14/02/2011
NEWS STORY
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Last week Williams released a statement which seems surprising. The team said "our 2011 budget is already contracted. We don't need new funds." This is an impressive situation for the team to be in since, as Pitpass' business editor Chris Sylt explains in the Independent today, Williams made a net loss of £31.5m over the five years from 2006 to the end of October 2010. But this isn't the reason why the statement might be surprising.
On 1 February, Williams launched what it calls an interim livery with just nine sponsors and swathes of blue covering the car. Since the end of last season the Grove outfit has lost six sponsors including insurance company Allianz which had been a partner of the team since 2001 but this year has switched to Mercedes. However this too isn't the reason why it may be surprising that the team is happy to say that it doesn't need new funds.
The prospectus for the team's proposed flotation reveals that its income from prize money and its three largest sponsorship agreements "represent between 80% and 90% of the group's contracted income." This demonstrates that the number of sponsors on its livery doesn't matter - it is of course the amount they are paying which counts.
However, there is a big difference between needing and wanting more sponsors. Although Williams says it does not need more sponsors it would presumably not turn down more brands if they knocked on the door. This doesn't at all mean to say that the team needs more sponsors to race this year, just that, like all F1 teams, the more sponsors it has the better.
Money is the driving force in F1 and can make the difference between winning and losing races. In 2009 Williams had revenues of £108.3m compared to £234.5m for championship winner Brawn. So although Williams did not need new sponsors, as it had enough money to get through the year, its performance may have benefited if it had had a bigger budget.
Indeed, despite having the support of the behemoth that is Red Bull and getting increased prize money this year from winning the 2010 championship, Red Bull Racing still plans to announce new sponsors even though it has launched its new car. Team boss Christian Horner recently told Sylt that the team has "signed a couple of interesting deals which will be announced in the next couple of weeks."
Some would say an F1 team always needs more money and can never have enough in its quest for victory and there is some logic behind this. McLaren's mission statement is "to compete in, and win, every round of the world championship" and it is clear that an increased budget can help achieve this. For example, hiring Adrian Newey on double his current salary could do the trick for some teams. Accordingly, they may only be able to say at the end of the season whether they needed more money to achieve their aim.
The very fact that Williams has launched an interim livery suggests that it is still planning on signing new sponsors, even if it doesn't need them, and there is certainly space for them on the FW33. However, the chance of new sponsors approaching Williams may be reduced by the team telling the world that it doesn't need new funds.
What is the point in new sponsors asking Williams if they can partner with it when it has publicly stated that it doesn't need new funds? In reality, as we have explained above, Williams would presumably be happy to accept new sponsors but saying that "our 2011 budget is already contracted. We don't need new funds" could well make them reluctant to approach the team which is why it seems such a surprising comment to make.
But what could Williams have said instead? It's a tough call. One wonders why the team needs to say it doesn't need new funds in the first place. Presumably many of the other teams also don't need new funds in order to compete this year but they haven't bothered saying it. However, there has been increased focus on Williams' finances over the past month due to its plans to float so it is only natural that they wanted to make a statement about them.
Instead of saying "our 2011 budget is already contracted. We don't need new funds" how about saying "we have enough money to race this year"?
It's too late for Williams to change what it said about 2011 but it's surely not long before the team tells us that its 2012 budget is in place so perhaps a rethink of the statement might come in handy then.