The owners of the Silverstone circuit, the British Racing Drivers’ Club, have activated the break clause on their contract to host the British Grand Prix and will now only hold the race until 2019. There are currently no other circuits in the UK with the classification to host Formula One and there are no credible alternatives. If the BRDC fails to come to a new agreement with owners the Formula One Group (formerly Liberty Media) there is a genuine possibility there would be no British Grand Prix, an event that has been on the F1 calendar since the world championship began in 1950.

With this year’s British Grand Prix set to take place this weekend and despite another huge crowd expected to attend to watch Lewis Hamilton’s attempt to win his fourth race in a row there, the event remains loss-making for the circuit.

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“It is not financially viable for us to deliver the British Grand Prix under the terms of our current contract,” said John Grant, chairman of the BRDC. “We sustained losses of £2.8m in 2015 and £4.8m in 2016, and we expect to lose a similar amount this year. We have reached the tipping point where we can no longer let our passion for the sport rule our heads.”

The Formula One Group, insisted they had offered Silverstone longer to consider invoking the break clause and claimed the circuit was looking to make a short-term gain. “We deeply regret that Silverstone has chosen instead to use this week to posture and position themselves and invoke a break clause that will take effect in three years’ time,” said a statement.

“We offered to extend the current deadlines in order to focus on everything that is great about Silverstone and Formula One. Regretfully the Silverstone management has chosen to look for a short term advantage to benefit their position.”

Before the current contract was signed in 2009 there was considerable expectation that the circuit would not be able to meet the demand for new facilities at the track nor the hosting fees demanded by F1 management – at the time led by Bernie Ecclestone. They met both criteria but in doing so assumed the current financial difficulties.

There was a £50m investment programme and the deal done to host the race from 2010 to 2026 was known at the time to be difficult to meet, especially the escalator clause that ensures the fees rise each year but taken on in the hope that revenues would increase. Silverstone had been given a more generous deal than many circuits but the figures remain intimidating. Over the opening eight years the 5% escalator saw the fee rise from £11.5 million in 2010 to £16.2 million in 2017. It would be set to reach £25m by 2026.

The Formula One Group made it clear in advance of the break clause being initiated that they were not willing to renegotiate. They have also been vocal in their stated support for keeping classic European races and helping promoters generate more revenue. However Silverstone is already almost at a maximum in terms of revenue from ticket sales. It is the best-attended F1 race and has had ticket sales of 139,000 for the past two years.

The difficulty they are rightly stressing is that it would be virtually impossible to sell more tickets and have made it clear they do not believe prices can go any higher. “You can’t just keep putting prices up for the fans,” said Stuart Pringle, the circuit’s sporting director. “There is a breaking point beyond which fans will not go.” Suggestions that London would be able to host the British Grand Prix remain largely fanciful. The central difficulties with the concept – including fundamental organisational, safety and financial issues – remain unsolved are unlikely to be resolved before 2020.

The decision has been interpreted in some quarters as posturing in a bid to coerce Liberty Media back to negotiating a new contract and the circuit has stressed it is still working with them. However that this was only part of a ploy to arrange a new deal was denied. “We don’t do this lightly,” said Pringle. “We are fully cognisant of the implications of our actions but the reality is we can’t carry on with unsustainable losses.”