[ron_9191]

Sutil is a bloody good driver specially in the rain. I dont think it is a nice idea for SFI to let him go.

[pranavt]

Mallya is exiting the team within 2 years. This is the start of handing over the reins to someone else. Expect to see more Indian pay-drivers on the grid. LOL.

[khanak]

Originally Posted by pranavt

Mallya is exiting the team within 2 years. This is the start of handing over the reins to someone else. Expect to see more Indian pay-drivers on the grid. LOL.

Is this concrete news or just speculation?


Here is the new Sahara Force India logo.

[pranavt]

Originally Posted by khanak

Is this concrete news or just speculation?


Here is the new Sahara Force India logo.

Attachment 826552

Pretty concrete insider news.

[khanak]

Originally Posted by pranavt

Pretty concrete insider news.

Interesting.


Maybe that's why the team was named Force India F1 and not Kingfisher Racing.

[gtonsing]

I agree with you mgh. Sutil should stay with FI (cant get myself to SFI yet). And they should also hold on to Paul by all means. Sometimes I almost feel that he is the better (read more competitive) than Sutil.

[pranavt]

Originally Posted by khanak

Interesting.


Maybe that's why the team was named Force India F1 and not Kingfisher Racing.

Applying logic at Force India «

Have at it.

[SilentEngine]

Originally Posted by pranavt

Applying logic at Force India «

Have at it.

Counter argument here, with obvious dig at the above blog.
pitpass - How Force India got new owners without being sold

A general question about the deal. How the share holding structure is changed without no actual sale of shares?

[D33-PAC]

I just hope the Force still stays with FI. VJM really improved it and it's amazing how fast it improved , and also how sustainable he made it. I remember the days when FI used to be the HRT of F1 . I still remember the shock I was in when Fisichella made P1 at Spa and VJM & Crew went around prancing like horses with the Indian flag after the race. It's truly remarkable that FI has been showing a lot of positive signs in the past two years.

$100 million is big money for FI though, which has always been somewhat conservative with spending.

I just hope it continues to go forward with the Force and I hope Sahara doesn't try anything funny, like removing the highly talented Paul di Resta or Sutil and replacing them with Indians just for the sake of having Indians in the cockpit.

A little OT, but since so many people here are linking his financial issues to the dilution of ownership, I think this is a very logical question that needs to be answered: Can someone explain how $100 million will erode any financial crisis for Mallya? Of course it'll do something to mitigate his crisis but the average jet Kingfisher buys costs about $100 million.

Is the current situation so bad that even $100 million buys a part of VJM's pride and glory. I'm sure he spent this much atleast on his Yacht , "Indian Princess".

@ MODS: Sorry for the OT question, please don't flame me!

[pranavt]

Originally Posted by SilentEngine

Counter argument here, with obvious dig at the above blog.
pitpass - How Force India got new owners without being sold

A general question about the deal. How the share holding structure is changed without no actual sale of shares?

Joe Saward usually has an agenda, I accept that; However Pitpass usually likes to peddle trash in the name of journalism. As usual, hindsight will be on one of their sides. For once, I hope Mallya doesn't end up exiting the team and Saward is proven wrong. I do not expect Sahara to bring any positive change to the team's performance. They might make a profit out of the team and end up buying Bernie's shares in F1 in a few years because of their monetary power, but a good company to help FI progress through the field they are not.

[myavu]

The finances behind a Formula One team

Last week's news that the Indian conglomerate Sahara had invested £63m ($100m) for a 42.5% stake in Force India surprised a lot of people and not only because team principal Vijay Mallya, completely truthfully, said five days earlier that he was "shocked to read a media report that I am selling the Force India Formula One team. This is completely untrue."

The headline which grabbed most media attention was the fact that it puts a £149m ($235m) valuation on the team. Surprisingly, it is even higher than the £127m (€145m) value of Williams, F1's only listed team, at its closing price on Friday of £12.70 (€14.50) per share.

The Force India investment once again raised the question of why F1 teams are worth so much. Armed with data from the teams' accounts, Pitpass' business editor Christian Sylt answers the question.

A total of 8 of the 12 teams are based in the UK meaning that they file publicly available accounts which give great detail on their finances. The most recent year with a complete set of UK team accounts is 2009 and they show that the most profitable team was Brawn which made a net profit of £98.5m. At the other end of the spectrum, Force India lost the most money by making a £40.3m net loss.

Generally, the directors of F1 teams run them to break-even (i.e they make neither a profit nor loss) which involves spending whatever is available to them. They do this in pursuit of victory on the premise that it is better to win and make no profit rather than make money and do badly on track.

Victory on track increases the value of the team which gives the owners a payout when they come to sell it. It also increases the team's ability to bring in more money from sponsorship since brands are prepared to pay more to be associated with a winning team. Whilst team owners can get a financial return from selling a team in the long run, what do they get out when it is running to break-even?

Well, if the owner is a private individual, such as Sir Frank Williams, they can take an annual salary which comes out as a cost to the team. In 2009 the team with the highest director's pay of £4.8m went to Brawn with Ross Brawn believed to have received this.

If the owner of a team is a company which sells products, such as Mercedes, Ferrari or Red Bull, the benefit they get whilst the team runs to break-even comes from television exposure of their logos on the cars. According to F1's trade guide Formula Money, Red Bull was the most exposed brand in F1 for the past two years running.

This is based on Advertising Value Equivalent (AVE) - the price the brand would have to pay to buy a similar amount of TV advertising for the exposure it got on-screen through F1. Red Bull's AVE came to an estimated £144m in 2009 and £232m in 2010 when it received almost a quarter of the total received by all the teams. It has already got exposure worth an estimated £127.8m in 2011.

In 2009 the accounts show that F1's teams had revenues of £145.2m on average with Brawn the highest, at a whopping £234.5m, and Force India the lowest at just £31.5m. According to Formula Money, around 35% of team revenue comes from sponsorship with 28% from the owners, 27% from prize money and the remaining 10% from miscellaneous sources. In 2009 the total prize money paid to the teams came to £344m ($544m) with 50% split between the top 10 and the other half divided by the teams' position in the previous year's standings. Winning the title in 2009 gave Brawn around £60m.

There were no drivers who paid to drive or got to drive by bringing sponsors to the team in 2009. However, last year there were five pay drivers, such as Vitaly Petrov, and income from all of them averaged at around £2.5m. The others were paid to drive and this averaged at £3.1m per driver rising to an estimated £25m for Fernando Alonso. After manufacturing and research and development outlay, staff pay is the second biggest cost for F1 teams and it came to £29.2m on average per team in 2009.

In a nutshell, teams receive enough money to keep going whilst the owners take a salary or get marketing exposure for their products. Teams are not designed to make a profit but to win which increases their value when they are sold. Perhaps the best example of this is looking at the shareholders' funds of Brawn GP which came to £93.2m when it won the championship in 2009, up from a deficit of £5.3m the year before.

Brawn's shareholders sold their stakes to Mercedes' owner Daimler and Abu Dhabi wealth fund Aabar in November 2009 but the recent investment in Force India couldn't be more different. Instead of paying money to the team's owners, Mallya and Michiel Mol, Sahara gave the £63m to the company which runs Force India and in return it was issued with new shares in the business.

In fact, ironically, although Mallya's shareholding in the team was reduced through the issue of the new shares, the lower amount that he now owns is actually worth more than the higher amount he held before Sahara's investment was made. The reason for this is that the team now has £63m more in its bank account than it did before Sahara invested in it.

The bottom line of all this, which has been lost in all the talk of whether Mallya sold his shares or not, is that Force India now has £63m to spend. Presumably it has a very good plan on what it is going to do with the money and that makes it an even more powerful force.

Source : pitpass - The finances behind a Formula One team

Cheers!

Vinu

[pranavt]

LOLd.

How Pitpass writes its awful business articles… « F1 Vole Blog

How Pitpass writes its awful business articles…

In my opinion, F1 website Pitpass don’t half write some rubbish. They have recently outdone themselves though, with an article criticising Joe Saward, a journalist who travels to and reports from every F1 race on the calendar.

I’m not even sure that Pitpass attends races?

Pitpass is carving out a bit of a niche for itself writing pathetic excuses for ‘business’ articles about F1. They have a ‘Business Editor’ who’s only claim to fame appears to be something called…. no, it’s gone, but I think it was some sort of FOTA for sponsors, until it was made absolutely clear, presumably for legal reasons, that it wasn’t.

Anyway, they rented a conference room in a Hilton, so as you can imagine it was pretty big stuff – because when you rent a room in a Hilton it means Hilton endorse what you’re doing, doesn’t it?

So I decided to see whether I can write a Pitpass business article. And strike a light, I can:.

FORCE INDIA’S SECRETS REVEALED

The F1 Vole’s Business Editor Chris D has obtained a fascinating insight into the inner workings of Force India F1 Team, which casts derision on the pathetic ramblings of so called bloggers in the F1 world who attend races and interview people.

Whilst imagining what it might be like to share a sandwich and a cup of coffee with none other than Bernie Ecclestone himself, it emerged via a quick search on Companies House’s website that Force India is more properly known as company number 03660294.

Furthermore it appears that company number 03660294 has traded under a series of different names since it was incorporated in 28/10/1998.

The intrigue doesn’t stop there however, for according to Chris D, that name has changed no less than four times before settling on its current moniker, and that far from being Indian as the name Force India might suggest, it is actually based in Dadford Road, Silverstone.

Coincidentally this same Dadford Road address was formerly the home of an organisation known as Jordan Grand Prix Holdings Limited which, in an unbelievable coincidence of the type one reads about on Pitpass, is actually none other than a former alias of 03660294, suggesting that there may be links between the two organisations that would be obvious to anyone with a passing knowledge of Formula 1.

Girding his loins for more revelations, Chris D cut and pasted the following bombshell into the article: Next Accounts Due: 30/09/2011 OVERDUE. Yes, it seems that far from the accounts, which sources close to the author confirm were in fact due in September of this year, being provided on time, they were, in fact. Not.

This overdue accounts business can lead, according to the Frequently Asked Questions section of the Companies House website, (and Mr Ecclestone himself, I should think, if you asked him) to a fine. We asked the Companies House FAQ to comment* and it said – Yes, irrespective of their size, status or whether they are trading or not. This includes dormant, flat management and charitable companies.

But the F1 Vole can exclusively reveal that [that's enough Pitpass style articles - Ed]

[mgh]

Kingfisher Airlines seems to have serious problems. Wonder whether Mallya will continue to have time for Force India, and whether he will stay on.

[sajands]

Originally Posted by mgh

Kingfisher Airlines seems to have serious problems. Wonder whether Mallya will continue to have time for Force India, and whether he will stay on.

Well, cant say. Sahara might just get the remaining 42% shares as well, you never know. Force India are yet to confirm their driver line up as well.

-Sajan