Silverstone, the home of British motor racing, has been sold - raising the prospect of a new business and technology park being built beside the famous circuit, The Independent has learnt.
The identity of the buyer of the Northamptonshire race track, which is home to the Formula One British Grand Prix, is unknown, but is believed to be a real estate firm.
The most recent company linked with a takeover of the track was MEPC, a property group owned by the BT pension fund. Its offer was reportedly for £40m and paves the way for a 200-acre business park to be built on the land.
Until now, Silverstone has been owned and operated by the British Racing Drivers Club (BRDC), a group which has more than 800 members including F1 stars Jenson Button and Lewis Hamilton.
For the past few years the BRDC has been trying to sell a 150-year lease on the track and 850 acres of land surrounding it in order to financially separate the club from the British Grand Prix, which comes with an annual hosting fee estimated at £14m.
The leaseholder will take over as the promoter of the race and it is understood that terms were finalised over the past 10 days. Bernie Ecclestone, boss of the F1 Group, is meeting the new investors next week in advance of a formal announcement.
A senior motorsport personality, who is a BRDC member, told The Independent: “A deal has been done on Silverstone. I don’t know who bought it and I don’t know what the terms are, but it is absolutely categoric that a deal has been done and not due to be announced until next month probably.”
According to a recent report on the F1 website Pitpass, due diligence has been done on Silverstone five times over the past few months. It quoted a BRDC member who said he would “love to see the club out of Silverstone” but hoped that it would still be able to “use it and benefit from its heritage”.
The BRDC’s masterplan for Silverstone includes construction of a new business park, a technology hub, education campus and three hotels. A spokesman for the BRDC refused to comment, while a spokesman for the MEPC said it did not comment on any transactions.
The BRDC wants to use the proceeds of the deal to pay down loans it took out from Lloyds to fund construction of a new pit and paddock complex which opened at Silverstone in 2011. The work was needed due to the age of the 3.7-mile track. It sits on the site of a former airfield and hosted the first-ever round of the F1 championship in 1950.
The new facilities were demanded by Ecclestone as a condition of the BRDC signing a 17-year British Grand Prix contract in 2009. It left the club with £26.1m of net debt in 2011, the most recent year for which accounts are available. Interest on the debt alone came to £842,000 and this contributed to the BRDC making a £4.5m net loss.
The BRDC’s members have not given consent for the board to sell Silverstone outright, which is why it embarked on granting a long-term lease.
Hosting a Grand Prix can be a poisoned chalice as circuits generally do not get any revenue from the television broadcasts or corporate hospitality and advertising hoardings during the race. Money from this goes to the F1 Group leaving the circuits with ticket sales as their sole source of income from the sport. This usually barely covers the annual hosting fee with running costs often covered by investment from governments.
The British Grand Prix gets no state subsidies so to compensate for this it has some of the highest ticket prices in F1. They started at £145 this year making them more expensive than tickets to the men’s final at Wimbledon, the Grand National and the final day of The Open.
Race organisers are forced to increase ticket prices due to an escalation clause in their contracts with Ecclestone and this boosts the British Grand Prix hosting fee by an estimated 5 per cent annually.
The race to find a new investor for Silverstone has already stalled once. It began in 2009 when the BRDC members gave permission for a lease to be granted on the land. The club then engaged accountancy firm PricewaterhouseCoopers to contact potential investors and it entered into exclusive talks with a preferred bidder. The talks fell through and in May last year the BRDC announced it had opened discussions with other parties. After four years the race is finally over.