GP2 splutters but motors on
16/09/2008 With F1 making massive losses due to millions of dollars of debt repayments one bright spot in motorsport finance over the past few years has been GP2 which made a profit of £135,000 in 2006. It may not sound like much but considering that A1GP lost £100 million in its first year and Grand Prix Masters went bust , it's not bad. However even this has now hit reverse. According to an article in the Express newspaper by Pitpass' business reporters Christian Sylt and Caroline Reid, GP2 Motorsport, the Kent-based company which runs the series, made a £55,000 loss last year with revenues crashing 20% to £9 million. Not good news for CVC, the finance firm which owns F1 and bought GP2 last August. Fortunately the reason for GP2's downturn isn't one which is likely to be long-term. The lifespan of the GP2 car is three years and after launching in 2005, this was coming to an end last year. As a result of this, in 2007 the organisers sold fewer new cars and spare parts than they did the previous year when they were also helped by one-off sales to new team Fisichella Motor Sport. During 2007, GP2 still paid a £200,000 dividend which is thought to have gone to Bruno Michel, the company's former owner and right hand man to Renault F1 boss Flavio Briatore. Compared to F1, GP2 is still in a good position to weather an economic storm. Its total costs for 2007 were just £9 million - far lower than the hundreds of millions spent each year on running F1. It also has only 10 staff whereas its bigger brother employs 239 people. With the teams needing to buy the new car this year GP2's revenues and profits should soar but with the debt acting like a ball and chain around F1's neck, the same cannot be said for its bigger brother. |
