Williams GP Holdings has posted a loss for the financial year 2014, of £34.5m, whilst the team lost around £42m.
The group had delivered a profit just short of £12m in 2013, though this included the substantial severance payment from PDVSA as Pastor saw the greener pastures and headed off to Enstone.
Both Pat Symonds and Rob have been hinting that the team should loosen the purse strings over the past weeks, to speed up development and ensure the team doesn’t get caught by the chasing pack.
Red Bull are about to deliver their revolutionary RB11 proper in Spain and the concern is that Williams will quickly fall back into the clutches of the midfield.
However, CEO Mike O’Driscoll seeks to reassure fans and investors alike by explaining: “The loss was driven by lower revenue and higher costs in the Formula 1 operation. More than half the reduction in revenue is due to the recognition of a one-off sponsorship payment for 2014, which had to be recognized in the 2013 financial statements. It was also the result of lower commercial rights and partnership income due to our ninth place finish in the Constructors’ Championship in 2013, and the impact of the sale of the Williams Hybrid Power business earlier last year. The higher costs were attributable to the introduction of the new hybrid power unit into Formula 1, and investment in the Group’s operation to turnaround its performance.”
“Mid-way through 2013 we set out on an ambitious turnaround strategy to reinvigorate the Formula 1 team, create a strong and profitable Advanced Engineering business, and divest non-core activities. In 2014 we made very good progress against those objectives, investing significantly in people, facilities, and technology which we believe will provide a solid foundation for the future.
“The financial performance of the Group in 2014 reflected the poor on-track results of the prior three years, which resulted in a marked deterioration in commercial rights and sponsorship income. Last year was also adversely impacted by the costs of relocating our Advanced Engineering activities.
“Our much improved performance in the 2014 Championship will be seen in higher commercial rights and sponsorship income in 2015, coupled with improved performance from our Advanced Engineering division. Our ambition in 2015 is to consolidate the progress we made last year, continue building the necessary foundations for future sporting and commercial success, and consequently to materially improve our financial results for the coming years.”
It’s a catch 22 situation for F1 teams. Invest money not in the bank to improve this years position in the constructor’s championship – in the hope this will improve revenue from FOM next year.
Yet sport’s like the English Premier League have sought to mitigate their competitors from being forced into the extreme spending of funds they do not have. The spread between the payments from the top and bottom Premier League clubs is proportionately far smaller than in Formula One. Further, the base level of payment to the team last in the competition, is now sufficient for the team to compete and survive if properly managed.