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SBD Global/November 18, 2013/FranchisesPrint All
Williams F1 Deputy Team Principal Claire Williams said that there are “absolutely no concerns” around the team’s finances for next season, despite losing one of its main sponsors. Williams recently announced that Brazilian driver Felipe Massa will replace Venezuelan Pastor Maldonado in the team’s driver lineup for ’14 and as a result, PDVSA will end its deal with the team at the end of the year. The state-owned Venezuelan oil company will not be present on the team’s cars in ’14, but it will not further impact Williams’ ability to race next season. Williams told SBD Global at the Circuit of the Americas, “When we looked at the PDVSA arrangement, we had to make sure that the outcome of that maintained that stability for the business. So looking ahead to next year, we wouldn’t have gone ahead with the arrangement that we made unless that was the case. We wouldn’t have entered into this arrangement if we weren’t sure that we had the budget to go racing for next year, so there are no concerns around that.”
ALWAYS ROOM FOR MORE: While Williams said that the team is in a financially stable position at the moment, it is always looking to attract new sponsors. However, the current economic climate and the hefty price tag that is associated with an F1 sponsorship make it difficult. Williams said, “I think people have this view that Formula One sponsorships kind of come in it at $10, $30, $40, $50 million. It’s not true. We do partnerships for much smaller numbers than that, and we always want to talk. We are an independent team. We have to keep our budget at a certain level in order to continue racing, so we are always willing to talk about much, much lower numbers.” F1 is a property that has a lot to offer to potential sponsors. Two billion people watch the sport, so for brands that want to get their message out there, it is one of the most high-profile global sports; it is also a "fantastic" platform for global advertising and business-to-business opportunities, Williams added. However, another factor that makes it difficult for Williams to attract sponsors is on-track performance. Williams, which was a perennial title contender in the ‘90s, winning four drivers and five constructors’ titles, has been struggling for several years now. “At the moment, our share of voice is on the decline because of where we are on a track-performance prospective, whereas Red Bull is right up at the top,” Williams said. “If you are looking for that brand exposure piece, if you are a sponsor coming into the sport, then we are really fighting hard to try and convince them to come and join Williams. But we are really lucky at Williams because of our heritage in the sport; we’ve been racing for 36 years. We are a very specific brand.”
MORE MONEY, MORE PROBLEMS?: With the majority of teams up and down the grid struggling to survive, many have called for some sort of cost-control measure. But while talks on the issue have continued for years, they remain largely without result. Williams said that her team would be in favor of such a measure, but not every team agrees with that notion. She said, “We are all very competitive in this sport and there’s a kind of general thesis that the more money you have the more successful you can be. So the teams at the top of the grid, why would they want to agree to a cost cap? And teams at the lower end of the grid are saying, ‘We got to do this for the sake of our sport,’ so we can keep competing. I think there’s a middle ground to be found because we have to achieve it for a number of different reasons.” A budget cap of some sort would keep the smaller teams in the sport and help them compete fairly, Williams said. “They are never going to be able to compete if we are looking at teams at the top end of the grid that are spending near $300 million. That’s just crazy. There’s got to be a level playing field because that creates the excitement for the fans. We got to look to our fans and say, ‘Do they think it is appropriate that we are spending $300 million a year when we are in the current economic situation that the world is in?’” There are numerous arguments for and against cost controls, but next year’s new regulations and high engine prices might put some pressure on the issue. Williams: “I’m not sure that the costs have been given a huge amount of consideration and they are hurting a lot of teams.”
MLS DC United co-Owner and NBA Philadelphia 76ers investor Erick Thohir and his partners completed their purchase of a 70% stake in Serie A club Inter Milan. Thohir, Rosan Roeslani and Handy Soetedjo, who form Int'l Sports Capital, take over as the majority stakeholders. Inner Circle Sports was the financial advisor to Thohir, while Jones Day served as the legal team and Ernst & Young was the accounting advisor (Christopher Botta, SBD). REUTERS' Stephen Jewkes reported Thohir "has been appointed" as Inter Milan chairman, the club said on Friday as former Owner Massimo Moratti's 18-year reign "came to an end." In a statement, Inter said that its shareholders "had named a new slimmer eight-member board of directors headed by Thohir, adding that Moratti had been appointed honorary chairman." The Int'l Sports Capital consortium owned by Thohir and his two Indonesian partners paid €75M ($101M) and "took on all of Inter Milan's debt" of about €180M ($242M) in exchange for a 70% stake in the club (REUTERS, 11/15). SKY SPORTS reported Moratti was named "honorary chairman." Thohir: "I really want to thank my friend and new partner Massimo Moratti for the trust and support, and thank also my partners Rosan and Handy, who I've known for more than 20 years." Moratti believes Int'l Sports Capital is a company "that can add to Inter's success." Moratti: "I am convinced they are more than equipped to keep on adding new successes to our beloved colors. Personally I feel honored I have been the President of Inter for so many years" (SKY SPORTS, 11/15).
THE WELCOME MAT: Thohir "immersed himself" in the Inter Milan Nerazzurro on Saturday, taking in his first game as owner, a friendly against Chiasso. Thohir joined the fans in jumping and chanting "Chi non salta rossonero è" (If you don't jump you're Rossonero), and bowed to the fans in the Inter "curva." The fans unfurled banners hailing the new owner and praising Moratti (LA GAZZETTA DELLO SPORT, 11/16).
ABT Sportsline, which runs an Audi factory team in the German Touring Car championship, "will enter the new Formula E electric racing series starting up next year," according to Alan Baldwin of REUTERS. The Bavarian team "will compete under the Audi Sport ABT name." Audi motorsport head Wolfgang Ullrich said in a statement, "We've been watching this new project of the FIA with great interest and are delighted that ABT Sportsline as one of our close and long-standing partners will be involved right from the beginning." The team is "the seventh to be named for the series, with three more still to come, and third from Europe." Formula E is "due to start in China in September, with races in 10 leading cities including Berlin" (REUTERS, 11/15). AUTOSPORT's Glenn Freeman reported while Audi "will not be involved as a fully-fledged manufacturer entry, it has stressed its support to the project." This is "likely to lead to its factory drivers racing in the series" (AUTOSPORT, 11/15).
League Championship club Middlesbrough Chair Steve Gibson is "working with two of the game's biggest powerbrokers to rebuild" the team, according to TRIBAL FOOTBALL. Gibson has confirmed that he is "working closely" with former ManU and Chelsea CEO Peter Kenyon and "leading agent Jorge Mendes." Both Kenyon and Mendes "played a major role in the appointment" of new Middlesbrough Manager Aitor Karanka, as well as a "recent link-up with La Liga giants Atletico Madrid." Gibson: "I felt that I wasn't perhaps being challenged enough within the club. I wanted an outsider's view to come in and have a look and tell us where he thought we needed improving, and he's been a great asset in that capacity" (TRIBAL FOOTBALL, 11/16).
League Championship side Queens Park Rangers "are on course to be hit with the biggest fine in British football history, which, in a worse-case scenario," could top £60M ($96.7M), according to Nick Harris of the London DAILY MAIL. It will be "imposed because of the amount of money they are losing" -- believed to be a huge £80M for last season -- and will "compound their financial troubles, perhaps sparking meltdown." QPR has "racked up big debts and massive annual losses largely through signing dozens of players on huge contracts in recent seasons, including Chris Samba, Park Ji-Sung, Julio Cesar, Jermaine Jenas, Loic Remy and others," most of whom "remain on the club’s books, draining their resources" with contracts worth up to £100,000 ($161,100) a week. If QPR is promoted this season, the fine will be levied in January '15 by the Football League under its new Financial Fair Play rules, which will see "overspending clubs ‘taxed’ on their losses." Rangers "are currently favourites to go up to the Premier League from the Championship this season." They could avoid a fine -- "or at least postpone it -- if they fail to get promoted." In that case, QPR will be hit with a "lengthy transfer embargo." If QPR’s losses for the season are £80M ($128.9M), the fine will be about £62M ($100M). That would equate to "roughly all of QPR’s Premier League income (if they are promoted) for next season." Even if '13-14 losses are as "low" as £60M, a fine of more than £40M ($64.4M) would follow. A Football League spokesperson said, "This is the first season in which clubs will ultimately face sanctions [for over-spending]. Clubs have to submit their accounts for 2013-14 to us by December 1, 2014, with sanctions levied early in 2015. If a club being sanctioned are in the Premier League by then, the fine will need to be paid" (DAILY MAIL, 11/17). The HERALD SCOTLAND reported QPR Chair Tony Fernandes has "denied that the club are facing a possible £60 million fine from the Football League." Fernandes, who is also the club's majority shareholder, "later took to Twitter to claim the report was 'not accurate.'" Fernandes tweeted, "QPR fans please ignore Article. Shows how big our brand has become that people need to write stories that are just not accurate. Stay focused on getting back to the premier league" (HERALD SCOTLAND, 11/17).