Bernie successful?

[Derek Smith]

There has been a poll of the BRDC at Silverstone. Full details on pitpass.com, news page.

The three questions were:

Are you happy with the way the Board have conducted the Grand Prix Contract and planning applications?

Should the board resign over the loss of the Grand Prix (and some other detail)?

Should the Board be asked to resign if they fail to do so themselves?

Q1: 96.77% said no.

Q2: 96.10% said yes.

Q3: 95.45% said yes.

As overwhelming responses go, this is near the top.

So it looks as if the board which gave Bernie all the aggravation is about to be replaced. I wonder if Bernie might return if (when?) Donnington fail to get up and running.

[FourWheelDrift]

Judging by who they all are I'm sure there are/were many conflicts, they wouldn't all go and I'm sure any blame can't be levied at them all.

President in Chief
H.R.H. The Duke of Kent K.G.

President
Damon Hill OBE

Chairman
Robert Brooks

Vice Presidents
Sir Jack Brabham OBE
Martin Brundle
Ron Dennis CBE
Sir Stirling Moss OBE
Howden Ganley
Paddy Hopkirk
Tim Parnell
John Surtees MBE
Sir Jackie Stewart OBE
Henry Taylor
Sir Frank Williams CBE

Directors
Robert Brooks
Ross Hyett
Jackie Oliver
Stuart Rolt
Ian Titchmarsh
Derek Warwick
Nick Whale

BRDC Club Secretary
Stuart Pringle

Company Secretary
Gerald Couldrake

[Scuffers]

seems a bit odd to me....

I wonder how many people as a % actually answered the questions?

anyway, nobody in their right minds is going to commit the BRDC to something that will bankrupt them, assides the obvious, it's actually technically illegal...

[custardtart]

Aren't they all trustees, this makes it difficult for them to be creative when responding to Bernies demands.

[skwdenyer]

custardtart said:

Aren't they all trustees, this makes it difficult for them to be creative when responding to Bernies demands.

Why would they be trustees in this context? BRDC is not a charity AFAIK.

Besides, the Grand Prix meeting is organised and promoted by Silverstone Circuits Limited. It is SCL who would have negotiated with FOA over the Grand Prix. There would be no "trusteeship" issues there.

I appreciate some/all of them may be trustees of the BRDC Ben' Fund, but the fund's behaviour isn't at issue here.

[custardtart]

skwdenyer said:

custardtart said:

Aren't they all trustees, this makes it difficult for them to be creative when responding to Bernies demands.

Why would they be trustees in this context? BRDC is not a charity AFAIK.

Besides, the Grand Prix meeting is organised and promoted by Silverstone Circuits Limited. It is SCL who would have negotiated with FOA over the Grand Prix. There would be no "trusteeship" issues there.

I appreciate some/all of them may be trustees of the BRDC Ben' Fund, but the fund's behaviour isn't at issue here.

There was an interview during the British GP weekend that had Damon Hill saying the BRDC position as trustees makes it difficult for them to take the financial risks associated with the deal Bernie was prepared to accept. I don't know about who is or who isn't involved in negotiations just that's what Damon Hill said live on TV.

[Piglet]

The BRDC used to be (and I imagine still is) a Company Limited by Guarantee rather than a Limited company. That makes their situation very different to a commercial company. They have a stated objective of (something a long the lines of) "protecting and promoting grass roots motorsport". I imagine that they are unable to act in any way which prejudices or may prejudice that aim.

SCL may be the operating company but the BRDC hold the purse strings and hold the top level contract.

I loved the way the questions were so "open" and didn't lead the respondants one way or the other...

[profstoff]

Piglet said:

I loved the way the questions were so "open" and didn't lead the respondants one way or the other...

Agreed, not a very scientific survey and I would imagine before the board resigned they would commission their own survey which would yield completely different results.

Derek doesn't actually mention who commissioned this poll, whether these were the only questions asked, what percentage of the members responded, indeed, who actually was polled.

This survey alone is not justification for the board being replaced.

Anyway, the move from Silverstone is a good thing, it's the worst place in the world for watching motor racing.

[flemke]

skwdenyer said:

custardtart said:

Aren't they all trustees, this makes it difficult for them to be creative when responding to Bernies demands.

Why would they be trustees in this context? BRDC is not a charity AFAIK.

Besides, the Grand Prix meeting is organised and promoted by Silverstone Circuits Limited. It is SCL who would have negotiated with FOA over the Grand Prix. There would be no "trusteeship" issues there.

I appreciate some/all of them may be trustees of the BRDC Ben' Fund, but the fund's behaviour isn't at issue here.

They could consider themselves to be "trustees" with a small "t". That is, that they are custodians of a legacy, which they have a moral obligation to sustain and pass on to future generations.

[skwdenyer]

Piglet said:

The BRDC used to be (and I imagine still is) a Company Limited by Guarantee rather than a Limited company. That makes their situation very different to a commercial company. They have a stated objective of (something a long the lines of) "protecting and promoting grass roots motorsport". I imagine that they are unable to act in any way which prejudices or may prejudice that aim.

Indeed, BRDC Ltd is a company Limited by Guarantee. I don't have a copy of its Articles of Association (Memorandums were, in effect, abolished by the Companies Act 2006), but I have reference to BRDC Ltd's objects from the Competition Commission enquiry into the tie-up between Octagon and BRDC a few years ago. Although they may have changed, at the time their "main objects are to provide a members’ club and promote British motor sport."

At the time of the Octagon tie-up, when Octagon signed a long lease on Silverstone, BRDC waived some of the contractual rent in return for circuit upgrade investment by Octagon. Also, interestingly, FOA also waived some of their fees in return likewise, which may have something to do with BE's frustrations...

Piglet said:

SCL may be the operating company but the BRDC hold the purse strings and hold the top level contract.

Well, a bit of history. In 1999, BRDC rejected BE's "offer" to double the annual fee for holding the GP (to £7.5m pa, allegedly). BRDC believed BE couldn't go anywhere else, since only Silverstone was FIA licenced for F1.

BE simply went and signed a promoter contract with Nicola Foulston at Brands Hatch Leisure (BHL) signed a contract with FOA to replace BRDC as promoter of the British Grand Prix up to and including 2007.

BHL initially tried to buy Silverstone from BRDC. That approach was rebuffed.

BHL then applied for planning permission to extend Brands Hatch. The planning application was "called in" by the Secretary of State, and it was stated that a public enquiry would be called to decide the issue. This would have taken too long to allow BHL to fulfill their contract with FOA.

In the meantime, Octagon motorsports had been founded and paid £120m to buy BHL (whose profits were only £7m/year - it was the GP they fancied).

After reviewing their options, Octagon then reached an agreement with BRDC, under which Octagon was granted a 15-year lease of the Silverstone circuit and took over the operation of the circuit from BRDC. By this time, BRDC had become, ah-hem, rather more profit-motivated under JYS, so the terms were quite strict.

Octagon agreed to carry out an investment programme costing up to US$60 million to upgrade Silverstone. It was agreed, however, that BRDC and FOA would each contribute $20 million to the cost: BRDC through a reduction in rent under the lease and FOA through a reduction in the fees which Octagon had agreed to pay for the right to promote the British Grand Prix. FOA also agreed to extend Octagon’s contract to promote the race, previously due to run from 2002 to 2007, to 2010.

Octagon was owned by Interpublic of the USA, who fronted the money - a lot of money. That includes the £120m it paid for Brands Hatch Leisure, the £67m it agreed to pay the BRDC as rent for Silverstone over a period of 15 years, and the reported £75m charged by Ecclestone for the right to hold the grand prix until 2010.

Unfortunately Octagon over-estimated what they could do in terms of circuit improvements with the budgets they had. By 2002 they'd spent - according to BE - about £17m and not really put a dent in the project. The original improvement plans - promised to BE as a part of the deal to get the rights to the race - included building a new section of track and a new pits and paddock complex at the opposite end of the circuit.

Meanwhile there was a post-2001 global downturn in the advertising industry - Interpublic's core business - and Octagon was put under huge pressure to make money and concentrate on doing sponsorship deals - and to charge more for track time. Whilst BRDC had, effectively, subsidised access to Silverstone to smaller clubs by running the GP, Octagon had no such luxury. Even the VSCC, who had lent BRDC some of the money to buy the freehold to Silverstone in 1972, had the screws turned on them for access.

By 2003 everything was in meltdown. Octagon had become Brands Hatch Circuits Ltd, their other circuits were up for sale, and they were trying to get BRDC to stump up cash to do what they had contracted to do in the first place. There were a lot of political shennanigans, complete with MM (who else) wading in to say that the BRDC were being a bit greedy demanding to be paid the rent they were due. BHCL wanted out (at no cost to themselves), Bernie offered them a way to do it which, broadly, involved him picking up Silverstone for - more or less - nothing. Government money was found by BE, but the BRDC rejected it! After a lot of give-and-take, BHCL's situation worsened. Ultimately the BHCL contract was ditched by FOA/FOM. Result - no British GP promoter again!

Note that the only people to "win" so far out of all of this were Nicola Foulston (sold BHL for £120m, banked £50m profit, retired to Switzerland aged 33) and BRDC who had a couple of years' (reduced) rent from BHL/Octagon/BHCL. Oh and BE, of course

In 2004, BRDC made an offer themselves to promote the GP for 2005-7. From having a guaranteed rent agreement and guaranteed circuit upgrades, they ended up having to front the entire commercial risk of running the GP. They hadn't wanted it, but nobody else seemed willing to step up to the plate. At the time the BRDC said the offer had been made on terms that did not create a profit, and carry inherent commercial risk, for the BRDC. However it was made in the interests of maintaining a British GP.

I'm sorry if this is a long-winded way of getting to the point, which is that the BRDC have previously been quite capable of signing-up to deals which carry a lot of commercial risk for them. For them - or others - to attempt to say this time around that they are unable to make such deals because of the status of the BRDC is, err, rather nonsensical.

What may have been true is that the BRDC didn't want to follow in the footsteps of BHL/Octagon/BHCL and sign up to a contract which was suicidal for them. That would be reasonable.

Furthermore, I suspect they were a bit fed up with BE. Silverstone should have been upgraded by Octagon. It was - a little bit - but not as planned. BRDC only had 2005-7 on their original contract - far too little time to make it worth dumping $40m into the circuit. BE then drip-fed them contract extension, but again not enough to make the investment worthwhile. Apparently there was a new contract offered by BE with - of course - yet another fee hike in it.

Whether BRDC thought - as they had in 1999 - that they were the only game in town and therefore had a stronger negotiating position than they really did, we'll probably never know.

But I'd repeat, to suddenly start to talk about "trusteeship" and other nebulous concepts when the immediate history contradicts that position is decidedly otiose.

[DeadMeat_UK]

FourWheelDrift said:

Judging by who they all are I'm sure there are/were many conflicts, they wouldn't all go and I'm sure any blame can't be levied at them all.

President in Chief
H.R.H. The Duke of Kent K.G.

President
Damon Hill OBE

Chairman
Robert Brooks

Vice Presidents
Sir Jack Brabham OBE
Martin Brundle
Ron Dennis CBE
Sir Stirling Moss OBE
Howden Ganley
Paddy Hopkirk
Tim Parnell
John Surtees MBE
Sir Jackie Stewart OBE
Henry Taylor
Sir Frank Williams CBE

Directors
Robert Brooks
Ross Hyett
Jackie Oliver
Stuart Rolt
Ian Titchmarsh
Derek Warwick
Nick Whale

BRDC Club Secretary
Stuart Pringle

Company Secretary
Gerald Couldrake

If that impressive list of names couldn't achieve anything, I doubt any group could have given the same set of circumstances and motives.

[rude-boy]

skwdenyer said:

a lot

Ultimately you will note that at no point in the above carefully detailed history of recent events surrounding the BGP is there any situation/deal or scenario where the BRDC put/is putting the ultimate ownership of Silverstone at risk.

What was proposed by BE would have put this asset at risk.

Edited by rude-boy on Monday 4th August 13:29

[skwdenyer]

rude-boy said:

skwdenyer said:

a lot

Ultimately you will note that at no point in the above carefully detailed history of recent events surrounding the BGP is there any situation/deal or scenario where the BRDC put/is putting the ultimate ownership of Silverstone at risk.

What was proposed by BE would have put this asset at risk.

Edited by rude-boy on Monday 4th August 13:29

AFAIK, the deal proposed by BRDC in 2004 could have done precisely that. There was no up-side for BRDC in the 2005-7 contract (and possibly not now, either), only a large down-side commercial risk. If the BRDC had lost a lot of money during that period, absent any other reserves, its assets would have been at risk.

How is the situation different this time? Personally I'd like to think that the big difference would be that they wouldn't want to trust BE on something which might have risked the asset, but that isn't quite the point

[rude-boy]

Because whilst there was an inherent commercial risk the exposure was very much a known quantity, the length of time the exposure would be experienced for was much shorter than the new contract being negotiated was, and it was know that there were sufficient funds to deal with this short term risk.

It should also be considered (BE’s musings aside) that at the time of the deal Silverstone was almost totally up to date in terms of facilities and track upgrades.

The deal which was on the table this year would have bet more than the BRDC could afford to lose.

[skwdenyer]

rude-boy said:

Because whilst there was an inherent commercial risk the exposure was very much a known quantity, the length of time the exposure would be experienced for was much shorter than the new contract being negotiated was, and it was know that there were sufficient funds to deal with this short term risk.

It should also be considered (BE’s musings aside) that at the time of the deal Silverstone was almost totally up to date in terms of facilities and track upgrades.

The deal which was on the table this year would have bet more than the BRDC could afford to lose.

Thank you. OK, that makes sense, except for the part I've emphasised above.

The reson the BRDC did the deal in 2004 was because Octagon/BHCL had run out of money, had not put in the promised investment, and had managed to negotiate a get-out from their contract with BE.

It was supposed to be $60m of investment at 1999 prices, but by 2003 it had amounted to (even at the most optimistic assessments) just £17m. That rankled everybody because BRDC had reduced the rent to put in $20m over the life of the deal (up to 2010), and FOA/FOM and reduced the fees it charged to put in another $20m (over the same period). Octagon had to find $20m of cash (plus the other $40m they were already committed to spending) over the 8 year deal. By 2003 they couldn't afford to keep spending.

The 2004 deal was a compromise in that regard - no, it didn't deliver the Silverstone that all parties had originally envisaged in 1999, but it did at least remove the need for very major investment by BRDC.

Back to the point, ok, so BRDC didn't feel that this risk was worth it, whereas the last risk was acceptable. That's fine. But to dress that up as being something different (to talk about "trusteeship" rather than just saying this risk is bigger than the last one and we don't think it is worth it) seems a little unfortunate.

Out of interest, did BRDC seek outside investment in Silverstone?

[Piglet]

Getting away with something once, isn't a good reason for doing it a second time.

[skwdenyer]

Piglet said:

Getting away with something once, isn't a good reason for doing it a second time.

Sorry, maybe I haven't been clear! I'm not suggesting I know better than the BRDC whether the risk was worth it. I'm just saying that I'd prefer the BRDC to say that - the risk wasn't commercially attractive - rather than (it seems) trying to cast their position in some other light.

At the time of the 2003/4 negotiations, Mosley (amongst others) suggested that if the BRDC didn't want to commit to a GP at Silverstone, that they should sell the track to somebody who did. That was a bit daft and short-sighted, but an upgrade of Donnington to FIA F1 standards seems like a good thing for the UK (if not, err, for Donnington itself as a track).

My preferred option would be for one promoter (not a track-owner), and alternating the British GP between Donnington and Silverstone. Otherwise I don't see what incentive (financial or otherwise) the BRDC have for upgrading Silverstone, at which point we're back to just one viable circuit. That IMHO would not be good for the UK.

[rude-boy]

Personally I would say that only having one F1 spec track was all we need. The last thing I want to see is 14 acres of run off at Clearways for example. I am also uncertain as to the plans put forward for Donnington but will reserve judgement on this for now.

Silverstone is about the only track in the UK which isn’t under constant life threatening fire from imported locals/short sighted planners, to sell it would be a very last resort. Don’t forget the only reason the BRDC moved there from their original home was because of WWII.

My comments on the track being ‘upto date’ at the time of the last deal were centred around the required facilities, not the desired facilities. The plans were grand but, as you say the money was not there, and the proposed buildings and pit/paddock area, which remain un built, would have been nothing more than jam.

I hear your complaint that they are ‘hiding’ behind a ‘legal’ term which does not reflect their true legal position but iirc they are correct in that I think they are under a duty not to sell the freehold without a full vote of the members, and likewise not to charge, or otherwise encumber the asset. They do have an obligation, as trustees, not to recklessly endanger the clubs assets. The 'old' deal would not have risked the club's assets to the point where the track would have needed to be sold even in the worst case.

To put it another way if you have a total equity of £250k you could afford to sell everything and do a season in F Renault in the hope that you will be picked up for a free drive in F3, then GP2, then F1. I’d rate your chances of success at doing that to be far higher than of the BRDC breaking even, let alone making any profit, from the deal that was on the table.

The BRDC are under no obligation to ensure the survival of the BGP, merely to promote the interests of British Racing Drivers.

At this point I should also bow out of this debate sadly and look forward to reading the comments of others who might be closer the pulse than I.

[flemke]

rude-boy said:

Personally I would say that only having one F1 spec track was all we need. The last thing I want to see is 14 acres of run off at Clearways for example. I am also uncertain as to the plans put forward for Donnington but will reserve judgement on this for now.

Well put.
Some things are natural monopolies. London doesn't need two separate Underground systems. Similarly, we don't need two circuits competing for the British GP - what a colossal waste of money and human effort. It's great to have many circuits available to us, but, as you allude, the uniquely onerous FIA/FOM F1 requirements are hideously expensive, often unnecessary, and sometimes even spoil the circuit. Just look at the Nordschleife's awful current adulteration, which has been imposed by Mosley's bullies even without the excuse of Formula One usage.
Who ultimately will pay for Donington's huge new pit/media complex? The fans, of course, although they won't benefit from them one iota.

[anonymous-user]

You are talking as though the BRDC didn't put in a proper bid skwdenyer. They did put in a proper bid, it's just that Bernie got a better bid for him and his business interests from Donington. Whether that will be a better bid for the BGP and it's future is yet to be seen.