NOVEMBER 12, 2004
It's now or never for Jaguar Racing
Negotiations are in their final stages for a Red Bull buyout of Jaguar Racing. The sale must be finished by Monday in order for the team to enter next year's World Championship. It is rumoured that the deal will cost Red Bull a nominal sum but will remove a major liability from the Ford Motor Company's books. The firm has already set aside money to be used to pay for the closure of Jaguar Racing and Cosworth Racing but obviously it would be better for Ford if the team was sold, both from a financial point of view and from a public relations viewpoint. If the company does not do the deal with Red Bull as many as 300 people will be out of work. The team will need a sizeable budget for the next few years but as Ford was only contributing $60m this year to the programme (and most of that was going straight to Cosworth to pay for the engines) the money necessary may not be as high as some have speculated. However if the team wishes to move up the grids more money will be needed. It may be that Red Bull will look at 2005 as a building year, putting in place longer-term plans and so the costs will be kept down, particularly if the team is run by the same management as for the last two years which has done a very good on a minimal budget. The team ran this year on $138m and made a small profit. The money not supplied by Ford came from sponsorships and from the TV money which comes from FOM.
This is a small budget compared to Renault, which had a budget of about $240m but it is well in excess of the small teams like Minardi and Jordan which ran with less then $48m.
All the current dealings are covered by confidentiality agreements but the word is that a decision is close.
It is a similar story at Jordan where Arden Motorsport's Christian Horner is believed to be close to a deal to take over the team. There is said to be a second bidder but we have yet to find any evidence that this is serious.
If Jaguar Racing is saved the team is likely to run Christian Klien and Vitantonio Liuzzi. The team has been working to build a development car which is due to begin testing shortly.
Red Bull was previously the owner of the Sauber team but sold to Credit Suisse in 2001 after a disagreement with Peter Sauber over drivers. At the time Sauber was championing the cause of Kimi Raikkonen while Red Bull wanted Enrique Bernoldi. History relates that Sauber was right.
It is anticipated that a deal will soon be announced that Cosworth Racing has been sold to a consortium headed by Champ Car series owner Kevin Kalkhoven and some of his partners. The deal is expected to include a plan to continue to build F1 engines although it is not clear how much money will go into engine development. Cosworth's engine development budget in recent years has only been around $75m, which has not been enough to stay competitive with the bigger operations in F1.
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