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How long until Force India goes for sale?


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#1 Victor

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Posted 31 December 2013 - 15:25

According to the Portuguese Auto Sport, Force India may become the next team in serious financial dire straits. Vijay Mallya and his partner Roy Subatra, the owner of Sahara Group, are involved in several financial scandals in India. Subatra does not have permission to leave the country until he pays back 2.8 billion euros (!) in debts. Mallya’s airline company, Kingfisher Airlines, has closed, apparently leaving huge debts for him to pay. How long until Force India goes for sale? 



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#2 Jon83

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Posted 31 December 2013 - 15:26

Same question is often asked at this team of the year!



#3 SenorSjon

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Posted 31 December 2013 - 15:31

That is why Hulkenberg left last year, only to find a team in more dire conditions. And now he has returned. No wonder no topteam wanted him, he is the bringer of financial doom. ;)



#4 Module

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Posted 31 December 2013 - 15:33

That is why Hulkenberg left last year, only to find a team in more dire conditions. And now he has returned. No wonder no topteam wanted him, he is the bringer of financial doom.  ;)

 

Yes, Lotus situation deteriorated when they started contemplating him...



#5 turssi

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Posted 31 December 2013 - 15:37

According to the Portuguese Auto Sport, Force India may become the next team in serious financial dire straits. Vijay Mallya and his partner Roy Subatra, the owner of Sahara Group, are involved in several financial scandals in India. Subatra does not have permission to leave the country until he pays back 2.8 billion euros (!) in debts. Mallya’s airline company, Kingfisher Airlines, has closed, apparently leaving huge debts for him to pay. How long until Force India goes for sale? 

 

I thought Caterham, Sauber or Lotus would disappear first? Do we know if it was Caterham who did an offer on Lotus or the other way around?



#6 Maikel0230

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Posted 31 December 2013 - 15:44

I doubt that Force India is in a dire situation, last year the same rumours surrounded the team and it turned out to be nothing, I doubt Hulkenberg and Peréz are cheap either so that should be a clear sign of financial stability, lotus and Sauber on the other seems like they could be in serious trouble.


Edited by Maikel0230, 31 December 2013 - 17:14.


#7 Fastcake

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Posted 31 December 2013 - 15:50

This is not news. Force India's owners have been involved in financial problems for some time now, but there's no indication that the team has been directly affected.



#8 fluffy38

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Posted 31 December 2013 - 15:53

I thought Caterham, Sauber or Lotus would disappear first? Do we know if it was Caterham who did an offer on Lotus or the other way around?

FYI, there is nothing between Caterham and Lotus...Where did you see that "rumor"?



#9 aray

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Posted 31 December 2013 - 16:10

at present Marussia,Caterham and Lotus have more financial worries than FI...the first 2 teams can't run without pay drivers and Lotus now depending on Venezuelan oil money...even Grosjean brings Total's money..in comparison Hulk bring almost nothing and Perez brings far less than Maldo....



#10 Module

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Posted 31 December 2013 - 16:24

I have been under impression of the opposite, that FI is making a real effort to progress as they didn't take paydrivers but have maybe the strongest lineup in midfield and have been recruiting strongly on the engineeringside. To me it has seemed like they would try to strike past Lotus and Sauber as theese are struggling. In addition there was information on another topic that Mallyah has sorted out his troubles.

 

My guess for next year is:

 

RBR, Merc, Ferrari 1-3

McL 4th

FI 5th

Lotus(if they survive), Sauber, TR, Williams 6-9th


Edited by Module, 31 December 2013 - 16:27.


#11 fluffy38

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Posted 31 December 2013 - 16:31

Caterham and Marussia dont have financial "trouble" .... they are just low budget teams that rely on pay drivers.

People at Caterham are getting paid every month and there are news engineers coming in regularly...



#12 aray

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Posted 31 December 2013 - 16:59

Caterham and Marussia dont have financial "trouble" .... they are just low budget teams that rely on pay drivers.

People at Caterham are getting paid every month and there are news engineers coming in regularly...

while FI made to midfield in 3 years from the backpack(Spiker/Midland),Caterham and Marussia seem to be stagnated for the past 3 years..low budget for  working on is kind of a 'financial problem' for engineers...nobody wants to be in low budget by choice...it means they have problems getting investors...


Edited by aray, 31 December 2013 - 17:00.


#13 fluffy38

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Posted 31 December 2013 - 17:05

while FI made to midfield in 3 years from the backpack(Spiker/Midland),Caterham and Marussia seem to be stagnated for the past 3 years..low budget for  working on is kind of a 'financial problem' for engineers...nobody wants to be in low budget by choice...it means they have problems getting investors...

 

I'm not saying the situation is ideal but its certainly not as bad as lotus.. it's just that both teams are building slowly and putting infrastructures in place... the factory at Caterham is impressive considering the results.. but results dont happen straight away... they will come



#14 MikeV1987

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Posted 31 December 2013 - 17:12

Wouldn't mind seeing another manufacturer buy them out tbh.



#15 onewingedangel

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Posted 31 December 2013 - 17:36

while FI made to midfield in 3 years from the backpack(Spiker/Midland),Caterham and Marussia seem to be stagnated for the past 3 years..low budget for  working on is kind of a 'financial problem' for engineers...nobody wants to be in low budget by choice...it means they have problems getting investors...

 

But they were previously an upper-mid-field team (Jordan) and had the facilities that entailed. Caterham and Marussia started from nothing.

 

It can take years to build up the infrastructure of even a mid-field team even if you were spending tens-of-millions extra each year.

 

Short of an injection of hundreds of millions to get a fully kitted state-of-the-art facility and poaching wholesale an established technical team, there is going to be quite a painful few years to get established.

 

Realistically, moving forwards any new entrant will learn from the mistakes of Caterham and Marussia and either buy an existing team or enter a partnership to use their resources.



#16 MustangSally

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Posted 31 December 2013 - 18:00

About 'up for sale'.

 

I think teams are more likely to disappear at the moment than to be bought. Buyers have been scarce in recent years.

 

Reportedly, Toro Rosso was for sale for a couple of years with no takers. No one bought Super Aguri or HRT. No one bought BMW, it only reverted to Peter Sauber.

 

And of course, Genii only really bought Lotus with the idea of selling it on . . . or even a piece of it . . . but definitely nothing happening there.

 

Maybe it is the mood of the times, maybe the recent scandals, but F1 isn't attracting corporate money or investors at the moment.

 

Neither Caterham nor Force India are in dire straits, but both principals have warned recently of a four or five team F1 in future. Unreasonable costs and the lack of a level playing field could persuade quite a few just to give it up.



#17 Zava

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Posted 31 December 2013 - 19:12

Neither Caterham nor Force India are in dire straits

yup, you're right. only ferrari is in it, via Luca Badoer:

 

DSC_6973.JPG

 

knopfler_1.jpg

 

(sorry, had to  :p )



#18 charly0418

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Posted 31 December 2013 - 22:34

I've been looking everywhere and cant find anything related to this story on another news site. As people mentioned here, this is reported of FI every year (how VJ is struggling outside of F1). But the team may have reached the point were it can survive ot itself by having decent years



#19 MaxisOne

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Posted 01 January 2014 - 00:42

Kingfisher has been pretty much grounded for well over a year ..probably two and while Roy Saharas news is a little more recent.. his issue has been going on since this past summer.. with no ill effect on the F1  team.  

 

Mind you i do think VJ plays a tad too loose with money .. but his empire was not built on Kingfisher airways... When his Liquor empire goes under and he is still holding on to Force India is when i would be worried.



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#20 Nemo1965

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Posted 01 January 2014 - 00:46

I have to say I am beginning to have doubts about these stories about VJ and Force India. For the last three years I have read scathing op ed articles from, for example, Joe Saward about VJ/Force India and, at the same time, almost only positive op eds about Caterham (also from Joe Saward). The thing is: Force India keeps doing very well considering its budget, and Caterham has been making zero progress forward. And though those two things don't have to be connected, you should expect that all this foretold doom about the principal of Force India should come to pass one day.

 

It is my sneaking suspiscion that Caterham, Force India, Marussia and perhaps also Toro Rosso are just hanging on by the fingernails, waiting for the shoe to drop... meaning: the exit of Ecclestone, a new Concorde Agreement, a new financial situation in F1. For all these teams, having one team less means more money, for Caterham the disappearance of either Marussia or Force India would be great financial news. It is not only a piranha club at the top of the fish tank, but also at the bottom. I think that supremely negative press about bottom end F1 teams could very well be 'produced' (by lack of a better word) by other bottom end F1 teams. 



#21 Doughnut King

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Posted 01 January 2014 - 02:49

Who knows? F1 teams have a tendency to be sold or expire quite rapidly.



#22 loki

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Posted 01 January 2014 - 04:18

Kingfisher has been pretty much grounded for well over a year ..probably two and while Roy Saharas news is a little more recent.. his issue has been going on since this past summer.. with no ill effect on the F1  team.  

 

Mind you i do think VJ plays a tad too loose with money .. but his empire was not built on Kingfisher airways... When his Liquor empire goes under and he is still holding on to Force India is when i would be worried.

Mallya lost control of the spirits side of the alcohol business to Deigo earlier in the year.  Heineken has recently taken controlling interest in the beer side of the alcohol business.  It's been reported that Mallya has used funds from the United Brewery Group (apparently in the form of sponsorhip) to fund some of the race team.  It's not yet known if Heineken will do the the same or allow him to continue.  The airline was always a money pit, the booze and brew is what brings in the cash.  Mallya is still the CEO of UB but the board is controlled by Heineken and the CFO is a Heineken pick.  Depending on how much it is it might be good for other brands under the Heineken umbrella to participate. They haven't been doing badly considering their place among the top teams and that could be a lot of eyeballs on the Dutch beer makers brands.



#23 ArkZ

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Posted 01 January 2014 - 10:18

I hope they will stay ok, recently I read that FI heavily invested in infrastructure and signed probably the best midfield drivers line-up.



#24 jcbc3

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Posted 01 January 2014 - 11:13

Mallya lost control of the spirits side of the alcohol business to Deigo earlier in the year.  Heineken has recently taken controlling interest in the beer side of the alcohol business.  It's been reported that Mallya has used funds from the United Brewery Group (apparently in the form of sponsorhip) to fund some of the race team.  It's not yet known if Heineken will do the the same or allow him to continue.  The airline was always a money pit, the booze and brew is what brings in the cash.  Mallya is still the CEO of UB but the board is controlled by Heineken and the CFO is a Heineken pick.  Depending on how much it is it might be good for other brands under the Heineken umbrella to participate. They haven't been doing badly considering their place among the top teams and that could be a lot of eyeballs on the Dutch beer makers brands.

 

wall005k.jpg

 

Courtesy of Heineken2008



#25 sopa

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Posted 01 January 2014 - 11:36

Ever since Mallya's airline business hit trouble with the arrival of recession, there have been claims Force India is in trouble and for sale. Years have passed and nothing has gone badly wrong yet. Of course you could say one day they will indeed sell the team - they are not going to stay around forever. Any case, unless there are some very good markers for the case, current situation doesn't look worse than any situations in the past.

 

Not to mention Force India has recently been almost the only midfield-to-back-end team, who has never needed to resort to selling a seat to the highest bidder paying in excess of 10M $ for the seat. So they have always had good-to-solid drivers. As long as it is the case, I think it is an indication FI has less to worry about than a few teams around them.

 

I think "Force India in trouble" is being trumpeted a lot by Joe Saward. Almost every year he has been writing, how they are going to go under. Yet if you look at the likes of Lotus and Sauber, I think you could get more serious stories out of them.



#26 BackmarkerUK

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Posted 01 January 2014 - 12:46

I think you would find that most teams on the grid are "for sale", in the sense that they would consider serious offers.  Lotus and Sauber are probably actively seeking buyers, but Force India, Caterham, Marussia and Toro Rosso could probably be had if you were looking to buy a Formula One team.  Williams' financial situation is not excellent since Toto Wolff left, so they would at least welcome a partner, but Frank Williams is fiercely independent, and anyway, most buyers would probably want to keep the Williams name.  So that leaves Mercedes, who are fine as long as the car company is (after all, although they've only operated as an independent team since 2010, they've been in the sport since 1995); Red Bull who are fine as long as Dietrich Mateschitz thinks its a sound way to shift cans of energy drink; McLaren, who have the McLaren Group backing them and so don't need to sell; and Ferrari, who will be in F1 as long as F1 exists.



#27 MustangSally

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Posted 01 January 2014 - 16:04

 

It is my sneaking suspiscion that Caterham, Force India, Marussia and perhaps also Toro Rosso are just hanging on by the fingernails, waiting for the shoe to drop... meaning: the exit of Ecclestone, a new Concorde Agreement, a new financial situation in F1. 

 

I agree. It has to be addressed, and soon. But the last guy who really took up the issues, Adam Parr, was blown out of F1 by Ecclestone. Ecclestone has priced people out of F1 on many levels. TV companies like the BBC and RAI can't afford F1 any more. The circuits struggle. Increasing numbers of fans can't afford tickets. That is a direct effect of the escalator BE puts into contracts.

 

You can imagine that Fernandes would be philosophically opposed to Ecclestone, since he has made his money by offering budget, no-frills services, both in airlines and hotels. 



#28 HistoryFan

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Posted 01 January 2014 - 16:09

who should by a F1 team?



#29 Amphicar

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Posted 01 January 2014 - 17:18

who should by a F1 team?

I guess you mean who would buy an F1 team - if so, it's a good question. The most successful recent example of buying an F1 team and making it better is of course Red Bull who took an under-performing Jaguar team and turned it into world (championship) domination. Is there anyone else with the motivation, commitment and money to emulate Dieter Mateschitz?



#30 chipmcdonald

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Posted 01 January 2014 - 17:48

I said this before last year: there is no reason "Formula One" has to always exist, and with the global financial situation the way it is it's extraordinary to be we still have it.

 

Ferrari has to always be there. Right?

Mercedes?  Not really, if the global economy gets worse - if they don't blitz this coming season I think it might be a hard sale for the team to be financed, I could easily see them just making engines.

Redbull - as long as Dietrich is amused.  Renault won't go anywhere, they've taken the smart route over Mercedes and limited their exposure.

Toro Rosso - really profitable?

Force India - in trouble.

Lotus - in trouble.

Marrusia - depends on Mystery Money.

Caterham - who knows?

Sauber - in trouble.

Williams - in trouble.

McLaren - kinda in trouble, what is going to happen with Honda?

 

I could imagine a lot of teams on that list bailing for LMP if things get worse.  This year we can count on everyone, but 2015 - Ferrari, probably Redbull/Renault, Mercedes engines... everyone else?  McLaren is too big to fail?  None of the rest left over are in the "too big to fail" category.  A mass exodus could occur, particularly if it turns out 2014 is going to be a mess of engines and strange tire failures ruining 2nd string, mid pack runners campaigns in the middle or end of the seasons.  That's the big dumb part of changing the regs: Ferrari, Renault and McLaren might be able to handle their seasons being ruined by engine follies, but the rest - teams like Sauber or Caterham, if it turns out they begin a moderately successful campaign at the beginning of the season, only to have it ruined by reliability - it's going to be a hard sell for them sponsor-wise in 2015 when it looks like F1 is such a crapshoot.



#31 HistoryFan

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Posted 01 January 2014 - 18:46

I guess you mean who would buy an F1 team - if so, it's a good question. The most successful recent example of buying an F1 team and making it better is of course Red Bull who took an under-performing Jaguar team and turned it into world (championship) domination. Is there anyone else with the motivation, commitment and money to emulate Dieter Mateschitz?

 

Yes, I think there is not really someone who is interested in buying a F1 team (an American group is rumoured, but nobody knows who is it)



#32 SukaKamF1

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Posted 01 January 2014 - 19:15

Can you post the link to this story? I tried searching in google but nothing turned up..



#33 BackmarkerUK

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Posted 01 January 2014 - 20:10

McLaren - kinda in trouble, what is going to happen with Honda?

 

I'm not sure how McLaren are "kinda in trouble", aside from their poor 2013 performance.  McLaren Group is in rude financial health and had a net income of £2.3 billion in 2012.



#34 MustangSally

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Posted 01 January 2014 - 20:10

I said this before last year: there is no reason "Formula One" has to always exist, and with the global financial situation the way it is it's extraordinary to be we still have it.

 

Ferrari has to always be there. Right?

Mercedes?  Not really, if the global economy gets worse - if they don't blitz this coming season I think it might be a hard sale for the team to be financed, I could easily see them just making engines.

Redbull - as long as Dietrich is amused.  Renault won't go anywhere, they've taken the smart route over Mercedes and limited their exposure.

Toro Rosso - really profitable?

Force India - in trouble.

Lotus - in trouble.

Marrusia - depends on Mystery Money.

Caterham - who knows?

Sauber - in trouble.

Williams - in trouble.

McLaren - kinda in trouble, what is going to happen with Honda?

 

I could imagine a lot of teams on that list bailing for LMP if things get worse.  This year we can count on everyone, but 2015 - Ferrari, probably Redbull/Renault, Mercedes engines... everyone else?  McLaren is too big to fail?  None of the rest left over are in the "too big to fail" category.  A mass exodus could occur, particularly if it turns out 2014 is going to be a mess of engines and strange tire failures ruining 2nd string, mid pack runners campaigns in the middle or end of the seasons.  That's the big dumb part of changing the regs: Ferrari, Renault and McLaren might be able to handle their seasons being ruined by engine follies, but the rest - teams like Sauber or Caterham, if it turns out they begin a moderately successful campaign at the beginning of the season, only to have it ruined by reliability - it's going to be a hard sell for them sponsor-wise in 2015 when it looks like F1 is such a crapshoot.

 

I think there's a lot in what you say.

 

It has been mixed up with politics . . . first Mosley trying to bounce out the manufacturers in favour of the garagistes . . . and now the opposite happening. You are so right about the engine regs. They were talked up as a way to attract manufacturers and make F1 'road car relevant'. But not all the teams make cars nor have the slightest rationale for being road relevant. 

 

I've always found engine grid penalties desperately unfair on teams and drivers, especially when it is an outsourced component. Now you can pay 20m a year to risk being penalised for this 'crapshoot', as you put it. Just 5 engines a year? Will it work?

 

The fact is, no one knows. KERS did not have the smoothest introduction and led to the withdrawal of BMW. But at least that was optional in year one.



#35 Anderis

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Posted 01 January 2014 - 20:12

Williams - in trouble.

In what kind of trouble?



#36 Anders Torp

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Posted 01 January 2014 - 21:21

McLaren Group is in rude financial health and had a net income of £2.3 billion in 2012.


Really? Do you have a source for that?

#37 loki

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Posted 01 January 2014 - 22:10

Ever since Mallya's airline business hit trouble with the arrival of recession, there have been claims Force India is in trouble and for sale. Years have passed and nothing has gone badly wrong yet. Of course you could say one day they will indeed sell the team - they are not going to stay around forever. Any case, unless there are some very good markers for the case, current situation doesn't look worse than any situations in the past.

 

As noted in the post above, the money maker has always been the alcohol business which he no longer controls.  Diego isn't interested in F1 and we don't yet know what Heineken's intentions might be.  Though that is a good looking Heineken livery posted above.   :D  F1 could be a good marketing platform for beer.  It all depends on the cost.

 

The situation is different now that he doesn't directly control what is said to be one on the primary revenue sources, the sponsorship from UB.  I think it's not only possible but extremely likely this year they will be the best of the rest.  maybe not a win but I think some podium finishes unless they completely miss the setup on the new car.



#38 BackmarkerUK

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Posted 01 January 2014 - 22:28

Really? Do you have a source for that?

 

McLaren Group wikipedia page, which takes its figures from ICC Financial Analysis.



#39 Amphicar

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Posted 01 January 2014 - 22:37

As noted in the post above, the money maker has always been the alcohol business which he no longer controls.  Diego isn't interested in F1 and we don't yet know what Heineken's intentions might be.  

I think you mean Diageo, which acquired a 53.4% stake in United Spirits in 2012 - but far from not being interested in F1, they already sponsor McLaren through their Johnny Walker brand.



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#40 SukaKamF1

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Posted 01 January 2014 - 22:58

I think you mean Diageo, which acquired a 53.4% stake in United Spirits in 2012 - but far from not being interested in F1, they already sponsor McLaren through their Johnny Walker brand.

 

Diageo has only acquired about 25% of united spirits and not 53.4%...



#41 chipmcdonald

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Posted 01 January 2014 - 23:02

I'm not sure how McLaren are "kinda in trouble", aside from their poor 2013 performance.  McLaren Group is in rude financial health and had a net income of £2.3 billion in 2012.

 

"Net income" isn't profit.  They lost money in 2011 and 2012, their fiscal year isn't over until March.  McLaren Group exists on the whimsy of Bahraini and Saudi money.   If the global financial situation worsens in 2015, and they don't get a title sponsor - that is actually a bigger problem for McLaren F1 than an operation like Sauber. 



#42 chipmcdonald

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Posted 01 January 2014 - 23:07

In what kind of trouble?

 

Who is their title sponsor?



#43 Anderis

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Posted 01 January 2014 - 23:39

Who is their title sponsor?

Lack of title sponsor doesn't mean their existense is in trouble. Williams is able to run the team without debts for some years in row. Some people keep thinking they're in trouble because they actually were in trouble around 2006 with huge debt after BMW divorce, but they did fail to realise things have changed. Adam Parr has done a great job for Williams, reducing it's debt practically to zero between 2006 and 2009, starting new businesses that are still growing and growing (WHP, Technology Centre in Qatar which, for example, provides simulators for drivers of public transport in Qatar) and ensuring a long-term financial stability for the team.

 

They comfortably have at least 6th biggest budget in current F1 without getting into debt. They have a special FOM payment due to historic achievements. They are expanding their activity outside F1. They have already new sponsor lined up for 2014 and a big payment from PDVSA secured for cancelling their contract. (confirmed by Claire) They are not in trouble financial-wise. Their future in F1 is well secured for years.



#44 teejay

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Posted 02 January 2014 - 00:42

Everyone is quick to default to doom and gloom



#45 PayasYouRace

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Posted 02 January 2014 - 08:04

Ah it must be early January before the car launches. This topic comes up every year.



#46 Anders Torp

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Posted 02 January 2014 - 17:51

I have to say I am beginning to have doubts about these stories about VJ and Force India. For the last three years I have read scathing op ed articles from, for example, Joe Saward about VJ/Force India and, at the same time, almost only positive op eds about Caterham (also from Joe Saward).

In Saward's case that's at least partly because he 1. DIspises VJ, and 2. Does work for Caterham Cars (not the F1 team though). Still, he might turn out to be right about Force India's problems, eventually.

#47 Fastcake

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Posted 02 January 2014 - 18:44

In Saward's case that's at least partly because he 1. DIspises VJ, and 2. Does work for Caterham Cars (not the F1 team though). Still, he might turn out to be right about Force India's problems, eventually.

 

You could say he's never actually been incorrect about Force India, even if he does have an agenda. The owner's companies, where much of the budget comes from, have been embroiled in various difficulties, while the team itself has gained a reputation for late payment of suppliers. It's not exactly hard to insinuate that the team could run into financial difficulty, just be repeating the facts.



#48 Anders Torp

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Posted 02 January 2014 - 19:08

You could say he's never actually been incorrect about Force India, even if he does have an agenda. The owner's companies, where much of the budget comes from, have been embroiled in various difficulties, while the team itself has gained a reputation for late payment of suppliers. It's not exactly hard to insinuate that the team could run into financial difficulty, just be repeating the facts.


Similar things could be said about several other teams. FI and VJ seems to be something of a pet obsession for Saward.

#49 chipmcdonald

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Posted 03 January 2014 - 16:59

Everyone is quick to default to doom and gloom

 

 The global financial situation has not been in the predicament it's in before.  F1 does not show any signs of taking it's financial health seriously - aside from deciding new engines need to be designed to make it "cheaper" and so forth.  All I am saying is that "too big to fail" works with banks, I'm not so sure about Formula One.



#50 Amaroo Park

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Posted 04 January 2014 - 02:13

Get Eddie Jordan back in he can buy it back  :rotfl: