OCTOBER 7, 2004
The Mansell bid for the British GP
The British Grand Prix is not saved yet, despite stories which suggest that former World Champion Nigel Mansell is going to be involved with a consortium which will guarantee the race at Silverstone for the next seven years. The stories are based on documents leaked by Bernie Ecclestone to members of the F1 media in Japan. These indicate that a deal is agreed although there is clearly no signed agreement as yet.
The company involved is called Brand Synergy Ltd, a new firm which apparently involves Mansell, former British Touring Car Champion Robb Gravett, David Phipps, an F1 photographer from the 1980s and a little known "motor racing entrepreneur" called Kim Cockburn. This group has "a masterplan that will ensure the success of the circuit and the businesses which are dependent on it".
The documents indicate that Brand Synergy is in partnership with Quintain Estates and Development plc, a listed property development company which has been involved in the revamping of the area around the new Wembley Stadium and the redevelopment of the land near the Millennium Dome.
What is interesting to note is in June 2003 Cockburn (known at the time as Kimmy) bid to buy the Brands Hatch circuits from the Interpublic Group. She recruited Gravett, who is running high-performance driver training programmes, as a business partner. Their aim was to return Brands Hatch to its former glory. The bid failed and the circuits were sold to Jonathan Palmer.
This time Cockburn seems to be confident and says that there is a deal "on the boardroom table of the BRDC that is good for them, good for the fans and good for the long-term future of motorsport in this country". She says that she has "agreed with Bernie to sign a seven-year licence and am confident that Silverstone will appear on the calendar for 2005 and the foreseeable future."
This all sounds splendid but it should be remembered that Ecclestone's latest F1 race deals all feature compound interest of 10% a year on the fees being charged and with a seven year deal the current asking price of $16m would have risen to $26.5m by the end of the contract, making a commitment over the seven years of around $134m for the fees alone. On top of that there would need to be money to pay rent to the BRDC and the costs of upgrading the track and developing the facility. These will add up to at least $250m over the seven year period.
Quintain has a property portfolio valued at around $1.5bn but the company made a profit of only $36m last year. It does however have a corporate loan for more than $600m, which is underwritten by HSBC, the Bank of Scotland, Barclays and Lloyds.
The big question is really whether or not the bid is a serious one or whether it is simply a lever to push the BRDC into doing a deal. One way or the other, the bid is certainly very convenient for Ecclestone. The BRDC cannot easily turn down an offer to rent the track (if the price is right) and that puts pressure on the club to either accept a deal or find an alternative. If the BRDC fails to do that it will then get the blame for the disappearance of the British GP. The club is waiting to hear from the British government as to whether or not the East Midlands Development Agency will come up with a deal to help fund the race with allowances and incentive packages which would help the club to get to Ecclestone's price.
The fear is that while that might be possible for 2005 a longer-term deal would need more substantial government support.
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