Silverstone Circuits Limited confirmed that it has a contract to run the British Grand Prix for the next 17 years, ensuring the prestigious event's future in the Formula One.
The deal, worth around £300 million, was announced Monday morning after Bernie Ecclestone agreed to forgo fees of a further £60 million—the only major stumbling block on the race's future.
To secure the necessary finances for the upgrades the circuit needs, Silverstone needed a long-term deal to give them the security to proceed, in addition to reducing or removing the 7 percent annual increase on fees to Ecclestone.
As part of the agreement, Silverstone will undergo a modernisation of the facilities including the rebuilding of the pit lane and paddocks to bring them up to standard with facilities at other circuits.
With just seven months until the race, Silverstone has a strict timetable and work will begin immediately after Christmas.
While I expected a deal to be announced, I am surprised that Ecclestone has finally awarded an unprecedented 17-year deal to Silverstone, despite his warnings that F1 does not need a British Grand Prix.
Of course, he had originally gave Donington a 17-year deal before financial problems wrecked any hopes they had of developing the Leicestershire circuit, nevermind host a race. But traditionally, Silverstone has had to work with five-year deals with the uncertainty preventing them from exploring new financial agreements.
Silverstone MD Richard Phillips said, "We've always had the belief the British Grand Prix was an important cornerstone of Formula One but, with Bernie, you're never quite sure. At the end of the day, though, you have to have a British Grand Prix.
"We've now got to sell a lot of tickets, to get out there and do similar sorts of numbers as we did this year when we had 230,000 people there over the three days, and promote the event."
Ecclestone said, "This will ensure the British Grand Prix is included on the Formula One calendar for many years to come, which is something I've always wanted to happen."
But being the man he is, he couldn't help but get a dig in at the British Racing Drivers Club (BRDC). “It’s been a long and tiring nonsense,” he said. “They could have done this whole thing months and months ago.”
BRDC president Damon Hill said, "This announcement is tremendous news. It really does cement Silverstone as a motor sport venue and is incredibly satisfying for the BRDC to cement its relationship with F1. We want Silverstone to be retained as a place for motor sport, for motor racing of all sorts, but significantly the British Grand Prix."
But while a deal and fees have now been agreed upon, let's not get too carried away by this. Dig a bit deeper and you will discover that Ecclestone's fee has dropped from a 12 percent to a five percent increase on the race fee.
It will still cost Silverstone £310 million to host the race—a very welcome cost compared to the original cost of £370 million that Ecclestone had wanted—but let's remember that last year Silverstone made a profit of just £662,000.
It's quite wise to have that mutual break clause in the contract after 10 years in case it starts to go wrong for the circuit.
In the mean time, let's rejoice! The British Grand Prix is saved for at least 10 years, and maybe more.
Hard cheese, Gillett. You've now got an extra 10 years to try and find some money for Donington.