DECEMBER 20, 1999
Arrows reveals new management
ARROWS is to have a completely new management structure and has signed up a pair of professional managers to look after the administration and financial side of the business. The racing team remains an independent operation run by experienced Formula 1 team manager Steve Nielsen while the technical departments remain under the control of Mike╩Coughlan.
The new chief executive of the team will be Keith Shepherd and his chief financial officer will be Chris Hicks. The pair have no motor racing experience but made their name in 1992 when they masterminded the $30m purchase of Rank╩Screen╩Advertising from the Rank Organization with backing from venture capitalists Shroder Ventures. The company was renamed Cinema Media and was quickly built up to gain control of 80% of the cinema advertising in the UK. In July 1996 Cinema Media was sold to Carlton Communications for $85m.
The pair will head Arrows Autosport Ltd., the holding company of Arrows Grand Prix International. The move is a clear indication that Tom Walkinshaw's partner in the team Morgan Grenfell Private Equity Ltd. wants to build up the team into an organization which can then be floated or sold. MGPE is still looking to reduce its involvement in the team to around 15% so as to avoid any clashes of interest with its new role as Bernie Ecclestone's partner in Formula One Holdings. MGPE already owns 12.5% of FOH and has an option to buy another 37.5%. This option runs until midnight on December 31 and MGPE's Scott Lanphere is currently working hard to find the necessary $975m in the time available.
The new management will allow team boss Walkinshaw to concentrate on other aspects of his TWR empire - not to mention his interests in rugby football. Tom has been in the news in recent weeks as he leads an attempt to create a "super╩league" in the sport in Britain, despite opposition from the Rugby Football Union, the governing body of the sport.
It is worth pointing out that Walkinshaw's business empire includes the Autonova AB factory in Sweden where he will shortly begin producing "Renault Sport" versions of the Clio model. The factory has the capacity to produce 40,000 cars a year and there are a string of indications that this will result in Arrows getting a factory Renault engine supply in 2001. Although there are suggestions that Benetton is in line for the deal we have recently heard that Flavio Briatore - who has a remarkable amount of influence at Renault Sport - is still a TWR shareholder and so would profit from an Arrows-Renault╩deal.
The team this week confirmed that it has renewed its deal with the Spanish oil company Repsol (now known as Repsol YPF after its takeover of the Argentine oil company Yacimientos Petroliferos Fiscales) and that it has taken up its option on Pedro╩de╩la Rosa. The deal is believed to be worth about $7.5m to the team.
The second seat remains open. Tora Takagi has been told that he is not wanted next year and current speculation suggests that the drive will go to Jos Verstappen who has $7.5m to spend. He has driven for the team before and knows a number of the race team from his time at Honda Racing Developments.
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