“With the financial reforms to lower the barrier to entry to realistic levels it is good to see such a strong market for new teams, ” said the FIA this afternoon in a second official statement, following on from the announcement that F1 will have three new teams on the grid next season.
“This exercise has demonstrated that the only reason there have been vacancies on the F1 grid for many years was the excessive cost of participation. ”
This is what the FIA has maintained all along was it’s main motivation for introducing dramatic cost reductions and even the budget cap. Judging from the extensive comments on this site over recent weeks, it seems that a lot of people welcome the idea of fresh blood in F1, provided it is stable and has a strong chance of surviving more than a few months in the bear-pit of F1.
The FIA revealed that there were 15 applications for the championship from new teams, some of them were chancers, others deadly serious. From the chatter I’ve heard in racing circles, they have picked ones who have got their ducks in a line, namely Campos and USF1, the only slight surprises for me are the absence of Prodrive and the inclusion of Manor Motorsport, who will operate in partnership with Nick Wirth, formerly with Simtek and Benetton.
Each team went through a due diligence process overseen by the FIA’s Tony Purnell, the ex Jaguar F1 boss who has been advising Max Mosley on the technical side.
The primary concern was to ensure that adequate funding was in place. USF1 has raised around $60 million of start up capital from US investors in Silicon Valley. There are rumours that one of the founders of You Tube has put money in.
Adrian Campos has always been very good at raising money in his GP2 ventures and he has run a successful team. The team, now called Barwa, is leading the GP2 championship at the moment with Romain Grosjean at the wheel. Campos is also the man who discovered Fernando Alonso, so his credentials are pretty respectable.
So how did the due diligence process work? “We have requested documentary evidence to support all the new teams’ assertions, in particular with regards to funding,” says the FIA statement. “Thus we have been provided with accounts, contracts, multi-year business plans and other supporting material. On the technical side we have asked for a thorough description of their capability, key staff, project plans, capital assets (present and planned for), organisational charts, and so on.
“We have asked to see contracts and letters of intent. This extends to the sponsorship side, where plans and any descriptions of existing relationships are required. In all these aspects we have requested evidence that substantiates any claim in the teams’ plans.
In the background to these evaluations, where key individuals were identified on the funding side, our forensic accountancy advisors have run reputational checks, alongside the checking of factual data supplied.
“Once we had formed an opinion of the serious contenders we asked them to come to London to be questioned face to face by the due diligence team. Then a short summary report on the top five was sent to the FIA President.
The process was conducted with the professional assistance of Deloitte.
Prodrive boss David Richards was surprised and probably rather embarrassed not to have had his entry accepted. Of all the proposed entrants he is the one with the most senior F1 experience and his Prodrive company has succeeded at the highest levels of motorsport in sports cars and rallying. He also has wealthy backers from the Middle East.
But DR has not given up yet. As long as the FOTA teams’ entry remains provisional and a chance remains that one of the teams will not enter, there is a chance that the FIA will go down the reserve list to fill the grid.
“We are naturally disappointed by the FIA’s decision not to include Prodrive in the preliminary entry list for 2010, ” said Richards. “As we believe we have the resources and set-up to be competitive in Formula One and would make a positive contribution to the sport.
“We will wait to see how things develop in the next week, up to the 19th June deadline set by the FIA and we remain prepared and ready to implement our plans should the circumstances allow. As we have seen before, there are quite often many twists and turns in Formula One.”