When Marussia joined Formula 1 along with Caterham, we picked out new teams to cheer for. Paul chose Caterham while I chose Marussia and I have to admit that this is very sad news to me as a fan of the team. I still have a Marussia backpack I’ll cherish but that and a few memories are all we’ll have left as the team officially closed its doors this week and laid off 200 employees.
My disappointment pales in comparison to the very unsettling news that 200 people’s lives are now impacted just ahead of the holiday season. There was talk of a possible rescue but it seems British-Indian brothers Baljinder Sohi and Sonny Kaushal we unable to reach an agreement in order to save the team.
Geoff Rowley, joint administrator and partner at FRP Advisory, told the press:
“It goes without saying that it is deeply regrettable that a business with such a great following in British and world motorsport has had to cease trading and close its doors,” Rowley said.
“Whilst the team made significant progress during its relatively short period of operation, operating a F1 team requires significant ongoing investment. The Group was put into administration last month following a shortfall in on-going funding and the administration process provided a moratorium to allow for attempts to secure a long term viable solution for the Company within in a very limited time-frame. Sadly no solution could be achieved to allow for the business to continue in its current form. We would like to thank all the staff for their support during this difficult process.
“As joint administrators our immediate focus will be to assist staff who have lost their jobs and provide them with the necessary support to submit timely claims to the Redundancy Payments Service.
“The team will not be participating in the two further rounds of the 2014 championship remaining, in Sao Paulo and Abu Dhabi. The joint administrators will continue with their statutory duties to realise the assets of the business in the best interests of all the creditors.”
That leaves Caterham as the last remaining “new team” with a chance of survival and although their administrators are still trying to find buyers, it seems doubtful they will attend the final race of the 2014 season in Abu Dhabi.
The sad element in this story is that the team was having the best year in its four-year lifespan. They are sitting 9th in the constructor’s championship which would have paid out a significant cash award at the end of the season but as they are no longer an entity, Sauber will be moved into the 9th position and claim the prize money.
In an interesting commentary about the demise of the new teams, BBC Sport’s Eddie Jordan said:
“There are four reasons why the three teams who entered F1 in 2010 have all failed.
“First, Caterham [previously Lotus], Marussia [previously Virgin] and HRT were promised that the sport would have a budget cap of 50m Euros and governing body the FIA failed to impose this.
“Secondly, the costs for an engine were about £5m last year but have gone up to £15m this season with the introduction of new turbo hybrid engines. Who’s accountable? It’s Bernie Ecclestone’s job to make sure promises are adhered to, and these costs are not coming down next year even though the manufacturers originally said they would.
“Thirdly, teams have to use Ecclestone’s freight but the costs of this are high. There used to be a £10m payment from the commercial rights holder to teams to support the freight costs but Ecclestone withdrew that two years ago, saying he needed the money to pay Mercedes more.
“Fourthly, there is the gross disparity of of $300m being skimmed off the top of the money allocated to pay the teams as a cash payment for the top five teams, Red Bull, Ferrari, McLaren, Williams and Mercedes.”