With the slowdown in the construction industry, he has more than enough manpower available and as his business partner owns most of the means of production, like steel mills and concrete facilities, reprofiling the track and putting up the 800,000 sq/ft of buildings isn’t going to be a problem.
The bit I was sceptical about was the financing of the whole thing using a debenture scheme. I mean, can you imagine trying to find companies and individuals in this economic climate, willing to give you £18k for a debenture and then commit to another £7k a year? It was a good business model in the bull market and worked at Wembley and to a lesser extent Arsenal’s Emirates Stadium before the credit crunch came.
But the critical point, according to Gillett, is that the risk on the scheme doesn’t lie with him, it lies with his debenture partners IMG, the sports marketing firm and Goldman Sachs, the investment bank. He says that they committed to the programme before the credit crunch came, so he will get his money anyway whether they sell 10 debentures or 10,000. He gets the up-front money, they get the annual fee. If that is the case, then he certainly got his timing right and this event could well come off. And given that he also claims to have negotiated very good terms with Bernie for the five years, in other words he’s got the race on the cheap, you can see why he was looking quite pleased with himself at the Forum.
If you want to know more detail about the plans for the new-look Donington, including the zany idea of banning cars from driving into the circuit, Grand Prix.com has done a pretty thorough report on it.
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