MARCH 6, 2000
Arrows and Orange
TOM WALKINSHAW's Arrows team has announced a range of sponsorship deals which would appear to have solved its immediate financial problems. The major deal is with the British mobile phone operator Orange and, according to the team's press release, this is for three years and is worth $110m. The team will be known as Orange Arrows.
In addition there is support from a variety of Dutch companies, notably United Pan-Europe Communications (UPC) which will be using its "chello" brand name, from the Internet company Lost Boys and from energy drink Enorm. These three deals all seem to be linked to driver Jos Verstappen while Pedro de la Rosa's drive has been secured thanks to his backing from the Spanish oil company Repsol YPF.
In addition Arrows has landed backing from the bookmaking company Coral International, which has just launched an online gambling service called Eurobet. Coral is owned by Walkinshaw's Arrows partner Morgan Grenfell Private Equity.
The influx of money is good news for the Leafield team and should help Walkinshaw secure its financial future after a very rocky period.
The sheer scale of the deal has taken some F1 people by surprise given the team's lack of performance in recent seasons and the fact that the sponsorship was not concluded until a few days ago. Everyone involved in the deal has agreed to a confidentiality agreement and so the only figures available are the official ones but the circumstances would seem to suggest that Orange should have got a much cheaper deal.
The most curious aspect of the sponsorship is that the Orange company is currently for sale and a long-term investment of this scale was not expected because the current owners of the company have nothing to gain from it. Orange was created by the Hong Kong conglomerate Hutchison Wampoa. It was sold last autumn to the German telecommunications and engineering company Mannesmann. Just before Christmas, however, Mannesmann became the target of a hostile takeover bid from Orange's British rival Vodaphone AirTouch and as part of the battle Vodaphone pledged to sell Orange if the bid was successful. All this has yet to be settled as the European Commission has not yet decided if the takeover can go ahead. This has not stopped rival telephone companies preparing to bid for Orange. These include France Telecom, Japan's NTT and Spain's Telefonica.
Thus it is a strange time for Orange to launch a three-year sponsorship deal and it is being assumed in F1 circles that the deal is actually a one year deal with options for the future. A deal with France Telecom would suit Walkinshaw nicely as he continues his campaign to land a factory engine deal from Renault. Both companies are still under the influence of the French government although they have, in theory at least, been privatized.
Whatever the details Walkinshaw was upbeat at the launch of the Orange sponsorship.
"I will be very surprised if we do not finish in the top five of the constructors' championship this year," he said. "Arrows will be one of the best-funded teams in Formula 1 and that's what you need to compete. If you are going to do the development required it costs money. This will enable us to apply all our engineering expertise to delivering the right results. It's a huge commitment on behalf of Orange and we will work hard to make sure they get a return on it.
"We will establish Arrows as a top-five team within the next 24 months," he added.
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