While Renault, McLaren and Williams appear set to disrupt the sale of the Force India sale for their own reasons, in the minefield that are the Team Agreements, there is another element that could cost the Silverstone-based outfit dearly.

The float prospectus talking about the team agreement states that:

"A team's rights and obligations under its Team Agreement terminate if it: (a) ceases to be a constructor, fails to participate in more than three Events in a season or fails to submit a valid entry form for participation in the World Championship, or (b) is insolvent."

Should it be the case that Force India is actually insolvent, in that it cannot currently pay its bills, under the terms of the team agreement it is not allowed to race and also loses its rights to the prize money.

This is why Manor's parent company, Just Racing Services Ltd, and not the one which signed the contracts, previously went into administration.

If this were the case it would mean the prize money, estimated at around $150m, goes to the other nine teams, who could agree to give it to a new team or keep it.

The crucial point being that if Force India is insolvent it is no longer Force India's prize money.

Interestingly, FRP Advisory was the administrator in the Manor case also.

When Manor went into administration the teams had to vote on it using an old car but not whether it kept its prize money.

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READERS COMMENTS

1. Posted by ClarkwasGod, 03/08/2018 13:10

"I have a feeling that, if Ecclestone was still in charge, not only might FI not have got to this situation (by means of a(nother) quiet donation from his personal funds), but that he would have "persuaded" those teams objecting to withdraw their complaints for the good of all. "

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2. Posted by Mad Matt, 01/08/2018 11:32

"According to what I read on the BBC the other teams are concerned that the Red Bull/Toro Rosso, Ferrari/Haas etc. way of working will become the new norm and that independent teams will be forced out. They're asking for assurances that Force India won't follow that route but they're not saying that, for example, what Ferrari do with Haas is OK, just that enough is enough.

They may have a point.

As for the prize money, well you clearly have an opinion and I might have sympathy with it but it's not what the rules say. I'm not a huge football fan but don't football teams get docked points if they go into administration, or some such thing? I seem to remember it was a concern for a premier league team hovering on the brink of bankruptcy.

Turning to engines: I'm not aware of anything which stops an engine supplier taking on a new client, just as we've seen Honda do this year and next. I believe costs are capped at €12million per season to a customer team, following an agreement made back in 2016.... if memory serves. I don't think the manufacturers make much in the way of profit, it supposedly comes indirectly from being associated with F1.

As an aside, I watched a clip from Fifth gear going back to when Jenson Button drove for Honda and it was claimed that they used around 100 engines a year....."

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3. Posted by SteiffCollector, 01/08/2018 9:33

"I find this all very confusing and would really appreciate it if anyone could clear this up for me please.
One of the points that I have read, regarding the potential sale of Force India, is that these top three teams have concerns over Force India becoming a Mercedes B Spec team!
How then is this any different to already have Toro Rosso F1 Team on the grid? Are they not a Red Bull B Spec Team? So what exactly is the difference?
As for the right to now withhold prize money, as I see it, yes, naive I may be, but surely whatever has been legally won/earned, whilst actively part of a current season, must be deemed as payable in full?
If an athlete wins a gold medal at one major event in a year, but goes on to decide to retire from that sport soon after, do you have the right to take their medal back? The same can be said in just about every other sport, especially those where prize money is involved, you can’t take it back or withhold a percentage because they are no longer taking part!
We are not seeing the same level of complaints regarding engine suppliers are we? Several of which are permitted to supply numerous teams, not only to obviously make huge sums of money, but by doing so they are being allowed to develop their engines far quicker than the teams that can’t afford to take up these engines, simply by having their engines installed in more than one team, I see this as an unfair advantage over the lower ranked and less financially viable teams.
The situation as a whole, has become something of a farce and is nothing more than detrimental to the sport that is Formula One!
"

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4. Posted by Frank H, 01/08/2018 7:23

"@Anthony: If I have understood it correctly, the Administrator will get his costs covered by a future owner. So in reality, they're still under "the harsh realities of commercial life", perhaps even more so, as the administrator will only pay those things that really needs to be had. "Do we really need this" is probably the first question of all expense."

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5. Posted by Anthony, 31/07/2018 20:48

"Why should Force India gain a benefit from the administration procedure whilst their competitors still have to deal with the harsh realities of commercial life?"

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6. Posted by Hibbie, 31/07/2018 15:31

"Clare would like to get her hands on another $16.66 million. 18 cars on the grid sounds good to her. "

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7. Posted by Editor, 31/07/2018 12:42

"@ LukeP

Absolutely"

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8. Posted by LukeP, 31/07/2018 12:39

""If this were the case it would mean the prize money, estimated at around $150m, goes to the other nine teams, who could agree to give it to a new team or keep it." clear conflict of interest when they get to vote on what happens now then!"

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Force India to lose prize money?

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