JUNE 22, 2005
How BMW got a cheap deal over Sauber
Credit Suisse is selling its shareholding in the Sauber team over a three-year period to BMW. In the same period, Credit Suisse will remain an official partner of the team. That would seem to suggest that the price of the purchase is going to be fairly low as the Swiss bank will probably be getting free advertising for three years. Given that the bank was putting in around $17m a year, it is fair to say that such a situation would be worth around $50m to the bank, which means that the actual sale price could be next to nothing.
Credit Suisse owned 63.25% of the shares in the team. Peter Sauber retained the rest and held all the voting shares so he will have had to have been bought out by BMW and we believe that he will have had much more money than Credit Suisse, at least in terms of cash, although his deal is sure to phased as well, to spread the purchase cost over a number of years. The opportunity to acquire the team cheaply was presumably the primary motivation in the purchase for BMW because at the moment there is little logic in paying out huge sums of money at a time when F1 is in complete crisis. There will need to be considerable investment in the team's facilities in Hinwil and in a facility in Munich, which we understand has been ready and waiting for some time, but with BMW now in a position not to have to fund Williams as well, this will mean that the money that was going to Grove will now go into Sauber.
Although BMW is saying that it is the first time that the company has entered F1 in its own right, the company did run a works Formula 2 programme in the 1960s and the cars were often raced in F1 events. The decision to enter F1 is a vote of confidence in the sport at a time when there is much chaos and the news also strengthens the position of the automobile manufacturers in F1.
"This decision is a strong, long-term affirmation of BMW's commitment to Formula 1," says BMW's Burkhard Goeschl. "We anticipate that F1 will emerge strengthened from the current restructuring phase and that it will continue to represent the top echelon of motor sport for the future as well. For BMW, Formula 1 is thus the right platform for demonstrating our competence as a car manufacturer. We want to discuss the future options together with Williams F1 in order to find the right way forward for both sides. We do not expect instant success from the new constellation, but we are convinced that we have chosen the right path for the long term."
BMW will continue its commitment to touring car racing - both in the new World Touring Car Championship and in leading individual events such as 24-hour races. Formula BMW with its four series in Asia, Britain, Germany and North America will also continue.
Peter Sauber says that the BMW is "an ideal solution" because it will improve the team's performance and safeguard the jobs of the people at Hinwil.
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