What £116 million will get you in Formula 1: Williams F1 team announces results
The Williams F1 team saw an increase in income to £116.
The Williams F1 team saw an increase in income to £116.7 million in the year ending 31 December 2016 and even made a profit of £12.4m, according to its financial results published today.
The Williams team is the only Grand Prix outfit listed on the stock market and so is obliged to make public its financial results. Were Mercedes, Red Bull or Ferrari to do likewise, the headline number would be at least double the £116m figure and in some cases higher.
That gulf in spend is also reflected on the race track this year with the top three teams finishing well clear of Williams as best of the rest in Melbourne two weeks ago. It's a long season and Williams has put in place significant personnel changes to try to boost competitiveness, such as replacing Pat Symonds with Paddy Lowe as technical director and replacing several heads of department.
Teams had significant outlay from 2016 to 2017 with R&D for an all new set of Formula 1 regulations, which certainly ate into the cash flows. Costs are far higher in F1 than they need to be and one of the key objectives of the new management team at Formula 1 is to work with the teams and the FIA to reduce them, so a team like Williams can be fully sustainable and less reliant on sponsors than today. The team is celebrating 40 years in Grand Prix racing this year and it's been a roller-coaster ride at times.
Williams managed to finish 5th in the 2016 Constructors' championship with that budget, a disappointing drop down from third place in the previous two seasons. This was partly because the chassis was not good enough - the team was beaten to fourth by Force India using the same Mercedes engine - and partly because Ferrari and Red Bull were both able to consolidate their performance in 2016, where each had been wayward in previous years.
This year the team has the financial support of the Stroll family, with Lance Stroll coming in as a debutant to drive alongside Felipe Massa. While Williams will have been obliged to pay Massa an uplifted fee to tempt him out of retirement, Stroll is contributing the budget. He also paid a multi million sum last year for a test programme, using a two year old Williams Mercedes hybrid car as permitted in the F1 rules. This helped to make up the funds on the F1 side.
Although Massa showed that the Williams was best of the rest behind the top three teams in Australia, it will be challenging with that driver line up for Williams to stay in 5th place in the championship, although the early signs are that their two main rivals for that slot, McLaren and Renault, are not at the level of competitiveness expected this year, especially not McLaren.
Williams shareholders will be a heartened by the boost in earnings from Williams Advanced Engineering, which seeks to exploit F1 technology for other purposes outside of Grand Prix racing. It enjoyed a 74% increase in revenue, thanks to expertise in battery and EV technology as well as lightweight materials, aerodynamic consultancy and other technologies.
Commenting on the numbers, CEO Mike O'Driscoll, who deserves immense credit for stabilising Williams as a business in recent years, noted that the new ownership of F1 under Liberty Media gives significant cause for optimism going forward about the F1 business.
This is on the assumption that Liberty's F1 management team will achieve three key objectives with regard to Formula 1 in the coming years; reduce costs, increase the revenues and share the revenues more fairly among the teams than under Bernie Ecclestone.
“Our 2016 financial results represent continued improvement, with strong revenue growth across both Formula One and Advanced Engineering," said O'Driscoll.
"Following a complete restructuring of our business over the previous two years, both operationally and financially, we made further gains in 2016. Our Formula One division continued to operate profitably, despite enormous levels of competitive spending in what is arguably sport’s toughest financial environment. Williams Advanced Engineering, although still a developing business, continues to make excellent progress.
“Our Formula One team achieved fifth place in the Constructors’ Championship in 2016, following successive third place finishes the previous two years. Commercial rights income is paid a year in arrears, and these accounts reflect our third place in the 2015 Constructors’ Championship. We have recently made significant new appointments to our technical team, in our push to improve on-track performance and drive Williams Martini Racing to the front of the grid. Our team continues to attract support from some of the world’s leading companies and brands, and we are very optimistic about the overall potential for the sport, under Liberty Media’s stewardship."
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