OCTOBER 12, 1998
So where does that leave Tom?
THE loss of Pedro Diniz was not unexpected but nonetheless comes as a blow to the ambitions of Arrows boss Tom Walkinshaw as he prepares for the 1999 season. His task has not been helped by the financial problems of his main sponsor Danka, which agreed a two-year deal with Tom at the start of 1997.
In the last few days Danka shares have tumbled to just $0.75 compared to their peak in 1997 of over $13. The company, which has considerable borrowing as a result of its takeover of Eastman Kodak, said that it was likely to breach banking covenants. In the circumstances it is most unlikely that the Arrows sponsorship can continue. Zepter remains a solid backer but the team's commercial department is hard at work trying to find more money for next year.
The team has the additional problem of heavy debts which resulted from the relationship with John Barnard earlier this year. This, of course, was always going to be an expensive year for Walkinshaw with the set-up costs of an engine operation and Barnard's demands to bring the team up to the correct level in F1. That work has now been done and with income from TV revenues and some sponsorship from a paying second driver the team will be able to survive although a lot more money will be needed for real progress to be made.
Walkinshaw is understood to be talking to British American Tobacco and its offshoots about possible deals which will help the tobacco company out of the branding mess in which it currently finds itself but the team is also working on other big sponsorships as there is no shortage of space on the car to fill.
Although there are some who are already writing Walkinshaw off it should be remembered that Tom is at his most dangerous when his back is to the wall and that there is not much wrong with the Arrows A19. Additional research and development work will improve the package and the V10 engine is not only increasingly powerful but will also be much more reliable in its second year of development.
In recent days we have heard a variety of rumors designed to destabilize Walkinshaw's position, hinting that Mika Salo may quit the team to join BAR. Tom has already taken up Salo's option and while there may be a buyout clause in it, this will be at least $5m and with Salo needing to be paid as well any team that wants him will have to come up with at least $7m. There have also been suggestions that Salo will be part of the Honda team in the year 2000. This is quite likely as Mika has previously worked with the principal members of the Honda operation when they were all at Tyrrell.
It looks likely, therefore, that Salo will stay and will be partnered by Spaniard Pedro de la Rosa, who has a sizeable budget available from the Spanish oil company Repsol. This is rumored to be in the region of $8m which will certainly help Walkinshaw's cause.
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