Donington may have to share British GP
Ecclestone warns shortfall in funding may steer race back to Silverstone
Sunday 19 July 2009
Formula One chief Bernie Ecclestone has warned that if the Donington circuit fails to get its funding in place to host the British Grand Prix next year, it may have to share the race with its current home, Silverstone.
It would not be the first time that the British Grand Prix has alternated between two circuits. Hosting rights for the race rotated annually between Silverstone and Brands Hatch for over 20 years until 1986.
And it could be the only way in which Donington is able to host the race since the Leicestershire venue needs to find £80 million to make modifications so that F1 races can take place on the 86-year-old circuit.
"If they don't do it, Donington will get together with Silverstone," Ecclestone (pictured below) told The Independent on Sunday. He added that Silverstone itself also needs to make improvements in order to host F1 next year. "If Silverstone do all the things they promised me they are going to do, we are going to be at Silverstone."
Donington has only ever hosted one F1 race, in 1993, and without the £80m it will not be able to make changes to the circuit which are crucial to getting a grand prix licence. Ecclestone has given Donington a September deadline to get the development on track but the economic downturn and the turmoil in the sport have made it an uphill struggle.
The race promoter, Donington Ventures Leisure (DVL), is majority-owned by the software entrepreneur Simon Gillett and his business partner, property developer Paul White, and they plan to raise the required funding from corporate guests buying annual high-level hospitality passes. In the current economic climate this plan seems fanciful.
In recent weeks there have also been threats that F1's top teams may leave the sport due to a dispute over next year's regulations. This uncertainty makes it even less likely that DVL will gather enough bookings to fund its development.
Resources are running short with the company's latest accounts showing that it had just £28 in the bank at the end of 2007. Even if it does get its funding in place by September it may still need to alternate with Silverstone. A spokeswoman for DVL said: "We will discuss financial issues when we are ready and have nothing further to comment at this time."
Most grands prix break even and if they make a loss it is covered by the government of the host country. However, Britain's is the only race which has no state support and so if DVL starts its F1 contract with an £80m loss, it could struggle to cover it. If it has a one-year breather between races, it can host events which are more profitable than F1 in order to build up a reserve of funding.
However, one obstacle standing in the way of rotating the circuits is Damon Hill, president of the British Racing Drivers' Club, which owns Silverstone. "I am not in favour of rotating it. I think it's an insult," he said. "It's another absurd step to try and squeeze as much profit and as much benefit for the commercial rights-holder. It's not a long-term strategy."
Hill added: "I'm in favour of the contract for the British Grand Prix being negotiated with Silverstone because I don't believe that the Donington project is viable."
However, even if Hill agrees to the race rotating with Donington, it may still not secure the future of the British Grand Prix. The German Grand Prix has been alternating between Hockenheim and the Nürburgring since 2007 but the race is now in jeopardy. This is because it is not breaking even but instead making losses which are tough to cover even with the benefit of a one-year breather.
Ticket sales for the race at Hockenheim have slumped 37 per cent since 2002 and last year it made a €5.3m (£4.6m) loss. Hockenheim officials are struggling to find the resources needed to hold the 2010 race, with the circuit's local city and state officials refusing to bankroll it.
"Without grants from the state there will be no more Formula One in Hockenheim," said the circuit's managing director, Karl-Josef Schmidt, in December last year.
Ecclestone and the German minister Günther Oettinger, premier of the southern state of Baden-Württemberg where Hockenheim is located, were scheduled to meet last weekend to try to renegotiate the race fee for the track, which currently stands at $21.5m (£13.1m). However, these talks were cancelled after Ecclestone made his controversial comments about Adolf Hitler.
With doubts about the future of the race in Hockenheim, there were hopes that the Nürburgring could replace it. But even these have hit the wall. "Definitely we are not available for next year, we are planning only for 2011," says Walter Kafitz, managing director of the Nürburgring, adding that only a reduction in the race fee would change his stance. "Bernie could manage it [by reducing the fee], but I cannot imagine that he is willing to accept my wish."
Schmidt ominously adds that soon only countries in the Middle East will be able to afford F1 unless the race fees decrease: "Formula One will disappear not just from Hockenheim but from Germany as a whole," he said. "Then it will only be run in Arab countries."
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