FEBRUARY 14, 2000
The Arrows is quick but money is still short
But while there is plenty of glowing publicity about as a result of the test, Arrows is still facing a major shortfall in its 2000 budget, despite money coming from Pedro de la Rosa's sponsor Repsol YPF and from Jos Verstappen's new backer UPC (United Pan-Europe Communications NV).
UPC, which is believed to be paying around $7.5m this year, is a Dutch-based cable TV network with around 10m subscribers on its networks in 12 European countries and Israel. It is headquartered in Amsterdam - hence the Verstappen connection - but is a subsidiary of the Denver-based UnitedGlobalCom Inc. The UPC deal will be announced at a launch in Amsterdam on February 24.
The company hopes to use Grand Prix racing to build up the brand while it extends its fibre-optic cable network with the aim of bringing the fullest benefits of the digital revolution to customers across Europe. These services will include high-speed Internet access and telephone services for both businesses and private individuals in addition to its TV services. The networks in Holland, Belgium, Austria and Israel are already in place and work is progressing in France and Norway. The company currently has sales of around $250m a year but these are increasing rapidly.
Although it had been thought that UPC was part of the consortium trying to buy the Arrows team from Walkinshaw, our sources say that this is currently not the case and that the bidders are still trying to raise more money in order to buy control of the team. We hear that Walkinshaw and his partners - the venture capital company Morgan Grenfell Private Equity Ltd. - are currently not willing to sell enough shares between them to give the consortium immediate control. Without a full operating budget, however, Arrows needs to pick up more sponsorship or face the possibility of going into further debt.
There are likely to be major developments in the weeks ahead - either in terms of new owners or new sponsors.