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Ecclestone says Lotus Renault deal needs to be sealed by Monday
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Bernie Ecclestone, Gerard Lopez
Posted By: James Allen  |  25 Sep 2015   |  12:49 pm GMT  |  92 comments

F1 commercial supremo Bernie Ecclestone has said that the deal for Renault to buy Lotus needs to be completed by Monday, as the 84 year old tycoon confirmed publicly for the first time some details of the negotiations behind the scenes.

Speaking to Reuters, Ecclestone said that Monday is D Day.

“Apparently Renault are going to take over Lotus. Apparently. This is what has been foreseen. Whether it will be completed, I don’t know. If they don’t complete it (the takeover) by Monday or put some money in soon… unless Renault come to the party, it won’t happen,” he said.

“It’s strange that a company as large as Renault are taking such a long time to make a decision, to be honest with you.”

Lotus Japan 2015

According to Reuters, “Lotus are due back in the London High Court on Monday to face demands from Britain’s revenue and tax authority (HMRC) to have the team placed in administration as a result of unpaid taxes.”

It is a complex deal, which has to account for substantial debt on the Lotus F1 team, albeit most of it is to the main shareholders. Genii Capital is likely to retain a minority holding in the team once the deal is complete. However Alain Prost has distanced himself from suggestions that he would be a minority shareholder in the mode of Niki Lauda at Mercedes F1 team.

Ecclestone, who is not attending for the second Grand Prix in succession after Singapore, confirmed that his negotiations with Renault revolved around their entitlement to CCB bonus, which rewards heritage in the sport and is a separate fund from the main prize money fund for championship positions. The five leading teams currently qualify for this, so the fund excludes Lotus, Sauber, Toro Rosso, Manor and Force India.

Ferrari receives an annual CCB bonus of $100m, while Mercedes gets $34m, the same as McLaren. Renault feels it is entitled to be treated in a similar way to Mercedes, as the most successful engine maker in F1 history and as a two-time champion constructor in 2005 & 2006.

“They’ve been waiting for us to make a contribution to give them a reason to do something, which we’ve done two weeks ago. So I don’t know,” said Ecclestone.

“They wanted the same sort of deal as Mercedes and some money. So we tried to work it out. We got a calculator and worked out what nine years would be.” This is believed to be a reference to Renault’s request for nine years guaranteed CCB money, to 2024. The current bilateral agreements with the five leading F1 teams expire the end of 2020. These bind the big names to the sport.

“What we’ve done for them is not anything that we need to do, or had to, but we’ve done it to try and be helpful and keep Renault in Formula One.

Ecclestone added the caveat “Our agreement is with Renault and not with Lotus.”

Lotus F1 Japan 2015

Lotus is in a parlous state this weekend as the deadline looms on its adjourned court room date with HMRC in London over tax bills. The team has been locked out of its hospitality unit in Suzuka due to unpaid bills from last season and Ecclestone arranged for the team to be fed by his Formula 1 Paddock Club caterers on Friday.

Last Sunday Pastor Maldonado was confirmed at the team for 2016, meaning the continuity of his funding to the team from Venezuelan oil giant PDVSA.

Lotus F1 team

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1

I think you will find 2 things!

1 – Bernie only paid 1% of his own tax bill as HMRC accepted his counter claim (to save tax payers a costly court casen) what a complete joke that was!!!!!!!!!!!!!!!

2 – Seb vettle knew that red bull was pulling out of F1( because they only wanted to be called a winning team)so they told him they wanted their BALL back(no pun intended) so he jumped ship

2

All teams what to be the best team and once they have they had compeattive edge that places them at the top no matter where it comes from don’t want to give it up.

And yes even during the period of RBR winning the WDC and WCC for four years running, the Merc enginge I blieve was considered to have more grunt than the Renault, where RBR did well was in the aero which could make up for the lack of grunt from the engine. We now potnetially have the situtation where we have had a major enginge rule change and others have caught up with RBR in the aero department. When the enginge riules chance there is the chance that one manufactuer will make a better eninge than the others. Now you could argue that the token system that was agreed upon could hinder the development of the enginge but a few points

1.>The teams agreed to them, no these are all intelligent people surely they must have considered the possibility they might develop a bad enginge so why agree to the rules.

2.>Aren’t they free to develop the enginges as much as they like with the tokens only becomming spent when cashed in so to speak i.e. they sumbitt the modification to the FIA

3.>They are free to develop the enginge freely (again via the FIA) for cost-saving, safety and reliablity. It’s quite clear to anyone watching the sport that both the Renault and Honda enginges are unrealiable so they can use that clause to develop the enginge.

Now Imagine you are working in a team and you start to complain about your teammates, belitting their contribution at every turn. How would your teammates react? I doubt that that approach is the most productive. No place yourself as an observer to that team, they come to you and say would you like to join us? How would you react seeing what has gone on? Many would likely say thanks but no thanks as it seems to an observer that you don’t respect your teammates.

I was under the impression that RB had committed themselves to the sport until 2020 as part of a deal to receive money for competing. Sure in sport sometimes things don’t go your way. To some observers it seems because things aren’ going RB way they are throwing a tempoer tandrum. With the rumor that they’ll withdraw from the sport if they in essence don’t get what they want. I think that is the problem some have with RB not the fact that they want a competative PU, we want more competative teams but their attitude.

And Mercdes and Ferrari are business at the end of the day, and like any buinsess they can refuse to sell.

3

Why all the animosity to red bull? They sponsor two teams who pay their bills, no debt. They pay for their engines and only want a competitive engine. Note the word competitive, it is common knowledge that even with the old v8s the Renault engines where not the best but reasonable. Red bull did note complain but got on with racing and were successful a point some do not like.

They only started to complain when no amount of behind closed door talk resulted in worse performance.

Since Mercedes are not interested in supplying then the only other engine is Ferrari which they will be paying for so would like a competitive engine.

The next time you compete in a competition of some sorts ask your competitors what sort of handicap they would like you to compete under and be happy.

4

@ michael…thank you for another lucid and intelligent response. i have been unmercilessly flamed for posting that self same response. well done. watch your head though hahaha

5

Can Formula 1 afford to loose 6 cars from the grid in 2016?

6

@ matt….the simple answer is ‘NO’. another angle i have just read is that berger, who is very close to the main players in all of the red bull/renault/ferrari/mercedes wrangle over engines claims that a possible deal could be in the offing with mercedes!…again?

berger may just be putting it all out there to further confuse the issue but sometimes he does seem to get an inside run and he is very close to DM and to marko. frankly wish it were all decided and we could then focus on what 2016 may or may not look like.

7

@ rich c….you’re not wrong there mon ami. at least we don’t who the winners are and i wouldn’t try to guess..hahaha enjoy suzuka

8

This is actually more entertaining than the racing.

9

Could Renault have been using similar software to VW in their diesel road cars? If so, I can imagine they’re having financial worries to VW.

10

I hope they go under and renault quits f1.

F1 needs an urgent wakeup call. Boring dead sport.

11

Not sure if Bernie is right, about Renault and Enstone, that he deal has to be done by Monday. The HMRC debt – tax owned is based on our PAYE amounts that an employer has to pay across, after they deducted the tax and NI from their employees. Given that Bernie advance the salaries for one month, then £900K is about right, plus some small amount of interest to the capital amount, and this would most likely go back to Q1 period. (That is 90 days)

My understanding is that Renault have taken out an Option to acquire the Enstone team, and the price of the option is £900K, so the UK court case will end, if Renault pay that across to Enstone, which in turn pay off the outstanding PAYE amount.

As for Renault holding out to be included in the CCB Fund – (Constructor Championship Bonus) – which was set up in 2012, with a starting pot – signing on amount of $180M, which was spread out between 4 teams with Mercedes joining a year later, to make it 5 teams that get this sum. Ferrari, due to the fact they have been in F1 every year since 1950, then they get an additional amount – capped now at 5%, plus there share, and additional amount on where they finish each year in the championship.

So does Renault have a case in getting some of this money? Well yes & no, as I think they factored in the Red Bull win rate, using the Renault engine, as to why they are in this scheme. As for Mercedes, they can point out as long term engine supplier and the fact they were in F1 way back in the beginning, and Bernie need them, more than they needed to be in F1, so a nice little side deal was done, now he has to dig deep to keep Renault happy.

Going back to this option that we think Renault have taken out on the Enstone team, this is a pure property play, and one that Andrew Ruhan will know all about. As for the amounts outstanding and who will take the massive haircut on their investment, remains to be seen. I said a while back that I worked out that the debts of this team where north of $150M, and that also includes the $30M that is still on the books owned to Proton.

Andrew Ruhan became a Director of Enstone & Genii in 2013, so one wonders how much has he pumped into the two business, and he has never been known to be on the wrong side of a deal. I think there is still a lot to play for, and this Option is just a way to hold off the HMRC creditors, for a short time, until maybe some of the Maldonado Funds become available.

I doubt that Gerard Lopez / Eric Lux of Genii are the real owners of the team any more. It is well known that Andrew Ruhan is a motorsport nut and word is that he may have someone else in the back ground lining up to help out, and the option is a way for them to get there financing in place, and once the option period runs out, put in a offer.

If Renault thinks that Bernie and this CCB Fund will be around for “ever”, then that really is a false economy on their part. I think the EU will start to look into F1 very soon, and this CCB fund and the way he pays out the championship prize monies over a 2 year period will have to stop and be paid out once a year. The CCB fund is really just an advance appearance fund to make sure that the key teams turn up at each race. Promoters’ do the same thing in most sports, where they pay out an appearance fee to get the best people to appear at their event. In Ferrari’s case it amounts to about £5M per race, given that a tennis play can get that amount over a year going to 30 or 40 events where Ferrari only do it 20 times a year.

12

The current Lotus F1 team is basically the old Benetton and Renault teams. Benetton has a world championship and Enstone-based Renault has two.

Why does Red Bull get “heritage” money, but Enstone-based Lotus F1 (as opposed to the defunct Chapman Lotus) doesn’t? Why is there any question on whether Renault should get “heritage” money?

13

“Renault feels it is entitled to be treated in a similar way to Mercedes, as the most successful engine maker in F1 history….”

They still don’t get it.

NObody except us here on this blog gives a hoot about the engine.

Non-crazy fans don’t know or care about “the lump.” They only know whose CAR wins.

So being in the sport as solely an *engine supplier is a waste of time.

14

I care.

These PUs all suck.

Fake green.

Crap sound

Killing F1 slowly, but surely.

Why look at the state of the sport today. Look back 2 years. Ask, ate we better off? We’re on the cusp of potentially losing 3 teams. McLaren is a back marker. Others in financial challenges too. No one talks about Sauber, but they didn’t find bags of cash trackside. Seriously. New PUs suck.

15

I quit paying attention to Sauber when it became evident that no one on staff there could count to three and their lawyer-leader didn’t realize that three contracted drivers for two cars would be a problem.

16

Not a fan of the new pee-yu’s either. But apparently “they” had to come up with something to keep the 200 engineers on staff interested.

The old formula was optimized to a fare-thee-well so it was boring for them.

Still think its funny that the ppl who pushed so hard for it got it so wrong.

17

…and worse still, the only people in the world able to make a winning power unit don’t want to sell it to you! Alas poor Cosworth I knew him well (apologies to W. Shakespeare).

18

giving one team £100m just for being in the sport is absolutely ridiculous

19

Says a lot when Lotus haven’t even paid their bills from last season to be locked out. There is a certain irony to Renault’s insistance to go to turbos….

20

whatever way but something needs to be done asap – at this stage Lotus’ adventures turn in even more ridiculous shape that those with Caterham and Marussia. Even HRT disappeared in more gracious way

21

Sorry, I forget: is this the “real” Lotus or the faux one?

22

Remeber when they fought over who was going to have the prestige of using the Lotus name? I’m sure owners of the name are super happy about all the value that’s been added to the Lotus brand in F1 since.

23

Good to hear.

Renault back in business.

I bet they’ve already designed a power unit for 2016 that will be better than the one in the Red Bull cars are using now.

It would bs funny to see them quicker than a Red Bull with a slightly less powerful Ferrari engine than the works team.

Renault don’t forget to slam the door hard as you exit Red Bulls HQ.

Another note

A very good friend of Bernie Ecclestone

Sepp Blatter being investigated by Swiss police. Could be interesting if he has anything to sat on the matter.

Liechtenstein a place that likes to sat yes 😀

24

They still have Maldonado though…..???!!

The man’s worse than any debt Renault could inherit from a possible takeover or will his contract be made void if the team changes name?

25

2024 eh? That’s a long commitment. I wouldn’t sign that deal if I was Renault. There will be a better one on the table when the other five renew after 2020. I wouldn’t want to be left holding a lesser deal with 4 years more to go before renew.

26

Well spotted and agreed 🙂

27

Renault could buy RBR when they pull out and get their 34M until 2020, and a way better team.

This is funny. I am always amazed at how good Renault is at negotiating. I mean they got away with it after Crashgate really, didn’t pay the crazy fine or whatever it was. Now they are basically in a position where they could impact 3 teams. I mean, Renault pulls out and it’s a mad scramble off season for Lotus, RBR, STR. 34M till 2024? I’d be like make it 64M till 2020 Bernie. And since we have till Monday, you have till Sunday to decide.

28

Main photo: Proof that Bernie can talk anyone to sleep anywhere.

“I SAID HAVE YOU EVER THOUGHT ABOUT BUYING A ROLEX?”

29

Main photo……

Looks like he’s singing “I did it My Way”

30

VW was just the top of the iceberg. Renault and others are below the surface still.

So if the iceberg topples over money may be needed elsewhere.

31

Another case of living above ones means. That’s why we don’t buy things if we can’t afford them kids. It’s embarrasing for the team.

I’m shocked they’re in this financial state, with Grosjean and Maldonado’s sponsors?

32

I think the distinction needs to be made between ‘Lotus’ and ‘Enstone’ – by which I mean that there are a lot of very talented guys at Enstone, with pretty good facilities – who are being hampered in terms of development by these ‘business’ related budget issues. Considering the lack of development and new parts, they are actually doing rather well – as soon as the revenue stream is sorted out, and the engineers can do their magic, I would not be surprised if they jump in terms of performance… Red Bull/Torro Rosso have shown that the engine is considerably better that it was at the beginning of the season – the ‘Lotus’ car just needs to catch up in terms of ‘new’ bits…but for the sake of the employees, I really hope this ‘will they/won’t they’ crap is sorted out soon – it must be very difficult working under those conditions – where, in the case of the team in Japan, you really don’t know where your next meal is coming from!

33

It’s not that Lotus can’t afford to pay these bills, they are choosing not too….but they are now effecting team members rather than just 3rd parties – if Renault are not careful they will be faced with a lot of defections- Eg to Haas or a Manor wanting people who have worked with Merc?

34

Who do you think is left there? Key contributors already left.

35

Looks like Grosjean made the right decision.

36

James?

That Maldonado deal is somehow strange …

getting money from PDVSA (oil company) when Renault normaly sticks to Total lubrics …

do they paint both comanies on the cars then?

how does that fit?

greetings

37

Simple: NObody outside Venezuela knows what a PDVSA is, so it won’t matter. (Public Display of Very Strong Affection?)

38

Bernie can easily afford to pay CCB bonuses to Renault, now that Red Bull have withdrawn their commitment to stay in F1 and so will be returning all of their CCB payments.

Probably.

39

I wonder…if RBR and STR can’t score an engine and thus can’t compete even though they are willing, is that a violation of their 2020 CCB commitments and thus would not make RBR or STR liable for pulling out 5 years ahead of CCB commitment without panalties?

40

Is that really a violation of their 2020….it should read. I think.

41

They can go if they are gonna keep crying for Ferrari works engines.

42

Anyone know what we’re talking about here regarding debt? I recall it was 110M GBP last year, so let’s say 140M this year?

43

It was around that figure but Lotus share holders wrote off all the debt owed to them. The debt is around £30 million if you included money owed to current suppliers.

44

The checks in the post…kind regards QUANTUM 😉

45

@Sebee- Truth is we dont know because GENII and Lopez are probably not accurately disclosing the exact value of “Marketing / Advertising” expense they get from sticking their name on the cars. So the Debt whatevers listed is not real.

Think Lotus showed £112 at start of last year. I would guess its close to £150m by now.

Wouldnt be at all surprised if Bernie gets something to make this deal happen.

46

This whole thing is weird.

I mean, they got the team free right? Because Renault pulled out quick. But I thought behind the scenes they were covering some costs. Kinda like a mistress they wanted to keep an option on, just in case. But then the Mercedes engine…did Mercedes just give “Renault” their engine basically?

This whole thing is weird. Like cousins getting married. Like sitcoms that ran out of options on everyone sleeping with everyone else.

47

I see your 140m and raise you 170m.

Poker face Random… 😐

48

Yikes. I fold. Keep it.

49

I don’t get it. Why would Renault buy this “dog with fleas” Honestly.

I’m putting it on record. Lotus is being used as a bargaining chip once again.

50

If you give the dog a good wash, and a flea jab then they die and fall off. Then get a very happy nice looking hound!.

51

Renault is faking like they are buying Lotus and they will turn around and buy Red Bull. =P

52

Exactly!

If RBR and STR pull out end of season as they threaten, there will be a 2-for-1 sale on Red Bull at 7-Eleven.

53

Testing 10:55pm, 25/09

54

What exactly are you testing for?

If it’s to see how long a comment takes to show up I’ve found lately that manually refreshing the page (F5) after a couple seconds does the trick.

55

Yeah. There is something wrong. Your comment seems to have come through 8 hours before you sent. Or, you are really from Adelaide.

56

My money’s on (A) 🙂

57

4 minutes. Better than 10+ hours I guess

(9 minutes so far on my other post)

58

That’s a long lap.

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