Silverstone confirm break from F1 contract from 2019: What does that mean for British GP future?
BRDC confirm intention to end F1 contract following the 2019 British GP, but what does that mean for the future of the iconic race?
By James Galloway and Matt Morlidge
Last Updated: 18/07/17 12:16pm
Silverstone's owners have confirmed they have triggered the break clause in their contract to host the British GP. But what does that mean?
According to The British Racing Drivers' Club, the break 'means that unless a new contractual arrangement can be reached with Liberty, 2019 will be the last year that the British Grand Prix takes place at Silverstone - the only viable venue for a British GP.'
But while the BRDC will opt out of their current contract in 2019, that does not necessarily mean the iconic circuit will be gone from the F1 calendar forever.
Confused? Sky F1 has the answers...
Why have Silverstone broken their contract?
There is only one reason Silverstone have terminated their F1 contract early: costs. Put purely and simply, the terms of the 17-year contract they signed eight years ago have increasingly become too onerous for the BRDC, the circuit's owners, to afford.
A five per cent fee escalator built into the deal means that what was a cost of £12m in 2010, has become £17m for 2017, and was set to exceed £27m by 2026.
"We have reached the tipping point where we can no longer let our passion for the sport rule our heads," said BRDC chairman John Grant. "Put simply, it is no longer financially viable for us to deliver the British Grand Prix under the terms of our current contract.
"By running the British Grand Prix we sustained net losses of £2.8m in 2015 and £4.8m in 2016 - that's £7.6 million over two years. We expect to lose a similar amount this year. To continue on this path is not only unsustainable, it would put at risk Silverstone, the home of British motor racing."
They have now given two years notice of the termination, meaning the final British GP under the present deal will be in 2019.
So Silverstone won't host the British GP from 2020?
Not necessarily. In fact, it remains the best venue suited to the job of holding UK motorsport's premier event into the next decade.
Silverstone could yet keep hold of the British GP if they thrash out an entirely new deal with F1's new American owners, Liberty Media, before the current one now expires in 2019.
The BRDC may have served notice to exit its present deal, but the circuit wants to retain the race and wants to come back to the negotiating table. But it must be affordable.
Could the British GP fall off the calendar?
Until a new deal is in place with Silverstone or any other circuit for 2020, there is bound to be a period of uncertainty over what happens to one of F1's most cherished races in three years' time.
Liberty Media, who took control of F1's commercial rights at the start of the year, has repeatedly made clear the British GP is a race it values highly - making it therefore unlikely to let it drop off the schedule completely.
But, unless a more viable deal is agreed with Silverstone, finding an alternative host would be easier said than done.
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Who else could host the race?
This is where it gets tricky.
The UK is well served by other serious, well-run permanent race circuits but none can match Silverstone's infrastructure and scale. If Silverstone cannot make an F1 hosting contract work, then the challenge would be as great, if not greater, for a Brands Hatch or Donington.
London has long been regarded as a 'dream' destination for a race for F1 owners past and present, but the logistical challenges of holding a four-day event in one of the world's busiest capital cities remain myriad.
Then there's the question of who exactly would fund it.
Nonetheless, speculation surrounding a possible event in London's Docklands in the east of the city surfaced over the Austrian GP weekend and there's bound to be other interest.
How will Liberty react to Silverstone's move?
Discussions between Silverstone and F1's new look management have been ongoing pretty much since Liberty Media bought the commercial rights to the sport, and therefore inherited all of its existing contracts, in January.
Sean Bratches, F1's commercial boss, told Sky Sports News HQ last week that the activation of Silverstone's break clause would not represent a 'black mark' for the Northamptonshire circuit and prejudice future talks.
"We've had ongoing conversations with our friends at Silverstone and from our perspective, this is all about the fan," said Bratches. "We don't want to do anything that would prejudice the fan."
But while Bratches seemed to be holding out an olive branch for Silverstone's owners, Liberty Media have criticised Silverstone's public response and said the timing of the break clause could have been avoided.
"The week leading up to the British Grand Prix, should be a week of great celebration for F1 and Silverstone," the F1 group responded. "We deeply regret that Silverstone has chosen instead to use this week to posture and position themselves and invoke a break clause that will take effect in three years time.
"We offered to extend the current deadlines in order to focus on everything that is great about Silverstone and Formula 1. Regretfully the Silverstone management has chosen to look for a short term advantage to benefit their position."
What's the likelihood of a deal being reached?
"Our focus is still to preserve the British Grand Prix," Carey continued, hinting that a deal could still be thrashed out. "We will carry on negotiating with the promoter in good faith and in private to reach a fair and equitable solution."
It was a stance repeated by Grant in the BRDC's lengthy statement, as he added that the two parties wanted to "ensure a sustainable and financially viable future for the British Grand Prix at Silverstone for many years to come."
But considering Liberty have so far not backed down and lowered costs despite the financial complaints, why are the BRDC confident that they will change their mind over the next two years? It was a question put to Grant by Sky Sports News HQ's Craig Slater at a Silverstone press conference.
"We're starting from a reasonably positive starting point," Grant responded. "Liberty have made very clear that they want to preserve the important European grands prix, they say that they include Silverstone as one of those and of course we would agree with them.
"I think we want to achieve the same results, it's a question of how we get there. Our relationship with Liberty Media has been quite cordial, they've been constructive in a number of ways, we would like to think we've been constructive in a number of ways. If we're both looking for the same result there must be a way to get there."
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