After weeks of speculation, Silverstone has activated the break clause on their current contract with F1 owners Liberty Media, meaning that the 2019 British Grand Prix is set to be the last under the current guise.
The British Racing Drivers’ Club – who own the Silverstone venue – have been backed into a corner by the fiscal unsustainability of the current contract, which was penned back in 2009.
The terms agreed included a five percent escalator fee which has facilitated an annual increase in the overall cost of the race. With the event costing a mere £11.5 million in 2010, this number has risen to a suspected £17 million fee to host this season’s race.
BRDC Chairman, John Grant, stated: “This decision has been taken because it is not financially viable for us to deliver the British Grand Prix under the terms of our current contract. We sustained losses of £2.8m in 2015 and £4.8m in 2016, and we expect to lose a similar amount this year.
“We have reached the tipping point where we can no longer let our passion for the sport rule our heads. It would not only risk the very future of Silverstone and the BRDC, but also the British motorsport community that depends on us.
“However, I want to be clear that although we have now activated the break clause, we are fully supportive of the changes the Liberty team are making to improve the F1 experience.
“Our hope is that an agreement can still be reached so that we can ensure a sustainable and financially viable future for the British Grand Prix at Silverstone for many years to come.”
The news breaks on a day in which the sport announced an unprecedented pre-race event to be held on the streets of London on Wednesday, featuring demonstration runs and with all ten teams in attendance.
It is evident that F1’s new owners recognise the significance of the British GP and the continued appeal of the sport in its spiritual heartland.
However, renegotiations will be far from straightforward. Liberty cannot simply slash the price for Silverstone, with the prospect of other venues triggering similar break causes in order to secure themselves more profitable arrangements.
Unlike when Liberty sealed an extension of the Canadian Grand Prix earlier this year, it is highly unlikely that government funding can be thrown onto the negotiating table in Silverstone’s case.
It is unquestionably an uncomfortable situation for all parties, not least the fans who will descend on both London and Silverstone pondering the prospect of their favourite race disappearing from the calendar after 2019.
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