Interesting times these are for Lotus F1. The rumors of an imminent takeover of majority ownership by Renault has been circulating for the last several weeks but an article at AUTOSPORT today reveals that the teams financial issues are actually stemming from an unpaid invoice from PDVSA—the backer of driver Pastor Maldonado.
Our friend, Christian Sylt, unpacked the current financial situation in F1 with the grid amassing $318.2 million in debt with Lotus holding 64.2% of that total. Chris didn’t have access to Ferrari or Sauber’s total debt but of the seven teams he did look at, Lotus F1 is by far the leader with $204.3 million of the load.
The article is an interesting insight to how F1 teams function, which is to say they basically shoot for a break-even status after all revenues, costs, salaries and SGA is accounted for. They are in the business, not of profit but to break even after making everyone a tidy sum in compensation and while running a team that can harvest points in order to insure their portion of the prize money.
The AUTOSPORT article is equally interesting as it says that a $50 million invoice is left hanging over negotiations and this is the invoice to PDVSA for Pastor Maldonado’s retention for 2016. The Venezuelan oil company pays up front and that usually happens in late July or early August according to the report.
Having said that, Venezuela isn’t having an easy time of it as of late and it remains to be seen just how the Renault takeover will be seen by PDVSA given that the team are in serious talks with Renault and Romain Grosjean is backed by Total.
AUTOSPORT reckons that Renault will honor Maldonado’s contract, which expires at the end of 2016, and they are better positioned than I but Renault are taking on a serious load with this move and I wonder if they would rather have a different approach than Maldonado? It’s hard to argue with $50 million though, that’s a huge number for any driver to bring to the table so most likely, AUTOSPORT is right.
While Maldonado has been helping Lotus F1 stay afloat, his presence and PDVSA’s invoice—put on hold while the due diligence happens—is also helping sink Lotus F1 as team boss Alan Permane described this year as their worst financially speaking.
It goes to also show how the paying driver scenario has become a huge impact to a team if you find a driver with Maldonado’s level of backing. He can be the key to surviving or dying as a team or at least helping and hurting.
Time will tell but if Renault are serious about being a full works team, then perhaps PDVSA’s money isn’t needed if they can get Total or another sponsor on board.