One of the key partners in Donington Park's bid to host the British Grand Prix from 2010 onwards has confessed that 'now is not the best time to be persuading people to part with money for a new sporting proposition' and that they 'would have been more confident of being able to do this twelve months ago'.
Formula 1's commercial rights-holder Bernie Ecclestone – who awarded Donington the ten-year deal to take over from Silverstone in welcoming Britain's blue riband
motorsport event from next year – has given the Leicestershire venue's owners Donington Ventures Leisure Ltd (DVLL) a deadline of September to secure both planning permission and the necessary funding to complete the ambitious £100 million, five-year re-development that will be required to bring its facilities and amenities up to F1 standard.
“They have a contract with us that I am sure they understand,” the sport's supremo told the Daily Telegraph
, “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.”
It is understood that Donington is currently trying to raise the final £40 million towards its re-development budget, set to pay for a track re-alignment, a new pit and paddock complex, six new grandstands to seat as many as 68,000 fans, a new media centre and new hospitality suites amongst other upgrades and improvements. However, amidst the current global credit crunch, realisation is beginning to dawn that such a task will be far from easy, leaving the circuit facing a dramatic race against time if it is to successfully honour its commitment to stage the race.
DVLL's intention is to secure the required funding by offsetting bank debt against future ticket revenue, largely from the corporate sector. Such an approach was used effectively in the construction of Wembley Stadium, where bank loans of more than £400 million were raised against the potential of premium seat licences sold to corporate customers.
The goal, according to the Telegraph
, is to sell more than 6,000 seats to corporate customers, at an annual cost of £5,000 a seat – thereby generating as much as £30 million a year from just five-to-ten per cent of paying customers. However, seat licences will not go on sale until July, meaning there will be less than a year to sell the packages and that the money will need to be raised whilst, rather than before, the on-site construction takes place.
“Would we rather have been testing the market and putting together this product a year ago? Of course we would,” acknowledged 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.