GPWizard F1 Forum
F1 News & Discussions => General F1 Discussion => Topic started by: lkjohnson1950 on July 11, 2017, 10:22:05 PM
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Silverstone has triggered it's break clause to stop the GP from being held there after this year.
http://www.autosport.com/news/report.php/id/130663/silverstone-triggers-british-gp-break-clause?utm_source=Autosport+Newsletter&utm_campaign=fb2245e5f4-EMAIL_CAMPAIGN_2017_07_11&utm_medium=email&utm_term=0_37b525b20e-fb2245e5f4-85608567 (http://www.autosport.com/news/report.php/id/130663/silverstone-triggers-british-gp-break-clause?utm_source=Autosport+Newsletter&utm_campaign=fb2245e5f4-EMAIL_CAMPAIGN_2017_07_11&utm_medium=email&utm_term=0_37b525b20e-fb2245e5f4-85608567)
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Funny how businesses claim they always lose money
but they still stay open. I work for myself in home
improvement and if I operated at a loss I'd soon be
looking for a job.
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Funny how businesses claim they always lose money
but they still stay open. I work for myself in home
improvement and if I operated at a loss I'd soon be
looking for a job.
Working for yourself is far different from paying other people. All the money that Silverstone 'loses' is money that goes to people. It's no big deal for them to go out of business, but that means that people aren't getting paid. There are plenty of businesses who's business model is to screw over employees to make money from shareholders, but some businesses do anything they can to take care of their people, but at some point, the shareholders have to be considered, investors won't put more money in.
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They said they lost money on the GP in 2015 and 2016. That leaves 7 years that might have been profitable. Plus, they run all kinds of other events, WEC, BTCC, track days, test days... those might offset losses for awhile. Losing money on a single event doesn't mean they're teetering on the edge of receivership.
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Last year they said they lost £4.8 million and its due to increase and as Liberty Media are not able to negotiate while under contract the only option was to activate the clause. I also has to be remembered that Silverstone receives no state funding unlike all other GP's.
I hope it can be resolved as the thought of a circuit around the roads of London will mean another race where nobody can pass anyone else.
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They always make losses - in my opinion the 'business' is deliberately operated on a 'breakeven' model because this is very tax efficient. They roll all of the surplus into new investments. This is very clever.
I think their actual problems include the very bad investment they made in the new Wing which went massively over-budget; the fact that their investments mean that they now carry huge depreciation costs in the accounts; they operate with no cash (they basically live on advanced ticket sales).
The cumulative effect of this probably goes hand in hand with a poor forecast of what the prevalent inflation rates would be. They agreed to an annual uplift in fees from FIA at (I beleive) a rate of 5% p.a. If this was in-line with inflation I guess they thought they would be able to increase their charges by the same 5%. However, with the UK economy in the sorry state that it is, any attempt to increase their charges by 5%p.a. would see corporate and non-corporate income collapse.
Therefore, much better to take the break clause and hope to negotiate a better deal. It is a huge gamble but I don't think they have a choice.
I still think they should do some kind of lease to buy deal with Jonathan Palmer and let a proper professional business man run the circuit (Silverstone is currently 'managed' by four officers - not one of them has any experience managing a large company).
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I vote for Monty to take over Silverstone management. :good: :good:
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I just really, really hope that Liberty doesn't use this as a reason to replace Silverstone with a "Look at the pretty buildings" street
parade race in London.
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I just really, really hope that Liberty doesn't use this as a reason to replace Silverstone with a "Look at the pretty buildings" street parade race in London.
I always figured that Britain would support two Grand Prix better than most.
Given how much money Sky has tied up in their TV rights, they'd probably have the most to lose if British F1 fans lost interest without a home race. Maybe they can help out.
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I vote for Monty to take over Silverstone management. :good: :good:
oh no, I couldn't, really. Although could I actually do any worse than the BRDC???