Silverstone on track to pay £20m annual F1 fee

Silverstone, the Northamptonshire-based race track, will have to pay almost £20m annually by the end of the decade to host Formula One's British Grand Prix, according to new research. This comes after it emerged that the BBC is considering dropping its coverage of F1 racing, because of the cost of the rights.

The £20m sum demanded of Silverstone is 64 per cent more than the fee paid to host this year's race, which takes place on July 10, and it will make it increasingly difficult for Silverstone's owner, the British Racing Drivers' Club (BRDC), to turn a profit.

In December 2009, Silverstone signed a last-minute 17-year deal with F1's boss Bernie Ecclestone to prevent the British GP from being cancelled after Leicestershire's Donington Park circuit failed to honour a contract to host the race.

Under the deal, Silverstone agreed to pay £11.6m, its highest-ever fee for hosting the race. The key concession is that this fee escalates by 5 per cent annually instead of the 10 per cent which is applied to most other F1 circuits.

Last year Silverstone had a near capacity crowd of 115,000 on race day and record-equalling attendance of 105,000 for qualifying. This gave it the highest attendance of all F1 races in 2010. But, despite this, the BRDC reported a £1.9m loss for the year, down from a £1.3m pre-tax profit. The loss was due to the F1 fee which is still accelerating.

According to projections in the latest edition of the F1 industry guide, Formula Money, which was released last month, Silverstone's fee comes to £12.2m this year and will hit £18.9m in 2020, rising to £19.9m in 2021.

Silverstone has to cover this cost from ticket sales alone since the sport's rights holder Delta Topco, which is majority owned by private equity firm CVC, takes all revenue from F1 broadcasting, trackside advertising and corporate hospitality. Projections by Formula Money show that by 2020 the cheapest tickets to the British GP will cost £195, up 31 per cent on this year, whilst the most expensive will sell for £475.

Silverstone is one of only two F1 circuits which gets no government funding and in the past four years it has made a profit as often as it has suffered a loss. Any shortfall is covered by the BRDC which is a private company, limited by guarantee, with 850 members including star drivers Jenson Button and Nigel Mansell.

In April 2010, Silverstone took out a £26m loan with Lloyds Banking Group to fuel development and last month it opened a new pit and paddock complex. The BRDC has engaged the corporate finance arm of PricewaterhouseCoopers to secure new investors for future developments at the circuit which it is believed will include a hotel, new driver training facilities and a visitor attraction.

This follows news that the BBC may not renew its contract to broadcast F1 in the UK when its contract expires in November 2013. The current cost of £60m a year makes it the corporation's most expensive programming.

The cost meant it was more than the entire budget of its digital channel BBC4 for the year with the races only attracting up to four million viewers. The BBC is currently looking to slash 20 per cent from its budgets by 2014.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links