Liberty Media in order to host the British Grand Prix.
As has also been reported, this Promoter’s Fee increases by 5% every year. This means that over the first eight years of the contract, the 5% escalator has increased the Fee from £11.5 million in 2010 to £16.2 million in 2017. By contrast, had this fee escalated in line with UK inflation (CPI), it would have increased to only £13.6 million – some £2.8m less. By 2026, the last year of the contract, the Promoter’s Fee will have risen to £25m.
The cumulative effect is that, despite being the most popular weekend sporting event in the UK, the net revenue from ticket sales and hospitality at the British Grand Prix is not enough to cover the Grand Prix’s share of Silverstone’s overhead costs. This is why the BRDC has taken the decision to trigger the break clause in its contract with Formula 1/Liberty Media.
“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," says John Grant, Chairman of the British Racing Drivers’ Club.
"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.
"However, I want to be clear that although we have now activated the break clause, we are fully supportive of the changes the Liberty team are making to improve the F1 experience. Our hope is that an agreement can still be reached, so that we can ensure a sustainable and financially viable future for the British Grand Prix at Silverstone for many years to come.”
Silverstone hosted the inaugural Formula 1 race back in 1950 and has been the home of the British GP since 1987. The BRDC is determined to secure a sustainable future for the Formula 1 race at Silverstone. The organisation remains in discussions with Liberty Media about finding a solution that secures the long-term financial viability of the event, and hopes that an agreement can be reached.
