xpb Williams writes big losses
05/29/2020
B Frank Williams, founder of the racing team and long-time team boss, met for a long time , and Claire Williams, his daughter and surrogate, repeatedly opposed the sale of Williams. The aim is to preserve the independence of the team and, despite the difficult economic conditions, compete against the automobile companies and other private teams supported by billionaires.
But now the poor performance on the racetrack is forcing the resulting slump in profits and the corona crisis a rethink. As the Williams Grand Prix Holdings announced on Friday (May 29, 2020), the company's management is seriously considering a sale.
Accordingly, Williams is weighing between three options: the sale of a minority stake, a takeover by a majority or the complete sale of the racing team. Initial talks with potential buyers have already started.
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Claire Williams runs the team.
Williams slipped to tenth place
In recent years, the third-oldest Formula 1 team after Ferrari and McLaren has seen it a big downturn. There was no longer any indication of the team that, under the leadership of Frank Williams and Patrick Head, won the constructors 'championship nine times in the past, was the drivers' world champion seven times, celebrated 114 GP victories and was on pole position 128 times .
Williams was the technology industry leader in Formula 1, especially in the 1990s. But this was followed by a gradual decline, which began by the mid-2000s at the latest. Williams has not celebrated a race win in eight years. The last success dates from May 13, 2012, the penultimate victory in the premier class on October 24, 2004.
ZuAt the beginning of the hybrid era from 2014, Williams still benefited from the Mercedes engine. Two fifths followed on two third places in the Team World Cup. The decay began in 2018. First Williams was last with seven points. In 2019, the third most successful racing team in Formula 1 history only scored one point.
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Williams has slipped continuously in recent years.
F1 team loses 35 million
The poor results on the racetrack have led to a decline in sales. Williams receives a million-dollar bonus for previous world titles and long-standing presence in Formula 1. But with two tenth places in a row, the other income from the large pool of rights is shrinking.
The group had to last Year-on-year sales fell from £ 176.5 million to £ 160.2 million. The Formula 1 business, which had generated 130.7 million pounds in 2018, shrank to 95.4 million in the previous year. A profit before taxes, depreciation and amortization of 16 million pounds (EBITDA) turned into a loss of 10.1 million.
Even the company's second arm, Williams Advanced Engineering, could not make up for that. This is the name of the technology division, which, for example, once served Formula E with batteries and works with Lotus on the Evija hypercar.
Williams Advanced Engineering increased sales from 44.8 to 63.7 million pounds. The other corporate income is rather negligible at 1.1 million. The bottom line is that the Williams Group posted a loss of 13 million, instead of posting a profit of 12.9 million pounds as in 2018.
Partnership with Rokit ended
2020 is on an upswing not to think. The corona crisis will leave its mark too much. Even if Formula 1 actually drives at least 15 races this year and the full TV and sponsorship money should flow. The total pot for the distributions will be smaller. Williams will also earn less this year because Formula 1 uses the 2019 results to apply the distribution key. And Williams was last.
Although the racing team presented itself during the winter test drives in theFebruary in an improved form. At least a glimmer of hope that the extensive restructuring in Grove will pay off. But most experts assume that Williams will only be able to fight for the last places. Scoring will likely only be possible when chaos prevails. Like in Hockenheim 2019. And even then Williams needed a penalty against Alfa-Romeo-Sauber in order to actually move up into the points.
The corona crisis also affects team sponsors. Williams announced that the partnership with main sponsor Rokit has ended with immediate effect. Actually, both parties would be bound to each other until 2023. What led to the separation is unclear. One thing is certain: It will further reduce Williams' income. The team has to look for a new main sponsor.
Williams is looking for sponsors
Not even the Formula 1 budget cap, which will come into effect from 2021, seems to be sufficient as a lifeline to remain independent in the future. Teams are only allowed to spend $ 145 million in 2021. In 2022, the budget ceiling will be lowered to $ 140 million and in 2023 to $ 135 million. There are exceptions to the rule, but private teams should generally be given more equal opportunities.
Especially since the payout will also be adjusted. The small teams should receive more money in relation to the big ones. Still, Williams is considering selling it. Incidentally, there was already a minority stake beforehand. Williams was a family business for three decades. Until Toto Wolff invested in the racing team. After moving to Mercedes, the Austrian sold his shares.
The family has only held a minority in Williams Advanced Engineering since the end of 2019. This could soon also be the case with the Formula 1 team. Williams desperately looks for sources of money. Around 130 Formula 1 cars are said to have been pledged for 50 million. First to a bank, then to billionaire Michael Latifi. The Canadian is likely to be a candidate for the takeover. His son Nicholas has been driving for Williams since 2020. Should it come to that, the last of the once so many legendary private teams in Formula 1 would lose its independence.
