Since yesterday I have had a few comments in from readers and made a few phone calls, received a few SMSs and emails with the powers-that-be and so I can bring you a few more pits and pieces that I have picked up along the way.
The Lotus-Lotus situation remains to be sorted, but my feeling is that Tony Fernandes will be changing the name of the team from Lotus to something else. He’s not saying what that will be as yet, but it is worth noting the livery change that took place between the end of the Abu Dhabi GP and the start of testing.
That may not amount to much in the way of hard evidence, but if the team was staying as Lotus no-one would bothered saying “Thank You Lotus Fans”. To me this suggests that the Lotus name will be switching to the Renault F1 team, although this is a complex story because if the team wants to change the chassis name it will be very costly, unless all the other teams agree. By my reckoning a chassis name change would cost Renault F1 about $50 million in lost income, unless everyone agrees to it (and they are not likely to as they will be getting the extra money). Perhaps Group Lotus’s Dany Bahar can persuade them. Perhaps this why we have had to wait for an announcement. In any case, Tony Fernandes will have had some kind of a pay-off, presumably with a confidentiality clause as he has stopped talking. What he will say is that we should watch the entry list for the team name. I think we will see a name change to a completely new brand and a new engine name as well. Fernandes has spent the last couple of days at the ASEAN Finance Ministers’ Investors Seminar in Kuala Lumpur, where there is much talk of creating an Asean Economic Community, similar to the old European one which opened up trade in Europe. This would be great news for Fernandes’s businesses and so it might be the right moment for a nice new brand. Fernandes’s Air Asia just reached the 100 million passenger mark, after eight and a half years of operation and it now intends to get to 200 million by 2013. His Tune Group is expanding in various areas and F1 might be a useful tool in this process, although a Tune F1 car does not sound very enticing. It is worth noting that if Fernandes does change chassis names it will have little effect on the Team Formerly Known as Lotus (TFKL) business. Lotus Racing finished 10th in the Constructors’ Championship, which means that it will be classified as what is known in the Concorde Agreement as a Column 2 team. This means a payment from the Formula One Group of around $9.6 million. If the team had finished 11th it would still be a Column 3 team and would be paid $10 million. That may not seem logical but that is the reality. The advantage of being a Column 2 team is that if TFKL were to stay as Lotus and finish in the top 10 again in the next two years, it would become a Column 1 team, and make much more money, even if returning to Column 3 thus earns more cash in the short term.
In the interim, Lotus driver Heikki Kovalainen has been confined to bed by doctors after a big accident during the Race of Champions event in Dusseldorf. Kovalainen has a heavy concussion and has been told to rest for the next few days and then have some more tests. His girlfriend Katherine Hyde, who was with him as his passenger in the event, is also out of action with an injured hip, a hairline fracture of the pelvis and damaged leg muscles.
Back to Renault F1 (or whatever it will be called next year), there is still to be a decision about who will drive for the team alongside Robert Kubica. At the moment it is not clear whether the team will keep Vitaly Petrov, although that would make sense if the Russian comes with cash. Other options include Nick Heidfeld and Nico Hulkenberg. Hulkenberg says that he and Williams are going their separate ways in 2011 as they could not come to an agreement. However the fact that Williams has not announced two drivers for next year is significant. If Hulkenberg was 100% out then the team would likely have named Pastor Maldonado as its second driver. The fact that it did not suggests that Hulkenberg could stay at Williams if alternative money to Maldonado’s millions can be found. The Venezuelan would then be transferred to HRT.
It is also worth noting that Renault World Series champion Mikhail Aleshin has told Russian news website gzt.ru that he has agreed a deal with an unnamed team. It is not clear what role this would be for but the obvious teams with potential vacancies are Lotus, Virgin, HRT, Force India and Renault. It is probably not Renault as team boss Gérard Lopez says that he has still to make a decision.
In the meantime, it is worth noting that Kubica had an impressive showing on the Rallye du Var at the weekend when he finished fourth overall in his Renault Clio Super 1600. Kubica won the final three stages of the rally to finish only nine seconds off the podium, beating the factory-backed Citroen DS3 R3 driven by Sebastien Ogier. He finished behind Cedric Robert in a more powerful and 4WD Peugeot 307 WRC, ahead of the new French Rally Champion Bryan Bouffier (Peugeot 207 S2000) and Stephane Sarrazin (Peugeot 207 S2000).
The other whispers are that Sauber is still looking for cash, despite its new deal with Telmex, which is not sufficient to run the team at a competitive level.
There are also rumours that the Silverstone is about to be put on the market, with accounting firm PricewaterhouseCoopers having put together the plan, which aims to avoid the club having to pay for new buildings. It is not clear at the moment whether this is true and whether the sale is to be private or public. It will be interesting to see what happens there. The move may come without needing the BRDC members to agree to anything as they gave away this power to Silverstone Holdings Ltd, and all that it must do is to act in the best interest of British motorsport and the membership. BRDC members would, of course, each benefit from the sale of the circuit.
There have also been some questions in recent days about the Russian GP in Sochi in 2014, the gist of which is that the International Olympic Committee wants to know more about the plans for a Grand Prix because they are worried that construction work could upset the Games. The organisers say that only one new building is required (for the pits and race control) and all other facilities will be shared and there is no need to worry about disruption for the Games. The option exists for the Grand Prix to be delayed a year, but the aim remains for the race to be held straight after the Games. These will happen in February so an early season race seems to be on the cards, although the weather will be decidedly fresh in Sochi in March…
joeblogsf1 
Interesting insight into the Concorde Agreement. But being 10th still matters in terms of FOM covering the travel costs, doesn’t it?
zoltan,
Not really. New teams have allowances as well
Joe, I find it a bit disappointing that Fernandes has apparently given up and settled for the pay off. A few weeks ago, you said he held all the cards, now it appears he has conceded to a failed car company eager to jump in and take the glory.
dkfone,
There are bigger pictures than Formula 1
Hi Joe,
Good, well thought-out reasonings as usual. Thanks for the insight into the financial machinations going on behind the scenes.
The question I have from this post, is that you say, “..if TFKL were to stay as Lotus..”.
Does that mean if they execute a name change that they no olonger benefit from having made the COlumn 2 grade this year?
Regards,
Peter
Peter S,
If they change the chassis name without everyone agreeing.
The Lotus “Thank you” was on the car in the last race
http://www.wemotor.com/blog/2010/11/lotus-racing-f1-mission-accomplished/
and
http://sidepodcast.com/post/abu-dhabi-2010-race-highlights
(12:22 comment)
Alistair,
Does not change the argument
“By my reckoning a chassis name change would cost Renault F1 about $50 million in lost income, unless everyone agrees to it (and they are not likely to as they will be getting the extra money). Perhaps Group Lotus’s Dany Bahar can persuade them. Perhaps this why we have had to wait for an announcement. ”
Joe, would I be right to infer from this that you reckon that the provision that existed in Schedule 10 to the 1997 Concorde Agreement that allowed a chassis name change in the event of a change of ownership (but only once every five years) no longer exists under the current agreement?
Dodger,
This is what I believe
Well I suppose it will remove confusion for the general public if the Lotus car company and race team are under common ownership. Hopefully Tony got a suitably large pay off and can use it to help his team move forwards, as they clearly have a lot of passion for the sport in that team unlike HRT which just seems to exist as a pure business venture. I have no respect for Bahar however and don’t look forward to seeing him poncing about the paddock like a big shot next year. He reminds me of a certain flamboyant Italian we used to have in F1 who also had an inflamed sense of his own importance!
Joe; Is the Rallying Stephane Sarrazin the same man who had a few F1 races for Prost a few years ago?
Tim W,
Sarrazin raced a Minardi if I remember correctly. Has a monster crash in Brazil.
Very much off-topic, but…
” His girlfriend Katherine Hyde, who was with him as his passenger in the event, is also out of action with an injured hip, a hairline fracture of the pelvis and damaged leg muscles.”
One might just wonder, that what kind of action are we talking about here. 😀
Hi Joe,
Thanks for the update.
There seems still to be a lot of confusion regarding this whole matter of Lotus. As you are aware Tony Fernades stated on his twitter page that “we are the peoples team” after he asked the question of whether he continues as Lotus. Then last night I watched this clip on YouTube:
Danny Bahar is a very good media performer, however the interview seems to edge towards some kind of deal in the pipeline with Lotus racing. Furthermore he is making the point about how important Le Mans is to their racing programme and how big their commitments seem to be at the moment without F1. All of this whilst standing in front of a cabinet full of helmets of former Lotus F1 drivers!
I appreciate the old adage that “Win on Sunday sell on Monday” is a philosophy than some sportscar companies still use however considering the titanic amounts of money being sunk into Lotus wouldn’t they have to win everyday of the week for the next decade to recoup any of it?
A column 1 team has to “finish in the top 10 in the Constructors’ Championship in two of the previous three years”, but more importantly “Have to have competed in F1 for a set number of years, or have historic value to F1”
The column 3 teams get transportation of two chassis and 10,000 kgs of freight to fly away races, and 20 economy class tickets.
I was once told that the one of the best ways to get a larger company to buy you out is to file a law suit against them. Thank you Lotus fans.
I hope Heikki can explain himself convincingly to his better half and deal with the comments heading his way, which must include a myriad of innuendos.
Reading the recent ESPN Lopez interview, it strikes me that he is fairly clear on Petrov’s future, stating it has got nothing to do with how much money he can bring, only his talents. This comment was in line with the rest of the interview, that had a centralised theme running through it; Lopez-backed Renault F1 does not and did not have any financial concerns what so ever. What’s going on Joe?
Jakub,
That is bullshit. They missed a payroll this year. There were Serious financial problems.
dkfone,
I don’t recall Joe saying ever Fernandes held all the cards, or anything like that, but it’s obvious he’s pivotal.
Joe,
“Team Formerly Known as Lotus”
good one, even has both his name and their capital city in the initials 🙂
Doing a “Prince” are they?
That might be a very cheeky play.
Scratching head about a complete rebrand, but that makes a lot of sense.
TF has undoubtedly played this for cash – hence maybe the insignia gratitude. Hmm, whole team naming for sale. Not a hopeless outfit either. Branson looks very silly.
Could the rest of the paddock be sufficiently fed up with this saga, to agree a chassis rename unanimously, if TF makes a clean break, and Group shut up and pay Venture a adequate palliative? (Or for obvious reasons, TF does that directly, but with Group’s money)
– j
P.S.
Has anyone else noticed how every company with Team Lotus inthe name, started off as a shelf registration?
For the uninitiated, some folk like to buy shelf companies to artificially create a inception date.
Or how many companies have been dissolved with Team Lotus in the name?
TF + Venture i just realised might be a nuclear gamble. They’ve got next to nothing, but a court battle will show that Group have the same or less, which would spoil things just a little for Group.
The pennies drop!
John,
Most F1 teams in the UK started out as off the shelf companies
Peter Sanderson,
TFKL to stay as Lotus?
I think that’s the best takeaway from Joe’s analysis.
BMW Sauber?
. . .
Tim W,
Flav was way classier than this Bahar chap. FB actually brought proper money to F1, and knew how to sell, if nothing else. What does Bahar, or any of this Lotus lot bring?
. .
WBarnato,
It’s a lot less confusing than it was a little while back. Now the confusion is just normal deal making misdirection.
John,
Flav classy? Do me a favour…
Lotus road cars?
Pop down to Bell & Coville in East Horsley and take a look at all the unsold new cars………..
…….I don’t know what these new guys game is but it isn’t about making cars, unless they can convince the RoW to buy a Lotus instead of a Porsche or Ferrari (or even a McLaren).
Pirelli is fresh out of WRC… I am sure they have some good snow tire technology for the Russian GP in 2014! 😉
“Sarrazin raced a Minardi if I remember correctly. Has a monster crash in Brazil.”
I remember that well. Poor guy hit the barrier in the final corner and rotated at speed for a few seconds.
When Sarrzin got out of the car, he could bearely stand up straight.
So the entry list is out and it contains Team Lotus… is this good news, or does it mean nothing?
joe,
long time reader, first time caller.
shortly after your post, the entry list was posted: Team Lotus it is.
could tony fernandes have pulled off a major coup? although there’s lots of talk about slots for AirAsia disappearing and all kinds of political pressure being applied, it must be said that this was bandied about in his previous battles with state-owned MAS – and he’s come out grinning, so far.
the dude has balls. cannot wait to see team lotus-renault next year, resplendent in black and gold, with a big airasia logo stuck right on the front: the ultimate f**k you, we won.
I hope.
danke,
vi
p.s. tf’s twitter indicates a sponsorship deal with dell some way back, around the time of the OG team lotus announcement… any PR on that?
vi,
nothing at all, but it looks like there will be a Dell sponsorship of some kind
well joe , when I posted a while ago you told me that the ownership of renault F1 was not clear you stated that it was
care to comment in view of recent events
when I stated that the use of the lotus name would be affected by what happened in the uk courts you stated [ sorry I haven’t checked the back posts ] something like the malaysian government had decided the matter ] ; care to comment on that ? …..tony taking the money to go away will only confirm the matter
Colin G,
Once the entry list is done, it will take a lot to change it.
joesaward
Jakub,
That is bullshit. They missed a payroll this year. There were Serious financial problems.
—
Thought so, thanks. I suppose alarm bells should have rung when the phrase ‘I will answer the question openly and honestly’ was mentioned.
Joe, do you know if there’s any chance of Williams snapping up Vitaly Petrov? i reckon that’d be better than Pastor Maldonado if the two drivers are bringing in similar level of budgets.
thanks!
Louis,
None at all
Does the FIA entry list announcement not throw a spanner in the theory that Fernandes has caved? Especially as news of the Renault-Lotus deal seems to have gone very cold indeed. Bahar can’t find £50m to build the required extension at Hethel so how he’s going to fund an almost-complete buyout of Renault is beyond me.
The most sensible move for Group Lotus is to let Fernandes & Co continue racing and reap the benefits that thier free publicity provides; they sure as hell wouldn’t have been announcing their ambitious new range without the renewed interest in the brand.
Richie,
Yes, it does. My gut feelings were wrong.
Joe,
I thought i said, or least meant, classier than Bahar. Low target?
I don’t understand the shelf company thing at all. It used to mean a trip to court to vary anything to do with governance, but even that aside, I just don’t know what’s wrong with fresh applications. The use case is so minimal – avoiding being a company promoter personally before deals are finalised. Or maybe accepting money to avoid escrow arrangements if the shelf has accounts. Just my view that shelf companies are messy. But yeah, i hear you. It seemed when i was a junior everyone expected to buy a shelf. I kept asking why pay? But maybe i just was young and found the drafting easy .
Anyhow, TLV’s shares are (ea. GBP1):
98 Ryalls Lane Ltd
1 Edward Roger Lynton
1 David Wentworth Hunt
Ryalls Lane is Fernandes.
a guess at the date of the deal is about this time:
10/09/2010 Companies House Gazette of a change of directors
Ultimate Parent is HORWOOD LTD, incorporated in the Bahamas, so we’re not getting anything else there.
There’s a debenture registered in the names of Lynton and Hunt.
Presumably that’s some call they still have over the assets.
Old if not oldest trick to create a paper loop as to where the assets are. Not known to do more than test a lawyer’s basic competence though.
*Holy cow*
Fernandes is sole director, and there is no secretary listed.
That makes it a Single Member Company (assuming the record i’m seeing is accurate, which is what i imagine,but thee are so any weird things in this whole affair, it might be possible such a grave error has een overlooked).
Which means TF has unlimited liability.
That could be really unfortunate.
I’m going to double check this for sure come lunch. My mind boggles too much now.
“…but if the team was staying as Lotus no-one would bothered saying “Thank You Lotus Fans”.”
How great it is to see a team in touch with its fans – this kind of message is common in other sports at the end of a season (and in those cases, the teams have a habit of being back the next season.)
for colin grayson,
I’m not Joe, in fact i’m nothing but Slow on this issue. (ugh, sorry)
“well joe , when I posted a while ago you told me that the ownership of renault F1 was not clear you stated that it was”
Do you hold a mortgage? Who holds your title deeds if you do?
Maybe the confusion is about the bank names appearing on the 2010 Renault, run under license?
That looked like a bit of refinancing of GenII for their operating budget.
But in no conceivable way is the name “Renault” mortgaged by anyone. The engine outfit was cosseted by their parent.
I personally think the GenII “cross marketing” plan is not only unattainable, but never been done despite numerous attempts, and posted at some length as to reasons why it looks unrealistic, hence offloading to more easily impressd debt providers. (new “sponsors”)
I fail to see how anything has changed, or would, with Renault, the car company and its wholly owned F1 engine outfit. They’ve been studiously clear how they retain their operations. Ghosen is a hard choice for best motor CEO, when you’ve Piech and Toyoda, that’s not a call which can be answered without detailed clarification of the actual question. But Ghosen looks the toughest real world guy. Fixing a state industry in France, and a lost Japanese company (Nissan) the the same time, is frankly amazing, and neither parochial, nor personal politics nor empire building. Ghosen was ruthless in good ways.
Hmm, so this guy (or any exec at this level) is somehow unclear?
Maybe the thing is that 99% of F1 press is hopeless to explain, or even attempt to read for theselves . . .
“when I stated that the use of the lotus name would be affected by what happened in the uk courts you stated [ sorry I haven’t checked the back posts ] something like the malaysian government had decided the matter ] ; care to comment on that ? …..tony taking the money to go away will only confirm the matter”
What you say there needs breaking down a bit, i hope I don’t mangle your intended meaning:
You stated Lotus name would be affected by courts.
What case are we talking about?
There’s not even been an application hearing.
– –
I don’t recall Joe being as simple as suggesting the M’sian Gvt would decide the matter.
But there’s a heck of a lot of politics involved.
When M’sia got a GP I heard of pressure on cameramen (more likely state tv mix operators) to bias the World Feed, or it was a rumor intended to influence something else.
Mahatir could be with Ferandes to fix a Proton deal, or he could be there to lobb a hate bomb, or anything in between.
That all these guys are Government involved is because M’sia has been a state planned economy.
So the two things are inseparable.
. . . .
It looks like TF has taken the money, said “thanks mate” and flipped the finger. To wich i say “nice one!”
I don’t think TF was ever not going to be paid.
We don’t know what for.
Again, I don’t recall Joe saying TF would [sic]”take the money and run”. He look that kinda guy?
I you’ve a neat way to uncover Bermudan accounts, let me know! (there can sometimes be ways, indirectly, but it’s heavy – lift and involes more guesswork than we have even indulged here)
– – –
Doesn’t the 1 race + 1 test “debrand” look like faking it now?
This will remain a sweet story i think for some time.
For racing, TF flipping the bird is going to be a morale booster, not a background legal drag. It’s my qualified, amaeteur view, that there’s no legs to any litigation of any kind in any event. Face saving time.
Mildly ashamed what i”unearthed” i could have pulled up from the start. But, hey, I’m a fan, paid to do something else.
– – –
You yourself said you’ve not reviewed the posts. That’s clear. I know there is lots of detail, and lots of fluff too, but if i was being unkind, i’d think you were trying to put words ito Joe’s mouth. I don’t think more than you mis-read or misunderstood something, but would you think it rich to lengthily justify an “editorial stance” you never took? As for comprehension, I’m commenting as a deliberate personal excercise in comprehension, and so far I’ve not had much “hit rate”!
– john
Sorry all,
one bit there I wrote needs expanding:
I wrote, “There’s not even been an application hearing.”
…
There’s one thing which is clear, no-one even thinks they’ve the chance of interlocutory injunction (a order with immediate effect), or it would be across the wires.
An application hearing sets out the grounds for your case.
You do this when things are not cut in plain tort (damages in a contractual relationship) or there are other complicating factors.
Or, you go to Applcations to get a decision to prevent other bad things happening, possibly without giving notice to the other party.
If it’s that bad, a judge can make an order out of hours, from home even. Stamp in morning. These guys don’t actually clock off.
You’d laugh if you saw how many cases (especially of this nature) get told to go away by the Clerk, without even admission to court to be heard. Beware that Clerk. Most erudite “bouncer” ever 🙂
So, the silence indicates were into finessing probems, even defining what the “problem” is.
For a lot of reasons, no-one has prevented Fernandes from logging Team Lotus in the entry book.
FOM/FIA like being courts to themselves, and they beak nothig else by choosing now.
Unless someone can argue they can’t get an agent to walk the snow blessed streets of Temple for a hundred yards, where such guys almost bivouac, nothing will be considered urgent 48hrs after the fact.
I think we got the idea now there’s not a sufficiently strong case, either way, to override the intentionally brusque manner of how a fast case would be considered for hearing. I’m using the word fast, not in any procedural sense, but because there’s no likelihood anone would make a return date (“get yer papers to back this up and come back, Now!”)
. . . .
Why is TF picking up money?
We absolutely do not know he is.
But, think of this, I’d expect to be paid to be involved, and paid to go away also.
TF is legitimising a thin claim by TLV.
That’s something I’d want to be paid for also.
There’s undeniable potential benefit to Group, or they would have no reason for the 2010 license, of whatever natue that was. May not have been a license, bit a stand – down. This one is messy,but if you se out to do something good for someone, and they moan about T-shirt licensing half season. Wow. Constructive breach. (“I worked to help you, you messed with it, now i want my costs”)
As TF, and he kept nicer than Group about this, I’d be lobbing defamation, libel, interference with contract, reach of (license) contract (think who leaed first over licensing terms) and finally real damages which are open ended if breach action persists.
E&W law favors who dares. Always has, always will.
Not some jerk sitting from the sidelines. (Nice mix there, TF to TLV!)
. ..
you can almost ignore any technical thought i brought, e.g. as to company formation, marks.
Unless there exist strong real considerations, a court looks at this in equity. Which means what can be earned. Can a counter claim for a smaller matter be paid in lieu settement fairly?
So, maybe paid, at least costs in action, to TF, maybe some money going the other way later.
—
Finally, I’d not want to touch this case with a barge – pole. In trial. Too much aural and third party evidence trying to influence highly technical problems. What quality of counsel do you think would hitch themseves to this?
There’s no reason to imagine we’d be ever told there was even a settement.
But scope for hate – bombs still.
E&EO.
First “E” might be all of what i write . .
cheers,
– john
*I WAS WRONG ON THE FOLLOWING*
____________________
TF does *NOT* risk personal liability as a “Single Member Company.”
____________________
____________________
That provision does not apply to “small companies”
____________________
(though you could imagine why it would to a large business. . . C2006 clocked in as the most complex English language legislation of its time, at 768pp, and wasn’t a “clean draft”. Anyhow mea, no excuse on my part)
****
I’m deeply sorry for any improper intimation I made.
****
If perhaps (not justfiable) I wanted to dig myself out of a hole, I’d argue that it’s obvious Secretaries have special functions, which qualifications unlikely avaiable for a small outfit, and it might be arguable that 2010 filings for revenue will see TLV pass that mark, but boy that’s splitting hairs. But that’s rot, save for obscure alignent of stars we never see.
Sorry to all for jumping the gun late last night.
THIS is, however why you look at the Table A (like I said, something shelf companies do not do custom) as to who decides, if there must be a vote. But directorial power is almost absolute without provisions. Or debentures which can contractually restrict …
anyhow, i screwed up, and looked at the wrong thing.
– john
Ouch!
I was only out by 18 years!
Provided, since a 1992 Directive, the single member thing was declared.
Until 92,it was strict that a comany would be wound down without both, both eligable to be members.
Shareholders do not have to be members, nor vice versa.
2006 removed the requirement for a Secretary in any normal LTD company. That could have been enacted with a commencement order as late as April 07.
But only if the Articles are amended, if previously registered. (no indication there for TLV to have changed that, that’s where i got caught out, linking a new provision to old remedy)
Much stricter rules apple to PLCs.
. . as far as i’ll go without tripping myself up more,
yours in shame,
– j
So, so sorry, finally,
to be clear,
without the microfiche,
Lynton and Hunt are almost certaily members (and that definition has been messed with by 2k pages of legislation, so i’m not saying a thing, but there’s nothing definitive in statute anywhere)
so, they will be obliged to register clearly their interests. Or if not members, the debenture interest ought to be clear. No directly applicable statutes, no guidance!
Hmm.
but not a “single member company”.
Maybe you could try to unveil at a stretch, but not what i speculatively claimed, to be very clear – there’s nothing automatic, and i’ve pushed every idea to try to reduce my embarassment and consider whether you can unwrap this. But nope, nothing concrete.
Only proves old fools can scan – read still to save their bones.
over & out.
– j