Brave New World
F1 2017
End of the road for Manor? F1 team’s operator enters administration
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Esteban Ocon
Posted By: Editor   |  06 Jan 2017   |  12:43 pm GMT  |  151 comments

The company that runs the Manor Racing Formula 1 team has gone into administration, it was announced today.

The British team, which nearly collapsed during the off-season of 2014-2015, missed out on around $15m in prize money when Sauber pipped it to tenth place in the 2016 constructors’ championship.

It is understood that staff attended a meeting at the squad’s factory in Banbury this morning where they were told that the Just Racing Services Ltd company that operates Manor had been placed into administration. FRP Advisory, which was involved in the team’s administration when it was known as Marussia, has also issued a statement confirming the state of play. If new funding cannot be found in short order then the team will not be in Melbourne for the season opening race and the F1 grid will feature just 20 cars.

We wrote a post in December highlighting concerns around Manor’s sustainability.

Manor Grand Prix Racing, the entity that owns the team’s rights to enter F1 and which goes back to the John Booth era, is not in administration.

Stephen Fitzpatrick

The team’s owner, Ovo energy boss Stephen Fitzpatrick said at the Abu Dhabi Grand Prix in November that the former Virgin Racing and Marussia squad had “agreed terms with an investor”, but no progress on a takeover has been made and, as we outlined here, Manor now faces a race against time to find new investment if it is to make the 2017 season opener in Australia.

In a statement, FRP administrator Geoff Rowley said: “The team has made significant progress under its new ownership since the start of 2015, the highlight of which included securing a constructors’ championship point in the preceding F1 season, but the position remains that operating a F1 team requires significant ongoing investment.

“During recent months, the senior management team has worked tirelessly to bring new investment to the team to secure its long term future, but regrettably has been unable to do so within the time available.

Esteban Ocon

“Therefore, they have been left with no alternative but to place JRSL into administration. The joint administrators are currently assessing options for the Group.

“The team’s participation will depend on the outcome of the administration process and any related negotiations with interested parties in what is a very limited window of opportunity.

“No redundancies have been made following JRSL’s entering into administration and all staff have been paid in full to the end of December.

“The ongoing staff position will however be dependent on whether new investment can be secured in the limited time available and the joint administrators will continue to review the ongoing financial position.”

Pascal Wehrlein

Manor finished 11th in the 2016 constructors’ championship after Sauber driver Felipe Nasr finished ninth in the Brazilian Grand Prix, a result that pushed the Swiss squad above its rival, which had scored one point at the Austrian Grand Prix thanks to Pascal Wehrlein’s tenth place finish.

What do you make of the news that Manor has entered administration? Leave your thoughts in the comment section below or head over to the JAonF1 Facebook page for more discussion.

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151 comments

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1

I'm afraid I find myself hoping that Manor will truly expire after this fall into administration. I will give my reasons, but I do want to say that I feel sorry for the staff.

Manor is NEVER going to make it out of last place, it has just been a mickey mouse team pottering along in last place and causing a moving hazard block for the other teams.

It never got the investment necessary to get out of last place and I don't believe it ever will. If that is the case then why run? You are just running for the sake of it and a forlorn hope of maybe hitting the jackpot and picking up 1 point (which was exactly what Stephen Fitzpatrick was rolling the dice on and he lost).

Let Manor pass away and let's get on with the racing please.

2

probably...but what about the staff? Fitzpatrick is in fault. Manor was hiring until November (yeah november 2016), without any type of limitations, without any issue regarding the 10th place. And now? I don’t think they are going to receive their 6 months notice period…Fitzpatrick has lost his money, but other people are going to lost their job for his lack of judgment. This is a shame!

3

Ok, if the last place 'mobile chicane' philosophy stands then next year Sauber? the year after that (assuming no change in standings) will Renault get a 'get-out-of-jail-free' card because they're a manufacturer? or will they be culled too?

4

And when will the chain end?
Let Manor pass away because they are last.
2018 do same with Sauber.
2019 Mercedes leaves because they can't beat Red Bull and trying it is a waste of money. Ferrari continues because they even get money when they are last.
2020 Red Bull leaves because there is no one left to fight and the only other team being Ferrari with 4 laps behind.
2021 Ferrari wins all races with place 1 and 2. No other team around and Ferrari sues the F1 rights holder to have 100millions each year for the next decades...

5

"Let Manor pass away and let"s get on with the racing please" Yes I agree, at least next year the one that finishes last will get it's allocated money and want have to worry about another team beating them to it.

6

And Lewis gets more engines to choose from or more time put into them, so less chance of theatrics. Win, win situation.

7

Manor cannot be on the grid in Melbourne, even if money is found, what happened last time, being allowed to use a year old chassis with a current front wing is not possible this time, they did not do any work at all on the new 2017 regulations car.

8

Keep in mind that Sauber BARELY beat them. Why not just lop off anyone who cannot compete for wins and have a 6 car grid? I think a lot of F1 fans follow the progress of lesser teams, and also the new drivers that find entry into F1 this way. The annual monies should be split amongst all who compete. For sure more to those who perform better, but to finish last by a point or two and to have it cost tens of millions, and indeed the life of the team itself, is just stupid. We could lose Sauber next year and even Force India with it's owners legal troubles. Pretty soon you have 3 teams and even Mercedes at some point will lose interest as all manufacturers eventually do excepting perhaps Ferrari. Without feeder teams, F1 will be dead in no time.

9

You are a 100% correct, Kclark, the current payout situation is ridiculous!
PK.

10

I agree let it die. Sorry for the employees but they collapsed before owing 35 million and many small independent companies didn't get paid. They traded on others credit and that is not correct. Fitzpatrick has Ovo energy that is in profit but invests nothing into his race team. He is not a serious racer and just saw this as a business deal that now will not be profitable. Goodbye. He won't be missed.

11

Fitzatrick has certainly let Manor down.

12

And if you had just won the GP2 WDC and just been given your dream chance at F1?

13

To me it looks like Fitzatrick has let the team down big time.
I was under the impression that Fitzatrick wouldn't need further investment up to 2020, and that by that time all creditors from the last bust would have been finished being payed, and that was why Manor was allowed not to go bust.

14

Does that mean we get rid of Sauber too? And McLaren don't have a title sponsor - do we not allow them to race as well?

15

Bit harsh mate, someone has to come last. But it's fair to say it's happened before and it'll happen again. If the TV money was divided up a bit more fairly this wouldn't happen.

I find it sad that people who want to go racing falter at the expense of flighty manufacturers who come and go as they please depending on their corporate agendas.

16

@kevin
And what if they do stop. What about the team that's in last place next year? Are we gonna just end up with 4 top teams in the end. Someone's got to be last.

17

Wow. Bernie would be proud.

These are not the comments of a true F1 fan.

18

I totally disagree.

20 cars is ridiculously small for a grid.

I agree that they don't stand a chance under the existing Concorde Agreement, but then I'm not sure many fans think the current agreement is fair end equitable.

19

There is an unfortunate logic to this indeed.

20

I've written this about a million times before, but here goes for the millionth and first time...........racing requires resources and capital. Simples.

The capital required is generated by sponsorship streams or partnerships. If a constructor doesn't have a credible long term sponsorship/partnership revenue stream, they shouldn't try to participate, never mind compete in racing's top flight. Racing is a dog eat dog free market capitalist enterprise - if you haven't got the savvy and business skills to survive and thrive, don't do it.

As Milton Friedman said - there's no such thing as a free lunch in a competitive capitalist system, and after half a decade Manor/Marussia are no exception.

21

Gazboy, and how many of the current teams started up without the required funding? Frank used to run Williams from a phone box because he couldn't afford an office! Half the teams on the grid wouldn't be there if their founders hadn't taken a punt!

22

Gaz, any business needs capital to purchase equipment/machinery/plant etc, but also needs opex (operating costs) to pay wages, transport and materials. I would suggest that it was the latter that ran out.......

23

Yes it does require lots of investment but don't you think if Fitzpatrick is a serious racer he would take Ovo energy money and fund his race team? Ovo makes a lot of profit every year even from low income households in the UK.

24

No.

Because that's bad business. You don't take money from X and put it into Y.

Y has to be able to fund itself. Otherwise you're risking both.

25

Yeah, but that's precisely what F1 teams do. Suck money from their parent/owner company/shareholders to fund a money losing F1 operation. Which is why F1 is bad business from a team perspective. I don't think any of the teams are self funding. Even the big manufacturer teams get funding from their manufacturer parent (usually 10s of millions of GBPs). The best the F1 operation typically does is break even. The best businesses in F1 are probably Williams or Force India. The teams are definitely not profit centres in and of themselves. Teams can only justify the spend because of advertising/technology sharing. Probably mostly advertising.

https://www.autosport.com/premium/feature/7334/how-much-did-formula-1-teams-spend-in-2016

26

And in up to date news relative to your comment, same applies to circuits: http://www.bbc.co.uk/sport/formula1/38526002

Worst circuit I've ever visited as a spectator.
Give it to Donnington.

27

you can't spell the track's name correctly [mod] its a popular track , racing drivers love it that includes formula E drivers , porsche cup drivers , ex formula drivers like mansell , Moto gp riders , btcc drivers and i have met a lot of them even future F1 drivers.

28

what a load of crap. The top teams get a big fat check just for showing up...That's not capitalism.

29

It's a real shame they're in trouble. Had it not been Manor it'd have likely been Sauber?

I hope the rumours about Ron Dennis being interested prove to be true. If the can buy the team from the liquidator it'll be good news for all the staff whose jobs hang in the balance.

Ultimately though F1 needs to address the inequality it has with its distribution of funds, so people who devote their lives to making races happen get to go about their business without some sword of Damocles hanging over their heads at any given time.

30

The constructors cup prize money allocation cannot be changed until 2018 at the earliest - all the agreements were signed in 2012 and are legally binding, meaning Mr E/FOM would have to pay compensation if they amended the detailing. And he won't!

31

Could BCE not 'acquire' the team for the benefit of F1? He attempted to acquire the old Honda team at the start of 2009 without success as Brawn had the deal done. Manor aren't winners, but with investment they could mirror a Haas as a 'second' team for a manufacturer.

32

Ecclestone cannot own a F1 team. It would be an obvious conflict.

Honda didn't sell their team to Bernie because they didn't like or trust him. Anyway, the *offer* he made wasn't as good as that of Brawn.

33

The problem is that Billionaire Bernie does NOT give a hoot...He owns the whole show and if he decided to own a team, who is going to stop him?
If a team stops paying HIM money, he wants them out....he is not a billionaire by being Mr Nice Guy even if he is only 5ft 4"

34

He runs the whole show but he doesn't own it - have you read the stories about CVC and now Liberty Media?

35

"He runs the whole show but doesn't own it" correct there MR JAMES as per the present F1 situation, But once upon a time his buddy stole it from the teams and gave it to him (according to Ron Dennis), The only hope left for F1 is his outing from anything to do with F1, once that happens most if not all of F1 problems will follow him out the door.

36

James, does he even still run the whole show? I don't get that impression. I know he will say differently but...

37

Brawn made out pretty well from Honda on the deal. From a March 8, 2009 article on SportsProMedia.com:

"Honda Motor Co. Ltd has handed over more than US$200 million in the deal that saw the factory 'sell' its Formula One team to its former team principal Ross Brawn. The Japanese automotive manufacturer has given Brawn US$110.9 million of fixed assets, including US$38.4 million in leasehold land and buildings and US$36.9 million in factory equipment and machinery, as well as US$50.2 million cash to cover a year's staff wages that it would have otherwise had to pay in redundancy costs. The company has, additionally, written off significant debts owed to it by the team.

Brawn's new team has also received the cash Honda Motor Co. Ltd would have had to pay both him and driver Jenson Button to cancel their contracts, which were held directly with the car maker in Japan rather than with the British-based racing team.

Honda has done the deal as an alternative to putting the team into liquidation - it could have walked away with only US$100 million of losses. An insider said: "Effectively Honda has handed Ross a US$100 million cash dowry plus the same again in physical assets." It is believed that Brawn handed a symbolic dollar to buy the team and Honda deposited the US$100 million cash in the team's bank account."

So Bernie only offered $.50?

38

Ross Brawn has written a book recently and tells what happened when he took over the Honda team. Ecclestone hasn't, but his mouthpiece Sludge, likes to spread tales in various newspapers, most of which are nonsense.
As I said, Honda do not like or trust Ecclestone and didn't want to do business with him. In fact, few people do trust Bernie.

39

I think Bernie can be proud that his empire has killed off another team, as I guess this has been the primary target of his tactics in finance distribution.
Hope Liberty sees through that, says thank you to Bernie, tears up all contracts (effective 01.01.2018) and begins a new era of fair play with a new Concorde agreement and contracts with all teams.

40

Like capitalism in general, the grand prix prize money allocation is not as black and white as you might think. In 2012 Mr E offered ANY constructor extra prize money provided each individual constructor would sign a contract guaranteeing to be competing in Formula 1 until at least 2020.

Merc, Fer, Mc, RB and Wil have all signed up to Mr E's extra prize money. The rest didn't - or were reluctant to - because they couldn't give a cast iron guarantee that they would be competing in in Formula 1 until 2020. MERC, FER, RB AND MCHONDA all receive an annual constructors cup bonus (CCB) that is worth over 30 Million Euros per constructor, while FER, MERC, RB and WIL all receive an annual "heritage constructor" bonus which differs in scale per team. The CCB and heritage contracts are all bilateral agreements between the individual constructor and Mr E. However, should any of them renege on their deal and pull out of Formula 1 before 2020, they have to pay that bonus money back - it's a sign of commitment from the individual constructors to Mr E and vice versa.

That is why Force India, Lotus-Enstone-Renault F1, Manor, Toro Rosso and Sauber (as well as Haas F1) will not receive any bonus money, because they couldn't commit to be part of Formula 1 until 2020. Is it fair or unfair? I'll leave you to be the judge of that, but that is the story of the gaps in prize money distribution.........

41

Gaz - its obviously unfair...smaller teams are not stable enough financially to make that commitment, and the deal it makes them even less stable...it represents the current perversion of capitalism where the game is rigged in favour of the big players who can afford to play by different rules (a lot more money in this case)...

42

I will repeat what I told JAMES, Once MR E is gone most if not all of formula one problems will follow him out the door.

43

Thanks Gaz. Nice to have some clarity on this...

44

Let me simplify the payments:

𝘾𝙤𝙡𝙪𝙢𝙣 1: 33.5 Million Euros for each constructor (excluding Haas)

𝘾𝙤𝙡𝙪𝙢𝙣 2: From over 63 Million Euros for 1st to around 13.5 Million Euros for 10th in the WCC (no payment for 11th in WCC or 0 Euros), sliding scale performance related pay.

𝘾𝙤𝙣𝙨𝙩𝙧𝙪𝙘𝙩𝙤𝙧𝙨 𝘾𝙪𝙥 𝘽𝙤𝙣𝙪𝙨 (𝘾𝘾𝘽): 32 to 39 Million Euros per constructor for FER, McHONDA, MERC and RB for signing upto participate in the WDC/WCC until 2020. Also 5% extra bonus for any constructor who wins 3+ WCC.

𝙃𝙚𝙧𝙞𝙩𝙖𝙜𝙚 𝙗𝙤𝙣𝙪𝙨: For "grandee" constructors, FER get 70 Million Euros, MERC and RB each get 35 Million Euros, Williams around 10 Million Euros. Another bi-lateral agreement and "reward" for signing upto 2020.

So MERC F1 prize money: Column 1 (33.5) + Column 2 (63.5) + CCB (39) + Heritage (35) = 171 Million Euros.

45

There have been a trillion words written on that topic, that's why the only way to make things right is to terminate all these agreements, hidden payments, veto votes, etc... and create a transparent fair system, which will allow to attract teams, give them the ability to sustainably exist and develop. And not to earn 0$ for a whole year, because they got X-1 points than some other competitor.

This needs to be done ASAP.

46

+1.
If Liberty tries to make F1 more american, let's hope they refer to the Major Leagues in the US, where money prizes are more fair, and where owners have well understood history and stability is needed to have a good show !

47

Hopefully the staff were paid for December and the major components like the Tub are already sorted out. If they can keep the car assembly on chance and hope some of the staff will work whilst looking for other jobs/a buyer they might make it, but sounds tough.

First test of Liberty I suppose. Will they want to avoid the bad publicity of a team folding.

48

Sorry to see this, I've heard comments before about the lower placed teams not being wanted and a high profile person allegedly stating they were an embarrassment to the sport but I strongly disagree, I love the spirit of some of the lower teams to design and build a car and run a team on a fraction of the higher placed teams budgets, A lot of teams started out like this and is part of Formula 1's rich heritage. It's a real shame that with all the money involved more of it doesn't get to the lower teams to help them.

49

Someone give Ross Brawn a nudge, get him to buy it for £1 🙂

50

Ross Brown bought then Honda because, he worked in its development, and knew before hand that, it was faster. But, this Manor in many respects is a dog of a car.

51

Sad but not exactly unexpected, F1 can only support 10 teams under the current structure, and I think the Bianchi money is all gone now.

If Manor don't make it, wonder if Sauber will get Mercedes engines? Ferrari seem to have turned to Haas as their de facto No. 2 team.

52

Good point andrew i think sauber may move away from ferrari and i thought honda originally.Then the Wheirlin link and maybe sauber could take over the mercedes engine deal in 2018 be a massive boost to the team.
Lastly i really dont think you can compare sauber who have been in F1 for many years and challenged high up on grid at times with Manor.
I could see the team being reformed maybe but not this year.

53
Kieran Donnelly

At one end of the grid, the drivers are probably make enough money to run a mall team like this and, at the other end, there is just fighting for scraps. For sure, there should be some rewards for success but there shouldn't this much punishment for trying to make it in the sport. I'm sure that almost everyone in Manor has worked as hard as those in the more comfortably financed teams. It will be 2 fewer seats in F1 but I suppose it won't change the races that much!

54

Sad news.
but then again, how can F1 expect to have 11teams with only 10 getting prize money...if NAsr did not score in Brazil, maybe it would be Sauber going under ?

without Manor in 2016, how could mercedes/ force india evaluate Ocon and Werlhein ? I believe that would have been rather an incentive to "play it safe" and hire an "old" driver rather than take chances with a rookie....

where does that leave Werlhein ? going from hoping to jump into the championship winning car (and it's magical crew) to unemployed ??????

55

Weherlein is going to Sauber I believe. I suspect that will mean sauber wind up having merc engines in the '18 season.

56

What a shame.
Does Bernie think we want to see fewer cars racing? Does no one involved in running F1 understand that without fans there is no F1? Don't they understand what the fans want? The demise of Caterham, HRT, Manor/Marrusia robs fans of 6 cars to watch and 6 drivers to follow as they develop their F1 careers. Not that we want to watch minnows, we want to see those 6 cars fighting to win races but the inequitable spread of funds and absurd technology wars have robbed us of this.
Surely it's not that hard to see? Or am i the only one that sees things this way.

57

I just don't get this complaining about unfair compensation. Do you really think that that is logical for a business? Do you lot go into your job everyday complaining that you should get paid less because the guy across the office makes 20% less than you do? I think not. All these teams signed a contract knowing full well what they would get. Other teams choose not to sign a contract committing to a longer term and in turn to receive more money from the sport. This was all their choice, why are you complaining? I don't go open a business without a plan for profitability and success, why do these companies keep doing it and then everyone is all up in arms when they figure out they can't make it? The teams are businesses, mainly owned by shareholders, the shareholders demand a maximum return of their investment, so Ferrari, for instance, negotiated well and someone else didn't. If the company doesn't deliver then their management team is removed or the company is out of business. It's how it works, get over the hypocrisy unless you are in fact demanding you also get paid less so someone else gets paid more.

58

@F2004
In business terms, you are absolutely correct. Cant fault your case👍🏻
But as a fan of F1, of motor racing as an entertainment, I think it stinks. Do we have to see this happening time and time again? This is not just about Manor, this is also about the hundreds of people who work there.
I agree that the the best so to speak, should get the best deal. The top teams have also got the money to employ the best negotiators, and good for them. But that there is so much inequality seems a bit wrong to me.
But that's just my opinion😊

59

Nope. I see things exactly the same way.

60

Lots of people said since day one that Fitzpatrick was only in it for the short haul and was looking to sell and make money from it. The problem being he wants too much money, which I'm sure was the problem with the investors he was supposedly talking to...

61

The blame for the loss of 200 jobs can be laid at the door of FOM, CVC and Bernie Ecclestone and their greed. It's time all the teams are paid. It makes no sense whatever to only pay the first 10 and to pay them a year behind.

62

Nonsense! It can be blamed on the group who wanted to own and operate an F1 team without an adequate business plan or long term funds.

63

Fitzatrik wasn't supposed to need further investment up to 2020, and that he would have finished repaying the creditors from the last administration, and that was why Manor was not allowed to go bust last time.

64

I think the death knell has sounded for MRT i'm afraid -losing that vital 10th place in the WCC thanks to Sauber's Brazil points was the final nail in the coffin. Be sad not to see them next year as I don't expect them to be reprieved for a 2nd time.

65

Oh dear, unless a white knight rides in from somewhere it looks like the end of the road for F1's great survivors. It's such a shame, they were just getting all their ducks in a row when the last round of administration happened. I doubt many fans will have had direct experience of a firm going into administration, but let me tell you it's a highly destructive process. The administrators care about securing maximum value in the very short term and if it doesn't look like there's a cashed-up buyer on the horizon, they won't care one jot about the longer term viability of the business. When my old firm's parent company went under and while senior management were preparing to buy the company out (buy it back, really) the adminstrators trashed the place. Sold off vital hardware for a fraction of its true value, laid off key personnel and sold off vital IP to our competitors. They even went so far as to rip most of the copper wiring out of the walls to sell as scrap metal. The company limped on for a few more years, but the enormous costs of rebuilding after the administrators' wrecking act was too great and the business was never truly viable after that.

From what I hear, the administrators at Manor/Marussia were not especially kind either, and left them without invaluable systems and equipment. It's a miracle they managed to race in 2015 at all and I've had a real soft spot for them since then, having been through a similar experience. It would be a shame to lose them - F1 really needs a plucky backmarker to stop the big boys from being embarrassed too badly.

66

I can imagine the horror and sadness you describe, but our sympathy for the debtor's demise should be tempered by sympathy for the creditors, who may be living through some some horror of their own!

67

You have to applaud the structure. Manor Grand Prix Racing will probably just stand by, and in a few days come in and buy Just Racing Services Ltd. for pennies on the dollar, while scrubbing the debt that is in place. How much does Just Racing Services Ltd. owe out there to creditors? Do we know?

68

That would be what's known as "fraudulent conveyance". A second year law student could pierce that fraudulent LP structure in court.

69

Seebee, your reply not displaying so I reply here. I'm telling you that in this case it would be an easy charge of fraudulent conveyance. Any administrative court judge would laugh at the suggestion that debts of such a parent, whose proceeds were raised for the sole benefit of the subsidiary, when said parent has no operations of its own or other operating subsidiaries, can be "scrubbed" through administration, with no fallout for the subsidiary. And in any case the only assets of the parent are the equity in the racing team, so the racing team's assets would be sold off to pay creditors of the parent. The fact that those assets are in a subsidiary is irrelevant.

70

...and I bet you they will, or already have, set up a new entity that will be represented by a lawyer, which will present bids to the judge handling the restructuring. Clearly Manor Grand Prix won't be betting on the assets, leases, etc. They didn't want to hold that on their books the first time around, why would they now?

71

It doesn't seem like the structure is where Just Operations was set up as a wholly owned subsidiary. It seems they are completely separate entities. If they went this far to structure them separately, I'm going to guess they are not registered at same address, or perhaps even country.

72

So....this would be the first attempt in the corporate world to use bankruptcy and receivership laws to scrub some debt? Don't you find it interesting that owner of entry on the grid and actual operations are separate entities?

73

All FI teams operate like that, (two separate entities).

74

Seebee, Again, your comments arrive in email but then don't display for me on JA F1.

Manor Grand Prix ("MGP") owns the F1 entry and owns the operating entity Just Racing Services ("JRSL"). JRSL's lender is Fitzpatrick/Ovo, which is also the sole shareholder of MGP. For that reason Fitzpatrick does not need administration to swap JRSL debt for equity, i.e. to "wipe out" JRSL's financial debt. Fitzpatrick could do that on his own as he is JRSL's lender as wells its sole shareholder via MGP.
JRSL is in administration because it is out of cash and has significant debts to trade creditors. Absent a new capital infusion of $20 to $30 million, either debt or equity, JRSL is not going racing, end of story. Fitzpatrick is not willing to provide that capital to JRSL. There is no three-card Monty here, which would enable JRSL to go racing by "wiping out debts".
The only thing the MGP - JRSL structure may achieve is protecting the financial value of the F1 entry from the recovery process by JRSL's trade creditors during administration. As I have said previously, that structure will be contested by the creditors, and they have a good case that the structure provides for a fraudulent conveyance. However, that outcome does not matter for the future of the race team, only for who is left holding the bag.
The best case here is that a wealthy buyer shows up, buys the race team assets out of JRSL's administration, and buys the F1 entry from MGP. Whether the proceeds from the sale of the F1 entry go to Fitzpatrick/Ovo or to JRSL's trade creditors is not material to the financial situation for the revitalized race team. And regardless of what the new buyer pays for the assets and the F1 entry, the real money will be the operating expense budget they need to cover with new equity and/or debt capital.
I'm done on the topic; I know the subject matter all too well.

75

Very enlightening Gary! I do like the term 'fraudulent conveyance' which has a lovely ring to it! As for the F1 entry, I seem to recall from previous seasons that the team are allowed to skip the first three races but if they still cannot comptete, they have defaulted and would therefore have no valued asset to sell. Perpaps someone could comment on how the entries work.

76

If indeed there is no legal separation in the entities as you say, then it would seem Manor is done and done.

Otherwise, this structure does deliver a mechanism to wipe out the debt for the next purchaser, and as you say, does protect value for a period for current owners of MGP entity.

What I'm getting out of your comment is that while it my be difficult for current owners to continue by dumping the debt, it looks like it still delivers what the structure intended in the first place, skirt the debt and deliver protection to key assets for at least a period of time.

77

The only hope is that a real buyer decided to wait for administration to acquire rather than do so is normal trading conditions to get it cheap

If there was (is) no such entity then its over and a few hundred people are out of work

78

Presumably Guttierez's move to Formula E is a sign that Tavo Hellmund is not interested in buying the team anymore, be it through administration or not.

79

Well done F1... you seem to miss the target when you change the rules, apply the rules, sell TV rights, ignore social media... but you never ever miss the opportunity to shoot yourself in the foot.

A grid full of strong, sustainable teams = a sport worth watching.

80

The "team's operator" is in administration but manor racing isn't? Being a bear of very little brain it all sounds too complicated to me! Anyone know if they have a 2017 car built since if they haven't its probably all over anyway.

81

Sad day for Manor.
But that's life.
You win some and ...
Scratch that...
You loose some then you loose some more
& more & more. No backers no finances no team. Sad but inevitable. The minnows fall.
No wonder Wehrlein had Toto pull out the stops to get him a drive at Sauber.

82

That was a red-flag something was up at Manor. It did enter my mind Pascal may have flipped out about losing the works drive however that was always the most logical explanation for it.
Sad as you say and ultimately it's just another reflection on why F1 finds itself on a road to nowhere.

83

2 less pylons to get around.

84

..two less drivers to make names for themselves in F1 (actually driving an F1 car)

85

What i don't understand is the logic behind the decision to get involved in F1 in the first place! Either is was blind 'racing' fanaticism or else a conscious decision to throw mega millions away.... If it was the latter then someones sanity needs to be seriously assessed. One assumed that the principal of manor had a degree of business sense in order to have earned the capital invested in the first instance, then throws it all away on a gamble against the odds!!! None of this makes any sense.

86

So F1's ridiculous payment structure which punishes teams that are already struggling, by making them struggle even more, might claim another victim. The sport needs it's small teams, they are a great way for drivers and technical staff to get into the sport, and they can bring something to the races on the odd day they over achieve.
Have Manor got a car in place for next year? If an investor is found and the team can be saved, will they have a car to run? I hope that the rumoured return of Graham lowden with financial backing happens, and I hope that the team's contribution to the sport is finally recognised, and they can make progress up the grid.

87

The main revenue stream (or prize money to old duffers like me!) is generated from FOM's Column 1 and Column 2. C1 is the "all the animals are equal" Marxist-Leninist "socialist" payment of 33.5 Million Euros per constructor, irrespective of where they finished in the WCC - on the proviso they have finished twice in the Top 10 over a 3 year period. Marussia qualify for this - so they were to get a payment of 33.5 Million Euros.

C2 is the decadent capitalist "all the animals are equal but some are more equal than others" payment which correlated to finishing order in the constructors cup - the winner gets the highest prize money in C2, 10th place gets the lowest. Marussia/Manor did not finish in the Top 10 WCC, so get 0 Euros............but remember, they DID qualify for Column 1, so not getting any prize money in C2 is compensated by the 33 Million Euros of C2. So, really, weirdly, the prize money is a mixture of "dog eat dog" ruthless capitalism and "caring sharing Marxist" socialism - it's both unequal and yet very equal at the same time...........

Incidentally, IF Manor go bust, that C1 money of 33.5 Million Euros payment will be then be deferred and divided by the remaining 9 constructors, which is a windfall of 3.72 Million Euros per team if my mathematics is any good - all the other teams are hoping they actually go bust! It's a dog eat dog world........

88

"It's a dog eat dog world..."

Only because this applies in most of the cases in F1 (and even day to day situations) the question is why should it continue?
Sustainability and planning for the future come to mind: in a dog eat dog world you eventually run out of dogs and in F1 you end up packing things up and close the show when there isn't any competition left.
How many people would watch a F1 with (for example) only 3 teams on the grid and 9 drivers racing?
It will destroy the sport, transform it into a deformed surrogate of sport similar to pro wrestling.

It's still time to change F1 and dog eat dog mentalities, continuing like this will only get us so far.

89

gazboy, I doubt Mercedes would be happy to see manor go, as they miss out on the engine fees. The column one payments should be higher, full grids are better than half empty grids. Column two should keep its sliding scale, but it should be compressed. Championship bonus payments and special historical payments should be scrapped and that money added to column one.
Any sport needs it's underdogs, the days when the small fry get to mix it with the big boys are the days everyone remembers, giving manor and Sauber a few quid to keep going and have faster cars isn't going to threaten Mercedes and Ferrari, but will help the sport overall, which helps those big teams.

90

Wow! You are very good with words, so clear in thought. I think I understand all of the back scene stuff a little bit more now, cheers. 🙂

91

Clarification ? What about the extra-special additional Ferrari-only bonus payment that has been "discussed" in the past? How does that figure into the pot, if it is still operative?

92

Not really any different from someone who has a degree from Oxford vs someone who just graduated from high school. Ferrari do bring more to the table, even if they don't win. Like it or not.

93

Indeed, they brought more to the sport they, as Williams and McLaren have a great history.
But, you should realise that for the race they still bring 2 drivers and 2 cars, just as Manor brought, and history doesn't help too much future development and stability.

94

RE Garrett Bruce:

FER - Constuctors Cup Bonus (CCB) of 35 Million Euros) and Heritage Bonus (70 Million Euros), as well as Column 1 + Column 2. CCB and Heritage Bonuses are bi-lateral agreements and run until 2020.

95

Copy and thank you. Appreciate the clarification.

96

Copy, and thank you. Appreciate the clarification.

97

RON we need you to run RONAM!

98

Maybe... McRoni xP
...
Well the sole value of Manor is his - potential - F1 Franchise.
I believe the F1 stakeholders have to approve the purchase of Manor's license to compete in F1.
Right away the new buyer won't inherit any payment from 2016 and has to request permit to change the name of the team.
Very bureaucratic process... meh.
...
It's like buying a lottery ticket.
There is the expectation that The Liberty Group will revamp the money share structure among racing teams.
If so, Manor's franchise might worth a lot of money as the stream of future cash flows improves.
...
Hope Ferrari buys Manor to create the Maseratti / Alfa Romeo team.

99

May be he can bring Beckham on board as they are now great pals! Bromham f1.

100

A morn. A Norm. At Manor.

Roman drives for another team though.

A Mr. No, since Ron is not a Doctor, it's as close as he can get to 007 role.

101

Lucky Wherlein! Out of the frying pan... gutted to all involved but I think we saw this coming the second the flag waved in Brazil. Hopefully they have designed a 2017 version of a Brawn Gp and can sell the idea to an investor. No Brazilian on the grid seems even more likely now.

102

I find it hard to decide who to lay blame on here. When it was bought the individuals buying it should have completed due diligence and had a plan in place to at least survive for more than a few years. Assuming they did, either they did a terrible job, or what I think is more likely, they were made certain promises of what F1 brings, that clearly didn't come true.

So I feel F1 itself should shoulder a lot of the blame here structurally. They are always talking about being the pinnacle of motorsport etc, but clearly a team that pays it dues and runs in all the grand prix can't even survive at the back of the grid. This team performed at the lowest level of all this year and still couldn't survive.

I'm sure it's a sign of bigger problems in F1, given that many tracks are wanting out the door also. Don't believe the hype. And what I don't get is why allow such a team into F1 in the first place? Surely between F1 and the organization buying into a team, they can calculate costs 3 years down the road? If both can't then it's just a sign that someone isn't doing their job right, or doesn't have the best interests at heart. Well, bring on the next sucker...

103

Too many teams have too short a memory. Red Bull once was were Manor is when they were Stewart. Williams was where Manor is when the first started in the late 1960s and early 1970s. McLaren was where Manor is when they first joined F1 in 1966. Force India was where Manor is when they were Midland and Spyker. Renault was there when they were Toleman (1981-83). Sauber has been there recently. Torro Rosso was there for years when they were Minardi. Every team has potential. They just need some money and leadership.

104

And i might add, a lack of either one will result in a disaster. Will Manor be missed? Not by me i'm afraid. There are plenty of lesser grades for drivers to hone their skills but F1 should be confined to those who bring all the ingredients not just part of the 'recipe'.

105

Kenneth, you wouldn't miss them, but I and many others would. If some of the money currently given to the top teams was diverted to the smaller guys in order for them to survive, would that bother you? Do you remember Mark Webber getting that fifth place at Melbourne? or Jordan and Stewart winning races? Great days for the sport, no longer available if the minnows are allowed to die.

106

You make it sound like money and leadership are easy to come by. Sorry, but that's a touch naive.

107

Please do remember that we're talking F1 here, not darts.
The sport generates a lot of money, a more equitable distribution would help the back markers; also no one said leadership is a given - if they screw up let them fall off the grid, but they (the smaller teams) should be given a bigger chance to survive. These days the amount of money needed for running a F1 yea"It's a dog eat dog world..."

Only because this applies in most of the cases in F1 (and even day to day situations) the question is why should it continue?
Sustainability and planning for the future come to mind: in a dog eat dog world you eventually run out of dogs and in F1 you end up packing things up and close the show when there isn't any competition left.
How many people would watch a F1 with (for example) only 3 teams on the grid and 9 drivers racing?
It will destroy the sport, transform it into a deformed surrogate of sport similarm are so high tha

108

EXACTLY!

109

In a sport where by the nature of the result there will always be winners and losers, when the losers are not in a financially sustainable position bankruptcies are inevitable. Unfortunately with the high barriers to entry in F1 there is no pipeline to replace those who fall by the wayside. Putting these two together means a grid of the current size is clearly not sustainable, it also makes the teams at the top indispensable, and gives them too much power. Sound familiar? The model is long overdue for an overhaul. I am hopeful Liberty Media have practical solution that can make it through the F1 political machine.

110

Mosley's mad model lingers on.

111

James, with Manor disappearing and Wehrlein supposed moving to Sauber. Does that mean that Sauber will get the Mercedes-engine now? Will it be for 2018 or is their a chance that they will get it already for this season? How much difference is their in the aerodynamics of designing a car for Ferrari or Mercedes?

112

Kind of ironic that Merc re entered F1 as an engine supplier to Sauber when Sauber first appeared in F1.

113

Interesting point. Sauber has been a Ferrari customer as long as anyone can remember but they don't supply engines that are as current as works team to customers as Mercedes do, I believe

Politically Sauber was always aligned with Ferrari but Haas has taken that slot now, so could be up for grabs, yes

114

Excuse my ignorance James but what exactly is Mercedes corporate relationship with Manor? Many were talking of them being a 'Mercedes Junior' in a similar style to Torro Rosso/RBR. Is there any attraction in Mercedes investing in the team to ensure the continued development of their young drivers?

115

Elementary, my dear Tal.

Mercedes makes luxury cars.
Rich people have several properties: Masons, beach and country houses.
When going countryside, a Mercedes driver park his car in Manor.
...
Aaand... duck xP

116

This is getting ridiculous and totally unfair. First Manor, and now Silverstone are talking about scrapping the GP because they are loosing money every time!
The people at the top should hang their heads in shame! Are you listening Bernie!

117

Bernie can't hear. His head is in his wallet.

118

Certainly not happy to look upon the possible demise of Manor. I wonder if interested parties concluded it might well be cheaper to buy the team from the administrators than as a going concern from Stephen Fitzpatrick ? The latter previously bought the team from administrators. Time will tell but given we are in January with testing shortly and the first race is in 11 weeks time, there's arguably little opportunity for an effective rescue. Either there's someone biding their time for the strategic moment to speak to the administrators or there's no-one. The value of the team and its assets may well be little; what a buyer has to consider is the cost of running the team, month by month, once purchased. Where does the cash flow come from if there are no significant sponsors and performance money from BCE ?

119

The F1 graveyard is littered with 'wannabe's'. No businessman worth his salt would enter into an F1 business without a minimum three/ five year plan. That plan would/should have as a basis, how to survive a 'worst case scenario' a top line version of 'blue sky' with a middle plan of a 'most likely'. Based on that decisions can be made. If Manor failed it wasn't because of unfair financial distributions because they are, in this case, after the fact. I have zip sympathy for people who find themselves in this position simply because of bad business decisions. The 'drovers dog' would be aware of what the costs of participation in F1 are and build a business accordingly. If you don't have the means in the first place don't expect charity....stay away.

120

If there were potential 'buyers' their propensity to buy would have been influenced by (i) the state of the 2017 program and (ii) the price. If the 2017 car has not been finalised and a chassis is not yet in the production process then participation the early races would be unlikely as this time they cannot run a 2016 car. If there is no car the price consideration becomes irrelevant and closure beckons. This does not look like the Brawn 2009 situation where the car was ready to roll and Ross was talking about it publically to all and sundry. No one is tallking up Manor's car for next year! I hope I'm wrong but it looks bad.

121

Does this mean that Manor Grand Prix Racing can now partner with a completely new investor and enter the F1 Championship?

122

Sucks to be pascal werhlein right now, i bet ocon can't believe his luck!

123

This makes me sad. I suppose the vultures are circling. Hopefully there is a Phoenix also.

124

Hi James. Is there a way to explain all this Manor scheme ? I mean who owns what? - on the paper down goes operator not Manor GPR so what exactly that means ? Or did Tavo/Consortium deliberately allowed this to happen to get Manor for sandwich? Anyway one don't want to be superstitious but you can't help but think all that project has been born under wrong star

125

Could be, as there is $30m of prize money owing, even though they lost around $15m by not finishing 10th

Sometimes a tactic for a buyer is to let it fold and then pick it up

126

It's a shame to see any F1 team fold. Manor has been through the wringer what with losing its test driver in a freak accident, losing its first points scoring driver due to ultimately fatal injuries in a race, and nearly folding at the end of 2014. Let's hope a solution can be found, especially to save the jobs of the hardworking employees. Mercedes might consider adopting Manor as its farm team as RB did with Minardi in 2005.

127

Running Manor was so obviously a money pit with no allocation of F1 money. The cars were always being complained about by the front runners as too slow. As a business model it would be declined loans by most lenders. The only hope the owner had was the lottery hope of finding a buyer with even more money to waste. Mind you, if I won £100m on the lotto I would have had a go for 2-3 years! I hope that all the employees find employment fast.

128
Racing driver 1

I don't understand why F1 management don't change the points system. Points should be available down to at least 15th place, which would create a lot more meaningful battles. At present if your racing around in 11th place you might as well be in last place. There needs to be more gradient to the points system, like in Moto GP.

Second of all, why don't they just scrape a few million off of the top teams winnings and share it amongst the lower teams. It seams that would kill the shakey situation for the last place teams.
Now manor are on the way out, this just means Sauber or Haas will be in a similar situation of getting a poor payout this time next year?

129

This year, if there is no Manor entry, Hass or Sauber could score zero points and still get tenth place money!

130

haven't read the comments but i do wonder if anyone has pointed out that this is why we need manufacturers in f1

mclaren have essentially become a manufacturer by starting to sell road cars, Williams and rbr are in other technology fields and sell the odd patent here and there

sauber will end up going the same way as manor if they don't get help from somewhere

131

Sauber will be fine. Monisha will just keep on signing drivers. That was the F1 Ponzi to beat all Ponzis, fortunately they ultimately fold.

132

Sorry to read this. I was hoping that Ron Dennis would grab this team. My guess is he does not want to invest his own money into the team or needs partners.

Also, after doing due diligence I suspect the development and design of the 2017 car is not where it needs to be. This would scare off any investors. In addition I am sure someone wants to get out of the debt.

Steve

133

Does this affect Manor WEC too?

134

I generally assume that the way things are is the way those in charge want them to be. Here we have a case where Manor having survived in almost impossible circumstances for quite a while, finally have to admit that they're not in a position to continue without a share of F1's revenue.
But the question is, why is F1's revenue only split ten ways when there are eleven teams? I have always assumed that it was because Bernie Ecclestone wasn't happy with there being more than ten teams. Was it that the FIA wanted more than ten, so allowed additional teams in, but Bernie disagreed and the FIA couldn't force him to fund the newcomers?
That's what I've always assumed, but I don't think I've ever seen it stated anywhere.
If it's the case, then I guess it's a happy new year for Bernie!

135

Does anyone konw what happened to the EU investigation triggered by Sauber writing to them (I think) about a year ago. Did they just drop it to wait abnd see what Liberty will do?

136

Could this be Marchionne's moment to bring back Alpha Romero? He could buy Manor lock, stock, and people and have an instant F1 team.

137

He has enough problems running one team!

138

Top 3-4 placed teams need to run a third car the following year.

139

Ron an' Ross
To make a mentor ship programme
By owning manor
Might bring younger viewers
Hope it all comes good for everyone

140

There was a time I thought of an outfit like Minardi as a bottomfeeder F1 team. Times have truly changed.

141

If you worked all year at your job and didn't get paid enough to cover your household running costs then presumably you'd ask for a raise or change job.
The problem of course is when you see others that you work alongside doing the same job (granted a 2 second per lap better job) getting paid over %1000 more for doing that job.
That's not capitalism.
That's ridiculous.

142

I find it sad that they struggle to compete. I rarely have a chance to watch f1 life but it always makes me appreciate the effort of all the teams, not only the ones that the TV decides to show.
I was in Malaysia last year and was very much impressed by the manors. They were the loudest cars and during practice always seemed to be pushing as hard as possible.

143

The cost cutting which was the opposite for small teams with the enormous hybrid engine development was crushing to small teams. We need more teams on the grid, not less. As many have said here the payment system needs to be more balanced over the whole grid. That will help the back rows of the grid. I am not a big fan of the back markers, but somebody has to be back there.......so give them some damn money Bernie. I believe the new boys controlling F1 will be smarter and create a better system, a more equitable grid for the minnows. Just hurry it up.

144

I'm hoping Ron Dennis and his Chinese investors, or Ferarri, take Manor on.

145

Teams need someone to beat, that's how racing works. Benetton won, Renault are a works team, but when I visited the Old Station Lane in Witney the legacy of Toleman was still there. I started supporting Toleman back in the Henton/Warwick era. Minardi morphed to Toro Rosso, Stewart became Red Bull. Big teams don't just appear out of thin air, they need to be nurtured and supported.

146

'big teams don't just appear out of thin air'. True. They become big teams because they have top class professional management and ADEQUATE funds to go racing according to the 'model' at the time. There is only one reason why teams fold...$$$$. Enough of these and you can race for as long as it lasts. Winning however is different. First you need the aforementioned and then you need to spend wisely and If you are clever enough you will win. It's not PhD material. It's business.

147

This "business" you are talking about is heading to bankruptcy under the current modus operandi.
If you treat your employees badly, your demands for the new staff are absurd and do not create an good work environment, you'll end up without a workforce.
Not to mention that the product is a bit outdated.

To put it in terms you seem to prefer.

148

@ ionut E...How you can arrive at the thrust of your post from what i have said simply astounds me! What on earth are you on about and don't give me any more of your 'canine cannibalisation' theories.

149

The point is (for better understanding of my meaning) that today's racing model is utterly overpriced and for this business of F1 to continue in a sustainable way and grow, the management should take care of ALL the teams (compared to the workforce in my post), as loosing them gradually would only mean a collapse of this enterprise. I hope this clears my post.

You can also explain what you mean with that canine bit, I don't see the connection between these two totally different posts.

150
Tornillo Amarillo

As a small team, Manor was performing well, decent speed for a small team, good Mercedes PU, developing drivers. If the team did its job I consider unfair not to get part of the prize money, it should be some money for a team that has competed in a decent manner, with or without points. They can evaluate other performance than points, like qualify, race finishes, gaps, etc.

Thanks to Manor Ocon now has a seat at Force India and he hopefully would progress through the grid. Same for Wherlein who goes to Sauber maybe. How many champions have started in a small team at the beginning of their careers?

I think 20 cars is not acceptable for the average fan... 22 or 24 is better.

I think F1 should save Manor, and help with the task of finding an investor and / or sponsor. Mercedes could help too financing PU I guess.

151

That's a bloody shame! Bearny should assist them over this tough time. It's incredible to think that with so much money being made from the F1 show that it's not being shared more evenly with the teams that actually put the show on! Something I've never been able to understand. Maybe the new owners will make things fairer.
PK.

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