Some really good editorial from Autosport:
As Lewis Hamilton's momentous year made way for 2009, the big news in Formula One circles was, of course, the demise of Honda Racing F1 Team as a competitive entity. This was followed immediately by CEO Nick Fry's suggestions that "we have to have credible interest this side of Christmas," from "serious potential buyers" if a deal is to be done which would enable the team to line up on the Melbourne grid on March 29.
At the time, Fry was bullish about finding a buyer, citing the facilities on offer as a major selling point. The sale was unlike that of bankrupted teams with limited assets he said in early December: "This situation is very different from the Super Aguri and Arrows type situation(s)," adding that Honda had "possibly the best F1 facility in the world," plus the sport's best full-size wind tunnel and that the sale included engine dynamometers.
The list of assets further included a contract with Jenson Button (although Honda announced that it was in talks to 'undo' the contract) and, of course, the contracted services of Ross Brawn, whose championship-winning abilities cannot be overstressed.
A further selling point was the fact that the racing team's parent company was prepared to let the entire operation go for a relative pittance simply to see it continue in business, with Honda Motor Co., Ltd rumoured to be open to nominal offers of just a dollar or so.
During the festive season, the F1 fringe media went into collective frenzies after rumours abounded that Peugeot/Citroen and telecommunications magnate Carlos Slim Helu were close to announcing their respective purchases of the team.
However, no sooner had the gossip begun than PSA firmly put a lid on any future F1 involvement, while the Slim story ran a bit longer before being rubbished. It did, though, have some credibility: the Mexican – with a personal fortune worth around $60bn (about 25 times the net worth of the Ecclestone family trust) is believed to be the world's second richest man after investor Warren Buffett – is not short of funds. He owns the Telmex (racing) Team in addition to having an interest in the Mexican A1GP operation, and was said to have visited Honda's base in Brackley shortly before Christmas.
However, shortly before Christmas a statement on the Telmex Team's website scotched the rumours, although some within the team still believe Slim and his three motorsport-mad sons, sponsors to both Nelsinho Piquet and Bruno Senna via their various South American telecomm interests, to be potential punters.
Even Michael Schumacher was linked to buying the team, with disciples of this theory pointing to his healthy bank balance and close relationship with Brawn after the Brit directed every one of the German's seven titles. However, Schumacher's press officer told an impeccable source that he did, in fact, have contractual obligations towards Honda – racing in the German Superbike Championship – but that was the full extent of his interest in the Big H.
Other than David Richards, who once headed the outfit when still owned by British American Tobacco – and to whom we will return shortly – and Force India's Vijay Mallya, said to be more interested in asset-stripping to bolster his own Force India operation than running the team as a going concern, there has apparently been precious little concrete interest, with none whatsoever from motor manufacturers interested in entering the sport.
Given the selling points as outlined above, just why has there been a seeming dearth of interest in what, on paper at least, appears to be the Formula One bargain of the decade?
Such a transaction would, though, come with strings attached, not least the issuance of guarantees, indemnities against unemployment and other contractual claims. While these details remain undisclosed, a parallel could be drawn with the disposal of the last manufacturer team to be similarly up for sale – Jaguar Racing.
When Jaguar was 'sold' to Red Bull, the drinks company is believed to have indemnified the team's owners – the premier automotive division of Ford Motor Company – against retrenchment claims for a period of three years while agreeing to honour all contracts then in place.
The transaction was finalised at the end of 2004 – around the time spending in F1 reached stratospheric levels, meaning all facilities and the quantity and quality of heads in place at the time were, at most, ample for the task in hand, and both machines and manpower would be added to considerably over the next two years.
As is now common knowledge, the five manufacturer-backed operations – Honda, Toyota, BMW, Mercedes/McLaren, Ferrari and Renault – at that stage embarked on frenzied expansion sprees, with Honda spending as though there was no tomorrow – which, as it turned out, was the case. Such was the frenetic pace of facilities development in Brackley that, according to a well-placed source, certain land ownership issues are still outstanding and need to be addressed before any sale of the team can be completed.
Thus, as the foregoing makes clear, Honda now faces a major challenge in selling as the operation is both over-equipped and over-staffed for the Formula One of the immediate future. And, given the sport's rulers' predilection for constant regulatory changes, who knows what the medium and long term will bring in this regard? Whatever it is, though, is unlikely to tax the full extent of Honda's space-age facilities.
After all, what use a bank of engine dynamometers when power units are effectively frozen for the next two years, and the team would in any event be required to buy in engines after Honda announced that engine supply would not be part of any deal? Equally, what use to any prospective purchaser are engine regulations which guarantee a season's supply at £5m-odd to 'independent' teams – into which category The Team Formerly Known As Honda (hereinafter known as TTFKAH) would surely fall – if they come into force next season, not now when critically required?
Ditto the effort the team put into KERS, given that even the world's most prolific producer of hybrid road cars (Toyota) is steering shy of the technology for the foreseeable future and that off-the-shelf units are already available from Magneti-Marelli, with Bosch expected to unveil theirs at this weekend's Autosport International.
What use a full-size wind tunnel when 60% models are the largest size permitted, with further restrictions on the speed of airflow? For that matter, what use 500 staff members concentrating purely on chassis and transmission matters when track testing and wind tunnel activities are set to be drastically reduced, with similar restrictions for computational fluid dynamics systems near the top of the FIA's hit list?
Then there is the question of the (long-expired) Concorde Agreement and the destiny of television revenues earned by the team in 2008 (and possibly even earlier, for, when questioned during the 2008 French Grand Prix weekend as to whether all TV payments as outlined in the Memorandum of Understanding signed by the teams – including Honda – in May 2006 had been paid to the teams. Fry replied to that with a succinct "we wish").
Given that any prospective purchaser will likely take on guarantees and liabilities amounting to around £75m ($115m) before even operational budgets for this year and beyond are committed to (which must amount to at least double the initial figure), the least said buyer will require in return is some form of projected income statement.
But, the lack of any Concorde Agreement means that no contractual obligation exists in either direction, whilst Bernie Ecclestone's recent threats to decrease revenues from the agreed 50% of F1's total revenues - split amongst all teams - to 30% do not bode at all well in this regard. Nor is it even clear whether the new operation – for that is in real terms what the operation would be – even qualifies for an entry for the 2009 FIA Formula One World Championship given that entries closed on 31 July last year.
The Asia-centric nature of the sport's recent calendars means that the list of prospective owners of TTFKAH is reduced to those with extensive commercial interests in the Middle and Far East – and none in North America, or, for that matter, Africa. Slim and Schumacher fall well outside this category, as do most motor manufacturers.
There is one man uniquely equipped and prepared for the task of taking on TTFKAH – Prodrive's David Richards. Having twice taken on the challenge of running teams – and left without victory trophies on both occasions – F1 is to him unfinished business, particularly as Prodrive's own Formula One project, scheduled to enter last year, came to nought.
One of his previous F1 projects was, of course, BAR-Honda, operating out of the self-same Brackley address, so Richards, a qualified accountant, knows precisely what makes the place go around. Or not, depending upon your point of view.
Then, in the aftermath of Honda's exit, Subaru, very much a staple in his Prodrive product mix, decided to up sticks and leave the world rally stage with immediate effect, leaving the 56-year-old motorsport entrepreneur, who just happened to have leveraged a buy-out of Aston Martin with Middle East money, with just enough time on his hands to consider another project at world championship level, particularly one which saw a team place second in the constructors' championship under his direction. Tellingly, at the end of his BAR tenure many staff members transferred up the road to Prodrive in Banbury.
However, enticing as the opportunity of killing two birds with one stone – returning to the sport's top category with a team he once headed – may be, Richards is too much of a pragmatist to simply leap in where others fear to even tread. And hence his words in early December when first the question of Prodrive buying TTFKAH arose:
"I'm keeping an open mind," he said. "You could say that the facilities Honda have make it an attractive proposition, but I disagree. The overheads are not what would be needed in an age when Formula One is cutting costs. I won't rush into anything."
However, he said this before Subaru pulled the plug on its WRC operation, and it certainly provides a great opening gambit for a man with a reputation for playing for high stakes.