Yahoo Finance Silverstone to cash in on axing British Grand Prix
The owners of Silverstone are on track to make a £46.9m profit after giving the red light to the British Grand Prix seven years early, according to the latest company filings.
The British GP, launched in 1950, is F1’s oldest race. For the past 31 years it has been held at Silverstone, which is owned by the British Racing Drivers Club (BRDC), a group of 850 motorsport luminaries including Nigel Mansell and Lewis Hamilton.
In July last year it abruptly put the brakes on the race by triggering a break clause in its contract and announced that the Northants venue would drop the race after 2019 “because it is not financially viable”. The British GP has to rely on ticket sales alone to cover the running costs as well as the £16.2m hosting fee. This fuelled combined net losses of £51.7m for the BRDC over the five years to Dec 31 2016.
It explains why the BRDC announced last year that “while we would hate to lose the British GP, Silverstone will have a bright future without it”. It has now come to light how bright this will be. The BRDC’s accounts state that “approximately half of annual revenue continues to be generated by a single event, the British GP”.
This came to £27.5m in 2016 with the remainder generated by amateur events and other races. They will be retained and, unlike F1, are highly profitable. The BRDC announcement revealed that “by running the British GP we sustained net losses of £2.8m in 2015 and £4.8m in 2016”.
This means that the cost of running the race came to £4.8m more than the £27.5m that it made in revenue. It gives the British GP costs of £32.3m, with the BRDC’s non-F1 costs coming to £20.8m, as it had total expenses of £53.1m.
After dropping the Grand Prix, Silverstone will be left with £27.5m of revenue from events which are not connected to F1. Deducting the £20.8m of costs that come with them yields a £6.7m operating profit, which gives a total of £46.9m over the seven years which were remaining on the BRDC’s F1 contract.
