by Terry Lovell
The majority of the members failed to share Sir Jackie’s enthusiasm for the partnership. At an extraordinary general meeting on 22 February, their approval for the board to conclude negotiations with St Modwen, or with a company called Northern Racing plc, in which St Modwen was a principal shareholder, was postponed. Described as ‘a customer service-driven group of ten racecourses and one golf course,’ members were alarmed to hear that the board proposed handing over operational control of Silverstone to Northern Racing, a company without any experience of motorsport. Sir Jackie and chairman Stuart Rolt, in conceding that members ‘needed more time and a longer period of consultation’, remained ‘confident that… we can proceed with our strategic plans for the development of Silverstone’.
But they must have realised the proposed partnership was dead in the water. Less than a month later, Rolt conceded that the partnership with St Modwen had ‘no hope of success’ and was formally ditched in April. Its failure was a factor in the decision by Sir Jackie, after six years in office, not to seek re-election as president at the club’s annual general meeting in April 2006. He said: ‘It wasn’t only the St Modwen element. I have had a fairly high profile for a very long time. That is attractive to some people and unattractive to others… and that body, I’m afraid, was causing me a considerable amount of irritation. There were also other things going on in my life, which were consuming my time. It didn’t appeal to me any longer.’ His departure was followed, in June, by that of Hooton who was deeply disappointed by the outcome of Project Hill, wounded by criticism – some of it offensively personal, from certain BRDC members – and politically isolated following the departure of his strongest ally, Sir Jackie. ‘I had had enough of the whole bloody thing,’ he said.
Members’ opposition to the board was led by long-standing member and property developer Harry Stiller, the 1966–67 British Formula 3 champion. Before the meeting started, said Stiller, Sir Jackie attempted to persuade him to back the board. ‘He knew I was going to call a vote on the floor, and he said, “Look, Harry, drop it. Let this go through. It’s the best thing for the club.” What I said in reply upset him greatly. Of course, it came to a vote and almost every hand in the room shot up and it got scuppered. It was unanimous.’ Stiller said he opposed the St Modwen offer because ‘it was a lousy, rotten deal. Firstly, that figure of £600 million was blue sky. Secondly, they were going to get Silverstone for virtually nothing, for hardly any money down. Agreeing to a lease of 150 years was tantamount to selling the freehold.’
He disputed Sir Jackie’s claim that Silverstone would have received an advance of £30 million. ‘The figures he is talking about were projections by St Modwen over the course of ten or fifteen years. The only cash, real folding money, coming to the BRDC for a 150-year lease was £11⁄4 million. And the annual rental they were going to pay for the facility was… for taking over the grand prix contract… about £250,000 a year. I didn’t see any benefits for the club. It was a very one-sided deal.’ A senior BRDC figure, who was not prepared to be named but who was highly critical of Stiller, dismissed the recall of the figures as being ‘wrong… [they were] definitely not the terms of the St Mods deal.’
During the time when the BRDC board had met with various property developers, Stiller had got together with fellow member and racing circuit designer Tom Barnard, who was Silverstone’s Development Director and circuit advisor between 1992 and 1995, to submit to the board their own redevelopment plans, which they described as being ‘logical, achievable and capable of maximizing the return on the BRDC’s 780 acres of land in a very positive manner’. They proposed a grandstand and hospitality boxes marketed on a 20-year debenture basis, a review of plans for the establishment of a technology and industrial park, the provision of an extreme sports facility and the building of a half-mile oval track on what was the Super Special rally stage. Additional proposals included the staging of concerts and setting up a motorsports theme park. But their most radical proposal involved Ecclestone.
It called for ‘a beneficial joint venture’ with him, with the costs of redevelopment to be shared along with the gate money and sponsorship income and ‘many other cash-flow sources’ to be investigated and possibly shared. Stiller, a long-standing acquaintance of Ecclestone, went to the F1 boss’s office and left encouraged. ‘We agreed there were grounds for having a joint venture,’ said Stiller. Ecclestone was quoted as saying: ‘Harry’s trying to put something together to retain the British Grand Prix. I said I’d be only too pleased to help. There are various ideas under discussion. He asked me if maybe I could be the promoter. Everything is possible.’5 It wasn’t a view shared by the board. Its members did not desire a partnership with Ecclestone. As for the circuit redevelopment proposals, the current chairman, Robert Brooks, commented, ‘the ideas were considered as a whole but from a business perspective the overall plan simply didn’t hold water. One or two were simply a repetition of plans the board had developed [while] others were very amateur in their construct.’
Stiller was to depart from the BRDC under a heavy cloud of controversy, in vastly different circumstances from when, after winning his first Formula 3 championship title in 1966, Graham Hill and 1954 Formula 3 champion Les Leston respectively proposed and seconded his application for membership to the BRDC. He was booted out of the club in June 2007 following an application for life membership, which requires a period of continuous membership as qualification. However, there were two lengthy periods when he had been absent from the club – for two years beginning in 1985 and for eighteen months beginning in 2000. He explained them away by claiming that he had been unwell or in America at the time. In fact, during those periods he had been in prison after being convicted of fraud offences and conspiring to import drugs into the UK. Another member, in a complaint against Stiller, tipped off the board.
By mid-2007, with just two years to go before the expiration of its five-year contract with Ecclestone, the BRDC board – which in April 2007 rejected a reported £56 million buy-out bid from property developer Oliver Speight, plus a cash payment of £20,000 to every member – ‘We never received a proper offer from Speight,’ said a senior BRDC member – was once again focussing its efforts on a self-funding approach. Politics and wrangling within the club, brought to a head through the St Modwen and Stiller/Barnard episodes, had been a time-consuming distraction.
By late 2007, the BRDC began a period of consultation of a revised masterplan, a ten-year redevelopment project, with its two local authorities – Aylesbury Vale District Council and South Northamptonshire District Council; the Silverstone land is divided roughly between the two – that produced a Planning Development Brief (PDB) allowing planning permission in principle for the construction of a new grandstand and hospitality centre, a new corporate hospitality centre, a new pit and paddock complex and three hotels. The PDB, adopted by the two local authorities in December 2008, also approved the potential development of non-F1 activities, with the emphasis on educational facilities, high-tech engineering, research, logistics and leisure. The BRDC had hoped for approval in principle for the residential development of land owned by the club in the village of Silverstone. Objections by South Northamptonshire District Council, however, and the time it was likely to take to resolve them, dissuaded the BRDC from persisting, although planning permission for residential development was not refused.
Approval of the PDB was essential to the BRDC’s hopes of retaining the British Grand Prix. The granting of planning permission would greatly increase the value of its land, against which it planned to raise the necessary funding of tens of millions of pounds for F1 and non-F1 redevelopment. But it was the right result at the wrong time. The global economic meltdown, which had begun in 2005–06 when a boom in US house prices began to reverse and was followed by a sharp acceleration in 2007, had by now thrown the banking system in the UK into virtual shutdown. Land and property values took a sharp nosedive while banks, bailed out by billions of pounds of taxpayers’ money, wer
e refusing to loan it on, thereby effectively bringing the building industry to a halt.
By now the BRDC board was aware that its hopes of renewing the grand prix contract were unlikely to be realised. In February 2007, Tom Wheatcroft, the sprightly 87-year-old owner of Donington Park, went to see Ecclestone about an approach that had been made to him the previous year by the joint chief executives of a company called Donington Ventures Leisure Ltd (DVLL). The company had been set up in November 2006 after securing from Wheatcroft a 150-year lease, plus substantial landholdings, reportedly for £30 million, and were now interested in staging the British Grand Prix at Donington Park. The friendship between Ecclestone and Wheatcroft went back many years, and Ecclestone listened respectfully to what Wheatcroft had to say. ‘We looked at the figures, we spoke a lot about the figures,’6 said Wheatcroft.
By the end of their meeting, Ecclestone had agreed to meet the two businessmen – Simon Gillett, a former Royal Navy weapons engineer who moved into computer software before making his fortune in retail consultancy, and Legg Gill, a former Marks & Spencer executive who became head of retail in Europe, Middle East, Africa and Russia for i2 Technologies Inc, a NASDAQ-quoted supply chain company. Neither man had any motorsport experience, although Gillett had childhood memories of racing thanks to his father’s position as head of sponsorship for Elf in the UK. But for Wheatcroft, it is probable that they would have had trouble getting past Ecclestone’s personal assistant. He said: ‘I was influenced quite a bit by Tom introducing them.’ Without him I would have been a little more sceptical, I suppose. Tom’s got big influence, particularly with me. I know he wouldn’t bring people to me he didn’t know or trust.’
After months of speculation over whether Silverstone would continue to host the British Grand Prix, Ecclestone brought matters to an end with mischievous timing. On 4 July 2008, as celebrations were being made ready to mark the 60th anniversary of Silverstone, he announced that he had signed a 10-year contract with DVLL that the British Grand Prix would be staged at Donington from 2010. Coming at such a time, the news incensed the BRDC. Damon Hill said, ‘It hurt at the time but it didn’t come as a complete surprise. We had had reports that a contract was on the table for Donington.’
The bill for bringing Donington up to the standards demanded by Ecclestone was calculated to cost about £100 million, with £40 million required to bring the circuit up to scratch in time for 2010, which Gillett and Gill planned to raise through a debenture scheme similar to the approach used in the construction of the £798-million Wembley Stadium, where more than £400 million was raised by offsetting bank debt against future ticket revenue. DVLL was looking to sell more than 6,000 corporate tickets at an annual cost of £5,000 a seat to generate £30 million per year from less than ten per cent of paying customers. But, with just two years to complete the work, they were in a race against time, and trying to raise funding at a time when corporate expenditure on flesh-pressing champagne junkets was among the first casualties in spending cut-backs. It would have been difficult enough during a sound economy with the redevelopment work completed. Yet hopes were being pinned on raising the necessary funding while construction work was still going on, and amid negative publicity caused by such respected voices as Sir Stirling Moss, Ron Dennis and former broadcaster Murray Walker, who believed that the work – scheduled to include a new pit and paddock, a two-way bridge, six new temporary grandstands, a track infield loop for the final corner to extend the length of the track, and a clubhouse, at a total cost of £40 million – could not be completed in time.
The first sign that all was not well within DVLL came within two months of Ecclestone’s announcement, with the news that Gill was leaving the company, as was financial controller Peter Edwards, and public-relations company Sidhu & Simon Communications, respected PR and sponsorship specialists in Formula One. Gill, who claimed he was dismissed without notice, with his contract being ‘verbally terminated with immediate effect’ by chairman Nick Schwartz, took his case to the High Court to claim damages of up to £150,000, plus ‘other benefits’ totalling £36,000. It was set to be heard in 2010.
By early September, DVLL submitted a planning application to North West Leicestershire District Council for permission to carry out the required redevelopment programme, which, it was calculated, would take five years to fully complete and which, said Gillett a touch unrealistically, would result in a circuit that would be ‘the pride of world championship motorsport’.7 The council had been put under considerable pressure by DVLL to issue its decision early January 2009 in order to meet construction schedules. The impression given was that unless DVLL received planning consent by then, deadlines would not be met. A special planning committee gave its consent on 8 January, which caused a jubilant Gillett to enthuse: ‘I couldn’t be happier, and from tomorrow morning it’s shovels at dawn, and away we go.’8 But not, as events turned out, very far. On 9 January, work was scheduled to start on the new pit and paddock complex and medical centre and, on 9 April, a clubhouse and the track infield loop. But by late June – almost six months later – a shovel had still to be lifted. The only work completed in that time had been a two-way tunnel connecting the infield to the outer circuit ring, which caused its own problems. In mid-April, five race events, including the Formula Palmer Audi and the British F3/GT Championships, had either to be cancelled or postponed due to safety fears caused by a reduction in run-off areas surrounding the track above the tunnel.
Gillett’s boast that the revamped Donington circuit would be ‘the pride of world championship motorsport’ was called into question by the government’s Commission for Architecture and the Built Environment. The design plans of Formula One architect and circuit designer Herman Tilke, responsible for the design of the showcase Sepang International Circuit, Malaysia, and China’s Shanghai International Circuit, were said to ‘reflect a poor understanding of the site and the opportunities it offers’. It added: ‘The material presented gave us little confidence that a bold architectural vision had been developed for this facility to showcase Britain’s racing pedigree and create at Donington Park a racetrack of global standing to match Formula One’s most recent tracks in Bahrain, China and Malaysia designed by the same team working on Donington.’ Design architect Klaus Schackers, of Tilke GmbH, dismissed the report as being politically motivated. He said: ‘This is background politics in the UK. We feel there are some people that may be interested in damaging the reputation of Donington Park… due to the very special situation between Silverstone on the one hand and Donington Park on the other hand.’
Serious doubts about the financial stability of DVLL, majority-owned by Gillett and Monaco-based Midlands property developer Paul White, to deliver the British Grand Prix at Donington began to emerge as early as February when the company’s accounts to December 2007 revealed a loss of £12.7 million and debts of £66.7 million. Astonishingly, it had just £28 cash in the bank. In 2007, White had provided a guarantee of £4 million to enable DVLL to secure a £16.3-million bank loan from the Anglo-Irish Bank, a parlous state for a company ambitious to stage the British Grand Prix. The accountant also noted: ‘The current economic conditions create uncertainty particularly over (a) the level of demand for the group’s services and (b) the availability of bank and other finances in the foreseeable future.’
Ecclestone claimed to be unconcerned by DVLL’s vulnerability. ‘I don’t think what their accounts show makes an awful lot of difference, because providing they pay us, whether they don’t pay other people isn’t our business,’ he said. His agreement with DVLL was underwritten by Gillett agreeing to produce a letter of credit by September 2009. ‘If that happens, at least they’ve paid for the first two races. If the money isn’t there by September, there won’t be a race [at Donington].’
Further concerns about DVLL’s commercial credibility were raised after legal action was taken against the company by security firm McKenzie Arnold Security, of Braintree, Essex, for alleged non-payment of security ser
vices since August 2008. A public-relations spokeswoman for DVLL, Rebecca Brocklesby, denied any fees were outstanding, claiming that McKenzie Arnold had not been contracted to work on the site. However, managing director Martin Jackson said his company – which, he claimed, had begun providing security services at Donington Park in October 2006 and had taken over full security of the circuit in October 2007 – had issued a statutory demand for non-payment of security service fees on February 2, which, he said, DVLL had paid within the 21-day deadline. If a statutory demand is not paid within twenty-one days, a bankruptcy petition can be issued. A further statutory demand, he added, had been issued in respect of outstanding additional fees. ‘Whenever you go and do £800,000-worth of work there is a contract in place. It would be very bizarre if somebody like Donington Park didn’t put a contract in place, because they would have had absolutely no control over us.’ Brocklesby, on behalf of DVLL, declined to respond to questions.
But the biggest threat to DVLL came in early February when a dispute arose over alleged rent arrears dating back to September 2008 and totalling £2.47 million. On 23 April, Wheatcroft & Son Ltd issued legal proceeding at Derby County Court seeking forfeiture of the circuit lease in addition to the rent arrears. Six days later, Wheatcroft’s son, Kevin, announced: ‘We are still in communication with DVLL and hope there is a path forward, as the Wheatcrofts do not want to risk losing the Grand Prix for Britain, but, on the other hand, money is owed.’