FORMULA 1.5 THE OTHER CHAMPIONSHIP

Inspired by a Reddit post I delved into the other Formula 1 Championship that is happening before our eyes, Formula 1.5 a contest for the midfield teams – a world with no Mercedes, Ferrari and Red Bull – a series within a series.

Formula 1 is currently a “two-class” championship, the gap between the Big Three and the Others is huge and I believe the gulf is widening each year.

I venture anything up to two seconds per lap is the difference between the fastest of the heavy hitters and the best of the minnows, the deficit not only notable in qualifying when everything is dialled up but also in race mode.

So with some Excel trickery (thank you Joao Gouveia) it was interesting to eliminate the six drivers, of the top three teams, from the equation and calculate the championship with their absence, including the 14 remaining drivers in our project.

Drum roll… in this year’s edition of Formula 1.5, Nico Hulkenberg rules the roost with eight top-three finishes including four victories in the process!

Three retirements due to Renault’s flaky reliability have kept the chasing pack in touch, but other than that the Hulk is top gun in the midpack and only this team can prevent him walking away with the Best of the Rest crown at the end of the season.

Along with Carlos Sainz in the sister car, the French outfit (the only works team in this exercise) lead the F1.5 constructors’ championship by a healthy margin.

Sainz has been consistent with four-second place finishes and a third, however top spot on the podium still eludes him, he is remains in the Best of the Rest title hunt.

Hunter in chief is Kevin Magnussen in the Haas who has been consistently scoring points, he has two wins to his credit and only one DNF which he suffered at the season opener. He lies second on the points table.

The Dane has started from pole four times, more than any other driver in F1.5 this season so far and with the Haas package on song he will fancy his chances of claiming the title.

Fernando Alonso started the season with a victory, but as McLaren struggled to find the sweet-spot the Spaniard has been forced to wrestle his car to four more podiums, but retirements in Monaco and Canada have cost him. He is fourth in the standings.

Other winners include Force India’s Esteban Ocon who won in Monaco and notwithstanding three DNFs has had a strong run since then while Sergio Perez, winner of the Azerbaijan Grand Prix, has only one DNF but is 10 points adrift of his teammate. They are fifth and sixth respectively.

Incident prone Romain Grosjean made good of his Haas by claiming victory in Austria, but his waywardness has cost him dear, he has scored 73 points less than teammate Magnussen in the dozen races.

Red Bull-bound Pierre Gasly has enjoyed victory on two occasions, a famous drive in Monaco and last time out in Hungary he won by a comfortable margin of eight seconds, but three retirements have not helped his cause.

Despite this, the young Frenchman leads his teammate Brendon Hartley by 61 points, the New Zealander’s best result a couple of sixth places in the last two races before the summer break. This coupled to three DNFs leaves Hartley down in 12th.

In the constructors’ title race Renault enjoy a handy lead of 81 points over Haas with Force India hot on their heels. The American team need both their drivers to be scoring points regularly if they seriously want to challenge for Best of the Rest honour.

McLaren are fourth ahead of Toro Rosso in fifth, Sauber sixth and Williams way out of touch, anchored to the foot of the table. Their drivers Sergey Sirotkin and Lance Stroll scoring points only 11 times in 24 opportunities thanks to a woeful car at their disposal.

Although some F1.5 races may have been closer than the real F1 races, the intensity of competition among the minnows is not fiercer or closer than expected.

Hence the myth that racing is more intense in the midfield is now bust. Teams and drivers may be closer in one lap qualy mode, but when a race plays out there is a tendency for drivers in the midfield to spread out more so than when the Red Bull, Ferrari and Mercedes chaps are in the mix.

When analysing Hulkenberg’s haul of 169 points in 12 races with Lewis Hamilton’s real-world score of 213 points it is evident that Mercedes and their British driver are doing a better job than the German and Renault.

Interestingly the points difference at the top is very similar in F1 and F1.5, Hamilton leading Vettel by 24 points in the real world, while Hulkenberg leads Magnussen by 22 points in our exercise.

On the other hand, the constructors’ battle is far tighter between Ferrari and Mercedes than our Renault versus Haas duel.

So as we head into the final run of nine championship races, Renault is the B-team to beat and Hulkenberg is the driver to beat in the midfield.

Magnussen is the man on the move who with the better car in his Haas than his rivals. Sainz could do with a victory in the bottom flight because his consistency has kept him in the F1.5 title hunt.

Alonso has an outside chance of challenging for the accolade, but McLaren need to find some performance to keep the Spaniard returning to the podium before his F1 farewell in Abu Dhabi.

Dark horses in the midpack are the Force India duo, they are suffering amid the team’s financial woes, but if in this latter half of the season they can extract the type of performance from their package that they enjoyed last year, then they have a chance with Ocon and Perez fighting in their corner.
Below is a results summary of 2018 Formula 1.5 after 12 rounds and nine to go:

Australian Grand Prix
Pole: Magnussen with teammate Grosjean beside him
1st: Alonso wins by 4.8 seconds (real winning margin Vettel wins by 5 seconds from Hamilton
2nd: Hulkenberg
3rd: Vandoorne

Bahrain Grand Prix
Pole: Gasly
1st: Gasly by 12.8 seconds (real winning margin Vettel wins by 0.6 of a second from Bottas)
2nd: Magnussen
3rd: Hulkenberg

Chinese Grand Prix
Pole: Hulkenberg
1st: Hulkenberg by 9.6 seconds (real winning margin Ricciardo wins by 8.8 seconds from Bottas)
2nd: Alonso
3rd: Sainz

Azerbaijan Grand Prix
Pole: Ocon with teammate Perez beside him
1st: Perez by 3.5 seconds (real winning margin Hamilton wins 2.4 seconds from Raikkonen)
2nd: Sainz
3rd: Leclerc

Spanish Grand Prix
Pole: Magnussen
1st: Magnussen by 11.9 seconds (real winning margin Hamilton wins by 20.5 seconds from Bottas)
2nd: Sainz
3rd: Alonso

Monaco Grand Prix
Pole: Ocon
1st: Ocon
2nd: Gasly by 0.7 of a second (real winning margin Ricciardo wins by 7.3 seconds from Vettel)
3rd: Hulkenberg

Canadian Grand Prix
Pole: Hulkenberg
1st: Hulkenberg by 1,8 seconds (real winning margin Vettel wins by 7.3 seconds from Bottas)
2nd: Sainz
3rd: Ocon

French Grand Prix
Pole: Sainz
1st: Magnussen by 7.8 seconds (real winning margin Hamilton wins by 7.0 seconds from Verstappen)
2nd: Sainz
3rd: Hulkenberg

Austrian Grand Prix
Pole: Grosjean with teammate Magnussen beside him
1st: Grosjean by 1.6 seconds (real winning margin Verstappen wins by 1.5 seconds Raikkonen)
2nd: Magnussen
3rd: Ocon

British Grand Prix
Pole: Magnussen with teammate Grosjean beside him
1st: Hulkenberg by 1.7 seconds (real winning margin Vettel wins by 2.2 seconds from Hamilton)
2nd: Ocon
3rd: Alonso

German Grand Prix
Pole: Magnussen with teammate Grosjean beside him
1st: Grosjean by 1.7 seconds (real winning margin Hamilton wins by 4.5 seconds from Bottas)
2nd: Perez
3rd: Ocon

Hungarian Grand Prix
Pole: Sainz
1st: Gasly by 8.3 seconds (real winning margin Hamilton wins by 17.1 seconds from Vettel)
2nd: Magnussen
3rd: Alonso

2018 F1.5 Championship Standings after 12 of 21 Rounds:

Excel Stats by Joao Gouveia

By: Paul Velasco 

NEW SPONSORSHIP IDEAS

NASCAR is going to have to replace its title sponsor after 2019 as Monster Energy is not going to renew beyond that. Finding the same kind of money from a single company is very hard in the current markets and it seems that the sanctioning body has begun to discuss different sponsorship models with a number of companies. 

The structure of such a system has not yet been fully finalised, but there is talk of tier sponsorships, with a top tier of perhaps six companies which would enjoy rights that the lower tier sponsors would not have. This is pretty similar to the way that F1 teams operate their sponsorships in the modern era, with different levels of partnership. 

The logic behind this is simple enough. If sufficient partners pay less than a single title sponsor but there are a number of them, the organisation will make more money. 

The current suggestion is that NASCAR would ask around $10 million for a top-tier sponsorship, which would net perhaps $50 million, while a traditional title sponsorship today would be unlikely to go beyond $30 million. Such ideas are widely used in sports such as rugby (above) in which it is harder to find big single sponsors to get the required level of funding.

Source: JSBN

Red Bull Reveals $80 Million 'Junior' F1 Budget

(Photo by Mark Thompson/Getty Images)

It’s no secret that Red Bull is one of the biggest spenders on Formula One auto racing. As we have reported, the energy drinks giant pours $107.1 million into its flagship Red Bull Racing team annually but what isn’t so well-known is that it spends nearly as much on its junior outfit.

Called Toro Rosso, which means ‘Red Bull’ in Italian, the team is based in Italy so its financial statements aren’t as easily accessible as those of its British bigger brother. In April we revealed the highlights of its latest results and they can seen in full for the first time below.

Toro Rosso's financial statements are on display for the first timeCAMERI DI COMMERCIO

The financial statements reveal that in 2016 Red Bull paid the team $83.3 million (€79.1 million) which was 53.2% of its total revenue. F1 cars are developed the year before they race so this investment fuelled Toro Rosso’s 2017 campaign when it finished in seventh place.


As shown by the following summary, Toro Rosso spent $153.5 million (€145.7 million) creating its cars and had a $1.5 million (€1.4 million) tax bill. This left it with a $1.9 million (€1.8 million) net profit which helped to offset Red Bull’s turbocharged investment.

This summary of Toro Rosso's financial results shows how Red Bull helped to fuel its profits

It still gives the drinks company high-octane exposure to both teams but the big difference is their performance. Toro Rosso has only won one Grand Prix - its home race in 2008 - and has been overshadowed by Red Bull Racing which has four titles to its name.

This drove Red Bull to put Toro Rosso up for sale and in 2011 one writer claimed that Abu Dhabi’s sovereign wealth fund “Aabar has acquired a minority shareholding in the team (around 40 percent) and has an option to increase that to gain control (probably around 60 percent).” It was not to be and a report by this author in Germany’s Financial Times later revealed that Red Bull had taken the team off the market as it had failed to find a buyer.

Like its bigger brother, Toro Rosso drives exposure for Red Bull’s brand which is emblazoned on its cars. Although it needs almost as much funding, it hasn’t performed as well and has been stuck in the slow lane this year. The highlight has been French driver Pierre Gasly almost getting the team on the podium with a fourth place in the Bahrain Grand Prix but it currently lies in eighth, one spot lower than it finished last year.

The slide in its performance has been driven by switching from Renault engines to ones made by Honda. Red Bull Racing recently announced that it too has put the brakes on its partnership with Renault and will also use Honda engines from next year. If its results reverse its prize money would follow suit and this could be crucial to Red Bull’s future in F1.

Red Bull appears to have burned its bridges with Renault and it is unlikely that it would be able to get engines in future from Ferrari or Mercedes - F1’s other manufacturers – as they are its main rivals. It has fostered a partnership with Aston Martin which seemed set to build its own F1 engine but this plan appears to have stalled in recent months. It leaves Honda holding the keys at a pivotal moment.

The teams’ race contracts expire at the end of 2020 and F1’s owner, Liberty Media, plans to reduce the bonuses paid to the leading lights after that. Red Bull is one of the biggest beneficiaries as it receives an estimated $37.7 million before a single race begins. If Liberty’s changes make a dent in this, and the prize money falls at the same time, Red Bull may decide not to sign a new contract and instead bring the chequered flag down on its time in F1.

By: Christian Sylt - SportsMoney

FIA F1 World Championship all comes down to Smoke and Mirrors !

Speaking of “Golden Boy” Hamilton, “F1 Aficionado” earned his team name this week pointing out a blatant bias decision made last week in Germany when the FIA decided not to penalize Lewis for making a prohibited and potentially very dangerous re-entry to the track while in the pit-in lane.  Watch this 4-minute Will Buxton interview as Charlie Whiting tries to defend with a straight face an obviously bad call: 

https://www.youtube.com/watch?v=QyVaKJpoI8o

For the record, here is the FIA rule that was violated (curtesy of “F1 Aficionado”):

“Except in cases of force majeure (accepted as such by the Stewards of the Meeting), the crossing, in any direction, of the line separating the pit entry and the track is prohibited.”

Hmmm,  “force majeure” means unavoidable circumstance.  It was raining and wet.  Maybe they thought the wind blew him back onto the track?

If Lewis had been properly assessed the penalty after the race, that would have resulted in a 30-second addition to his race time moving him from first to third and moving Vettel from second to first.  The net point impact of that is 17 points.  So if Lewis wins the championship over Vettel by fewer than 17 points, we can chalk that up to this unenforced rule.

VETTEL: ULTIMATELY IT’S NOT THE SPORT THAT I FELL IN LOVE WITH




Anyone who has ever had a rush of blood to the head can relate with Sebastian Vettel in the wake of his error and subsequent histrionics after the Canadian Grand Prix – it happens when anger management goes out the window.

But at the same time, it is worth noting, as this post does, exactly what Vettel said after he had cooled down as he sat in the top three press conference and put his heart out there, revealing the driver that has endeared himself to Formula 1 fans.

Invariably tantrums are followed by contrition which invariably points to the core of the problem and the real cause of the meltdown.

After his post-race antics ended – including a radio rant, parking in the wrong place, inexplicably pushing his car and then storming through the paddock before finally being coaxed to the podium – the German cooled down and proceeded to reveal what really is bugging the sport’s four-time F1 World Champion and star driver of the sport’s most famous team.

Asked during the press conference if he was looking for FIA race stewards when he stormed around the paddock with his helmet on, Vettel replied, “I don’t know, I don’t know, I don’t know what’s the procedure now.”

“I was just thinking that I really love my racing. I’m a purist, I love going back and looking at the old times, the old cars, the old drivers. It’s an honour when you have the chance to meet them and talk to them; they’re heroes in a way.”

“So I really love that but I just wish I was maybe as good, doing what I do, but being in their time rather than today. I think it’s not just about that decision today, there’s other decisions. Just hear the wording when people come on the radio, that we have now.”

“We have an official language, I think it’s all wrong. I think we should be able to say what we think but we’re not so in this regard I disagree with where the sport is now. You have all this wording ‘I gained an advantage, I didn’t gain an advantage, I avoided a collision’. I just think it’s wrong, you know, it’s not really what we’re doing in the car.”

“It’s racing, it’s common sense. If there’s a hazard on track, obviously you slow down because it’s quite unnatural to keep the pedal to the floor and run into the car and then say: ah, it’s wrong that the car was there.”

“I think Lewis… obviously, as I said, I rejoined the track and then Lewis obviously had to react. I don’t know how close it was or close he was. Once I looked in the mirror he was sort of there but for me, that’s racing.”

“I think a lot of the people that I just mentioned earlier, the old F1 drivers and people in the grandstands and so on, would agree that this is just part of racing but nowadays it’s just… I don’t like it, we all sound a bit like lawyers and using the official language. I think it just gives no edge to people and no edge to the sport.”

“Ultimately it’s not the sport that I fell in love with when I was watching. Obviously, it hurts me today because it impacts on my race result but I think this more of a bigger criteria. Tomorrow, when I wake up, I won’t be disappointed.”

“I think Lewis and myself we share great respect and I think we’ve achieved so much in the sport, I think we’re both very very blessed to be in that position so one win up, one win down, I don’t think it’s a game-changer if you’ve been around for such a long time, but as I said, I’m not happy about all this complaining and stuff that we see so many times.”

On Sunday, similarly, he was asked if decisions made on Sunday during the race made him question his future in the sport, to which he responded, “Well, I don’t know. Not ready, what time is it now? I’m not ready for this kind of question.”

“I don’t know, I just feel that nowadays we look at so many things that maybe we didn’t look at in the past because nobody was really making a fuss. Now, obviously, it’s worth making a fuss for everything because you have these decisions.”

“I sympathise in a way with the stewards. I’ve said many times when I’ve been in there that they are sitting in front of a piece of paper and they’re watching the race and they also came back to me and say we agree but look, we have to do these kind of things so I think just the way we are doing these things now is just wrong but it’s our times, we have regulations for everything.”

“We need to have this jacket when… I don’t know, it’s clear there’s a hole when walking down a pedestrian walk and there is a hole in the street because they’re doing construction work and there needs to be a be guy who guides to the other side of the road, otherwise it’s the construction company’s fault that you fell into the hole and broke a leg.”

“But I think you’re just an idiot if you walk into that hole and break your leg but that’s a little bit how my theory is nowadays. The approaches are drifting apart,” added Vettel who has not won a grand prix since he triumphed in Belgium last year.

SCHECKTER: I THINK PEOPLE OVERRATE ALONSO

While the motorsport world digests the news that after 17-years Fernando Alonso will not be a Formula 1 driver beyond the end of this season, but while the plaudits are being sung by the media, former F1 World Champion Jody Scheckter has bucked the trend by saying that the Spaniard’s achievements are overrated.

Speaking to BBC in the wake of the announcement by McLaren, 1979 F1 World Champion, Jody Scheckter said of Alonso, “I like to just think how many championships somebody’s won. You can rate people that they had bad luck and bad cars. I think people overrate him.”

“One of his problems is he seems to upset teams and everybody around him. That’s not the way to win World Championships. You’ve got to work with your team and you’re nearly a leader.”

Scheckter is of the school of thought that Alonso can “split a team in half” and suggested that the Spaniard has a tendency to be sanctimonious with a “why me?” attitude which creates tension within teams.

Inevitably comparisons are being made between Alonso and the man he dethroned as the sport’s biggest star: Michael Schumacher.

Felipe Massa a teammate to both believes that Alonso was on Schumacher‘s level while veteran engineer Pat Symonds who was in their respective corners when they won titles with Benetton (later Renault) also believes their driving talents were at the same level, just that Schumacher was a people person and Alonso not.

Asked if Alonso was at Schumacher’s level, Scheckter replied, “For me, absolutely not. Schumacher has got to be rated as the best driver ever. Alonso, I don’t think he’s in that category. Not to say he’s not a good driver. He is one of the top drivers there now.”

WHEN IT RAINS IT POURS AT MCLAREN

When it rains it pours they say, indeed it is storming down over Woking amid Eric Boullier’s departure followed by a quick-fix appointment of Gil de Ferran in his place.

As if that and the woeful season they are enduring is not enough, McLaren are also facing a neighbourhood revolt and more ominously an investigation over alleged shenanigans at the MTC that may have financial repercussions and could threaten the team’s image.

Ominously, for the sport’s second most successful team, is the issue of an investigation that threatens the image of the brand.

The Telegraph reports that “McLaren Group, the business behind the supercar manufacturer and Formula 1 racing team, has been drawn into a mystery Government investigation that could damage its finances.”

The group’s annual accounts state that they were approached by unidentified “UK government authorities in connection with an ongoing investigation, concerning certain third-party companies and concerning executive and other persons who have been, or are currently, associated with the group.”

The team’s response: “We are not in a position to comment further for legal reasons.”

But according to the documents cited in the report, McLaren themselves warn that they “are currently the subject of the investigation… and intends to fully cooperate with the request for information.”

The report further warns that if “pursued or results in any culpability against those subject to the investigations, any negative publicity surrounding assertions against executive persons and other persons who have been, or are currently, associated with the group” while bracing for what could “adversely affect the brand and reputation.”

Unrelated, residents and commuters based near Woking have complained of long delays during shift changes outside the team’s headquarters in the town, to the point that McLaren have had to issue an apology for the congestion.

SurreyLive reports: “The car manufacturer has a shift change between 2pm and 3pm which appears to contribute to long traffic queues outside the facility. Road users have complained of delays of up to half an hour on the A320 outside McLaren at this time.”

They quote an unnamed resident saying: “This has been going on since at least January with no sign of any relief in sight, they are wasting huge amounts of other people’s time and money because it suits them to do so. Local business people and trades peoples are wasting their time sitting in a traffic jam every day caused by this company’s arrogance and intransigence.”

The team responded: “We apologise to anyone whose journey along the A320 has been affected because of traffic entering the McLaren campus and thank people for their patience while we work hard on a range of ideas to help alleviate the lunchtime traffic as quickly as possible.”

The rot came into the spotlight earlier this month when former team chief Martin Whitmarsh questioned the leadership while giving hint of dissent within the ranks at Woking.

Not long after the team’s former legendary designer John Barnard warned of a tough path ahead to revive the once great racing team and, a day before the Boullier announcement, questioned the team’s technical capacity to succeed again in Formula 1.

The team who has amassed 182 grand prix wins since their Formula 1 debut in 1968, but have not won a race since the 2012 Brazilian Grand Prix with Jenson Button. Their last title was in 2008 with Lewis Hamilton.

FORCE INDIA SAVED BY CANADIAN ENTREPRENEURS

Source: Reuters

As expected Force India has been saved by a consortium headed by Lance Stroll’s billionaire father Lawrence Stroll which guarantees the future of the beleaguered team formerly owned by Vijay Mallya.

Reuters report that administrators accepted the offer from Stroll’s fellow investors which include Canadian entrepreneur Andre Desmarais, Jonathan Dudman of Monaco Sports and Management, fashion business leader John Idol, telecommunications investor John McCaw Jr, financial expert Michael de Picciotto, and Stroll’s business partner Silas Chou.

Force India has been in administration since the Friday before the Hungarian Grand Prix in a bid to protect it against the threat of a winding-up order over mounting debts.

Force India’s chief operations officer Otmar Szafnauer confirmed, “This outcome secures the future of the Force India team in Formula 1 and will allow our team of racers to compete to our full potential.”

“I am delighted that we have the support of a consortium of investors who believe in us as a team and who see the considerable business potential that Force India has within F1 now and in the future.”

“At Force India, our expertise and commitment has meant that we have always punched above our weight and this new investment ensures that we have a bright future ahead of us.”

“I also would like to thank Vijay, the Sahara Group and the Mol family for all of their support and taking the team as far as their circumstances would allow,” concluded Szafnauer.

Joint administrator Geoff Rowley added, “It is rare that a company can be rescued and returned to a position of solvency.”

“The quality of the various interested parties has been impressive and required careful consideration as the administration has progressed.

“Having followed a robust process, in the end we were left with a highly-credible offer to save the company and restore solvency.

“Funding to support the team will be made available from today, and significantly more will be available once the company emerges from administration which we expect within the next two to three weeks.”

The latest development means that Lance Stroll will join the team next year, with the future of current drivers Esteban Ocon and Sergio Perez now hanging in the balance.

Source: Reuters 

To be or not to be - 2019 German Grand Prix.

There are major efforts going on at the moment to try to ensure that there will be a German Grand Prix again in 2019. The previous contract ended with the recent race. This was an agreement that began back in 2007 with the race alternating between Nurburgring and Hockenheim. This ran into difficulties in the first year because of a dispute between two automobile clubs: the Automobilklub von Deutschland (AvD), which sanctions Hockenheim and owns the rights to the title "Grosser Preis von Deutschland" and its rival Allgemeiner Deutscher Automobil-Club (ADAC), which had previously sanctioned the European Grand Prix at the Nurburgring. The AvD is Germany's oldest automobile club, dating back to 1899, while ADAC was established four years later but is today the biggest club in the country. 

However a deal was struck and from 2009 all the races used the same name, with Nurburgring holding events in 2009, 2011 and 2013, and Hockenheim running the events in 2010, 2012, 2014, 2016 and 2018. The Nürburgring ran out of money and so there was no race in 2015 and 2017. The authorities at Hockenheim have said they are only able to pay the fees required by Formula One, reckoned to be around $15 million a year, only every second year, and Nurburgring cannot afford the race at all.


The Formula One group has looked at other options but none seen to be sensible and there is frustration that they cannot find a solution in a country that has a strong racing tradition, not to mention Mercedes and a driver at Ferrari. Fans do not seem to be as excited by Sebastian Vettel as they were with Michael Schumacher but the primary problem has been very expensive tickets and a dwindling fan base. 

The best crowd at Hockenheim was in 2006 when 70,000 attended, but this year the organisers claimed 71,000, the number being bolstered by probably 20,000 Dutch fans, who drove the 350 or so miles from their homeland to support Max Verstappen. The three-day total at Hockenheim was reckoned to be 165,000, which was an increase of 35 percent compared to the last race in 2016. In theory there is a track capacity at Hockenheim of 120,000 on race day, so there remains room for improvement. 

The average ticket price these days in F1 is around $400 and so in theory the ticket revenues ought to over the fees, with money left over for other things. If the average ticket price came down to $250 and the crowd increased to fill the circuit, the finance would slightly better than it is today, without needing funding from sponsors and so on.

Source: JSMB

The future of Force India

IS FORCE INDIA INSOLVENT?

The fact that a company is in administration does not mean that it is insolvent. This is an important definition because if the team is deemed to be (or have been) insolvent, it then automatically loses all the rights and benefits that it has under the terms of the commercial agreements that exist in Formula 1.

The problem with F1 comes because of the commercial agreements that exist between the rights holder (the Formula One Group) and the individual teams. These bilateral agreements are all different and all confidential, but when it comes to insolvency, they all refer back to the Concorde Agreement of 2009, in which insolvency is defined using Article 123 of the Insolvency Act (1986) as one of the ways of defining what F1 calls a "Cessation Event". So did Force India go through a "Cessation Event".

In order to file a winding-up petition, a creditor must have evidence that a debt cannot be paid. Thus there is a device called a Statutory Demand, which a company must settle within 21 days. If it does not do this, then it is an indication that the company is not able to pay and the creditor can then to go court and petition for a winding-up order. If this is granted the company is liquidated and the debt will be paid off from the money raised by the sale of the company's assets. The winding-up petition is not valid unless it has been published in the London Gazette and thus a winding-up petition on its own does not guarantee that a company is, or has been, insolvent, unless it has been published in the Gazette. The odd thing is that a winding-up petition may be advertised in court listings, but this is not legally the same as it being in the Gazette. And if an administration petition arrives when a winding-up petition has not been advertised, it can take preference. This is what appears to have happened to Force India

In the past we have seen teams go into administration and emerge without the other teams having a say, but in these cases there were never any winding-up petitions because the teams satisfied all Statutory Demands within the 21 days allowed and were thus never technically (or officially) insolvent.

So what does this all mean? If Force India has not gone through a Cessation Event its rights and benefits as defined in the commercial agreements remain active and the other teams (the other signatories to the commercial agreements) have no say in the matter. So why then has there been a kerfuffle in recent days with teams saying that they will not sign for Force India to keep its rights and benefits but using a different company number.

There is no need for a new company to be established but it seems that the explanation lies in Vijay Mallya's claim that the team owes the Orange India holding company in Luxembourg $208 million. In administration, the company's capital reserve cannot be used to pay shareholders, but if the firm emerges from administration this would become real debt once more. Getting rid of that debt will obviously make the company easier to sell. So the team has debts of just $43 million, but if it escapes administration it will still owe a vast sum of money. Thus the attempts to get teams to agree to allow the team to change company numbers is really an attempt to keep the team alive, with no debt at all, rather than reviving it with a huge debt.

There is another option, as the administrator might be able to find a buyer who is willing and has deep enough pockets to forego the prize money for a while (as happened with Gene Haas). This means that the buyer would not get any Force India prize money, but would earn the rights with a different company. This would mean a loss of at least $100 million, depending on the results achieved, but it means that there is no unwanted baggage that comes with the team. Given that acquiring Force India will be a relatively cheap operation with only $43 million in debt (compared to the $250 million which the owners were trying to get in the sale), some might consider it wiser to buy the assets and put them in a new company and then get on and earn prize money, rather than buying it.


Will it work? Teams are famously self-interested and rarely do things for the good of the sport but they may all be convinced to sign if the Formula One group will make concessions. The downside of this strategy is that it could end up with Force India struggling to find a buyer and the teams taking the blame for that. This would be deserved, but the sport cannot really afford to lose a strong team, laid low by its previous owners.

Source: JSMB