APRIL 24, 2008
F1's deal of the century
The word in the Formula 1 paddock in Barcelona is that things are coming to a head over the future of the Super Aguri F1 team. Magma International now seems to have reached the end of the road with the Dubai Investment Corporation (DIC) and is looking for an alternative arrangement. The key point is that the team needs to stay in operation in order to guarantee that it continues to be paid benefits, a key source of revenue for any F1 team these days. There are questions of exactly what happens because of the arguments over whether or not there is a Concorde Agreement, but the most important point seems to us to be whether or not a potential buyer is acceptable to the Honda Motor Corporation. Honda is a high profile company and it is clear that the Japanese need to be sure where the money is coming from, and who is behind the deal. They do not wish to be involved with anyone who might risk any kind of scandal.
For the right company, however, Super Aguri F1 is an extraordinary opportunity to get into F1, as the price tag attached to the deal is more than reasonable as Honda has been working hard in recent months to keep the team alive, both because it wants to be seen to be supporting Aguri Suzuki and Takuma Sato, but also because it can benefit from technical input from a second team, particularly when it comes to engine development. The deal on offer would provide a solid partnership with Honda, a good foundation for any new team netering F1.
The problems for Magma seem to stem from the uncertainties surrounding the sport, as opposed to the team, although the two are related to a lesser or greater extent. There is the question of the Concorde Agreement and the ongoing problem of the arbitration case against Super Aguri, and there is also the instability that has resulted from the Mosley Scandal as the sport will not know for another five weeks who will be running the FIA. It is unlikely that any Concorde Agreement will be concluded until that is known.
The worry for Super Aguri is that no-one will be willing to step forward and take the risk.
"This is the bargain of the century in F1," said someone who is close to the deal.
If the team goes to the wall Honda will lose all the money that has been lent to the team. Super Aguri has few real assets beyond the F1 entry as the facilities belong to Magma. The other value is in the fact that the team of people at Super Aguri produce a decent product with the money they have available to them. This will all go to waste if a deal cannot be struck.
And time seems to be running out.