OCTOBER 1, 2004
Weep for the British Grand Prix
The British Grand Prix debacle, which we forecast yesterday, was inevitable, given the parties involved in the negotiations. The race will no doubt return one day to the Formula 1 calendar but that is not likely to happen until Bernie Ecclestone, Jackie Stewart and/or British Prime Minister Tony Blair have moved on and are doing other things.
The sad fact is that the Silverstone mess shows none of the parties involved in a very good light and adds to the impression that Formula 1 is a world full of greedy and unpleasant people; a world which would rather do business with totalitarian dictatorships than preserving its traditions; and a world where the only things that matter are money and power.
The British Grand Prix was the first race in the FIA Formula 1 World Championship back in 1950 and every year since it has been the showcase for the British motor racing industry. This great industry, built on hard-nosed competition and on the survival of the fittest, has been draining quietly away in recent years as Formula 1 has sucked up most of the money and people available.
Now times are hard, the British Racing Drivers' Club, which owns Silverstone, says that it cannot afford to pay the money that Formula 1 boss Bernie Ecclestone is demanding for the rights to hold the British Grand Prix as a round of the FIA Formula 1 World Championship. The club says that it made a decent offer to run the race in 2005, 2006 and 2007. Our sources indicate that this was $16m, which is rather more than the French paid last year. The club says that it cannot make a better offer as it would involve too many risks. The current offer allowed the race to break even only if all went well and risked a big loss if the crowds stayed away.
The offer was rejected by Ecclestone.
"The club has examined its finances carefully including plans for drastic reductions in expenditure, including reduced financial support for young driver initiatives, but we cannot financially save the British Grand Prix on our own," the BRDC said in a statement. "The international finances of F1 are now such that almost every country around the world that hosts a Grand Prix is given considerable financial support by its government. We regret that H.M. Government, unlike governments in almost every other country that hosts a Grand Prix, has not been able to put together a package to help the retention of the Grand Prix in this country. The government is committed to retaining the sport and the industry and yet the loss of the race will damage the sport and the industry. We have been campaigning as a club in recent years for the government to support a major capital investment programme for a Centre of Motorsport Excellence at Silverstone. We have discussed various financial options with them - none of which have been accepted. Where is the delivery of Sport Minister Richard Caborn's promise in July 2003 for the Government "to put its money where its mouth is"?"
The government responded by saying that it has invested heavily in paying for infrastructure work to be done at Silverstone which any visitor to the circuit can see is clearly the truth.
The BRDC lashed out at Ecclestone as well, saying that he has already been paid for the race in the years ahead. This is a valid point as under the terms of the settlement of the contract between Ecclestone and the Interpublic Group, which wanted to get out of its British GP deal in order to save money, Ecclestone received $93m in April. He appears to consider this as being pure profit.
However the BRDC argument is undermined by the fact that the club has also received a settlement from Interpublic with a payment of $50m to terminate the lease agreement that existed between the two parties. The BRDC could, in theory at least, lease the circuit again to another promoter although it is fairly clear that Ecclestone's financial terms for a Grand Prix are now so elevated that venues need government assistance to hold a race. Ecclestone justifies this by saying that he will charge whatever the market will pay.
In Britain there is resistance to the idea of government funding because unlike organizations such as the International Olympic Committee, which decides where the Olympic Games will be held, Formula 1's income is well known to go not to a non-profit-making organization but rather to the family of a man who is massively wealthy or to the banks which own shares in the company for which Ecclestone and his children previously received huge sums of money.
The British government has no desire to make Bernie Ecclestone any more wealthy than he is and assistance for Silverstone, rightly or wrongly, is seen as achieving only this. Ecclestone does not seem to care much about his image but British Prime Minister Tony Blair very clearly cares about how he is viewed by the British electorate, particularly in the run-up for an election which must come between now and June 2006.
And there is a history between Blair and Ecclestone, which dates back to 1997 when a scandal broke over a donation Ecclestone had made to Blair's Labour Party. Ecclestone said at the time that what happened was "grossly unfair" and "badly-handled" and ever since has rarely missed the opportunity to snipe at Blair, notably in 2000 when he and his wife Slavica said that Blair's behaviour was "third-rate" and "hateful". Ecclestone said: "I thought Tony Blair would do a much better job. I thought he would stand up and do the things he said he would do and he has not. I am very disappointed".
Blair has now stood up and refused to fund the British GP.
Ecclestone has not bothered attacking the government but has aimed his comments to date at the BRDC.
"We're not dealing with businessmen," he told Independent Television News. "We're dealing with a gentlemen's club which is a bit short of gentlemen actually. They should be running tennis. It's quite embarrassing. I am pushing the world to raise the standards everywhere and our country has one of the worst."
This is not strictly true because Monaco, Canada, San Marino, Brazil, Melbourne and Hockenheim all have facilities which are markedly inferior to those at Silverstone although they are allowed to survive because they pay what is asked of them or are absolved of fault because they are more important to Formula 1 than Formula 1 is to them. Many observers in Formula 1 believe that Ecclestone's distaste of Silverstone has at its root the relationship between Ecclestone and Sir Jackie Stewart. To give him credit the Scotsman did withdraw from the negotiations over the British GP to allow others to try to find a solution to the problem. Clearly it was not enough.
Ecclestone says that he cannot give Silverstone a special deal because that would not be fair on the other circuits around the world, an explanation that shows that there is no room for emotion or tradition. All the classic European races must now start to look over their shoulders and hope that no other governments decide that F1 will make them look good and thus force more classic races from the F1 calendar.
The French Grand Prix, the oldest surviving race in the world, is rumoured to be on the chopping block as well, as it too is struggling to meet Ecclestone's financial demands.
There is however one more thing which must be considered. With Ecclestone dumping the British GP, there is now no reason for the government to be helpful when it comes to tobacco regulations. At the end of July next year anyone who is based in England and is involved in tobacco sponsorship intended to promote sales in the UK is liable to imprisonment. Ecclestone produces TV feeds from a number of races and if these appear on British TV he could be held responsible. The maximum sentence for this is two years in prison.
|Print News Story|