The future of the Force India F1 team remains somewhat clouded with Vijay Mallya in huge conflict with the team’s primary sponsor Diageo (the owner of Smirnoff) and the team’s other partner, Roy Subrata (of Sahara), having said he is keen to sell his shareholding, in order to raise money to get himself out of jail in India.
Diageo is already looking at ways to take the F1 team off Mallya’s hands because of loans to the team that they guaranteed, that have not been repaid, but the Mallya empire is a mess with conflicting legal claims over many of its assets that mean that Diageo cannot easily take control of the shares it wants. Mallya is now saying that he is willing to step down as chairman of United Spirits Ltd, if there is a decent deal for him. Diageo may not like the idea, but it might be easier to pay Mallya to get rid of him, rather than trying to wade through endless legal actions to get him out. The faster the company returns to a stable state, the easier it will be to drive up sales and profits. If Mallya does sell out then another part of his family’s empire will have disappeared, but he is looking for money to pay his debts related to Kingfisher Airlines and probably has a rather high figure in mind for a settlement.
In its recent half-year earnings report, Diageo said it has deposited $139 million in an escrow account as part of an agreement to guarantee the liabilities of Watson, a company affiliated with Mallya, which owns his stake in the F1 team. Diageo says it is seeking repayment of that money from Mallya. There has been much talk in the course of the last six months of Diageo taking control of the F1 team (a valuable asset at the right moment) and then working in partnership with Aston Martin to rebrand the operation for their mutual benefit, with Aston Martin aiming to sell more cars and Diageo selling more vodka. Marketing men have pointed out that the connection is potentially very strong, as both Aston Martin and Smirnoff are linked with the James Bond character, a sexy brand that could attract money from other companies. Aston Martin, remember, is five percent owned by Mercedes Benz, Force India’s F1 engine supplier and the source of some of its road car engines in the future. Getting Aston Martin in F1 would be another coup for the sport and very much in line with Ferrari’s Sergio Marchionne says he wants to see more manufacturers in the sport, as the battle lines are drawn for commercial negotiations for 2021 and beyond. Ferrari and Mercedes are already strongly aligned in F1 with Renault and Honda also seeing the logic of their arguments. No doubt there are also plenty of phone calls going with Wolfsburg, the headquarters of the VW Group, which owns a string of brands including Porsche, Audi, Lamborghini and Bugatti.
joeblogsf1 
Joe, how do you think the F1 machine would react to a fit and proper person test?
Obviously the teams need money coming in but there is a legacy of what to appear to be slightly dodgy folk in around the lower teams yet seemingly above board folk, the likes of Paul Stoddart and Giancarlo Minardi leave as they don’t seem to be able to keep the cash rolling.
Is it really that hard to get these stratospheric amounts of cash that almost by definition you need to be a slightly dodgy person operating at the limits of financial correctness?
Or is it just plan greed and ego…..
I think there should be one
Yes Flav could run it !
“…how do you think the F1 machine would react to a fit and proper person test?”
As disgracefully as in other sports.
I feel strongly that VW should put the Diesel fiasco behind it (even with the costs involved), and throw itself into F1, making highly efficient Hybrid Petrol units, and using that to replace it’s current ‘Bluemotion’ brand. People have short memories and the diesel stuff will disappear under a good hybrid petrol campaign.
Can we consider the entry of Aston, mainly for the name in a team owned by Diageo like a manufacturer team? .. I don’t think ..
If it is badged as such and promoted as such, why not?
but, they will not have the money that have “big” car factory .. that’s a “branding” like it was with Enstone/Genii and Lotus .. and we have seen that it was not sufficent to be at the top ..
money is the key .. will Diageo ready to spend like Marlboro with Ferrari?
IMO, Aston Martin should be able to attract a good deal of sponsorship for an F-1 team. I agree, they hardly have the money to fund such an operation themselves, but still, I would love to see a “Gulf” liveried robin egg blue and orange F-1 car. Wouldn’t everyone like to see that?
for me it’s the mark of the Gulf Ford .. this isn’t a Ford, and I dont think Gulf will sponsorise the team .. but I love the colors 😉
I would have thought the only phone calls at Wolfsburg are relating to their on going “difficulties “! F1 won’t be on their radar surely?….
Arthur Daly or as he is better known Vijay Mallya. The man who says he’s a little short of dosh🙈🙉🙊 to the Indian Government then celebrates a birthday by having a huge Wing Ding of a party. The man is as slippery as an eel . All his business dealings seem to propped up by borrowing from “Peter to Pay Paul” this strategy will at some point implode. Funny how The Little men with Napoleon Complexes end up in F1 the likes of Bernie 💰Mallya 💰 Todt 💰 all end up in F1💰 😉.
Slightly off topic but if AM are really thinking about putting MB engines in their road cars they should look back a few years to when Rolls-Royce announced they were going to use a BMW (?) V12 in their cars.
What’s your point here? That BMW then bought the firm?
My point is that at that time, it was reported that, scores of RR orders were cancelled.
Aston Martin is consistently rated as one of the worlds ‘coolest’ brands.
How does tooling around in seventh or eighth place at most of the races
enhance that? And it’s been along time since a F! car looked in any way sexy.
It makes sense for day to day brands like Renault, and I would say didn’t do much for Caterham – who like Aston make cars that can be seen as actually more exciting and desirable than any F1 car.
+1 – these ‘branding’ schemes didn’t work out for Caterham, Lotus, Marussia or before them, Spyker. Indeed, in some of those cases, entering F1 only helped contribute to the car manufacturer’s demise. Slapping a name on a car is not a credible marketing ploy unless your target market is extremely gullible. Am not convinced F1’s audience would be so easily duped based on previous evidence.
The failure of the above was nothing to do branding. The teams were badly run and poorly funded. End of story.
That wasn’t the point being made. F1 is an expensive commitment and there is a history of car manufacturers entering the competition to promote their brand only to find that the costs involved, not only prevent competitiveness of the team (minor issue), but also burden the core business with financial responsibilities that contribute to the manufacturer’s demise (major issue). So in fact, the F1 involvement impeded the progress of these manufacturers as going concerns as opposed to the reverse.
The only way a manufacturer is able to discern ‘value’ from F1 is by appearing at the sharp end of the grid. Ferrari have been making noises about losing to Mercedes damaging their brand. Ferrari were the 2nd most successful team last year yet that wasn’t deemed good for their brand by Machionne. Given the money Ferrari throw at F1, by comparison any new entrant would be ‘poorly funded’. The cost-benefit analysis doesn’t add up.
While its great to see Renault in F1 but unless they topple Mercedes in the next 3 seasons, the return on investment is poor. Given that the likes of Ferrari, Honda and the independents are all striving for the same, the odds on them succeeding are very long indeed (and if they do, the other manufacturers who failed – Ferrari and Honda, end up looking like chumps instead).
I don’t remember it being specified in the books, but I doubt James Bond drinks Smirnoff!
Vodka Martinis old boy…
Made with decent vokda though, that was the point.
Bond doesn’t say ” vodka martini, shaken not stirred”
Vija Mallya is not my cup of tea but he is a motor sport enthusiast. I saw him racing on Sunbeam “Tiger” at VSCC events. He bought an F1 Ensign to race in Formula Libre events from which a relationship with Bob Fearnley developed.
Joe: “There has been much talk in the course of the last six months of Diageo taking control of the F1 team (a valuable asset at the right moment) and then working in partnership with Aston Martin to rebrand the operation for their mutual benefit, with Aston Martin aiming to sell more cars and Diageo selling more vodka.”
Selling to consumers and running an F1 team are mutual distractions. It didn’t work for British American Tobacco with BAR. It didn’t really work for Yeoman Credit or United Dominions Trust (the first commercial sponsors in F1) 50 odd years ago.
Marlboro and Imperial Tobacco (owners of John Player) kept it simple. They sponsored teams (and drivers) and tried to back winners. They never owned anything.
James Bond and Smirnoff have gone hand in hand for more than 50 years. The partnership between Smirnoff Vodka and Bond began in 1962’s Dr. No,
It may have not been specified in the books, but money talks in movies as it does in F1…
Dear all, Force India, despite VJ’s best efforts is one of the top teams in terms of points return for pounds! The CFO is definitely the best in the business, she has dealt with them all over the years, EJ, Midland, Spyker/Collin colles & VJ, she keeps the show on the road and the staff employed and paid! I really hope that there’s a happy well funded ending to this looming crisis!
Good point Martin! One that is quite probably overlooked by most fans.
Much juggling required in the current financial madhouse that is F1 and that individual must have had their work seriously cut out…
@Joe Saward.
Joe, in case you missed it, here is a link to part of European Commission pdf report on F1 & Alcohol sponsorship. http://ec.europa.eu/newsroom/dae/document.cfm?action=display&doc_id=11843 Your link rules acknowledged, so please remove.
Sorry to be a downer, but the knives are out when it comes to alcohol and sports sponsorship. The EC are out to kill it, in any area, where children or young people might associate it with glamour and driving.
They are not very big knives at the moment.
Which shows how out of touch these self serving taxpayer funded nanny staters are.
I have followed motor racing for as long as I can remember, which has included a Red and White McLaren, a Black and Gold Lotus, A Orange and Cream March with a Scheckter behind the wheel, a Blue and White March in 1977 and countless others in between.
I gave smoking a try once, as a dare. It was horrible and no matter how much money they throw at sponsorship I will never smoke. If I did maybe I would have all those years ago chained from a McLaren to a Lotus brand, but it would never make me take it up just out of gratitude for them spending money trying to woe me. (allegedly)
If I walk into a pub and they don’t have a tipple I am going to savour, I walk out and go to another or have a memory bank of those that do serve good beer mainly.
What they don’t appreciate, these so called politician types, is that its brand awareness and the real solution is not to ban what is legal to buy but to educate people to the dangers with the products in plain sight. But that takes too much effort
The Aston chief sounded pretty dismissive of F1 with some pretty strong commentary about F1 making no sense in terms of marketing its road cars. However, maybe it’s essentially a negotiating tactic to drive down any investment figure asked for on their part.
Not the ones I spoke too…
Where I live, Marijuana is legal for recreation use. Can you imagine a “pot leaf” logo on an F-1 car? I suppose stranger things have happened, but still….When I was in high school, “Riz La” brand rolling papers were never used for tobacco, yet they sponsored racing, mainly in MotoGP.