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The A1 Grand Prix series seems to be out of the 2010 sporting calendar with high profile cancellation of races in Australia, Malaysia, China, South Africa and Holland. TheSportsCampus.com explores the dogged past of this "World Cup of Motorsports" series and the events leading upto this debacle.
The troubles for the nation-versus-nation A1 GP series began in June 2009 when A1 Grand Prix Operations Ltd., the A1 Holdings subsidiary that manages its day-to-day operations, went into liquidation after cash-flow problems and reported accumulated debts of nearly $162 million.
This was followed by doubts on the commencement of the 2009 season after rumours surfaced that engine suppliers Ferrari would pull out over non-payments of dues. Current chairman Tony Teixeira's restructuring announcements didn't help either as A1GP failed to show up to their events, notably dishonoring bookings at Australia, China and Malaysia - severely denting all confidence in the franchise.
Soon more bad news followed as A1 Great Britain and Netherlands teams declared insolvency and were put into administration. With their troubles reaching epic proportions, it would seem wise for the A1GP organisers to scrap any thoughts of resurrecting the 2009-10 season in favour of concentrating on the re-launch of the troubled motorsport series in 2010-11.When we started looking at the causes of this debacle, we saw a visible trend in a number of major changes that the franchise had gone through in it's short life.
- First, a change in ownership within one year of launching the series. After it's first season in 2005, Sheikh Maktoum Hasher Maktoum Al Maktoum sold the majority ownership (80%) to RAB Capital in Dec 2006.
- Second, the sale of ownership was believed to be grossly overvalued. RAB bought Sheikh Maktoum's stake for a whooping $200 million. This money was shelled out despite A1GP reporting a $240 million loss in its first season.
- Third, the new management failed to attract significant financing and sponsorships for the events putting a further dent on the profitability of their acquisition.
- Fourth, when RAB Capital announced that its fund had lost 48% of its value in one year's time with most of this loss attributed to the A1GP investment, the pressure to divest from A1GP would have been immense on the fund.
Recently A1 Team Australia boss Alan Jones has suggested that "it is common knowledge that Mr. Teixeira bought RAB Capital out from A1GP" before the current season. However, A1GP events carried substantial RAB Capital branding. So in all honesty, we are as puzzled as anyone on the current shareholding pattern of A1GP.
To its credit, the A1GP series in a span of 5 seasons brought out refreshing innovations like the Sprint race, rolling starts, PowerBoost etc. In the last 4 seasons, 29 teams participated including 9 teams from Asia. Some drivers are today on the Formula One circuit - Sebastian Buemi, Vitantonio Luizi and Adrian Sutil to name a few.
The latest new emanating from the A1GP camp was that instead of liquidating the organization as a whole and selling the parts, administrators would look to get a better deal for creditors by trying to find a buyer for the series itself, giving hope that the A1GP series is not dead by any stretch of the imagination, and we could see it back on the tracks in a new avatar sometime in the future.
Photograph Copyright: Zvoort.nl
