Virgin on lookout for new directors
09/01/2010 A head-hunting firm operating on behalf of the recently-launched Virgin Racing team is understood to have contacted at least one senior motorsport industry executive about taking a post as non-executive director of the team. The news comes to Pitpass courtesy of our business editor Chris Sylt and one can only wonder as to what is the motivation behind the team's desire to make such appointments. Most F1 teams, and even the sport's commercial rights-holder itself, do not have a management structure involving a deputy chief executive and chairman, let alone non-executive directors. Indeed, the very concept of an F1 team having non-executive directors seems a little odd. In a nutshell, non-executive directors are not involved in the day-to-day running of a business but monitor the activity of its executives and contribute to the development of strategy. Thus their appointment is certainly positive from the perspective of transparency but clearly issues such as strategy and direction of a company are not really relevant for an F1 team since their main purpose is to compete in the World Championship. As one of the four new teams due to enter F1 this year Virgin Racing itself has little experience in the sport and non-executive directors could give the team valuable assistance. It has already hired as its chairman Etienne de Villiers who was a former director of F1's commercial rights-holder and also executive chairman of the ATP tennis tour. Non-executive directors may also point the team in the right direction when it comes to seeking sponsors and ultimately this could make the difference between whether or not the team gets to Bahrain. "This team will be the lowest-budget team in Formula 1. It will run under the £40m per year that was being set by F1," said Virgin's founder Richard Branson at the team's launch last month. According to BBC Sport, Branson said that Virgin had signed a three-year title sponsorship deal that did not involve any equity in the team but that Virgin had "lent the team some money." If this is accurate it raises several questions since if Virgin does not have any equity in the team then who does? Presumably the other shareholders are John Booth, his business partner Graeme Lowdon and the private equity arm of Lloyds which is thought to own 20% of the team. Time will tell as the team's holding company will eventually have to file documents revealing its ownership. Nevertheless, if Virgin has no equity at all in the team then it seems unusual that the FIA has allowed it to be wholly named after the title sponsor since Branson's company could leave the sport at the end of its contract giving yet another break in the continuity of a team name. Virgin's investment in the team is believed to be around £5m so the big question is where the other £35m will be coming from. F1's industry monitor Formula Money estimates that Virgin Racing's eight existing sponsors are paying a total of around £9m with £7.5m of that coming from former BMW sponsor the currency trading firm FxPro. With only nine weeks to go to the first race of the season, it's no surprise that Virgin may need F1 business direction. The question is will it arrive in time? |
