APRIL 5, 1999
Arrows and Virgin
ARROWS boss Prince Malik ado Ibrahim - who is now officially the commercial director as well - last week announced a small sponsorship deal with Virgin Records. Virgin says it wants to be associated with the Prince's pioneering attitude and maverick management style to advertise its new website "the-raft.com". It will also use the F1 sponsorship to offer corporate hospitality to some of its corporate clients and its VIP artists, which include Mick Jagger, Phil Collins, David Bowie and Tina Turner.
The deal with Arrows is not believed to be worth a great deal of money, although it may be that Arrows is hoping that once Virgin gets a taste for Grand Prix racing it will increase its involvement in the sport.
Virgin Records is unrelated to Richard Branson's Virgin Group - which now includes airlines, train services, retirement funds, record stores, drinks companies and even markets condoms. Branson founded Virgin Records in 1973 and it was the foundation for his later successes, but he sold the company in 1992 for $960m to the giant EMI organization. Branson is now in competition with his original record company having established a new record label called V2 Music.
While the deal will not do much for the Arrows budget it will help the Prince's credibility and he continues to say that there will be "a big surprise" at the San Marino Grand Prix at the end of the month.
The Prince claims that he is trying to attract a new type of sponsor to F1 and hopes to be able to find money in Africa, the Middle East and the United States of America and his recent comment that the next Michael Schumacher might be black has led to speculation that he will try to put a black racing driver in the car as soon as possible. The Anglo-Danish Formula 3000 racer Jason Watt is the only black driver in action in top level international racing at the moment.
If the Prince's San Marino surprise is a sponsorship deal it makes no sense at all to have missed the first two races of the season. One possibility that should not be overlooked is that he could announce plans for the team to be floated on the LondonĘStock Exchange. If that happened it would be the first F1 team to go public.
Together Malik and his partner Morgan Grenfell Private Equity Ltd. own 70% of the team. When the deal was announced the Prince said the team was valued at $175m but, judging by the state of Arrows in Australia, not much money was invested as a result of the deal. It may be that this original deal was designed simply to put a price tag on the team in preparation for a flotation and that Prince Malik and MGPE only invested a small amount - to buy out other shareholders, pay debts and keep the team running - and now intend to pay for the purchase with the profits raised from the public sale of shares. Such a deal would leave Tom Walkinshaw with both money and control of the team - which is what he set out to achieve.
MGPE, it should be noted, is a venture capitalist company but its speciality is taking small companies to the stock markets and profiting from the flotations.
|Print News Story|