In recent weeks there have continued to be discussions about the future of Manor F1, even if these were fairly pointless. The team could – in theory – have missed the first three races and appeared for the first time at the Russian GP in Sochi on April 30, but there was never much hope that this would happen because no-one had the money to push the deal forward.
The much-vaunted Indonesian bid that has kept hopes alive has consistently failed to demonstrate funds and the Manor staff has already dispersed. I hear that the F1 entry has now had to be withdrawn and that means the story is over and all that remains is the inevitable liquidation of the businesses and the quibbling over who gets what from the sale of assets. The team has a 2017-spec design and a decent amount of equipment and so anyone wanting to start a new team in 2018 might like to buy this either from the administrator or at auction. There are engine and transmission supply deals with Mercedes and Williams but it is not clear if these are transferable to a new entry.
The post-mortem for the team will not be very flattering. The new owners arrived in early 2015, with a top 10 finish in 2014 and a guaranteed top 10 finish in 2015, because there were only 10 teams that year. This meant that there was guaranteed prize money of around $25 million a year until the end of 2017. In addition there was a further $12 million minimum of what is called Column 2 prize money, which teams get based on how they do in the last season, but only if they finish in the top 10 in the Constructors’ Championship. That was guaranteed in 2016 but when the team was beaten by Sauber in Brazil last year, it dropped to 11th (Haas having joined the sport) and so this money was lost for 2017.
In the course of 2015 Manor grew from 65 people to double that at the start of 2016 and to 212 by the end of last season. There was a credible plan for a supply of Mercedes engines and Williams transmissions until 2020, which gave the team more value, but also more liabilities.
The plan seems to have been to find sponsorship to keep the team going but when that didn’t happen, it was a search for investors who would allow the owners to pull back and become minority shareholders. The problem was that no one wanted to do that at the price being asked. There were several opportunities to sell the team but the owners wanted more than the buyers were willing to pay.
The key question is whether there was a business plan beyond the sale of shares? Given the numbers involved, this does not appear to have been the case – because the team had a hole of $40 million in its 2017 budget. Even without the loss of 10th place to Sauber in Brazil, this hole was going to be around $28 million. That might have worked if there had been two pay-drivers with $14 million each, but in the end there were no such people and when that number went up to $20 million per seat, there were no takers.
The company has some assets and even some money in the bank, but it is believed to owe around $12 million and has liabilities beyond that because of its agreements with Mercedes and Williams, which are believed to amount to around $40 million. The key question now is which company owes what to whom, and how the cash from the bank and the asset sales will be divided up amongst the creditors. These things are often fairly ugly because owners protect themselves by being primary creditors, which means that the staff and suppliers often end up with very little.