Donington

Sources: http://www.telegraph.co.uk/sport/motorsport/formulaone/5208205/British-Grand-Prix-future-threatened-by-Donington-Park-owners-lawsuit.html ; http://www.telegraph.co.uk/sport/motorsport/formulaone/5451581/Donington-Park-clear-legal-hurdle-in-bid-to-stage-2010-British-Grand-Prix.html; http://www.telegraph.co.uk/sport/motorsport/formulaone/5454942/Simon-Gillett-adamant-Donington-Park-will-host-British-GP.html ; http://www.express.co.uk/posts/view/98471/Gillett-banking-on-the-best-of-British):

Yet another twist in the proposed £100m redevelopment of the Donington race circuit in preparation for its hosting of the British Grand Prix in 2010. While Donington had beaten Silvestone to securing 17yr hosting rights for the event, at a reputed £12m pa, doubts had begun to be raised over the track’s ability to complete this redevelopment.

At the start of the year, Donington Ventures Leisure Ltd (DVLL) is reputed to have owed the track’s owners (Wheatcroft & Son Ltd) £2.47m in rent arrears dating back to September 2008. Kevin Wheatcroft finally launched a legal action (at Derby Crown Court) against the track in April to recover the outstanding rent and force the track operators to forfeit their 150-year lease on the circuit.

The catalyst for this action seemed to be when Simon Gillett (Chief Executive of Donington Ventures Ltd) missed the March deadline to announce details of a ‘debenture scheme’ to finance the track redevelopment. After this omission, it would seem that the Wheatcroft’s lost confidence in DVLL’s ability to repay their debts. North West Leicestershire District Council even threatened to revoke the planning permission they had previously agreed for the track development if the two sides could not reach an agreement over the section 106 document (concerning the event’s safety).

Legal action was however averted on 5th June, when the two sides confirmed they had reached an out-of-court settlement over both the outstanding rent and the planning permission.

The problems for Gillett arose when he lost the support of his bank (understood by the Telegraph to be Goldman Sachs in a joint venture with IMG) to fund the track redevelopment through a debenture scheme. He later released details of this scheme in the Daily Express (http://www.express.co.uk/posts/view/98471/Gillett-banking-on-the-best-of-British):

“Debentures will be offered on three, five and 10-year levels. People will be pleasantly surprised at the prices with the lower level at £1,200-a-year going up to the platinum at £4,000 with varying degrees of access to superb new facilities for debenture holders.

They also plan to have “participatory” events for debenture holders with track competitions and other schemes to allow hands-on use of Donington. “All of this with a superb debenture clubhouse with three levels with everything people want in terms of quality, from food to views,” added Gillett.

We’re only looking for 4,700 a year globally to buy into our idea. Our survey shows they are out there.”

Initial estimates suggested that the project would raise £175m over 10 years. Since March, this figure has now been revised to £140m, excluding corporate hospitality.  Similar debenture schemes were used to fund construction projects at Lord’s, Wembley, Wimbledon and Twickenham, see: http://www.telegraph.co.uk/sport/football/international/england/2322630/Wembley-forced-to-make-cutbacks.html

And will include 40 days of entertainment apart from the grand prix including other motorsport and music events such as the Download festival.

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About Kris

Associate Professor in Sports Law, Staffordshire University; British Gymnastics Senior Coach

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