• by David Kaplan , November 12, 2004

Following the recent announcement of a $578 million loss for the third quarter, The Interpublic Group of Companies is terminating its interest in the Silverstone racetrack, effective December 15, 2004.

On that date, the company's Silverstone Motor Sports Limited subsidiary will transfer to the British Racing Drivers' Club. The deal covers IPG's associated businesses at Silverstone, thereby bringing to a close Interpublic's involvement in U.K. motor sports.

After that, Interpublic will have no significant future financial obligations related to its former motor sports holdings or contracts.

"For a number of years now, this non-strategic business has been a disproportionate drain on our operating results, as well as management time and attention," said a statement from Interpublic CEO David Bell. "Exiting motor sports is therefore an important step for us as we move forward and focus on our core business."

Last April, IPG agreed to pay $93 million to end the 15-year contract to promote and run the British Grand Prix in the fourth year of the deal.

The contract with Formula One Administration Limited would have cost IPG an estimated $300 million through 2015, according to analysts' reports. IPG was previously under contract to lease the Silverstone racetrack in the United Kingdom where the Grand Prix is held. In addition, it was also contractually obligated to cover the cost of maintaining the course. Those obligations were collectively estimated to be $160 million through 2015.