Analysis: Will Williams be sold – and who might buy?

2020 F1 season

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Even by Formula 1’s standards, that was a huge week for news.

Monday opened to headlines that Aston Martin planned to replace CEO Andy Palmer with Mercedes AMG executive Tobias Moer, again raising questions about the relationship between the two companies and their respective race teams.

Over the following days the McLaren Group announced a major redundancy process, carmaker Renault signalled that despite laying 15,000 heads globally it will remain in F1 – though for how long remains to be seen – and the FIA World Motor Sport Council ratified a major package of rules changes to further cut teams’ costs.

Topping all of those, on Friday morning Williams revealed it had made a £13 million loss and was offering its team for sale. It may have finished last in the most recent two seasons, but it’s a measure of how highly regarded the team still is that the news prompted such interest.

During a subsequent briefing of select media attended by RaceFans, deputy team principal Claire Williams took exception to a suggestion that the team was in “long-term decline”, responding that they had suffered “two bad years”. However, the record shows their last world title was in 1997, their last win in 2012 (and the second-to-last was another eight years earlier) and the team’s championship placings have slumped over the last five years from third in 2014 and 2015 to 10th and last in the two most recent seasons.

Claire Williams, Williams, Circuit de Catalunya, 2020
‘Williams are not in long-term decline, we’ve had two bad years’
The hard truth is the Williams business model of building an entire car (besides engine) in-house is now obsolete. This has enabled teams such as AlphaTauri, Racing Point, Sauber and Haas – all of whom source technologies from ‘motherships’ – to leapfrog Williams in the rankings, and all the more so as the trend accelerated. Only one other non-manufacturer team (McLaren) currently has a similar model, and it, too, hit headlines this week.

However, the real issue is that Williams suffered the brunt of F1’s inequitable revenue structure, one which has seen Ferrari, Mercedes and Red Bull cream almost $2bn in bonuses alone over six years, while Williams received just $60m in revenues over and above its share of prize money – which hit investments in crucial facilities and technologies. During the same period McLaren earned around $180m.

True, some teams received no bonuses, but they have manufacturer owners (Renault), wealthy benefactors (AlphaTauri, Haas), or faced bankruptcy before being saved by billionaires (Racing Point, Sauber). Where McLaren is majority owned by Bahrain’s sovereign wealth fund, Williams is listed in Frankfurt and owned 52% by founder Sir Frank Williams, from a modest family background and knighted for services to F1.

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While ‘Williams for sale’ makes a powerful headline, this remains but one of the possible outcomes, along with a sale of minor or majority stakes or options open to the owners as they endeavour to procure incoming investment as part of a strategic review. This is no fire sale – as some outlets would have their readers think – a point underscored by Claire when she said no redundancies are planned.

Frank Williams, Silverstone, 2019
Sir Frank Williams is the majority shareholder
Indeed Williams’s announcement states (in block letters): “This is an announcement of a possible offer under [the City code] on takeovers and mergers and does not constitute an announcement of a firm offer under rule [of the Code]. There can be no certainty that an offer will be made nor as to the terms on which any offer might be made.” This point obviously escaped some.

Asked by RaceFans to clarify the situation, Williams CEO Mike O’Driscoll said some were “rushing to conclusions in the various headlines that are appearing.”

“There are no prescribed outcomes,” he continued, “and we were clear about it in the release this morning.

“We’re looking at a range of options. The capital injection all the way through minority [share], [or] whole sale, is just one of many, many options. And I think to arrive at that conclusion [of sale] probably makes headlines, but it’s not necessarily factual and it’s not the way we’re looking at it.

“So we’re working through a process. We’ve got a couple of great banks helping us and I really would just leave it at that.”

As difficult as this move may be to contemplate for Williams and its supporters, the timing is at least on their side. The sport faces one more season under its outgoing, largely frozen regulations as rubber-stamped on Wednesday, during which more equitable revenue structures and a (lower) budget cap kick in. Thereafter F1 switches to its ‘new era’, which should deliver lower costs, tighter grids, better racing and an improved spectacle.

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The company structure – the Williams family holds (52%), American healthcare mogul Brad Hollinger and former Williams technical director Patrick Head around 14% and 9% respectively, 22% is on free float in Frankfurt and the balance held by minority investors – means a range of options is open to investors dependent on the size of stake required. Equally, the company could be taken private and de-listed.

Dmitry Mazepin, Sochi Autodrom, 2018
Mazepin (left) tried to buy Force India in 2018
There is expected to be no shortage of interest: The Williams brand still resonates strongly with fans across the world, and F1’s new covenants (once signed) means prospective team owners need to deposit $200m in an anti-dilution fund to buy into the sport; acquiring a going team avoids that.

Equally, numerous parties – including Russian chemicals billionaire Dmitry Mazepin, the owners of the Panthera F1 project and serial F1 applicant Adrian Campos – have expressed interest in acquiring a team, and Williams provides a turn-key opportunity that could be readily adapted to different business models, be they manufacturer, satellite, or full independent operating out of a custom facility, albeit one requiring upgrading.

It would, of course, be a great pity to see the Williams name and family disappear from F1 as part of any investment or sale, but even those two factors are not foregone conclusions for an investor or purchaser could conceivably acquire a minority stake, thereby providing much-needed capital for upgraded facilities and technologies.

Today’s statement merely signals the start of review process to attract investment, and is not (yet) a For Sale sign. Whether it comes to the latter only time will tell.

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Dieter Rencken
Dieter Rencken has held full FIA Formula 1 media accreditation since 2000, during which period he has reported from over 300 grands prix, plus...

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  • 40 comments on “Analysis: Will Williams be sold – and who might buy?”

    1. Whoever buys it (or in) should retain the name and its brand…like McLaren.

      1. Stewart Lotus Brabham
        30th May 2020, 13:13

        Why?

      2. @gpfacts It’s diferent from McLaren I think, because the car maker needs to be associated with the F1 team. Williams could be called anything, really… I hope the name keeps going

        1. UK interests sold MG easily enough, How about Williams MG, Williams BAIC or even better Williams Techrules?

          1. If we’re talking reviving old British car brands, how about British Leyland F1 Team. I know, TVR. No wait, Lotus. Yeah Lotus would be so nostalgic, they could have a black and gold livery harking back to the JPS days of yore. I’m welling up at the thought of it. 🤣

            1. Toucheé!

            2. A Lotus-Williams team (backed by Geely) would actually make a lot of sense for a number of reasons:

              – Geely has the resources to turn the team into a competitive entity.
              – Having the Lotus name on an F1 car would be good for publicity for the brand. If Geely is serious about building Lotus up as a supercar manufacturer, then the F1 association would be good advertising.
              – Li Shufu (the Chair of Geely) has the largest single stake in Daimler, so continuity of supply of Mercedes power units shouldn’t be an issue.
              – Lotus and Williams have already collaborated on the Evija (thought WAE has been sold off in the interim), so there are connections between the two companies. It wouldn’t be a bad idea for Geely to pick up WAE while they’re at it too.

        2. McLaren F1 team ownership changed hands couple of times before they became car maker, and the name was kept. Same with Brabham, before they disappeared, or even March.

      3. In some capacity, the name needs to be kept. This was the dominant race team for some time in Formula 1 and have earned that respect.

        1. Tyrrell was pretty iconic name and BAT had no trouble wiping it out…even Minardi and Sauber had their merits.

      1. No, because of the mercedes engine.

    2. According to the F1 website £10 million of the £13 mlion loss is because ROKiT didn’t pay what it was supposed to. And probably also not yet for 2020, which is the reason Williams split with that sponsor.

      Seems similar to the Rich Energy debacle to me.

      1. ROKit can’t be compared to the Invisible Pop Company, they do have money and you can buy the phones they make. Currently Rokit sponsor several other motor sport events, W Series and Esports, without issue.

        Why would ROKIt pay a lot of money to a team that isn’t racing?

        1. Jon Bee, does Rokit really have the money to fund such activities though?

          As I understand it, the company is classified as a “small company”: that allows it to be exempt from having to file full business accounts with Companies House. That means it meets two of the following items – it has a turnover of less than £10 million, a balance sheet of less than £5 million or a workforce of less than 50.

          If that is the case, that indicates it’s a pretty small company – so the only way that I can see for it to afford to spread its sponsorship around that widely is if those other deals are very cheap.

          1. Williams got their sponsorship money in 2019, otherwise they’d not have kept ROKit this year. According to some reports they paid more than Martini.

            Phones are made for many markets. The latest, all singing, all dancing mobile isn’t going to sell in Africa.

            1. Jon Bee, where is the money coming from in order to finance such largesse?

              If Rokit really was paying more than Martini was, that would imply an outlay of more than $15 million per annum, or more than £12 million a year (as that is what Martini were reported to be paying Williams). How is it possible for a company that is likely to have a turnover of less than £10 million to afford to pay Williams £12 million a year, let alone the other sponsorship deals the company has?

              The comments about “phones being made for many markets” is irrelevant – it doesn’t matter what the phone is or where it is being sold, the net outcome is the fact that the turnover of the company does not appear to be sufficient to explain how it could afford to pay that much in sponsorship.

              If Rokit really does have that much money to spend, where is it coming from and why isn’t it showing up in their financial accounts?

        2. I’m not so sure about Rokit at all. They are still offering the exact same line-up of phones today as they did 16 months ago when they started sponsoring Williams, and even then they were way outdated. I simply can’t shake off the feeling that there is something fishy about them.

      2. Of the 10M owed by ROKiT, most is contractual pre-payments related to (activities in) 2020, @silfen.
        from the 2019 Annual Report of Williams:

        At the balance sheet date an amount of $1m was owed by ROKiT and carried within trade debtors relating to the 2019 season. There is an additional £9m within both trade debtors and deferred income at 31 December 2019 relating to ROKiT sponsorship of the 2020 season.

      3. the shortfall is the money they paid paddy lowe. rokit said force majeure, not what we signed up for. claire is looking for someone to pay the settlement & therefore the nefrious details. as they don’t really want to sell but just cover her mistake.

    3. What would an investor gain from putting money into Williams, promises like Adrian Newey and other have received over the years, which never lead to anything? Williams needs a new owner, with deep pockets, who can turn the team around by changing the failed culture of the company.

      1. It’s worrying that an investor could conceivably do quite well by buying the whole thing and dumping the F1 team. That’s not what we want to see happen, obviously, but it seems that financially the F1 team is a drain on the engineering company’s resources for little strictly-commercial benefit.

        1. It’s worrying that an investor could conceivably do quite well by buying the whole thing and dumping the F1 team.

          What is there to buy besides the Formula 1 team, Dave?
          Most of WAE has been sold at the end of last year.
          There is a hefty bank loan against the builing and car collection.

    4. Maybe this is final chance for Zoran Stefanović!

    5. I really don’t get this move at at all. It was one (or two?) years ago that Claire vowed proudly that they would never be a customer team. Cheers all around from the crowd. Now instead she’s trying to sell whatever remains after totally running the team into the ground.

      How did it not make more sense to become for instance a Mercedes B-team? Even at least for a while until they got things back in order.

      Was it that they were hoping the budget cap would come sooner and that it would save them? It just doesn’t add up to think that spending a ton of money on a poor part would be better business model than spending less on buying a part that someone else already spent a fortune on development.

      1. Legally Frank Williams is the largest shareholder, so the responsibility for mismanagement issues is his, not Claire’s.

        1. @drycrust How is that relevant?

          1. He thought perhaps by quoting Claire you were implying that she was making these decisions.

            It seems to be pretty clear that Williams’ downfall came because they never rose to the level of funding that other teams did in the 2000s (after BMW left of course) and they didn’t change their practices to be similar but better to the other privateer teams who were operating on smaller budgets. Additionally, it seems like (and the most recent Drive to Survive gives one data point to support this) Williams is constantly chasing the magic bullet which will vault them back up the pecking order and ignoring inbuilt deficiencies. Gearboxes still being built in-house, out of aluminum, are just one example, but an even clearer deficiency is perhaps how they’ve treated talent over the years. The lack of desire to retain the services of drivers like Nigel Mansell, Damon Hill and even Nico Hulkenberg show how short-sighted the organization seems to be.

    6. The article title is a bit misleading — only 1 potential buyer is actually mentioned, Mazepin. I expected the other “numerous interested parties” to be named at least…
      Especially Michael Latifi, Nicolas’ father. He’s nearly as rich as Lawrence Stroll, and holds the mortgage to the Williams factory.

      1. “numerous parties – including Russian chemicals billionaire Dmitry Mazepin, the owners of the Panthera F1 project and serial F1 applicant Adrian Campos – have expressed interest in acquiring a team”
        @x1znet

      2. @x1znet Is Latifi Sr. not already a shareholder in McLaren?

      3. @coldfly I stand corrected, my apologies. I honestly didn’t see Campos mentionned in spite of having rechecked a few times before posting… and I misread Mazepin as the owner of Panthera, rather than being different parties.

        @mashiat Yes, Michael Latifi owns 10% of McLaren Group (the parent of everything McLaren) since 2018.

        1. ColdFly (@)
          31st May 2020, 6:45

          @x1znet, no worries.
          I must admit that I first read the Mazepin Pathera sentence incorrectly as well.

    7. Mark in Florida
      30th May 2020, 16:08

      So sad to see Williams in this position but it’s been coming for a while now hasn’t it? You could tell the end was going to arrive by how the team kept ignoring the new reality in the sport. Adaptability is the new reality when you don’t have tons of cash to burn through like a manufacturer. Haas started it and received massive criticism for their business model. I believe that Racing Point is leading the way now for others to follow it they want to make it. Is it ideal? Of course not. I think all of us would like to see independent manufacturers winning once in a while. With the new rules in place maybe that can happen. Williams just didn’t change their ways in order to survive.

    8. I agree. Williams did not change with the times and that has cost them it would seem. It has never been easy for those wanting to run an F1 team, and having deep pockets certainly did not help Toyota nor did it stop them from pulling the plug when reality bit. Honda too disbanded their team, only to return as an engine supplier. One might wonder, how has it taken so long for Williams to founder by comparison.
      With the big three teams hogging so much of the pie the situation Williams find themselves in is not the best advert for someone wanting to start up an F1 team from scratch. The much maligned Hass method certainly looks prudent now with the benefit of hindsight, the only crumb of comfort is that Williams are established with all the infrastructure in place much like Honda had back in 2008 when they disbanded. The whole enterprise needs money, but the biggest concern for me would be who would supply the engines for the team after it was sold? Would Mercedes continue or would the new owner choose another alternative.
      I think it is safe to assume that Williams will cease in their current form, but what rises from the ashes is the biggest question?

    9. NeverElectric
      31st May 2020, 2:57

      Saudi Crown Prince is definitely interested….watch that space.

      1. He’d kill for a chance at F1, I suppose.

    10. As someone who started following F1 after the start of Williams’ decline, its still pretty sad to see Williams make the 20th position their own. The least Claire Williams could do is face reality. And saying”we have been in a decline for the past 2 years” is not reality.

    11. Sorry Dieter, but you only get three free passes a year to use the cliche, “only time will tell.” This is your first offense for 2020—you have two free passes left. Use them carefully.

      Might it be more insightful to talk about the effect of time on the Williams situation? The “double downward” spiral of poor cars resulting in less prize money resulting in more poor cars has to be shortening the window of time to make a final saving move by the Williams family and investors.

      Perhaps the Williams family reaching this Rubicon during the Coronavirus pandemic is a perverse blessing, putting much of full bore F1 competition into status quo rules, shrinking budgets, and financial aid for all from Liberty Media.

      Maybe Williams board had breathing room now, but only for this year. And after this year the screws of time will tighten again, and this next time there won’t be time to consider offers.

      But time will tell, as it often does.

    12. I assume the reference to McLaren as a ‘non-manufacturer team’ is in the context of them not building their own engines?

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