JULY 6, 2004
BRDC gets bonus from Interpublic
The British Racing Drivers' Club is to get $50m from the Interpublic Group to terminate the lease agreement that existed between the two parties. This means that the BRDC will take control of the circuit in December 2004. The settlement figure is understood to be around what Interpublic would have to have to spent if the lease had run to then end of 2007, when there was a deal for one side or the other to get out of the contract. The full term contract would have been for a total of 15 years.
The arrival of the money will give the club the opportunity to decide on its future options, which might include investing some of the money to improve the facility. The future of the circuit as the home of the British Grand Prix remains in doubt although a deal is in place for the track to host the event in 2005 and 2006. After that there is no agreement. Bernie Ecclestone did a deal with Interpublic in April to take back the rights to the British Grand Prix, for which he received $93m. Interpublic admitted this year that it had commitments of $61m taking into account this year's Grand Prix and the BRDC lease. Some BRDC members were for more money because Interpublic had commitments to repair and renew the track to meet FIA standards and were hoping for a $100m windfall.
It is estimated that around $150m needs to be spent on Silverstone to bring it to the level at which it needs to be and that amount would double if it is to become the much talked-about motorsport hub of Britain. The money is already in place for a new pit and paddock at Silverstone and work is expected to begin after this year's race at the weekend.
It is possible that for the good of the club the BRDC might decide to run Silverstone without Formula 1. Other circuits have shown that this can be done if the management is good enough and it would leave British without a Grand Prix.
The payments from Interpublic will come in instalments but in such circumstances the BRDC could borrow off the deal in it wanted to make an substantial new investments, such as selling Silverstone and buying a different track.
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