Ecclestone keeps Marussia hanging by a thread – could there be just 10 for 2013?

A pretty girl

Marussia, is an old Russian word for a pretty girl – but it may be more appropriate to consider the pretty big mess the team finds itself in right now. The F1 team are often described in the media as a ‘Russian team’ yet they have hardly anything about them that is Russian.

CEO Andy Webb admits this but that the plan is to engage engineers from Russia in building Marussia F1 Team cars. Special programs are being developed in Oxford for Russian specialists to train in the UK.

“If we want to be a Russian team we need more of Russia in it: in engineering, marketing, mechanics,” Webb said in the publication ‘Russia’. “My goal is to have at least 10 percent of our staff to be Russian. Now we have only 1 percent.”  Webb has also indicated that the team could name a Russian pilot in 2014. Also, there is an idea that there should be a Russian driver in the team.

Russia is also building its first racetrack for Formula 1 in Sochi. Mikhail Gorbachev, a Russian F1 expert believes that Russian fans learned the ropes of the sport due to the extensive F1 television coverage in recent years. Slightly worrying is his comment, “But I don’t expect pilgrims from around the country to visit the Sochi track. All the fans from Russia, the CIS and the Baltic States already quenched their thirst for F1 Grand Prix events either in Hungary or in Turkey,” Gorbachev says.

Lacking in Russian-ness

Marussia identifies with Russia not only because of its name but the team competes under the Russian flag and its engineering director is popular TV presenter Nikolai Fomenko. CEO Webb said that Fomenko inspires the entire team. “I know that he is very talented; wants to be a millionaire and his enthusiasm is unshakable. He seems to have huge popularity in Russia. So we want the people to support him. And also his personality makes the team work. We want the team to understand Russia, and Nikolai will do that.”

However Gorbachev argues that while Fomenko is definitely a draw, he can’t make the team successful on his own. “Fomenko is a legend, but to succeed, the team needs a specialist with vast F1 experience,” Gorbachev said. “We have specialists of this kind, and I would rely on one of them. If we decide to have an F1 team once and for all, then I guess we’ll make progress.”

The Marussia F1 car itself is of course not Russian either. Marussia Motors collaborated with the UK’s Cosworth and Virgin Racing to construct the vehicle.

“The creation of the team indeed came as a surprise,” said Alexei Popov, a prominent Russian F1 commentator. “I thought that the project would be limited to marketing the Cosworth brand. On the other hand, while they made a formally Russian team, the owners did not make efforts to ‘Russify’ its personnel, even as a long-term project. There are no Russian-speaking specialists in the team this year.”

Financial plight

Much of this you may already be aware of, however, the Guardian revealed the plight of the team a few weeks ago when they reported the team was currently valued at around $72 million, but the debts are in excess of $125 million.

“The directors are in active discussions with potential new investors and also pursuing other sources of income, including potential sponsorship and drivers,” Andy Webb, Marussia’s chief executive, said. “Some of these discussions are well advanced although not yet completed, so the outcome of each remains uncertain”.

He added that the costs have risen because of “the significant investment in the team’s personnel, infrastructure and factory”. The writer of the article concludes, “Marussia is expected to seriously improve its financial situation and get money from the F1 organisers due to the Concorde Agreement, but only if they manage to maintain their tenth position in the 2012 constructors’ championships”.

Of course the latter didn’t happen, and ironically a Russian driver – Petrov stole that 10th place away from Marussia in the dying laps of the last race of 2012. This is believed to have cost the team no less than $10m and if are to believed this means the bank balance is now zero.

More worrying for the team, it appears they have no Concorde arrangement yet and whilst they are registered for the 2013 season, it is rumoured ‘special arrangements’ have been made for their entry fee whilst commercial matters are resolved.

F1 post the manufacturers

Following the departure of BMW, Honda and Toyota all within a year, the FIA announced its intention to open up the grid, aiming for a total of 13 teams for 2010 and in July 2009 selected three new teams from 15 new applicants, as well as confirming the entry of all 10 existing teams. The existing F1 teams, under the FOTA organisation, are understood to have agreed a system of technical support to assist new teams. This compromise proposal would involve the supply of parts and design knowledge to the new entrants, but not full customer cars, in return for which the budget cap idea was dropped.

The three teams on the entry list released in July 2009 included Campos Meta, a Spanish team led by former driver and GP2 team owner Adrian Campos and Madrid-based sports advertising agency Meta Image; Manor Grand Prix, an F3 team run by John Booth and designer Nick Wirth; and USF1, a team created by former designer Ken Anderson and journalist Peter Windsor. Following the withdrawal of BMW Sauber, Lotus Racing was accepted to the grid.

Manor became known as Virgin racing after Richard Branson’s Virgin Group purchased naming rights to the team, while Campos-Meta was reimagined as Hispania Racing after investor Jose Ramon Carabante purchased the team from Adrian Campos shortly before the first race of the season. USF1 officially withdrew from the championship in early March, following months of speculation and accusations from whistleblowers that the team had been crippled by mismanagement for months.

I could bore or entertain you further with some of the shenanigans of the other entries but we’ll save that for another day. However, further to the technical support offered by the existing teams, the commercial rights holder was persuaded to provide $10m of ‘Bernie Money’ to help the teams get going.

Concorde Sweetners

As I demonstrated yesterday in ‘Ecclestone, Parr and the Night of the Long Knives’ – the year a Concorde agreement is due for signing, teams get some incentives from Mr. E to sign at various times when negotiating difficulties around the contract arise. Williams got $40m following the removal of their CEO and swift signing of the new 8 year commercial agreement.

Marrusia are now apparently the only team with no Concorde agreement with Emperor Ecclestone.

Graham Lowdon (Sporting Director) when asked today in an interview with ‘ how much they will receive from FOM said, “At the moment there is no offer of whatever the new Concorde is. Therefore we do not know. The last thing we were told [by Ecclestone] was that there would be some money for us, but to be honest – who knows, as long as there is no agreement?”

Lowdon previously but had already announced that Marussia will definitely be on the grid in 2013, even without a commercial framework agreement with Ecclestone. “It has no effect on our stability in this sport, we plan this way – we will still be here, no question,” he emphasizes. “We now have to wait for when he gives us a Concorde Agreement, so we can look at the offer contained therein.”

On the question of whether a commercial offer would be helpful, Lowdon answers evasively: “I do not know, this is due to Bernie, it is strange that some teams have received one, no other But to be honest, it is only to him.. . It depends on whether there is a Concorde Agreement before the next season begins. This we must wait. It does not change our plans in preparation for next season. ”

FIA to take responsibility

There have been questions raise by some as to whether the FIA would intervene in this regard because of conditions relating to equal opportunities. Lowden responds to this saying, “The questions you have you should ask the owner of the commercial rights or the FIA. It is not our job to speculate why they do certain things or not,” Lowdon said shrugging. “We have a relationship with the FIA ​​and we have enrolled for their competition. The owner of the commercial rights has indicated that there will eventually be a new Concorde Agreement.”

The problem for the new teams has been that what they thought they were originally signing up for never happened. Before the arguments were resolved in 2009 over ‘to budget cap or not’ it had been suggested the smaller teams would have technological freedoms to compensate for their lack of spending power.

Lowden is clear on how unfair this has been saying, “If you look at the last three years, you have to remember that the championship for which we originally agreed to enter, has never existed. My view of things is that the three new teams should be treated with respect, because they have remained in such a championship, with rules we never agreed, and yet we have adjusted our business plans accordingly. The conditions have changed constantly, whether it is double diffusers, KERS or cost savings supposedly going to happen.”

He presses the point further, “But this is the crucial point: We’re still here – even though the playing field is constantly changing,” Lowden then calls for courage: “We are on the way, in the coming year to have a competitive car from the lessons we’ve learned. We have survived for three years to get through all this. We believe we will be in Melbourne for the start of 2013”.

Confidence in Russia

These are bold statements indeed, because there has been no indication from the major investor in Russia that another bean will be provided for the team. If not bold statements then maybe this the desperate actions of a man facing a Poker game ruin – knowing all he has is a 7 high and no more cash.

We have already seen one team base its entire F1 platform on its national identity and this has failed. Marusissia is far less Russian than HRT was Spanish. Ecclestone is known to only support the idea of 10 teams in F1 because more than this dilutes the funds he is prepared to allocate to each entrant. Or in other words may cost the commercial rights holders more money.

If Marussia are looking to the FIA for support then my concern would be that the little man in the big chair in Paris will be either inept or powerless to help you Graham. What will be will be and if Bernie survives the winter, he will surely at the other teams’ behest cast some scraps in your direction to keep the show on the road.

If Marussia were the 10th and last team on the grid – then things would surely be different.

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