The spectre of just 16 cars lining up on the Melbourne grid at the start of the 2009 season has been averted – thanks to a £14.5 million payment made by Bernie Ecclestone to the Williams F1 team.
The sole privateer left running (that is not owned by a billionaire, at least) faced penury after making a loss reportedly as high as £50 million over the last two years, increasing its net debt three-fold and running down its financial reserves in the process.
It is also being hit the hardest by the current financial crisis and resulting dearth of sponsors. It is reported to have lost around £30 million in sponsorship from Icelandic investment company Baugur, IT firm Lenovo and Brazilian oil company Petrobras.
The FW31 has been seen during tests at Portimao in a smart but sponsorship-free black livery which allowed its launch livery to be kept under wraps until its trickier sponsorship questions were settled.
For instance RBS, which has a contract with the team for the next two years, has just forecast an annual loss of £28m and is reviewing its commitments.
Existing sponsors Randstad and Phillips are keeping faith with the team – but the most famous sponsorship-free car to recently hit the world’s F1 tracks was the doomed Honda RA-109, the putative successor to which is currently languishing at Brackley with doubtful hopes of ever racing.
So, where does the money come from? Like all the other teams, Williams has been been in line for some 2006/07 prize money that has not been paid because of a long-term dispute over the signing of a new Concorde agreement.
The deal, brokered by Ecclestone and reported in the Financial Times and The Telegraph, ensures the team will be able to race through 2009 and 2010 with a secure budget.
Ecclestone is quoted in the FT as saying: “It’s a prepayment. They are entitled to some back-payments only due for payment when they sign the Concorde… we said to them we will pay you now.”
The paper says that the back-dated payments represent about 20 per cent of Williams’ revenues and will have helped the team get its budget in place in spite of losing sponsors.
The move mirrors a similar gesture by Ecclestone in June 2003 when he bailed out perpetually-broke backmarkers Minardi with a £2.5 million investment to keep the team in business.