The Williams Formula One team has been up for sale since May, but its acquisition in full by American investment firm Dorilton Capital still came as a shock.
Williams, the sport’s third-oldest team and second-most successful by constructors championships, had been the only continuously family-owned team on the grid since its 1978 debut.
But that rare tangible link to the sport’s past has been lost through this sale, and though Frank Williams and daughter Claire will retain their principal and deputy positions respectively, it marks the end of a long transition away from the independent constructors that were the bedrock of the sport for most of its 70-year history.
It’s been no secret that Williams has been struggling on and off track for years. Poor results begot a decline in financial returns, which in turn resulted in worsening car performance.
The vicious cycle is laid bare in championship results: from third in the standings with 320 points in 2014 to a lucky solitary point to finish comfortably last in 2019.
The sale of its research and development arm to refinance debts last year was a final roll of the dice to see the team through to 2021, but the plan lasted only until COVID-19 postponed the season for four months. By May it was on the market for fresh investment, and last week it was snapped up in full for €152 million.
But sale of the family’s shares at least ensures the iconic team’s survival, and Dorilton says it intends to maintain the team’s historic name and honour its heritage. The firm also says this is a long-term investment, which bodes well for the team’s growth prospects.
Williams’s white knight has arrived with impeccable timing. Not only has it galloped in during the same week all 10 teams agreed to a new, fairer and egalitarian financial deal with the sport, but it still has 18 months to prepare for a regulatory overhaul.
The sport was originally due to switch to a new set of technical regulations designed to promote better, closer racing and introduce a budget cap of US$175 million for 2021, but the pandemic forced a delay in their implementation to reduce new spending during these financially precarious times.
However, crucially the budget cap has not only remained in place but has been negotiated down to US$145 million, far closer to Williams’s annual expenditure.
For its entire history Formula One has been vulnerable to cashed-up teams spending their way to victory — Ferrari and Mercedes, for example, reportedly spend more than US$400 million apiece — but from 2021 will be restrained in how much can be spent developing a car.
The doling out of prize money is also set to change dramatically. Unfair financial terms struck by F1’s previous owners allowed the largest teams to cream money off the top of the total pool before championship standings were used to divvy up the rest, but from next year the differences in payment from first to last on the title table will be smaller and bonus payments for championship success will be correspondingly reduced. … Continue reading
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