JANUARY 25, 1999
More details on Arrows sale
THERE continues to be considerable confusion over the details of the sale of Arrows Grand Prix to a new consortium and the form which the team will take this season. The most recent Arrows press release talked of the team being valued at $175m but it seems that the actual income from the sale was probably only in the region of $120m as it can safely be assumed that Tom Walkinshaw's 25% share in the consortium will have been paid for in people, machinery and facilities and 5% of the shares have been allocated to the staff.
Of the $120m, we hear that at least $24m has been spent buying out former owner Jackie Oliver and his partners. Exactly who was involved in this deal is mysterious but we believe that in addition to Oliver, his former Arrows partner Alan Rees and their respective ex-wives were shareholders and each is said to have received around $6m. It is unclear whether Walkinshaw was paid for the 51% share of the team he controlled or whether he traded these shares for equity in the new consortium, but it is fair to conclude that with shares worth around $25m in the old company, control of TWR Engines and the Leafield facilities, Walkinshaw will have expected payment.
In addition it must be noted that the team ended last year with unpaid bills which we hear were as high as $24m. This may seem like a lot but it would not be an outrageous figure given that Arrows bought and funded its own engine program and invested heavily in chassis technology and staff. All this may mean that as much as $75m of the money invested has already been spent, which would leave around $45m to run the team this year. And that assumes that the sale was based on cash payments rather than the promise of income.
None of these figures account for possible sponsorship deals and we believe that Arrows marketing men are now busy looking for money - which is not an easy task. It is possible that Arrows may get backing from British American Tobacco if BAR is not allowed to run two liveries and there is likely to be an injection of around $7m from Repsol if the team hires PedroÊde la Rosa.