“Highly probable” Silverstone will activate break clause in F1 contract

F1 Fanatic Round-up

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In the round-up: The promoters of the British Grand Prix say they are likely to activate the break clause in their F1 contract which will take effect after 2019.

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There were so many great entries for this weekend’s Caption Competition it took a long time to pick a winner:

“Honey, I think that red car just rear-ended us again.”
Brian (@flyinglapct)

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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71 comments on ““Highly probable” Silverstone will activate break clause in F1 contract”

  1. Calum Menzies
    3rd July 2017, 0:05

    How savage were people to Honda in that caption competition!

    Really good one to read through though. Quite a laugh.

  2. Bahaha Ron’s beeing compared to Enzo’s legacy.
    That’s British journalism at high

    1. Agreed. It’s beyond laughable.

    2. Ron Dennis as great as Enzo …. dream on, not in 10 lifetimes.

      1. Maybe one sided isn’t the world but this is no diff then any time you watch sky or anything how much they hate on Ferrari and build up Some drivers and they can do no wrong. I wish they would do their jobs and no be so negative about one group and not the other. The last week has really showed this

        1. Is it not a thing for sports journalists to be impartial?

          I’m Canadian and I know it’s considered highly disrespectful, even at international competition, for sports commentators and journalists to break neutrality. Pretty sure it’s the same attitude in the USA.

          Only example I can really give of this related to racing was in NASCAR, when Ned Jarrett called the 1993 Daytona 500. His son was winning and he openly expressed he was cheering for his son. He apologized to the other drivers in the race afterwards for breaking neutrality. I know no one cares about NASCAR but that’s really the clearest example I can remember. It’s the same with most other sports too though i’ve noticed.

          1. Yeah, but Sky UK is special. If you listen to their commentary, it’s all about Lewis. It’s ok most of the time, but not one race goes by where they break neutrality, sometimes to pretty serious extremes.
            Disclaimer: McLaren fan.

      2. Yes, similarly eccentric, but arguably not at all as toxic a character…

        1. Nigel, who are you referring to in that situation – Ron, or Enzo? Don’t forget the famous mass walkout from the team in 1961 due to bitter internal arguments between the senior management of the team and Enzo’s wife Laura, whose interference in the management of the team was greatly resented, and internal outrage over the perception that Enzo couldn’t care less about the death of von Trips in Monza that year.

    3. This is almost funny they would even suggest such a thing. The British media is crazy. Why can’t they be more objective about this stuff. Like this is out of control one sided lol

      1. @racerdude7730 what’s out of control is the suggestion that somehow Enzo is such a hallowed figure that comparing anybody else to him is blasphemy. It is a great achievement what Dennis has accomplished turning a small enterprise into a globally recognised multi-billion dollar corporation. And no, Sky F1 UK are not negative about Ferrari, but I’m willing to have my eyes opened if you have examples. They can be pro Hamilton at times, which is understandable as they cater to the British audience. Just as the Dutch do to Verstappen, the Germans do to Vettel, the Spanish to Alonso, the Italians to Ferrari and so on and so on. Just because you don’t follow F1 in those languages doesn’t meant it doesn’t happen. It certainly isn’t somehow a British phenomenon to be partisan.

        1. I think its more England are the perennial underachievers when it comes to sport, specially given its infrastructure, investment, and is one of the most developed sporting nations in the world.

          – Cricket – failed to make it out of pool play at last world cup (England invented the sport)
          – Football – failed to make it out of pool play at last world cup (England invented the sport)
          – Rugby – failed to make it out of pool play at last world cup (England invested the sport)
          – Americas Cup – so much hype, end result not much
          – Highest ranked English tennis player – 55th

          While I’d like to think there isn’t an inflated sense of self worth given the history of the country, the expectation of the typically English punter is so out of touch with reality. The media doesn’t help things, but given successes are few and far between, no matter where in the world you are, you will hear about it.

          Given the above, I can understand why the media and public do take to British success in motorsport like a rash, as cringeworthy as it can be at times.

          1. @bam-boo F1 – more world champions than any other country

            (Also, Tennis – current male world #1 seed.)

            👍

          2. Hes Scottish. Sorry, British if he wins, Scottish if he loses.

          3. Johanna Konta identifies as an English tennis player. Top 10. Does she not count?

          4. Yea fair enough. I’ve just reeled a few off the top of my head, in case you’re trying to start that argument…

          5. @bamboo but you started THIS argument…

          6. Johanna Konta was born in Sydney, last time I checked was in Australia…I don’t care under whichever flags she’s playing.

          7. I don’t think you get what I’m referring to @mysticus, but hey, thanks for the input.

          8. Well, I think you get what i was referring to @bamboo, so he thanx for the output ;)

          9. @mysticus No I don’t, and I doubt anyone else does. Lay off the Mountain Dew kiddo.

          10. OK keep ricky rolling then mate… with ego you have, i m sure Mount Everest will not cut it for you, grandpa…

        2. Duncan Snowden
          3rd July 2017, 10:51

          Well said. Given their relative achievements, I think it’s perfectly fair to compare the two men. Despite my distaste for Ferrari (not least because of this attitude among its fans), I think Enzo probably edges it given that his company has become a household word even among non-fans, but by any objective measure they’re certainly comparable.

          1. Enzo was a crazy figure that started selling cars so he could race. The things they have done with their teams i still feel are on different levels when you take the full history of their teams and what their rolls were in building them and keeping them on top. I know Enzo was gone during the MS days but its still a team he built!

        3. racerdude7730
          3rd July 2017, 19:40

          It has nothing to do with saying Enzo is a god or untouchable its more of the fact that just looking at the simple facts and history they have no business saying that Ron could ever outshine that. Its impossible and shows the crazy one sided the media over there shows.

        4. It has nothing to do with saying Enzo is a god or untouchable its more of the fact that just looking at the simple facts and history they have no business saying that Ron could ever outshine that. Its impossible and shows the crazy one sided the media over there shows.

    4. @prelvu, In the interest of balance (I’m Australian) that’s 1 journalist voicing an opinion, and not unequivocally.

  3. Alonso and Kubica – Renault 2018

    You heard it here first.

    1. @yoshif8tures Won’t happen IMO.

    2. Alonso, Kubica, Hulkenburg – Team Porsche – Le Mans 24 hours 2019

  4. Ehh…..Kubica’s junior career wasn’t anything to write home about, very average indeed…..don’t know what Alonso is talking about. Not saying Kubica wasn’t a good driver, but you can’t put him into the ”one of the best” category based off of his junior career.

    1. Old_mate_Mick
      3rd July 2017, 2:03

      Kubica did well in karting, but 6 of his 8 junior karting titles were in the Polish championship, which had no competition anywhere near his level.

      Once he got to the junior single seat categories, he won 1 out of 7 junior championships he competed in, and finished runner-up in 1. He finished outside of the top 5 in the other 5 junior championships.

      So I’m with you mate, I honestly can’t see any correlation between what Alonso’s saying, and reality. Although Alonso’s had an on-off relationship with reality for a long time now, so I’m not surprised.

      1. COTA.. nearly fell off my seat laughing at that last paragraph.

        Hold my beer Fernando!

        1. *COTD…. even..

    2. Kubica was Hamilton’s biggest competition in go karting – the order was usually like this 1. Kubica, 2. Hamilton, 3. Rosberg. heres a photo proof:
      http://4.bp.blogspot.com/-slahD9rrE84/Tl3VmAO70xI/AAAAAAAAA8o/OOda6hqR7_Q/s1600/hamilton+kubica+rosberg+young.JPG

      I remember reading a story of them racing in karting, where kubica would constantly fiddle with the carburetor on the fly in races, and Hamilton trying to keep up, tried to copy kubica and stalled it, kubica drove past the stalled car with a smile on this face.

      1. Kubica’s junior career was pretty mediocre by F1 driver standards. In the 2002 season of Formula Renault 2000 Eurocup, a rookie Hamilton started only 4 of 8 races, and yet still finished ahead of 2nd-year Kubica in the standings (who competed in all 8 races). Hamilton finished 5th while Kubica finished 7th. Hamilton outscored the entire field in the 4 races he competed in.
        In his two seasons in Formula 3 Euro Series (2003-2004), he was beaten by several top drivers in the current generation:
        In 2003, he finished 12th, behind fellow rookie Rosberg (8th).
        In 2004, he finished 7th, again behind fellow 2nd-year driver Rosberg (4th), and also behind a rookie Hamilton (5th) – who went on to dominate and win the championship the following year, winning 15 of 20 races in 2005.
        Although Vettel didn’t directly compete against Kubica in Euro F3, his results were also much stronger than Kubica’s. In 2005 he finished 5th, in 2006 he finished 2nd.
        In short: Kubica 12th -> 7th; Rosberg 8th -> 4th, Hamilton 5th -> 1st; Vettel 5th -> 2nd.
        In Kubica’s winning FR3.5 year, the competition wasn’t particularly strong. It was the inaugural season of FR3.5, so every driver was a rookie to the series. Furthermore, the only other future F1 driver who competed in the full season was Markus Winkelhock. That picture isn’t proof of anything. It’s just one of the very few where Kubica finished ahead of Hamilton that’s all.

        1. Formula Renault 2000 Eurocup and afterthat is not karting. Read before You write

          1. Doodd, Alonso didn’t confine his comment just to the karting series – he also talked about Kubica’s performance in the junior ranks of single seater race cars, so the comment by Xaerun is valid.

        2. Old_mate_Mick, given that Kubica and Alonso have been close friends for years – when Kubica had his accident, Alonso was one of the very first people to go and meet him in hospital – I suspect that it is a case of Alonso wanting to flatter a close friends of his, in much the same way as many of us will stretch the truth when talking fondly about a close friend.

          Xaerun, you could also point out that, back in the 2002 Formula Renault 2000 series, Kubica was also beaten by Klien, a man who was in his rookie season that year whilst Kubica was in his second season.

          Even lower profile drivers like José María López performed more strongly in that series than Kubica did (López was 4th, despite only competing in six of the nine races that season). Now, whilst Kubica did perform well when entered F1, if you were to show most of the people here his junior career record without telling them who it was, I doubt that many of them would be impressed by it.

  5. Volunteers or slaves ? More of Bernies legacy of sucking the blood out of F1 . Normally I would be siding with the workers, but normally they would have been conned into free work by promises of future lucrative work, in this case it is pretty clear that they volunteered to be part of an event that they wanted to be part of, (there is no mention of whether they were conned or not in what their experience would be, so?) What’s next, professional ball-boys/girls at the tennis ? forget meeting your idol and having the very best view of the very best players at work, the union (quite rightly) demands that the professional ballpersons should be re-hired.
    Would you volunteer to work with the drivers and teams ? I probably would.
    Would you volunteer to direct cars in the carpark or flip burgers behind the grandstand ? No way Jose.
    Now that journalists are all interns we get the lousy reporting we deserve.

    1. Did you read the article? It states that the roles were in customer service. I don’t think they were able to roam the Paddock and meet the drivers.

    2. Great points made there @hohum. I wholly agree, while it is probably a tough job doing the marshalling and everything around the track running, I think many racing fans would be happy to volunteer.

      But the things directly connected to someone else making money need to earn at least a meagre wage (provided you get at least some “watching time” during the weekend). And yeah, the trend with unpaid interns is also a trend towards the gutter.

    3. I agree as well. Not all of the Marshall in Aus are unpaid either. The top ones are paid and the other spots are filled by volunteers. In fact, I think the paid ones are often sent to other circuits to train their staff. Baku for instance had Aussie marshals present to train the local guys. I think the same was true for Aussie marshals at Singapore and Malaysia.

      I can tell you right now that I would jump at the chance to be an unpaid marshal at the Melbourne Grand Prix. However I looked into it and the waiting list was too long. What is not to like about getting up and close to the action and getting it for free. You get a better spot on track than anyone else and probably a few more perks to go with it.

      However being an Aussie, I follow this story a bit more closely. The problem here isn’t with marshals. The labour hire firm got people to work for free in “customer service”. i.e. directing the public and so on. They probably got no-where near the track and few if any perks. I wouldn’t volunteer to do that job ever. Heck, I wouldn’t do that job if I was paid! This oversteps the mark and is just exploitation. If it’s the Olympics, then OK, but this is F1 and there is money to pay these people.

  6. Brian (@flyinglapct)
    3rd July 2017, 1:57

    How do Silverstone’s fees compare to other circuits? I don’t understand how they would sign this agreement knowing they could not afford it in the future. Was there an additional revenue stream that is now gone? I believe they draw the largest crowds on the calendar, but that will never be enough to cover these fees.

    1. @flyinglapct The Indian GP only lasted 3 years, but the Telegraph reported last year that F1 was still seeking £41.1m from the organisers in unpaid hosting fees. So they were paying (or owing) at least £14m a year (and probably more). Apparently the 5% fee escalation is a standard term in F1 contracts.

    2. @flyinglapct I do believe at least partly this is just the BRDC using the negotiation-tactics it learned from Bernie on F1’s new owners. Publically stating you could go without a deal in order to get a better deal for you.

      1. @crammond, right, and this is their chance to get out of a contract that Bernie manoeuvred them into by first forcing them into massive debt to upgrade the track. What’s the worst that could happen? They could end up without a loss making GP. BooHoo.

        1. Yep Silverstone are in a win-win. Get a better new deal from Liberty or stop making a loss on the GP each year.

        2. @hohum Yea it really is a bad situation for Silverstone and I think it’s time they stopped running around and scraping pennies to meet the hosting fee demands. Fact is, Silverstone is, year-in, year-out, sold out to capacity crowds. Short of charging more to regular punters, what exactly are they meant to do? If you’re selling to capacity, and still the numbers don’t stack up, then the financial model is bloody broken.

          Plus they were forced to pay for major track upgrades, none of which were to the benefit of the paying spectator, who has to fork out hundreds of pounds to squash themselves shoulder to shoulder on a piece of rickety old scaffolding. Peering enviously across at the lavish pit building which can only be accessed by teams and Paddock Club members – who, it should be noted, do pay thousands to be there, but not to the circuit. That particularly lucrative revenue stream flows into the pockets of FOM.

          At some point Silverstone is going to have to stop living by the grace of philanthropic investors who spend the money purely for the joy of having a GP. It’s time for the hosting fees structure to be torn up and thrown in the bin, along with virtually everything else that parasite Ecclestone introduced.

          1. Oops, Liberty Media paid $8 billion for a company whose “business model” is based on this “bloody broken”, parasitic construct.

          2. Essentially yes. Presumably under the assumption that it could be fixed and turned into a sport which could deliver healthy profit sustainably for long into the future. But clearly that can’t happen with things as they are. Silverstone is one of the best attended races on the calendar, which regularly sells out. Yet cannot recoup the cost of the hosting fee. Given that tickets are already astronomical, what part of that seems like good business sense? It’s only good if you’re interested solely in getting as much money out of Silverstone as you can over a short period of time before the race goes bust. This is literally the business model that Ecclestone and CVC were working with. That’s what needs to be thrown away in order for F1 to actually thrive into the future.

          3. That was Bernie’s business model: slash and burn. Find a rube with dreams and promise them the moon while bleeding them dry. Then when they figure it out, move to the next one, preferably a dictator.

    3. Neil (@neilosjames)
      3rd July 2017, 8:09

      I believe the Silverstone fees are on the low side, below average anyway. I’ve read figures between £15m and £19m, rising every year by 5% I think. But even that doesn’t seem to be affordable without some form of extra financial input from somewhere (state aid or extremely generous event sponsor).

      Looks like they signed seeing two options in the future – the break clause, or a sufficiently great upturn in interest to allow them to jack ticket prices up through the roof to cover the increasing cost.

      1. Silverstone is already expensive so I doubt they would be able to increase prices much more. The real issue here is the poisonous quick win business model developed by Bernie. F1s new owners need to realise that this is the single biggest threat to the sport. People want to see good racing at good tracks and at tracks with great support. If Silverstone which is the best attended event on the calendar and one of the highest attended sporting events in the world is losing money then something is clearly very wrong. The sport needs to be realigned in a way that benefits everyone involved rather than just being a fancy, glamorous pyramid scheme. If this is not done soon then all we will be left with is anonymous, boring tracks in the middle east with empty stands and a sport on its last legs…

    4. The mid-point break clause was negotiated precisely because there was a chance the British Grand Prix might be more able to afford the race in 2010 than in 2020. From what I read, the start point was unusually low (£14.7 m) but the escalator was bigger than typical – possibly up to 10%. If the mid-point break clause was ignored, the contract would continue until 2027. If my calculations are correct, that puts the current price at £28.6 m (top end for a European round), the 2019 race (last in current contract) at £34.7 m (vaguely akin to what the Canadian or Australian Grand Prix is likely to be paying by then) and the 2027 race at £67 m (which is a little less than Baku is likely to be paying by that point).

      1. @alianora-la-canta, I don’t know where you have heard those figures, but the figures I have seen quoted state that the contract started at £12 million and was due to increase to £27 million when the contract ended in 2026, with the fee for this year being £17 million. http://uk.reuters.com/article/uk-motor-f1-silverstone-idUKKBN14Q04J

        If those figures are correct, then the increase in the fee is closer to 5% per annum. Now, bear in mind that, at the time that the contract was struck in 2010, the UK inflation rate had been rising fairly rapidly and was around 3.7%, with inflation in 2011 being nearly 4.5% – so, at the time that the contract was struck, the rate of increase in the contract was not that much higher than the rate at which the purchasing power of sterling would have been declining due to inflation.

  7. Silverstone board of directors would be insane not to activate the break clause. They can’t make the numbers work now, but just wait until Hamilton retires from F1 and their race revenues drop by 33%. That plus the debt from FOM-driven expansion and construction equals bankruptcy.

    1. Not sure what Hamilton has to do with it… The British GP has seen huge attendances since F1 started and will continue to do so when Hamilton retires. However that does assume there will be a British GP by the time Hamilton retires…

      1. British people pay to see a British driver. With Palmer’s days numbered and no more Button, Mclaren (historically THE British team to go and support) in the doldrums, plus the sheer cost of attending the GP, you can’t say attendance wouldn’t drop without a “local” hero to support.

        1. GtisBetter (@)
          3rd July 2017, 11:03

          Lando Norris will be in f1 before hamilton leaves and maybe even callum ilott. So the future of british drivers is pretty good.

          1. FreddyVictor
            3rd July 2017, 11:44

            Yeah, cant wait to see Lando progress, he’s always impressed me!

            @Keith, appears the Palmer & Wolff links are switched

          2. Thanks very much – have fixed it.

        2. Since when has that ever been a thing in the UK? How many people flock to Wimbledon even in the days that we had no one with a hope of winning it? You go to any major international sporting event in this country and it will be pretty much full regardless of the existence of any UK hopefuls.

          1. It has been a thing in Britain for decades. Fortunately, there’s also always been a reasonably high-profile British driver. Given how Lando Norris is performing and the way in which F1 helps fund Lewis Hamilton’s preferred lifestyle, I don’t expect that to change.

          2. You can’t compare Wimbledon to the British GP: Champagne and strawberries in greater London versus beer and chips in the Midlands. If I was a Director of Silverstone I’d be mighty concerned that the numbers don’t pencil despite sold-out crowds cheering for their British “hero”, in three-time WDC Lewis Hamilton in a dominant car. The revenue potential only has one-direction under that scenario, and it isn’t “up”.

            My prediction has been, and continues to be, that Liberty Media’s acquisition of FOM will end up being a disaster for shareholders in the long-term, because it was based on revenue and EBITDA from an unsustainable business model propped-up by win-lose contracts, e.g., Silverstone, corrupt dictators, e.g., Azerbaijan, Bahrain, Russia, etc., pay TV contracts that maximize near term revenue at the expense of long term revenue, and automobile OEMs whose interests in this sport are going to diverge widely with those of the fans.

  8. It’s not a great track and a nightmare to get to anyway so…stuff it.

    Frankly, I’d love to see it in the London Docklands ala Singapore. Now that could be ace.

  9. petebaldwin (@)
    3rd July 2017, 14:25

    I live in Britain and yet it’s cheaper for me to travel to Spa and watch the race there than it is to go to Silverstone so I honestly don’t care if it remains or not.

    It’s a decent track so it’d be a shame to see it go but I wouldn’t put it in my top 5….

  10. Will Ron’s legacy one day outshine Enzo’s?

    Batteridge’s Law of Headlines: If your headline ends in a question mark, the answer is No.

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