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Troubles for money-losing A1GP persist?UPDATE With less then 10 days before the first race of this season kicks off at Zandvoort, The Netherlands, there still seems to be quite a few problems for A1GP.
The last few weeks some disturbing rumors have been circulating at several race meetings, We mention a few: 1) Only 9 - 12 cars will be at Zandvoort, 2) The Zandvoort race will be a non-championship race or even be cancelled, 3) Race-teams are not allowed to build their cars because the seatholder hasn't paid yet, (i.e. who can afford these expensive new Ferraris?).
These all came after some previous rumors became reality: First the A1GP race at Mugello had to be cancelled, then testing at several circuits was cancelled (due to several technical issues and production problems, due to the big shunt with Patrick Friesacher ...).
Only 4 cars were testing this week at Snetterton (incl. the test car).
The German team may not even race this year. This is the team that two years ago won the title with Nico Hülkenberg. Team owner Willi Weber may sell the franchise rumors say.
09/16/08 The news that hedge fund RAB Capital has removed its chief executive Philip Richards is not good news for the A1GP Series, as it is a sign that RAB recognizes that the investment made in the series was not a good idea. Richards spent a rumored $200m at the end of 2006 to buy an 80% stake in the championship from Sheikh Maktoum Hasher Al Maktoum, using money from the RAB Special Situations company. The firm has since revised the value of the A1GP shareholding with write-downs which mean that the A1GP stake is now worth almost nothing. The series continues to run races but income from TV coverage seems relatively small with the racing currently being shown only on South Africa's SABC, Greece's Novasports, TV3 New Zealand, Fox Sports Australia, UK's Sky Sports and Holland's RTL7. There have long been rumors that only a few of the teams are properly funded and that the rest are subsidized by the organizers. A1GP lost an astonishing $240m in the course of the 2005-2006 season but since then has managed to reduce the spending, although it is said that the company has nonetheless worked its way through as much as $500m since its inception.
RAB's A1GP investment was a significant part of the problems at the hedge fund and the final write-down accounting for 9% of the fund's 22% drop in August. Richards was forced to go although he remains in charge of the Special Situations company.
In an effort to improve its financial situation A1GP has employed Octagon Worldwide to provide strategic advice about commercial strategy. The deal is for three years, the same duration as the new chassis and engine partnership which will see Ferrari engines and Ferrari branding being used by the series. There have been rumors of money problems in recent months but once the cars are acquired the costs of keeping the series going will reduce, although there is no question that new investment or better returns from the series are needed to keep things afloat.
If that can be achieved then the series may one day be able to return to the plan of a stock market listing with the debts being paid off with some of the money raised. The big question is really whether or not A1GP can compete with its rivals - both in motor racing and in the larger sporting market. The problem is that the A1GP drivers are largely unknowns and the concept of national teams is not generally accepted as good in motor racing unless the countries are represented by the very best drivers available. They are all involved in F1 and making large sums of money. Until it is perceived as a real rival to F1 the drivers are going to remain old F1 drivers who want to go on racing and rising stars who hope to use the series as a stepping stone. Grandprix.com
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