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Silverstone to opt out of hosting GP

Silverstone to opt out of hosting GP

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Discussion

Derek Smith

Original Poster:

26,880 posts

162 months

Thursday 5th January
quotequote all
http://www.itv.com/news/2017-01-05/future-of-briti...

It would seem that the BRDCC are considering cancelling the British GP, starting 2019.

It is concern about the cost, the circuit losing £2m in a good year.

Or, of course, it could be just a ploy to get CVC to drop the price. There is a rumour that a number of other European countries are also considering opting out. If this is a joint action then I reckon there’s a good chance of it succeeding. If it is solely Silverstone then no.

There was a suggested move to concentrate more on corporate events, with hotels and such. It has a helicopter pad.

It is a shame, something of a tragedy.

Edited by Derek Smith on Thursday 5th January 18:12

Derek Smith

Original Poster:

26,880 posts

162 months

Thursday 5th January
quotequote all
It's the lead story on ITN national news.


FourWheelDrift

70,000 posts

198 months

Thursday 5th January
quotequote all
Derek Smith said:
Or, of course, it could be just a ploy to get CVC to drop the price.
Liberty Media.

Eric Mc

91,862 posts

179 months

Thursday 5th January
quotequote all
It's about time the circuits started standing up to Bernie.

Is this the first time Silverstone has warned Bernie rather than Bernie warning them?

rdjohn

2,186 posts

109 months

Thursday 5th January
quotequote all
I think any business that lost at least £2million every year hosting a single event that represented a huge proportion of turnover, would be stupid to continue. Just because it's the BRDC and Silverstone does not really get around that simple fact.

Every aspect of the financing of F1 is way too expensive. TV rights costs that are unaffordable to a very wide audience, tickets at circuits way too expensive for the privilege of sitting on a plank watching a diamond screen for most of the time, too expensive hosting fees and escalators for circuits generally. There should be at least 3 races in USA, but US citizens expect to pay up to $100 to watch a big event.

Bloated engineering and expenditure amongst teams, brought about by a clueless regulator. FRICS was banned, but the top teams have been cheating the spirit of the ban since 2014. Why not allow fully hydraulic suspension so it's as cheap for Manor to use as Mercedes.

Stupidly expensive power units. Tyres that wear out and so require teams to develop stupid systems to have the right temperature as they leave the garage, which they then dump to get a decent race pressure. There are so many blind alleys that are developed only for F1 and non of which is focused on making a better spectacle for less-informed viewer to watch and enjoy.

Sadly I do not see Liberty making a huge impact any time soon. Sure, they have mentioned a budget cap and the need to retain European events, but Bernie's Machiavellian contracts will probably exist until no one can afford to watch or visit a race.

I am no expert but I suspect that most teanagers (potentially future fans) expect everything to be free and available at a time of their choosing. 90 mins is also possibly way longer than their media driven attention span permits, so the format of races needs to be reconsidered.

Apart from that, everything is just dandy and I (65-years old) can't wait for the start of the season.
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jbudgie

3,339 posts

126 months

Thursday 5th January
quotequote all
Eric Mc said:
It's about time the circuits started standing up to Bernie.
Agreed.

Daz68

2,756 posts

124 months

Thursday 5th January
quotequote all
Derek Smith said:
http://www.itv.com/news/2017-01-05/future-of-briti...

It would seem that the BRDCC are considering cancelling the British GP, starting 2019.

It is concern about the cost, the circuit losing £2m in a good year.

Or, of course, it could be just a ploy to get CVC to drop the price. There is a rumour that a number of other European countries are also considering opting out. If this is a joint action then I reckon there’s a good chance of it succeeding. If it is solely Silverstone then no.

There was a suggested move to concentrate more on corporate events, with hotels and such. It has a helicopter pad.

It is a shame, something of a tragedy.

Edited by Derek Smith on Thursday 5th January 18:12
A real shame but not surprising really. Money and greed has destroyed the sport and I think the younger generation don't give a toss about F1 and certainly have no interest in paying nearly 1000.00 for 2 tickets, hotel and beverages to spend a weekend at an old airfield.

Derek Smith

Original Poster:

26,880 posts

162 months

Thursday 5th January
quotequote all
Ecclestone was contacted by ITN and he said that he'd use another British circuit. That would mean reducing the price. There's no way Brands or Donington could afford the price as they'd never get 150,000 plus to go. Brands would lead to traffic queuing back onto the M25 for hours. I went there in the late 80s and people were parking on the motorway as far back as the junction with the M26.

Donington's got the M1, and I'm sure that will cope without problems. Mind you, there's the airport.

Still, what does he care?


ukaskew

2,768 posts

135 months

Thursday 5th January
quotequote all
They'd never go to Brands now, completely impractical. Donington is the only vaguely suitable circuit that could be upgraded.

Vaud

22,788 posts

69 months

Thursday 5th January
quotequote all
rdjohn said:
Every aspect of the financing of F1 is way too expensive.
Aside from Monaco.

rubystone

10,539 posts

173 months

Thursday 5th January
quotequote all
Typical ill thought out bks from BCE. Is he going to pay for the upgrades to Donington? The actions Liberty Mutual take next year will show us the path they intend to take. FOM is running out of doors to knock on now. What's the next country in the queue to host a GP? Is there still a queue? This ought to be the last season that Ecclestone will be ringmaster. I get the feeling he isn't Chase's favourite guy.

Derek Smith

Original Poster:

26,880 posts

162 months

Thursday 5th January
quotequote all
rdjohn said:
Apart from that, everything is just dandy and I (65-years old) can't wait for the start of the season.
For years I thought F1 was the only game in town. The (deliberate?) lack of support in the days of the previous bloke in charge of the FIA for other forumlae meant that sports cars and rallying lacked the press support. For a while in the late 80s I went to a few sports car events, and thoroughly enjoyed them, but they seemed to stagnate. I subscribed to dailysportscar.com and that got me going but a rainy day for the 6 hrs one year at Silverstone where the organisers didn't appear to want to run it - not even opening the covered stands - meant I didn't go again for a few years.

This year I might be off to Le Mans, I'm going to Silverstone for the WEC on 16 April http://www.silverstone.co.uk/events/2017-fia-world... and the Classic, which has had a date change I think, to 30 July.

So no GP for me this year. I thought there was a rally cross event there but it would appear I am wrong.

But, twisted and irritating though it is, I'll follow F1 through the season, on Ch 4 and Now!


StevieBee

5,502 posts

169 months

Thursday 5th January
quotequote all
Some sums:

Let's say the GP brings in 200,000 people over three days, each spending - say - an average of £180 on tickets. That yields £36m in income.

I recall reading somewhere that hospitality packages and the like bring in around £15m

Concessions? - haven;t a clue but I'd peg this at around £2m

Event sponsorship will probably be in the region of £2m (probably a lot higher)

And there's probably around another £2m of beneficial add on such as cross selling other events and the like.

So, very conservatively you're looking at total event revenue of around £57m - £60m.

I'm not saying that the fee to F1 is right. But the surely BRDC would have known what the fees would be when they signed up and any other business would have done their forecasts, risks assessments, etc and determined whether what was on the table was affordable. If it wasn't, they would have either negotiated more favourable rates or not signed the deal.

But the BRDC is not a business, it's a club of racing drivers for which I have the greatest of respect and admiration. But, with a potential income of £60m even taking into account all the other costs such as traffic management, security, event marketing, etc.. £60m should be sufficient to cover all costs and return a decent profit.

There exists a problem across the whole of motorsport in that most of the organisers deem it to be an endeavour for the sole benefit of participants which is why highly entertaining club meetings on lovely summer days are regularly spectated by no more than a 100 or so people and why the BRDC cannot make the GP pay.

But as I say, this does not excuse the fact that the prices the F1 promoters charge is too high for what you get. But I don't think it is the primary reason why the British GP is under threat.







rubystone

10,539 posts

173 months

Friday 6th January
quotequote all
The only major income the circuit gets is from ticket sales. The promoter gets the rest. No advertising revenue, no Paddock Club revenue. The ancillary expenses to run the event are chunky. That's why circuits are turning away from hosting the event, it's a break even game at best. Think about that next time you bh about your day out costing you £250. It's FOM's fault, not the circuit's.

ukaskew

2,768 posts

135 months

Friday 6th January
quotequote all
StevieBee said:
So, very conservatively you're looking at total event revenue of around £57m - £60m.

There exists a problem across the whole of motorsport in that most of the organisers deem it to be an endeavour for the sole benefit of participants which is why highly entertaining club meetings on lovely summer days are regularly spectated by no more than a 100 or so people and why the BRDC cannot make the GP pay.
I think your conservative estimate is probably way too high, the circuit is pretty much limited to ticket/car park/camping income, almost everything else is tied up by FOM. 2015 is the only year the event itself turned a profit. The circuit fee thing is fundamentally broken if the most expensive and well attended race is struggling, and many races require government support.

The issue of spectators is an interesting one, I think only Castle Combe (without a single 'A' event such as BTCC, BSB etc) and one or two others have made the spectator income model actually work for club racing. Silverstone has its hands tied behind its back in this respect as fundamentally it's a terrible venue for the average punter, ironically made worse by the F1 improvements.

I remember one racing club say that for circuits like Silverstone they pay a flat rate for the circuit for the day and then any spectator income is money in the bank for them. Despite that, with limited admin/marketing staff it simply wasn't worth trying to attract paying punters, entry fees alone sustained their business. The Silverstone 24hr is another interesting case, once upon a time Britcar marketed it quite hard to the general public and put quite a bit on for them, it's telling that the race is now successfully run by a company that specialised in 24hr events, and spectator facilities or promotion are a token effort at best.

Vaud

22,788 posts

69 months

Friday 6th January
quotequote all
I'm guessing that it is the built in escalator that kills the model. 5% YoY fee increase to FOM IIRC. So you can start profitable, but there is only so much you can charge for tickets...

bobbo89

1,628 posts

59 months

Friday 6th January
quotequote all
Derek Smith said:
Donington's got the M1, and I'm sure that will cope without problems. Mind you, there's the airport.
If certain airlines cottoned on and offered the right flights you could easily fly there in the morning, walk to the circuit then catch your flight home in the afternoon. Be cheaper than petrol, parking and a hotel!

smartypants

27,856 posts

83 months

Friday 6th January
quotequote all
There are SO many better motoring events held at Silverstone. F1 has been probably the worst motorsport experience I've ever attended. They should drop it. When you have things like the Silverstone Classic it's pretty sad that Silverstone think they need F1 to keep the punters rolling in.




Vaud

22,788 posts

69 months

Friday 6th January
quotequote all
smartypants said:
There are SO many better motoring events held at Silverstone. F1 has been probably the worst motorsport experience I've ever attended. They should drop it. When you have things like the Silverstone Classic it's pretty sad that Silverstone think they need F1 to keep the punters rolling in.
I agree.

F355GTS

3,080 posts

169 months

Friday 6th January
quotequote all
StevieBee said:
Some sums:

Let's say the GP brings in 200,000 people over three days, each spending - say - an average of £180 on tickets. That yields £36m in income.

I recall reading somewhere that hospitality packages and the like bring in around £15m

Concessions? - haven;t a clue but I'd peg this at around £2m

Event sponsorship will probably be in the region of £2m (probably a lot higher)

And there's probably around another £2m of beneficial add on such as cross selling other events and the like.

So, very conservatively you're looking at total event revenue of around £57m - £60m.

I'm not saying that the fee to F1 is right. But the surely BRDC would have known what the fees would be when they signed up and any other business would have done their forecasts, risks assessments, etc and determined whether what was on the table was affordable. If it wasn't, they would have either negotiated more favourable rates or not signed the deal.

But the BRDC is not a business, it's a club of racing drivers for which I have the greatest of respect and admiration. But, with a potential income of £60m even taking into account all the other costs such as traffic management, security, event marketing, etc.. £60m should be sufficient to cover all costs and return a decent profit.

There exists a problem across the whole of motorsport in that most of the organisers deem it to be an endeavour for the sole benefit of participants which is why highly entertaining club meetings on lovely summer days are regularly spectated by no more than a 100 or so people and why the BRDC cannot make the GP pay.

But as I say, this does not excuse the fact that the prices the F1 promoters charge is too high for what you get. But I don't think it is the primary reason why the British GP is under threat.
I suspect it's more like an average of 70,000 per day spending an average of £70 so maybe around £15m of ticket sales