MAY 12, 1997
Changes coming at Benetton
The team has a big problem because it has failed to produce results since the departure of Michael Schumacher at the end of 1995. The team's sponsor Japan Tobacco - which owns the Mild Seven cigarette brand - is losing patience. The contract runs until the end of 1998 but we understand that it includes performance clauses which reduce the money JT has to pay if Benetton does not win races.
This is a big problem for Briatore because with Renault pulling out of F1 at the end of the year, he is going to lose his free engine supply and needs to find $20m to pay for a supply of Mecachrome (nee Renault) V10 engines next season. There is an agreement in principal between Mecachrome and Benetton but it will not be confirmed until the financial details are sorted out. If this is not done soon other teams will start to bid for the Mecachrome deal, which could leave the Benetton team is deep trouble. Briatore is trying to find more sponsorship but without any good results this is not easy and the Benetton Family seems to have told him that he cannot rely on them for more money.
Such are the problems that Benetton is believed to be considering either selling the entire team - with a price tag of about $50m - or selling a significant shareholding to someone with the money to put the team back on the right track.
This would not be a new step for Benetton which sold 35% of the shares in the team to Tom Walkinshaw in 1991. Tom revamped the operation and turned it into a winning force. He later moved to Ligier because the Benetton Family would not let him take over the financial control of the team.
Finding a minority buyer who is serious about the F1 business will not be easy. There have been persistent rumors in recent weeks that David Richards of Prodrive - which runs the Subaru rally team - is talking to the Benettons, and there have also been suggestions that Porsche and Audi have both shown interest in the team.
The problem in the meantime is that decisions need to be made before Mecachrome does a deal with a rival team.