White knight on the way to save money-losing A1GP series?
A1GP's future looks a lot rosier with an announcement expected of a wealthy investor piling some of his millions into the troubled series.
|Pete da Silva - Click image to watch interview on state of A1GP|
Debate about the sport's longevity has been circulating since one of its founding investors, Sheik Maktoum Hasher Maktoum Al Maktoum of the Dubai royal family, walked away from A1GP in 2006.
That intensified when RAB Capital, which paid the sheik US$200 million for an 80 per cent stake in A1GP, was virtually brought to its knees by the current economic crisis. Matters were not helped by the costs of the new Ferrari engines in all the cars. Ferrari's parent Fiat sued late last year to impound the new cars as A1GP owed it $2 million.
This weekend's round in Taupo is the first since Malaysia in November and some speculated it might be the last. Formula 1, the World Rally Championships and Moto GP are feeling the crunch. Some say A1GP has survived this long only through the energy and creativity of chairman Tony Teixeira, who owns almost half the teams, and chief executive Pete da Silva. But Team New Zealand owner Colin Giltrap said a white knight was about to be revealed to save the World Cup of Motorsport.
"If you had asked me two weeks ago, I would have been downbeat [about A1GP's future]," Giltrap said. "They were very tight for money three to four weeks ago.
"It had a little bit of a hiccup because RAB Capital got caught like a lot of international merchant banks and they had to withdraw the funding to A1 but there is definitely a new funder coming in.
"I think there will be a big announcement next month of a large capital injection from another shareholder. It's being finalized at the moment. The new shareholder is a multi, multi-millionaire from the Far East who probably has access to more money [than the sheik]."
Da Silva was a little more circumspect about a new deal but said they were in talks with a number of potential shareholders.
"A1GP is not in jeopardy," da Silva told the Herald on Sunday. "We have a few people who are very, very interested in the series.
"We have been very cautious. I don't want to take just anyone's money, even in this climate. I want to make sure whoever comes on board is not just adding financial value but falls in line with our strategic intent.
"There are at least three groups looking at A1GP in a serious way. I believe we could see [an announcement] in the next eight weeks. But in these markets nothing is sure until it is signed off."
Assuming investors are found, it will be a relief to the 22 teams involved from countries ranging from India to Ireland and Canada to China.
The concept of country racing country appeals to many, especially given it comes down largely to driver skill and a team's slickness in the pits rather than the team with the biggest bank balance.
It costs about $7 million a season to run a team, which pales in comparison to the almost $1 billion spent by F1 teams annually.
Interestingly, Formula 1 has adopted a number of changes, like control tires and control engines and one manufacturer supplying the engines and have even talked about introducing medals for drivers who reach the podium, bringing it closer to A1GP.
Although costs are drastically smaller than F1, da Silva has said they lost US$240 million in the first season. Now into its fourth season, A1 is still not making money.
"I have a business plan that sees us go into profitability in year five," da Silva said. "A lot of people tend to compare us to more established series like Formula 1 or Moto GP. Both are in their old age and celebrating 60 years of existence. We are only four years old.
"Our strategy from day one was affordability. I run 22 cars for less than the cheapest team runs two cars in Formula 1. Our costs are much lower but our revenues are much lower. We are a young series."
Although Taupo loses money for A1GP, most tracks are now profitable, including the likes of Mexico, Portugal and England. NZ herald