All quiet on the Donington Front

There has been a rather odd lack of noise about Donington Park’s failure to meet the terms of its Race Promotion Contract with Formula One Administration. This means that the plan to hold the British Grand Prix at the Leicestershire track is now not going to happen. According to Simon Gillette at the start of the project, the work needed to get the track ready for F1 required nine and 10 months. The race is scheduled for July 11 2010, which means that the time available is now eight and half months and while it is always possible that corners could be cut, the fact remains that nothing will be done until the money is in place and that is now not going to happen as the last-ditch attempt to raise money with a bond issue flopped. It may be that things are quiet as the Formula One group has no desire to publicly accept that its plan to switch the race from Silverstone to Donington has failed. The failure is ultimately that of Gillette and his backers but the Formula One group went along with the plan, unrealistic though it seemed. The only way that there can now be a British Grand Prix is at Silverstone and the Northamptonshire circuit is insisting that it be given a decent long-term deal, in the knowledge that the F1 teams have made it clear to the Formula One group that they want the race retained on the calendar. The Formula One group has always argued that it cannot give Silverstone special treatment, however that argument has been undermined somewhat in recent months with the news that the German Grand Prix was saved with a special deal for Hockenheim.

The other question that will inevitably come is what now happens to Donington Park. Traditionally, Formula One Administration’s race contracts include clauses related to penalties if the promoter defaults on an agreement. In the past the Formula One group has often made money on such failures. Given that the deal agreed with Donington was for 17 years, with a deal worth £18m a year and an annual increase of seven percent (which is rather better than the usual 10%) the circuit theoretically owes the Formula One group hundreds of millions and while it is saying that it will not pursue the matter, that is a dangerous course of action as other circuits may decide to risk defaulting if he does nothing against Donington.

The future of the circuit remains unclear at the moment but the ultimate owners remain the Wheatcroft Family.

20 thoughts on “All quiet on the Donington Front

  1. Joe – Donington is saying that BE will not pursue? That’s a dangerous course of action, given Bernie’s past record on cutting his nose off to spite his own face when someone backs him into a corner! I’m probably not alone in worrying that the British GP’s fate will be decided on how much space Silverstone allow Bernie so he doesn’t feel he’s the loser on the deal.

  2. A couple of things I’m not clear about from this article Joe.

    “…. the circuit theoretically owes the Formula One group hundreds of millions ….”, presumably this means Donington Ventures rather than the Wheatcrofts. Have I got that right?

    “… it is saying that he will not pursue the matter… “. ‘it’ is the Formula One Group/CVC and ‘he’ is Ecclestone?

    What a shame that the Wheatcrofts didn’t pursue their case for unpaid rent earlier in the year. Why not? Can you enlighten us Joe?

  3. Maybe BE will bail out Donnington in the same way he did Turkey (i.e., become the owner/promoter) that way he gets a cut-price deal on the circuit and snubs Silverstone and is seen as a hero for saving the British Grand Prix!

  4. i can see quite clearly that bernie is not at all fussed about having a british GP. and silverstone would like to host it but aren’t going to bent over backwards by the little man, with a year on year increase in hosting fees locked in for 17 years or whatever ridiculous arangement bernie tried with donnington. the fact is that bernie knows that the european audience is where the money is, and he’s chasing them with night races in singapore (and trying for australia too), and that there are governments out there willing to pay his fees for the honour of holding the shiny F1 balloon for a weekend – but he and cvc recieve no money from punters tickets so it’s not surprising that this is the things lowest on his priorities.

  5. My theory is that Bernie’s plan was actually to buy Silverstone, he knows the value and profit is there (the attendance figures), question is how to scoop it for cheap?

    If you want to buy something under value, you cant just go out and bid it up. You have to drive the value down first, which was what he tried to do by giving the race to Donington. He probably hoped that the BRDC would fold and sell the track, but problem was Damon Hill called the bluff. Bernie knew all along that Donington was a dream in the sky, but matters not because he would happily pocket the cancellation fees if it didnt happen. The Donington #’s from the bond deal and timeline would never have worked. Bernie is not foolish, Gillet is probably not either but he failed to find the greater fool to sell to.

    So where we go from here? If I was Damon I’d stand firm on numbers that I believe would work, and reject the deal otherwise. They didn’t plan on having the race as of last week, so no point to stretch beyond what the numbers allow to bag it now. If no British GP then so be it. Bernie can take it elsewhere, and we know at new places like Turkey and Bahrain, there is no market. The gov’ts and promoters will eventually tire of losing money, and the market prices will adjust. In the end, the races will go back to the places where the fans are, just need it to play itself out rather than chasing the market.

  6. Joe, I’m glad you were able to confirm what was in the back of my mind in that BE has set a precedent by forking-out to help Hockenheim. So how the hell can he take such a high-handed attitude with Silverstone and jeopardise the British GP.

    I’d like to hijack your blog, Joe, and take a straw-pole:

    Who’s GP is it Bernie? Yours or ours? (Answers on a postcard please)

  7. Um, a claim against the circuit? How? DVL leased the circuit from the Wheatcrofts, then did the deal with FOM. They are only promoters, not owners. It isn’t their asset. You can’t use your council house as collateral for a home improvement loan, can you? If DVL defaults in their payments to the Wheatcrofts then Donington reverts to them, as it almost did earlier this year. Bernie’s claims are going to be against the bankrupt DVL, not Tom Wheatcroft.

  8. DVL will file for bankrupcy shortly. They have nowhere to go.

    Control of the circuit will return to the Wheatcrofts and they will be left to sort out the mess.

    I have often wondered if BCE is behind the Middle Eastern interests who were reported to be interested in leasing Silverstone from the BRDC?

  9. Joe, apparently the Daily Express had a story yesterday that Gillett had found the money and paid Ecclestone. Do you have any more news on this?

  10. The Donington Track has been taken up and removed in the run up towards, and under the anticipation a construction contract would materialise (which obviously did not happen). If Donington want to make any money at all they will have to fork out the money to get someone to build a new track for them!

  11. Hi all,
    I cant stress how disapointed I am to hear that the F1GP is not to be held at Donnington, I guess I knew it was to good to be true !!! how could you let this fantastic opertunity slip away??? seems like you bit off more than you could chew and in the process of losing the contract you have also lost a lot of respect for letting the fans and the locals down.

  12. I take it that you have the funds to put the track right in time for the BSB, motoGP etc?? or have we lost those events too??

  13. What’s the latest on Donington?

    Was looking forward to going to F1 this season, and so, so, so disappointed when I heard they had declared bankruptcy.

    Hoping to see you soon at Donington.

    cheers

    Brian

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