22 replies to this topic

[Amphicar]

According to The Independent, quoting an un-named BRDC member, the Silverstone circuit has been sold to a property development company, which is expected to invest the capital needed to take the Silverstone development plan forward: http://www.independe...ix-8771357.html

[F1ultimate]

Building an education center, a business park and a technology hub is a saving grace for Silverstone. It paves the way for a hotel that has a potential customer base outside the main events e.g MotoGP and Formula 1 Grand Prix. Attracting large businesses to the area will like boost the number of clients Silverstone will have for their conferencing and exhibition facilities.

Hopefully the developments will improve profitability for the circuit and become a model which other circuits can replicate and not go bust.

[Ross Stonefeld]

Is this the rumoured Qatari bid from last year?

[Amphicar]

Is this the rumoured Qatari bid from last year?

The Independent piece reckons it is more likely to be MEPC, a property group owned by the BT pension fund http://www.mepc.com/Home.aspx

[JonathanProc]

Hopefully the developments will improve profitability for the circuit and become a model which other circuits can replicate and not go bust.

I really hope so. Any chance of the ticket prices being lowered would be great.

[F1ultimate]

The Independent piece reckons it is more likely to be MEPC, a property group owned by the BT pension fund http://www.mepc.com/Home.aspx

All I can say is good luck to them in finding tenants for the business park. Times are challenging. Even a few skyscrapers currently being built in London like the Pinnacle are on hold because business tenants have been very challenging to secure.

[Dolph]

I'm not sure I understand. I thought running the British GP was one of the main functions of BRDC. The essence of their existense was keeping F1 in the UK and keeping the legacy of Silverstone alive. Now they "sold it" to a real estate developer? I'm sure there is a logic to it. Can someone spell it out to me so I understand this move?

[sesku]

Building an education center, a business park and a technology hub is a saving grace for Silverstone. It paves the way for a hotel that has a potential customer base outside the main events e.g MotoGP and Formula 1 Grand Prix. Attracting large businesses to the area will like boost the number of clients Silverstone will have for their conferencing and exhibition facilities.

Hopefully the developments will improve profitability for the circuit and become a model which other circuits can replicate and not go bust.

Another Nurburging?

[Amphicar]

I'm not sure I understand. I thought running the British GP was one of the main functions of BRDC. The essence of their existense was keeping F1 in the UK and keeping the legacy of Silverstone alive. Now they "sold it" to a real estate developer? I'm sure there is a logic to it. Can someone spell it out to me so I understand this move?

The BRDC's intention is to safeguard the long-term future of both the circuit and the British Grand Prix by making Silverstone and the club more secure financially. They have an ambitious 20 year masterplan, involving diversifying the activities on the site: http://www.silversto...ning-approval/#

The BRDC doesn't have the capital necessary to implement the masterplan so it was always envisioned that they would need an external investor. I'm not a BRDC member so I don't know the details of the deal they have reportedly struck with MEPC but I assume that, if they have sold the freehold, the BRDC will retain the right to operate the circuit in perpetuity (or for 999 years) and that there will be other safeguards to secure the continuation of motor racing.

It is unlikely to be another Nurburgring. Silverstone isn't in the middle of nowhere - it is halfway between London and Birmingham with good road links to both via the A43 to the M1 and M40. MEPC have plenty of experience of successful business park development and it will not have escaped their notice that Silverstone is in the centre of the O2C arc (Oxford to Cambridge) nor that the successful science parks at Cambridge and Oxford are both heavily constrained by Green Belt.

[chrisblades85]

I really hope so. Any chance of the ticket prices being lowered would be great.

Do ticket prices for anything ever go down?

[F1ultimate]

I really hope so. Any chance of the ticket prices being lowered would be great.

In three years from now it will be a possibility. The more revenue an F1 circuit generates from activities outside F1, the less it has to rely on hiking ticket prices to generate profit. In UAE they really thought it through by not only building a circuit but a Ferrari theme park and other facilities next to it so that premise generate revenue all year around.

Silverstone were lucky that this year's grand prix enjoyed hot weather and that Lewis Hamilton was on pole. Had rain been forecasted and Vettel been on pole then ticket sales would have seen different performance which would have made a big dent in the revenue for the year. That's how volatile their business is. Hence the need for safe and steady income from business leases and conferences - in other words, income that can be forecasted.

[Amphicar]

In three years from now it will be a possibility. The more revenue an F1 circuit generates from activities outside F1, the less it has to rely on hiking ticket prices to generate profit. In UAE they really thought it through by not only building a circuit but a Ferrari theme park and other facilities next to it so that premise generate revenue all year around.

Silverstone were lucky that this year's grand prix enjoyed hot weather and that Lewis Hamilton was on pole. Had rain been forecasted and Vettel been on pole then ticket sales would have seen different performance which would have made a big dent in the revenue for the year. That's how volatile their business is. Hence the need for safe and steady income from business leases and conferences - in other words, income that can be forecasted.

I wouldn't hold your breath waiting for ticket prices to fall. Silverstone's deal with Bernie includes an annual percentage escalator on the fee the BRDC has to pay for the right to hold the British Grand Prix. The real estate deal should give them a capital reserve and (depending on the details of the deal) hopefully a more secure income stream - but they will still want the Grand Prix to pay its way.

[Tonka]

According to The Independent, quoting an un-named BRDC member, the Silverstone circuit has been sold to a property development company, which is expected to invest the capital needed to take the Silverstone development plan forward: http://www.independe...ix-8771357.html

Oh dear - look at the 'author' - Christian Sylt. I'll wait until the BRDC press release is published.

[Goron3]

I wouldn't hold your breath waiting for ticket prices to fall. Silverstone's deal with Bernie includes an annual percentage escalator on the fee the BRDC has to pay for the right to hold the British Grand Prix. The real estate deal should give them a capital reserve and (depending on the details of the deal) hopefully a more secure income stream - but they will still want the Grand Prix to pay its way.

Yeah I'm sure F1 tickets will keep steadily increasing unfortunately. It will be interesting to see if the ticket sales peak and income from other streams make up for it in the future; I can't see people paying upwards of £200 for a GA ticket.

[redreni]

I'm not sure I understand. I thought running the British GP was one of the main functions of BRDC. The essence of their existense was keeping F1 in the UK and keeping the legacy of Silverstone alive. Now they "sold it" to a real estate developer? I'm sure there is a logic to it. Can someone spell it out to me so I understand this move?

The BRDC exists to promote the interests of, surprisingly enough, British racing drivers and British motorsport. It's about a lot more than F1. Promoting the British GP is not a core function of the BRDC although it arguably fits within their remit to promote Britain as a centre of excellence for motorsport. But the BRDC has other, more important responsibilities, to Silverstone Circuit, for example. At the moment the contract they have with FOM for promoting the British GP, which escalates by 5% every year, is in danger of bankrupting the BRDC and Silverstone. This deal to lease out Silverstone, crucially, involves the leaseholder taking over the BRDC's contract with CVC to promote the Grand Prix, which would releas the BRDC from a contract which might otherwise have ruined them. The leaseholder will effectively end up having to subsidise the British GP in exchange for the right to build a business park and three hotels in a field in Northamptonshire. If you ask me they're barking, and it sounds like a very good deal for the BRDC.

Edited by redreni, 18 August 2013 - 22:38.

[redreni]

In three years from now it will be a possibility. The more revenue an F1 circuit generates from activities outside F1, the less it has to rely on hiking ticket prices to generate profit. In UAE they really thought it through by not only building a circuit but a Ferrari theme park and other facilities next to it so that premise generate revenue all year around.

Silverstone were lucky that this year's grand prix enjoyed hot weather and that Lewis Hamilton was on pole. Had rain been forecasted and Vettel been on pole then ticket sales would have seen different performance which would have made a big dent in the revenue for the year. That's how volatile their business is. Hence the need for safe and steady income from business leases and conferences - in other words, income that can be forecasted.

I don't disagree in principle, but it should be noted that Abu Dhabi is no example of how to operate a commercially seccussful Grand Prix venue wihout state subsidy, since the subsidy required to build the facility was so enormous that I dare say you'd need to pack out that theme park every day from now until the end of time to recoup them. And even if that were to happen, the UAE taxpayer would never see any of that money because, in keeping with public policy in middle eastern dictatorships, although the startup costs were socialised, any operating profits will be private.

[tifosi]

I really hope so. Any chance of the ticket prices being lowered would be great.

phhhhhhhhhhhfffffffffffffffffffffffffffffffttttttttttttttttttttttttttttttt

How do you think they are going to pay off the loans?

[Craigster]

Oh dear - look at the 'author' - Christian Sylt. I'll wait until the BRDC press release is published.

I dont believe that a paper as respected as the Independent would allow news like this to be printed on a whim or for dodgy writers to grace its pages. Its got too much to lose to do that kind of thing. Its really nailed its colours to the mast as it bluntly says Silverstone has been sold. It also says that an announcement will be made next month so we should find out soon one way or the other. If there is no denial from Silverstone over the next few days that gives it even more weight in my mind.

[Gilles4Ever]

Adam Cooper @adamcooperf1

BRDC/Silverstone "confirm that it has completed a transaction with British commercial property company MEPC"

BRDC says MEPC, owned by the BT Pension Scheme, "the UK’s largest corporate pension scheme", has paid £32m for a long-term lease.

Deal allows the BRDC "to pay off its long and short-term loans from Lloyds Banking Group and Northamptonshire County Council"

Deal includes only "Silverstone Industrial Estate and the development land around the outside of the circuit", not venue itself

[TimRTC]

http://www.silversto...deal-with-MEPC/

 

I think/hope this is good news. It will be a pity if the circuit surroundings go from being woodland to dull industrial blocks but if it means more investment in facilities at the circuit, that cannot be a bad thing.

 

My main concern is that a lot of the areas show as being designated for development in the image on that page are currently overflow car parking and if that goes then it might mean no on-site fan parking at all for events like the F1 and MotoGP.

[Clatter]

Building an education center, a business park and a technology hub is a saving grace for Silverstone. It paves the way for a hotel that has a potential customer base outside the main events e.g MotoGP and Formula 1 Grand Prix. Attracting large businesses to the area will like boost the number of clients Silverstone will have for their conferencing and exhibition facilities.

Hopefully the developments will improve profitability for the circuit and become a model which other circuits can replicate and not go bust.

Is this different to the one that is already under construction?

[wewantourdarbyback]

For me this is the most interesting bit of the release:

 

 

The agreement with MEPC does not incorporate the development or management of the circuit itself. On that subject, the BRDC can confirm that it has agreed terms with a suitable partner to further develop and invest in the circuit and circuit-related facilities. Under the terms of non-disclosure agreements the BRDC is not able to comment on any details, but the aim is to bring these negotiations to completion before the Club’s Annual General Meeting on 04 October.

[kimifan88]

I dont believe that a paper as respected as the Independent would allow news like this to be printed on a whim or for dodgy writers to grace its pages. Its got too much to lose to do that kind of thing. Its really nailed its colours to the mast as it bluntly says Silverstone has been sold. It also says that an announcement will be made next month so we should find out soon one way or the other. If there is no denial from Silverstone over the next few days that gives it even more weight in my mind.

 

So the original report was right after all. But I bet it wont bring down ticket prices