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Jaguar Land Rover demurs on Silverstone circuit lease

Published in blog.hemmings.com

Photo courtesy Silverstone Circuit.

A would-be financial rescue for the historic Silverstone circuit in Great Britain has apparently fizzled now that Jaguar Land Rover has backed away from a bid to either buy or lease the track as the home of a new heritage center to showcase its luxury vehicles.

Automotive News Europe reported in April that the British Racing Drivers Club, which owns Silverstone, was in negotiations with the automaker on a possible purchase or lease of the property for a proposed project that would have included a museum, offices, a hotel and a Silverstone visitors center. This week, the publication reported that those talks had broken off after dragging on for several months.

Silverstone is among the most deeply historic circuits in Europe, built on the site of a former World War II airfield, and having hosted the very first round of the modern Formula 1 world championship in 1950. Over the past seven years, the BRDC has tried to interest investors in buying a long-term lease for the track, to mitigate the club’s long-term exposure to risk. As it stands, the British Grand Prix is the sole event on the 21-race F1 calendar that receives zero public financing. Under the current F1 operating agreement, race organizers don’t receive a share of F1’s billion-dollar TV or branding monies, and rely solely on ticket sales for their income. Ticket revenues fund not just the running local expenses for hosting the Grand Prix, but also cover F1’s sanctioning fee, estimated to total around $25 million annually.

London-based The Telegraph newspaper reported last year that despite raising ticket prices, Silverstone lost money on the British Grand Prix three out of the last five years. Additionally, the BRDC built an elaborate pit and paddock structure with money borrowed from Lloyds bank, driving the operation deeper into the red. Despite the lack of cash reserves, the BRDC has denied that Silverstone is in any dire financial jeopardy.