Deadline time for British GP
The future of the British Grand Prix was expected to be decided as Motor Sport closed for press as Donington Park reached its deadline to secure the £80 million it needs to make modifications in order to host the race from 2010.
Formula 1 boss Bernie Ecclestone said: “They have got until the end of September to produce a bank guarantee and their contract depends on that. We’re waiting to hear from them.” He added that it was still too early to tell whether Silverstone would host the race if Donington is unable to do so.
“I think it has to wait until we know definitely what’s going to happen with Donington,” he said.
As the deadline approached, there was no word from Donington on its financial plans, although earthmovers were seen to be at work during its final race meeting of the year (see page 108). A spokeswoman said: “We are unable to publicly disclose any information about funding at the moment.”
It is understood, however, that the plan is to sell high-yield bonds secured on 3000 ticket sales from a hospitality area at the circuit, which Ecclestone has allowed to run alongside his established Paddock Club operation. It is believed that annual fees would be around £5000 a seat, which is twice as much as a three-day ticket to the Paddock Club. Given the economic downturn this strategy seems fanciful to say the least but Donington is allegedly promising 15-18 per cent returns to bond-holders.
The last time Donington hosted a Grand Prix was in 1993 and the circuit modification work so far has been paid by software entrepreneur Simon Gillett (right) and his business partner, property developer Paul White, who are majority owners of the race promoter Donington Ventures Leisure (DVL). Both are thought to have invested significant sums, but resources have been running dry.
At the end of 2007 DVL had just £28 in the bank and made an after-tax loss of £12.3m. Since then its financial situation seems to have gone further downhill – a report in May by business information firm Dun & Bradstreet revealed that the majority of DVL’s trade was not paid promptly or within 30 days, with a number of payments made more than 91 days late.
In a last-ditch bid to boost confidence, DVL announced in July that it had hired as a consultant Jayne McGivern, former chief executive of construction firm Multiplex. However, this may not be enough to allay fears as Multiplex also has a chequered track record having delivered Wembley Stadium around £300m over budget and two years late. Donington does not have that kind of time to play with.
Christian Sylt and Caroline Reid