James Moore: Silverstone deal is a massive gamble in a stalled economy
Tuesday 08 December 2009
Presumably, the British Racing Drivers Club knows something about this country's petrolheads that we don't. Because in economic terms, it's hard to see how it could otherwise sign up to the deal agreed with Formula One that will keep the British Grand Prix at Silverstone for 17 years.
Twelve million quid up front is steep enough, given what went before. But then there's the escalator. Five per cent a year for nearly a decade, not to mention a requirement to spend squillions on the track and the facilities to bring them up to speed with the likes of Abu Dhabi or China.
Where's that going to come from? At £100 now, a three-day ticket is not exactly cheap and even though fans of the British Grand Prix are a devoted bunch, if that is hiked too much some will inevitably stay home and watch on TV with a bottle of fizz bought with the money saved. Corporate hospitality budgets remain tight (as does advertising) so its tough to see that picking up the slack.
As for growth of five per cent a year... is it worth saying now that inflation and economic growth are currently all but non-existent? And likely to be slow for years to come? Of course, this sort of deal is no problem for likes of China and Abu Dhabi. Having the F1 circus in town is seen as an affirmation of their newly acquired global clout. Any shortfall in the numbers can be met from Government coffers. Things are different here, where the BRDC has to wash its own face without recourse to the taxpayer's largesse. That's been reserved for our banking industry.
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