NEW YORK Interpublic Group has agreed to pay $93 million to end a 15-year contract to promote and run the British Grand Prix in the fourth year of the deal, IPG said.
The contract with Formula One Administration Limited would have cost IPG an estimated $300 million through 2015. IPG will record a charge in its second-quarter results to reflect the buyout.
"I have made it clear that it is inappropriate for us to be involved in owning or operating venue-based motor sports businesses," said IPG CEO David Bell, in a statement. "We are pleased to have moved closer to completing our exit."
The holding company is still under contract to lease the Silverstone racetrack in the U.K. where the Grand Prix is held; it also is contractually obligated to cover the cost of maintaining the course.
Those obligations collectively amount to about $160 million through 2015. The lease and maintenance contracts, however, have exit clauses that can be invoked in 2007, at the approximate cost of $62 million, IPG said. Still, IPG is believed to be pursuing buyouts sooner than that. A company representative declined comment.