F1 Business Diary 2014: the Italian Grand Prix

Monza has a habit of throwing up major business lines and during the 2014 Italian Grand Prix weekend the talk was of resignations as much as results.

A throwaway tweet sent by former Williams chief executive Adam Parr in the hours after Sunday’s race certainly got Formula One people talking. 

‘This is the last year of F1 as we know it,’ Parr, who has no active involvement in Formula One these days but can be assumed to have solid inside information. ‘In 2015 eight teams will contest the championship, with several teams entering three cars.’ Three car teams have been on and off Formula One’s agenda for the best part of a decade. There are pros and cons, but the prospect of losing three teams from the grid is, to say the least, concerning. Thanks mainly to Formula One’s skewed revenue distribution model, which is now locked in until at least 2020, and continuing failures to agree substantial cost-cutting measures, it is an open secret that at least four teams are struggling to stay above the waterline. Parr’s suggestion is that matters will soon come to a head. 

Marussia and Caterham have the smallest budgets in the sport and face a year-to-year battle to stay afloat, but with Marussia reportedly seeking investors and the resignation on Sunday of new Caterham team principal Christijan Albers after just three races – Albers, it is said, has not received the promised investment from the mysterious Swiss-Middle Eastern owners who acquired the team in July – concerns are clearly growing. Lotus, meanwhile, appears in a downward spiral and both the British-based company and Swiss-based Sauber, another team which appears to be in survival mode, were linked over the Italian Grand Prix weekend to Canadian billionaire Lawrence Stroll. Stroll, a fashion industry mogul and car fanatic, is said to be interested in acquiring a team at least in part to smooth the path to Formula One for his 15-year old son Lance, currently racing in the Italian Formula 4 championship. Whether mischievous or fuelled by genuine insider information, Parr’s post-race tweet is likely to set the agenda for the next six races.

The results business
McLaren left Monza just a point ahead of Force India in the continuing battle for fifth place in the constructors’ championship, following eighth and tenth place finishes in Italy. Earlier in the week, however, the wider McLaren Group posted its 2013 financials, reporting an increase in turnover from UK£249 million in 2012 to UK£268 million last year. Revenue was up 7.5 per cent and there was a pre-tax profit of UK£18.8 million. The Formula One arm of McLaren is in transition – there have been no race wins since 2012 and no title since 2008, but a new partnership with Honda, starting next season, offers hope – but the wider group appears in rude health. Ron Dennis, chief executive and chairman, is anticipating “significant long term growth” for the company.

The results business – part two
Williams, who scored another podium finish on Sunday with Felipe Massa, also posted financial results in the build-up to the Italian Grand Prix, its interim figures for the six months to 30th June 2014. Williams Grand Prix Holdings, which is the parent of Williams companies including the Grand Prix team, reported reduced income, down from UK£56.4 million to UK£46.6 million, a result put down to what the team called a ‘special non-recurring sponsorship payment for 2014 within last year’s accounts’. That, it can be assumed, is the payment made by Venezuelan oil company PDVSA to cover its contract following its decision to follow Pastor Maldonado, the driver it has backed for many years, to Lotus for the 2014 season. Maldonado’s decision, given the relative performance of the two teams this year, looks worse by the race.

Formula sail?
November’s double points season-finale in Abu Dhabi may well determine this year’s world champion, but the twilight race, on Sunday 23rd November, will form only part of a big week of sport in the resource-rich emirate. The following Tuesday sees the start of the inaugural Sailing World Cup, a new annual season-finale event for sailing’s Olympic classes. Abu Dhabi, through its various sailing organisations and tourism authority, has invested heavily and will host the regatta until 2019 and, according to president Carlo Croce, the International Sailing Federation is looking to organise a Formula One-sailing tie-up. “We want to build an event with the Formula One teams sailing with our sailors on the bay,” Croce told SportsPro, pitching the idea during a recent interview. “The bay is beautiful for television, it’s right in front of the skyline and this would be very good for media and for sponsors, so we are working on this idea.” It remains to be seen whether Formula One, a sport which tends to keep itself to itself, would be as keen as ISAF on a joint promotional event.

Quote of the weekend
“I think this rumour is kicking up rather too much dust. Last March, I made it clear I was available to continue in my role for a further three years and if anything changes, I will be the first to let it be known.”

Ferrari president Luca di Montezemolo, who made his usual theatrical appearance at the Monza on qualifying day, doesn’t absolutely dismiss fevered speculation that he is poised to leave his role to run Italian airline Alitalia. There was no confirmation at Monza, but strong speculation in Italy suggests di Montezemolo’s departure will be confirmed as he announces what is expected to be a record set of financial results for Ferrari at next month’s Paris Motor Show.