Funding for the ambitious redevelopment, which will begin with improvements to the track and the construction of a new pit and paddock complex and hospitality suites, is not yet in place, and owners Donington Ventures Leisure Ltd have until this September to satisfy Bernie Ecclestone that plans are on course or risk losing their 10-year contract to stage the race.
Tomorrow night those plans will take a significant step forward when planning permission for the first stage of improvements to the circuit is expected to be granted by North West Leicestershire District Council. Greater hurdles lie ahead however as DVLL, led by chief executive Simon Gillett, seek financing for a project that will eventually cost £100 million over five years. Even those charged with raising the money concede that they face a challenge in a financial climate that has forced even Formula One to consider radical cost-cutting measures.
To succeed Donington will have to buck not only a financial crisis that has frozen corporate expense accounts almost as solidly as it has bank lending, but also the growing trend among F1’s traditional European venues, many of which increasingly question the sustainability of the sport.
DVLL’s contract with Ecclestone, the sports commercial rights holder, has a September deadline for certain conditions to be met, and last night he acknowledged Donington face a challenge in the financial climate.
“They [DVLL] have a contract with us that I am sure they understand, and I would imagine they have considered the state of the market and have a fall-back position.
“I am relying on what they told me they will deliver, and we have a September deadline, from memory, to see that all is as it should be. If it is not then we have four or five venues ready to stage a race.”
Ever since DVLL snatched the rights to host the British Grand Prix from under the nose of Silverstone’s owners the British Racing Drivers’ Club, questions have dogged plans to move the highlight of the motor racing calendar from its historic home. With less than 18 months remaining until the first race is due to take place at the East Midland’s circuit and redevelopment work yet to begin, many of them remain.
“Would we rather have been testing the market and putting together this product a year ago? Of course we would,” said Andrew Hambel, chief executive of ISG, a joint venture between sports media giant IMG and stadium finance specialists Bastion and the company engaged to structure the seat packages for the 2010 race.
“Now is neither the best time to be persuading people to part with money for a new sporting proposition, nor is it the best time to be asking banks to back an offer of this sort.”
Donington’s chief executive Simon Gillett said: “I can’t prove the doubters wrong except by building it, and I will do. Once we have planning permission, we can start putting all the other things in place.”
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