Let’s play this year’s round of “who wants to buy a struggling Formula One team?” Manor is in desperate need of saving again, as they’ve put the company which runs the operations of the F1 team, Just Racing Services Limited, into administration, reports Sky Sports. Administration is Britain’s version of Chapter 11, so needless to say: it’s not good.


Current owner Steven Fitzpatrick, who rescued Manor (née Marussia) from administration in 2015, called in administrators at FRP Advisory to help the team’s operations side through this time. None of the team’s recent investment discussions, including those with grand prix promoter Tavo Hellmund and Indonesian KFC branch Jagonya, have worked out.


Fitzpatrick explained to Sky Sports that the team must have its funding in order ahead of the season, or it won’t start the season at all:


Only the top 10 finishers in the constructors’ championship receive prize money. Eleventh place does not, which makes an 11th team on the F1 grid a particularly hard sell.


It’s been proven time and time again that Formula One has no interest in seeing its smallest teams succeed, as its very governing and payment structures concentrate all of the decision-making power and funding with teams who already have influence and cash.


While I hate to see Manor go and the F1 grid shrink again, a cat might be a better investment if you’re looking to take in something that needs some love and attention.

For instance, a few seasons ago the team suffered 'heat-soak' issues with the bodywork burning around the exhausts each time the car stopped in the pitlane. An old rag, soaked in a bucket of cold water was laid onto the sidepod each time it returned from a run and was reversed into the garage, to alleviate the problem. When Ron next attended a race and saw this going on he hit the roof. Next race they had nicely tailored and shaped black towels, each beautifully embroidered with the drivers initials, and the bucket was kept well out of sight.

McLaren has become the latest team to confirm the launch date of its 2017 Formula 1 car.

The Woking-based outfit will unveil its Honda-powered challenger on February 24, the same day that Ferrari will reveal its car in Italy.

McLaren made the announcement on Twitter, and is the fifth team to outline its launch plans.

The team is hoping to make a good step forward this season, on the back of a major revamp from Honda that it is hoped can help it close the gap to the benchmark Mercedes engine.

As well as retaining Fernando Alonso for a third year, McLaren has signed rookie Stoffel Vandoorne for his first full campaign in F1 – having made his debut in Bahrain last year.

The Belgian, who was called up to replace the injured Alonso, scored a point on his first outing despite a late call up.

Team | Date | Venue
Mercedes | February 23 | Silverstone
Red Bull
Ferrari | February 24 | Fiorano
Force India | February 22 | Silverstone
Williams
McLaren | February 24 | TBC
Toro Rosso
Haas
Renault | February 21 | TBC
Sauber

McLaren is set for its biggest livery revamp in years, amid mounting suggestions its 2017 Formula 1 car will run in colours that incorporate its iconic orange branding.

The team is embarking on a new era following the departure of its long-time chairman Ron Dennis at the end of last year, with executive director Zak Brown eager to revitalise the Woking-based outfit.

Brown, who became known as F1's sponsorship and marketing guru, has been clear that McLaren will do things differently from now on – and that is poised to include a new look for its car.

Speaking at last weekend's Autosport International Show, Brown said the team's 2017 livery had been signed off by team members – and he dropped a big hint about visual changes.

"We've shown it to the guys and girls at McLaren and we're very excited for our future," he said.

"We've just signed off on the car livery and I think the fans will be excited to find out what the car looks like both technically and visually."

Further rumours about the livery plans have been fuelled by the team's use of orange lettering in the tweet that confirmed the date of its 2017 car launch.

Reluctant for change

McLaren has often found itself ahead of car launches surrounded by speculation that it would use a radical new livery, although it has often disappointed fans.

There had been talk ahead of its new partnership with Honda in 2015 that it could switch to a red and white design, but in the end it stuck with the traditional chrome and dark grey concept that it had used since 1997.

At the time, McLaren boss Ron Dennis said he saw no reason to change just because fans wanted the car to look better.

"We have had the same [discussions about livery] inside the team: all of these people were saying, why don't we make it orange - because that was the old colour of McLaren?" said Dennis ahead of the 2015 campaign.

"Well, I say, 'you just said it - it was the old colour of McLaren. Why the hell do we want to go backwards?'

"So what do you do? Do you create an aesthetically pleasing design? But for what purpose?

"This is the livery of McLaren. It has always been a combination of these colours - and it will only change for commercial reasons.

"It won't change just to make a few people in the company happier because they want it orange or they want it yellow."

However, at the Spanish Grand Prix that year, McLaren switched to a graphite-grey colour that featured day-glo speedmarks and key lines.

Return to orange

Sources suggest that the change coming for 2017 could be much greater, and hark back to the famous orange livery that the team ran in Can-Am and in F1 from 1968 to 1971.

McLaren has also run the orange colours during pre-season testing twice before – ahead of the 1997 and 1998 campaigns, and in 2006.

Whether or not the entire McLaren 2017 F1 will be orange, or if only sections of the car will be orange, has not been revealed though - with the team eager to keep quiet about its plans prior to the launch on February 24

Williams deputy team principal Claire Williams has no concerns about Felipe Massa's ability to return to Formula One at the top of his game after the Brazilian made a u-turn on his decision to retire earlier this week.

Massa was drafted back into the team after Williams reached a deal with Mercedes to release Valtteri Bottas from his 2017 contract. He will partner rookie Lance Stroll at the team in what will be his 15th year in Formula One, but Williams is sure he is fully motivated to return.

"We are never going to put a driver in the car who we don't believe can deliver," Williams told Sky Sports. "As everyone saw even in his last race last year [in Abu Dhabi], he delivered for this team.

"He has lost none of his motivation. I know there's a lot of talk out there 'let the guy retire, leave him alone' -- he wants to come back. Little-known to me, I didn't actually realise that he didn't really want to retire and so I think Felipe is going to do a good job this year."

But Williams admits she initially felt bad about asking Massa to return just over a month after he had celebrated his retirement in Abu Dhabi.

"Bless him, Felipe had announced his retirement, we had a whole fanfare around it, and then to have to phone your ex-driver up and say 'would you mind coming out of retirement?' you feel quite bad about it," said Williams. "But I've never heard anyone so happy and excited, so it was a big relief for us."

His findings were:

The revenue system is skewed in favour of the already rich and powerful, to the extent that the smallest teams are struggling to survive and money is tight for about half the grid
There is a lack of competition on track
Television audience figures are dropping in many markets - although this is largely because of a switch to pay television, to make more money from TV rights deals
The longest-standing races are struggling to fund themselves and risk dropping off the calendar
The decision-making process is not working properly
Some significant business and sporting decisions have been made for solely financial reasons, disregarding other important factors, such as their effects on the sporting side
An acceptance that F1 has lost some of its appeal, particularly a sense of edge and drama and as an extreme driver challenge

Liberty Media, the incoming owner of Formula One auto racing, has signalled that it may put the brakes on the $100 million annual prize money bonus received by Ferrari, the biggest name in the series.

Ferrari is the only one of F1’s 11 teams which has competed in the championship since it launched in 1950 and in return it gets a plethora of financial and governance benefits. They include a guaranteed annual prize payment of around $100 million before the wheels of the renowned red cars even hit the asphalt.

Ferrari gets more prize money based on its finishing position in the standings but its $100 million alone is double the total received by the lowest-ranked team Manor which recently crashed into administration, the British equivalent of Chapter 11 bankruptcy.

In a bid to even out the field Liberty has suggested that Ferrari’s financial benefits could reverse and be redistributed amongst its rivals. Liberty’s theory is that a more financially balanced field would improve the spectacle of F1 which in recent years has been dominated by one team – reigning champions Mercedes. In turn Liberty believes this would boost Ferrari’s sponsorship takings and outweigh any loss of its bonus.

“If you’re Ferrari, you have enormous sponsorship revenue that goes directly to you. That’s going to be impacted more positively by great races. So thinking about balancing the team payments, so they’re a little more balanced and creates more fairness, has to be weighed, in Ferrari’s mind, I would expect, by the fact that creating a great platform helps our sponsorship revenue, too, so there’s give-and-take,” says Liberty’s chief executive Greg Maffei.

It isn’t clear how much of Ferrari’s bonus Liberty may eradicate but it is no idle threat as a window to do so is fast approaching. This comes at the end of 2020 with the expiry of the current contracts which commit the teams to race in F1. It remains to be seen whether Ferrari would be better off with less of a bonus but the signs suggest otherwise.

The sponsorship market across all sports has been getting increasingly tougher over the past five years as Williams deputy team boss Claire Williams explained to Forbes last year. “I talk to people that are trying to find sponsorships in different championships and to different rights holders and it’s tough,” she said. “I think the rise of social media hasn’t helped because there are so many different ways and means by which brands can get their messaging out there where you don’t have to pay millions to get it.”

This is reflected in the table below which shows that in 2015, the most recent year for which public financial data is available, sponsorship comprised an average of 31.6% of the teams’ budgets compared to 35% five years earlier. The gap has been more than filled by an increase in prize money which accelerated from a total of $659 million in 2010 to $903.8 million in 2015. It now comprises 35% of team budgets on average compared to 25% five years earlier.

Critics may disagree with Williams and say that the actual reason for the drop in sponsorship is the steady switch of F1 from free-to-air to pay television networks. The latter are prepared to pay significantly more than their free-to-air rivals in a bid to fuel subscriber numbers. This increased income falls to F1’s bottom line and the teams benefit through receiving prize money which is a share of the underlying profit of the series.

It explains is why the teams have not campaigned against the switch to pay TV services even though F1’s viewers have fallen 22.3% over the past five years to 400 million in 2015. There aren’t many businessmen who could turn a slump in customers into a bumper profit for his business and those of his key clients but F1’s chief executive Bernie Ecclestone is one of them.

This switch away from free-to-air can’t easily be undone as it would dramatically reduce the revenue under F1’s television rights agreements. So, as long as F1 continues its trend towards pay TV it is as good as inevitable that viewing figures will continue to fall. That’s not to say that F1 is in some way abnormal or negligent to its fans by being set on this direction. Quite the opposite in fact as some might say that F1 is late to the table since most major sports series largely left free-to-air behind many years ago.

In fact it is believed that the formation of Britain’s Premier League soccer championship way back in 1992 was driven by the promise of higher TV payments from pay TV network Sky Sports. By paying $290 million (£190 million), Sky beat the BBC and ITV to acquire the live and exclusive Premier League broadcasting rights for the UK and Ireland in a five-year deal. It took Britain’s highest-level football league off terrestrial and free-to-air TV for the first time whereas it still shows F1.

The bottom line is that against this backdrop the downward trend of viewers is inevitable which in turn depresses sponsorship values and makes it harder for teams to sell space on their cars, regardless of the competition from social media. Accordingly, it could be a huge risk for Ferrari to forego guaranteed prize money for the promise of greater sponsorship revenue if races are more exciting. In addition to the risk, the process of selling sponsorship comes with staffing costs for the team whereas the guaranteed prize money does not.

Then comes the question of whether races would actually be more exciting if the team payments were more balanced. It would reduce the risk that the minnows would hit the wall but the leaders could still outspend them in a bid for victory. Liberty says it has an answer for that.

Last month reports emerged that Liberty is considering introducing a budget cap with one unnamed source saying that “it makes no sense to have teams spending the better part of $400 million. That money is not doing anything good for fans. It is just wasted on competing on technology.” It may be hard to understand for Liberty, as it is new to the game, but it has forever been the norm in F1 and it’s not for want of trying.

On looking through the history books Liberty will find that F1 has repeatedly tried to implement a cap on team budgets even going so far as to attract new teams on the promise of one in 2009. The limit was set at $60 million and three new outfits joined on the basis of it. However, the plans fell apart and all of the teams have since collapsed with the latest being Manor. Ferrari itself opposed the plans and threatened to quit F1 if they were introduced.

F1’s leading lights weren’t deterred and just two years later Christian Horner, boss of the then-reigning champions Red Bull Racing, revealed to British newspaper the Guardian that plans to limit spending were still on the table. He told this author that the teams “agree with restricting activity but don’t cherry-pick ... let’s do a transparent once-and-for-all deal with this.” It is precisely what Mr Ecclestone did.

A much higher spending limit of $200 million was set and it was far from a stab in the dark. In 2012 the plans raced into the public domain and were well thought through. Mr Ecclestone said “I think there should be a maximum amount that the teams can spend on Formula 1 including the drivers. A ceiling, I don’t like the word cap. I say there should be an amount that you spend on Formula 1. You can spend it on the chassis or the drivers if you don’t mind. If they want to have bigger motorhomes or whatever they should do it but what we should be concerned with is reducing the need to spend to be competitive. Someone who starts a team shouldn’t be any more disadvantaged than somebody who has got an enormous budget.”

Two years later the budget cap plans were still under development with the age-old problem of how to police it coming to the fore. Mr Ecclestone even had a solution to that and revealed to Britain’s Express newspaper that “the plan under consideration is to give €1 million [$1.4 million] to any whistleblower whose knowledge is proved to be accurate. We will then say to the team that the following year you will lose three of the maximum points you have scored. Then let’s see if they want to cheat.”

Despite being well-formed, these plans too bit the dust, albeit more peacefully than the previous time. The end came in 2014 at the hands of F1’s decision-making body the Strategy Group. It comprises auto racing’s governing body the Fédération Internationale de l’Automobile (FIA), F1’s commercial rights-holder and the six leading teams which include Ferrari.

It isn’t in the interest of the top teams to cap spending as they have got the resources to invest more in a bid for victory. It can make all the difference in F1 as there is a close correlation between the level of investment and performance. As Ferrari is one of F1’s biggest spenders it’s no surprise that it reacted angrily to Liberty’s plans to cap costs.

“I don’t believe a budget cap can work,” said Ferrari chief executive Sergio Marchionne last month. “Despite all these interventions by the FIA to try and limit spending, [the teams] have found other ways to spend...If I look at the last four or five years, we haven’t saved a Euro. We have simply redistributed our spending to other areas.”

So the chances of a budget cap seem slim but Liberty says it has other tricks up its sleeve to compensate by boosting revenue. In an article last month in the Financial Times another unnamed source told the newspaper that Liberty plans to overhaul F1 “including selling race naming rights.” The source added that Liberty intends to turn each international Grand Prix into a week of events. It reflects comments from F1’s chairman Chase Carey which were reported by motoring magazine Autoweek in September.

As Autoweek noted, the idea of making a Grand Prix more of a festival is reminiscent of electric race series Formula E which is minority owned by broadcaster Discovery Communications and Liberty Media’s sister company Liberty Global. Formula E races are famous for their music and party-like atmosphere which has helped to engage fans but has also burned up money.

The latest financial statements for Formula E’s holding company show that in the year to 31 July 2015 it made a $68.4 million net loss on revenue of just $23.1 million. In contrast, F1’s underlying profit hit $464 million in 2015 on revenue of $1.7 billion.

Although it may not seem like it, “selling race naming rights” is perhaps even more risky. This year 7 of F1’s 20 races have title sponsors so F1 is already “selling race naming rights”. Accordingly, the FT was presumably referring to something else. The most likely option seems to be selling the naming rights to the series itself as F1’s American rivals NASCAR and IndyCar do. They may well be models as Liberty itself has little experience of sports management and it has slotted F1 alongside the most similar investments in its portfolio. They include stakes in the Atlanta Braves Major League Baseball (MLB) team and event promoter Live Nation.

The downside of having a series sponsor is that other brands, especially those which sponsor the races, could be deterred by brand clash with it. As Mr Ecclestone told Forbes in 2012 “I would never do a title sponsorship for F1 because it screws up every race. It would be very restrictive. It would certainly stop all the promoters or us doing a race title sponsorship.”

It is certain that Liberty’s management has ideas but what it lacks is experience of F1 and it doesn’t try to hide it. In his first call with analysts after the F1 takeover was announced in September, Mr Maffei revealed “I’ve gotten to know the business better, I certainly didn’t know it at all when we started this process. But it’s been a long enough process, I’ve learned a little bit along the way.”

In contrast, as Forbes has reported, the 86 year-old Mr Ecclestone’s biggest asset is the trust and experience he has built up over decades in F1. The risk of cutting Ferrari’s bonus and forcing a budget cap on it is that it could exit F1 which would almost certainly do irreparable damage to the series. Over the years Mr Ecclestone has carefully nurtured the relationship with the Italian marque and instead of cutting its benefits has offered it a little more in recognition of its service to the series.