The battle for Silverstone

The fight for the future of the British Grand Prix shows no signs of being over just yet, despite Bernie Ecclestone claiming he has now broken off negotiations with race chiefs. But the battle is not really just about Silverstone, it's about the long-term future of Formula 1 itself. Jonathan Noble investigates

The battle for Silverstone

Amid the constant barrage of words going backwards and forwards between Ecclestone and Silverstone's owners, the British Racing Drivers' Club, it is all too easy to believe that the head-to-head row is simply about money - that Ecclestone wants as much as possible to allow Silverstone to host the race while track owner, the BRDC, wants to pay as little as it can get away with.

But while money is almost certainly a factor, even though Ecclestone has already been paid almost £60 million for hosting the race by former promoters Interpublic as part of a severance deal, do not believe the hype that the fight for the race's future is simply a question of a dispute over a couple of million pounds.

Sources close to the negotiations have told autosport.com that there is now general agreement about the levels of payment for the 2005 race - and hardly any disagreement over the 2006 figure. Ecclestone wants £7.45 million from the BRDC for next year's race, and £8.15 million for the 2006 event. The BRDC is willing to pay almost all of this - and certainly within a reasonable enough financial window for a deal to be agreed.

The only problem is that the BRDC wants to agree to these figures for two years before beginning talks for a fresh five-year deal that will run from 2007 to 2011, while Ecclestone wants a one-year deal with a separate contract then agreed from 2006 to 2011.

One insider close to the BRDC's negotiating party said: "All we say is that we want two years to take a deep breath and then commit after that. The numbers are the same."

From the outside then the difference in a one or two-year deal appears to be a matter or nit-picking and Ecclestone himself has suggested that complications over agreeing the length of the deal are a 'red-herring', but the difference between a one-year plus six deal and a two-year plus five deal is immense.

Silverstone actually appears to have found itself right at the centre of a battle about the very future of Formula 1 itself. At the end of 2007, Ecclestone could find his stranglehold over the sport weakened because that is when the current Concorde Agreement, the document by which F1 is run, runs out.

This secret covenant lays down the financial terms for the entire sport - and details not only the amount of revenue teams get but also what is available to circuits and what finances are allowed to find their way into Ecclestone's own companies.

The current terms of the Concorde Agreement are vastly in Ecclestone's favour. F1 teams only receive 47 percent of television income while circuits are only allowed to keep revenue generated by the sale of tickets. Money from trackside advertising, hospitality, event title sponsorship and other similar streams goes not to the teams or circuits but to Ecclestone himself.

It is the apparent unfairness of this balance that has prompted several major manufacturers to form a company that is planning a breakaway world championship, the GPWC, from the start of 2008. This new series promises more income for the teams, a more transparent financial system and, possibly, greater income for circuits hosting races.

One way in which Ecclestone could effectively scupper any plans for the GPWC would be to ensure that he has all the current major 'grand prix events' under long-term contracts from the start of 2008. He would also have means for having up to 20 events under contract - thereby forcing teams to expand the calendar beyond its current limit and increase his own revenue streams.

If Ecclestone's own Formula 1 world championship had the British, Monaco, Italian, Brazilian, United States, Chinese, Australian, German and French Grands Prix under contract it would easily be a match for a GPWC series that could boast races only in those countries without a rich motor racing heritage.

Having all F1's 'historic' races under his control would give Ecclestone massive leverage against teams contemplating joining a less glamorous GPWC, as well as television companies perhaps considering ditching F1 in favour of the new manufacturer-led category.

Silverstone is viewed as a vital race for many British teams - and not just because it is down the road from their factories. Many of their sponsors only get interested in F1 because of their attendance at the team's home event, while it provides a happy hunting ground for teams actually signing future sponsorship deals with company executives.

As one insider said about the current fight for Silverstone: "It looks like the Silverstone row has got more to do with the Concorde Agreement coming to an end in 2007. Ecclestone is building up a portfolio of races whose contracts extend beyond 2007 and he is doing that, I think, because he knows within the next 12 months there is going to be a showdown with regards to the Concorde Agreement and the GPWC. I think he is trying to strengthen his hand."

Ecclestone knows that he needs Silverstone on a long-term deal as soon as possible - and well before the GPWC can approach the venue with the possible incentive of a more financially acceptable deal for its own race from 2008.

If Ecclestone does not get Silverstone's signature on a contract that runs until 2011 within the next 18 months, and instead caves in to demands for a two-year contract, then by the time it comes to renegotiate for 2007 it may already be too late. Silverstone could have been won over by GPWC for a more financially attractive 'GPWC British Grand Prix' in 2008.

In that scenario Ecclestone would be in a much weaker position to negotiate than he is now - so it is no wonder the current fight for the British GP is so intense.

The biggest danger Ecclestone faces, though, is that if he dropped the British GP because of his fears about the GPWC then it could lead to a backlash from F1 teams who view the Silverstone race as a showpiece event - and in the end this drives them further into the hands of the GPWC. He could also severely weaken his hand in trying to push for an expanded F1 calendar for 2005.

It is a dangerous game to play, and one whose outcome is completely unpredictable, but Ecclestone has not got where he is today by playing things safe. It is just a shame that Silverstone has found itself wrapped up in a ballgame that it has no control over.

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