Thursday, July 3, 2014

Caterham. Funding a project... Even successful businessmen get this wrong.

Today, I see that Caterham F1 has been sold.

I'm not an F1 insider, and I don't know Tony Fernandes. I have worked for Lotus engineering as a contractor in Malaysia.
I have added a few links and quotes after my thoughts so you can see where I'm coming from.

Tony is a very successful businessman. I assume he (or a team of professionals) does a business plan before entering a new business. He has access to accountants, and industry professionals.

IMO, Tony entered F1 in the hope of using it to promote his other business interests. Air Asia is the Ryan Air of Asia, and Tony had shown an interest in becoming involved with Group Lotus (Cars, Engineering services, blah blah).

In 2010 F1 proposed a cost cap of £40million.

The cost cap never happened. Tony ended up buying Caterham cars, and renaming his team.

The cost for all this was high. The return was obviously (at least in F1 terms) disappointing.

So does this make Tony an incompetent? No, very obviously not. However, Caterham F1 obviously hasn't met his expectations.

I have annoyed many people with my Motorsport Uni plan. Would it cost a lot?  Would it make money... Yes... and I think so...

Do I have the track record of Tony?... Absolutely not.

However, this project has been my baby for many years. I refuse to give up on it. Given the resources, and I'm confident I can deliver.

My plan has some parallels with Tony's.

I would like to get involved with Group Lotus. I would like to get involved with Motorsport.

Instead of using it (Motorsport) as a promotional tool, I would like to use it to support an educational project.

I was told by many people in Group Lotus that they NEVER make money with 'Training'.

Maybe they could just become vendors.

Phoenix University in the USA, presently has about 1/3million students. It has a healthy revenue stream, and is run at a profit. (The polar opposite of Group Lotus)

The University would have to be ethically run and monitored in order to be approved and its clients able to access government grants. Failure to meet government criteria effectively kills the revenue stream.

Article about Phoenix University.

DRB-Hicom now own Lotus. They have an approved University. The are not scared of entering the 'Training' arena.

This project has the potential to be global. Governments world wide finance and support education.

I hope that the new Chairman and CEO of Group Lotus look at my proposal with fresh eyes.

It could be vehicle that drives Lotus and its partners to new commercially sustainable heights.

I'd like to be a success. I'd like this project to be a success. Given the funding and support, I'm sure that this project can be a real game changer.

DRB-Hicom should give this serious consideration. Nothing is guaranteed in this life (other than death), but I honestly believe this could be one of the best investments you could make.

Education is a core business for DRB Hicom.

The Telegraph (UK) made this statement.

Fernandes had originally been seeking around £350million, but it is thought that Formula One's slowest team was sold for around one-tenth of that price. Sources suggested that an offer also fell through after the Monaco Grand Prix, when the team were dealt a severe blow by Marussia's ninth place.

 Tony Fernandes

SKY SPORTS made this statement:

Back then, they were known as Team Lotus and if Fernandes was already starting to take a dim view of the sport, those feelings would have intensified when he became embroiled in a court battle for the right to use the Lotus name.  
Rather farcically, two teams bore the Norfolk marque's name in 2011 after Fernandes' plans to buy Lotus outright were thwarted when owners Proton instead appointed Dany Bahar, formerly a marketing boss at Red Bull and Ferrari, to take charge.

The Guardian wrote:

After four and a half years on the Formula One grid without a point to their name, and after spending more than £250m on the organisation, Fernandes has sold Caterham to a consortium of Swiss and Middle Eastern investors.

In 2009 wrote:

Formula One racing’s governing body, the FIA, has revised its budget cap plans for 2010. Teams signing up for the optional cap must limit their spending to £40 million per year (£10 million higher than originally proposed) in exchange for greater technical freedom. This will not include driver salaries or, for 2010 only, engine costs.

Thirteen teams will be accepted for next year’s championship and all must apply by May 29, 2009, stating whether they wish to compete under the budget cap or not. New constructors will be eligible for a participation fee and assistance with travel expenses from commercial rights holder Formula One Management.

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