Silverstone challenges the viability of the Welsh circuit

At the time, Michael Carrick, the director of the company responsible for the development of the Welsh valleys, described his project as follows: « It is extremely important, not only for the regeneration of Blaenau Gwent but also for the UK economy, allowing the mobilization of significant private capital. It is the archetypal example of a new investment model as it involves a partnership between private investments and the government to establish an activity that will transform the region. »

However, the leaders of Silverstone believe that the project can only be realized with the contribution of public money, as the circuit is one of the few on the calendar that does not receive any public funding and must therefore find a financial balance with activities throughout the entire year. To address the debt incurred to build its brand-new paddock, Silverstone was forced last September to sell some of its assets as part of a 999-year lease granted to the British Telecom pension fund, in exchange for a payment of 32 million pounds sterling.

During our exclusive meeting in the paddock of the edition, Richard Phillips, the circuit director, stated: « If you look at our profits, organizing events like Formula 1 or MotoGP accounts for about 32% of our profits. The rest comes from our other activities. We have to do it. Even if we make money with Formula 1, the fixed costs around it are huge. Therefore, we have to amortize these fixed costs over other activities, and that’s what we do with our diversification program that we started almost ten years ago. In the future, we will try to diversify even more, by moving more towards leisure activities. We thus have an event organization company that operates on three continents. We have a lot of ideas to move forward and to ensure that motorsports can remain important at Silverstone. It is important to maintain this resilience because motorsports may remain profitable in the future due to the way costs are developing. So if we diversify, the company will be resilient and we can stay. »

Today, the leaders of the British Grand Prix house sound the charge against a new competitor who would not play on the same footing as them: « To be clear, Silverstone has no objection to there being competition between British circuits, but it must be on a level playing field. »

Silverstone is determined not to find itself in the situation of 2008-2009 when Donington had secured the hosting of the British Grand Prix, only to withdraw at the last minute in favor of Silverstone: Based on its unparalleled knowledge and experience in operating a race track for over 60 years, Silverstone’s view is that the Circuit of Wales project is not viable. In 2008, British motorsports faced a similar scenario when a previous management team at Donington Park underestimated the economic realities of hosting Formula 1. A proposed significant upgrade never materialized due to unrealistic projections and a lack of investments.

To support its arguments, Silverstone points out that it is at the heart of the Motorsport Valley. This area represents a significant source of employment as it brings together 4,300 companies that employ 41,000 people. Their combined revenue reaches 9 billion pounds sterling, making it a heavyweight in the British industry.

The conclusion of the circuit’s statement is therefore unequivocal: Silverstone reiterates that it is sympathetic to the economic situation of Ebbw Vale, but motorsports from the circuit’s perspective are not particularly profitable and often incur losses. Many British circuits are underutilized and struggle to generate revenue. It is unrealistic to suggest that the Circuit of Wales will be an exception.

With the participation of www.Racingbusiness.fr