Formula 1 news
Cash boost for F1 teams
At least, that’s what Sauber and Lotus are hoping… | by Adam Cooper
As Formula 1 marches towards the turbo era, the elephant in the room remains the inescapable fact that many teams are facing a severe financial squeeze – and the move to more expensive technology could not come at a worse time.
While increased income from the new Concorde Agreement will help, for many teams the sums still don’t add up. In recent weeks it was widely rumoured that Sauber would struggle to make the end of the season, while in June Lotus posted a huge loss of £56.8m in its official 2012 accounts. Others are also in the red as they commit to spending huge sums on powertrain deals for 2014 and beyond.
Lotus and Sauber have at least taken some pressure off by announcing fresh investment, although details are sketchy.
For Lotus the apparent saviour is a consortium known as Infinity Racing, not to be confused with car maker and Red Bull Racing partner Infiniti. UK-registered Infinity has acquired a 35 per cent stake, while Genii Capital retains the remaining 65 per cent, with Gérard Lopez continuing as chairman.
The three companies in the consortium are Crescent Investment Management (based in New Jersey), Al Manhal International Group (Abu Dhabi) and Universal Sports Group (Brunei), with their shareholding split 20-20-60. Exactly what the new investors are bringing to the Enstone camp is not clear, and Lopez is surprisingly vague on the subject.
“We’ll see how it works out,” he told Motor Sport. “We’ll keep on doing the thing we are doing, and we are the majority shareholder. They are supposed to bring contacts with sponsors and so on. This is like a wedding – we’ll see how it works.”
He also insisted that the team’s huge losses in recent years reflect a clever investment strategy: “We are actually probably one of the better financed teams. Three-quarters of the company’s debt is actually owed to us [Genii]. If I were to impose capital increases like everybody else does, we’d have to pay taxes. The best way for me to put money into the team is to loan it to the team.”
Meanwhile, Sauber pulled off a coup by attracting government-sanctioned funding from Russia ahead of the country’s first Grand Prix, which will be held in Sochi in October 2014. The team has also committed to running Renault 3.5 driver Sergey Sirotkin, who only turns 18 on August 27.
The three bodies involved are the Investment Cooperation International Fund, the State Fund of Development of North-West Russian Federation and the National Institute of Aviation Technologies. The last named is run by Sirotkin’s father Oleg, who has close links with Vladimir Putin, the driving force behind the Sochi event.
Thanks to this new funding Sauber appears to have weathered the current storm, but history has shown that there are obvious risks inherent in relying on deals linked to one driver.
For both Sauber and Lotus the recent announcements have clearly inspired some optimism, but the longer-term impact on the financial health of both teams remains to be seen.
Who will replace Webber?
Red Bull faces a straight choice between the experience of Kimi Räikkönen or the promise of Daniel Ricciardo as it decides how to replace the departing Mark Webber.
The latter’s decision to retire from F1 and join Porsche’s LMP1 programme has freed up a seat in the most successful team of the current era, and yet with other big names contractually tied up elsewhere – and perhaps wary in any case of joining a team built around Sebastian Vettel – the list of likely replacements is surprisingly short.
With perfect timing Ricciardo stated his case with top-10 qualifying performances in Britain and Germany, which left Toro Rosso team-mate Jean-Eric Vergne in the shadows. The Australian was subsequently called in to test the RB9 at Silverstone.
Clearly there’s a lot of momentum behind Ricciardo within the Red Bull camp, and if he followed the path established by Vettel it would emphasise the value of Toro Rosso as a training ground for the senior team, after so many other promising youngsters have fallen by the wayside.
Räikkönen has obvious appeal, however, given his impressive results of the past two seasons with Lotus. He first established Red Bull connections in his debut F1 season with Sauber in 2001, and had personal sponsorship both while at Ferrari and in his rally days. Räikkönen had high hopes of replacing Webber as long ago as 2011, should the Aussie have moved on at that stage.
Off-track, the bonuses for Red Bull are the huge marketability of the ever-popular Finn – despite his reluctance to participate in PR activities – and the trademark low-key approach that ensures he doesn’t clash with team-mates or waste energy on politics.
Räikkönen has consistently claimed that the decision on whether to stay at Lotus or move elsewhere is his to make, and makes it clear that he’s still weighing up what’s on offer.
Williams rebuilds around Symonds
Williams’s decision to hire Pat Symonds as its chief technical officer could prove to be a wise move as the team attempts to rebuild after a dire 2013 season.
After Sam Michael’s departure, Williams placed its hopes on the combination of Mark Gillan and Mike Coughlan. Gillan left last December, however, and Coughlan’s departure was confirmed in tandem with the Symonds announcement. Last winter the team talked to Paddy Lowe before the McLaren man switched his attention to Mercedes.
Symonds, who helped Michael Schumacher and Fernando Alonso to four World Championships at Benetton/Renault, was subject to an FIA ban in 2009 after the Nelson Piquet Jr ‘crashgate’ saga.
He returned at the start of 2011 as a technical consultant to Marussia, although until this season he did not appear during race weekends.
He officially joins Williams on August 19, which will be early enough for him to have a significant influence on preparations for 2014.
* The final piece of the 2014 engine puzzle fell into place when Marussia confirmed it will use a complete Ferrari powertrain and gearbox package from the start of 2014. At the time of writing Sauber, Lotus and Caterham had yet to confirm they will continue with their current suppliers, but all are expected to do so. Ferrari had the capacity to supply a new customer team, because it has lost Toro Rosso to Renault. The Marussia/Ferrari deal came about despite an apparent clash of interests, given the Russian company’s aspirations as a supercar manufacturer.