Interpublic exits motorsports with Silverstone payoff

LONDON - The Interpublic Group is set to exit what it described as its 'ill-fated' foray into motorsports as it negotiates to end its lease of the Silverstone racetrack for £27m.

Interpublic has been leasing the Silverstone track, which will host the British Formula 1 Grand Prix this weekend, from the British Racing Drivers Club in a contract that was not due to end until 2007.

However, the company has now negotiated with the BRDC to terminate the contract by mid-December, and has agreed to make the £27m payment in two instalments, the first of which has already been paid.

Today's announcement signals the end of Interpublic's disastrous foray into the world of motorsports, which has cost the company hundreds of millions of dollars.

Interpublic began buying motorsports assets as part of an acquisition spree in the late 1990s. The investments never paid off and, in 2001, the motorsports division posted a loss of $135.8m.

Interpublic began to dismantle the division last year, selling off Brands Hatch and three other motor racing tracks in January 2004 to former F1 driver Jonathan Palmer and, in April, terminating its contract to promote the British Grand Prix. Combined charges for the deals cost Interpublic $131m.

David Bell, president and CEO of Interpublic, said that the company was pleased to end its "ill-fated" foray into venue ownership.

"The new terms we have negotiated with the BRDC allow us to terminate the Silverstone lease and related obligations, which puts us in position to complete our exit from motorsports before the end of this year. This has been an important priority for the new management team," he said.

Interpublic owns the advertising networks McCann Erickson Worldwide and Lowe, as well as the media network Initiative and the global PR agency Weber Shandwick Worldwide.

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