Ecclestone deal drove Renault into the black
Monday 07 March 2011
Revenues at Renault's Formula One team accelerated by 9 per cent to a record £161m in 2009, despite the squad suffering a series of setbacks during the year, according to recently filed accounts.
The boost was driven by a new 2009 deal with the F1 chief Bernie Ecclestone, which doubled the team's prize money. The catalyst for the Renault team's woes was its boss, Flavio Briatore, being accused of fixing the result of the 2008 Singapore Grand Prix by demanding that one of his drivers crash.
Mr Briatore went on to resign in September 2009. He was followed by several sponsors, including the Spanish insurer Mutua Madrilena and ING, the banking group, which alone was believed to be paying the team £40m every year.
To distance itself from F1, Renault sold a 75 per cent stake in its team to the Luxembourg-based private equity firm Genii in February last year.
Genii bought the remaining shares in December but the team still carries the Renault name as a change would require consent from its 11 rivals in F1.
Fuelled by the additional income from Mr Ecclestone, the team raced into the black despite the loss of sponsorship, finishing the tumultuous year with a pre-tax profit of £11.1m, compared with a £12.6m loss the year before.
The introduction of a cost reduction plan led to the axing of 49 jobs, with the majority coming from the engineering department, and the team's total costs reversed by £10m.
The profits were ploughed back into the team and it made £6.5m of capital investments during the year, with the bulk being driven into new machinery.
However, that did not give the team the boost it was looking for – it finished a dismal eighth in the 2009 standings, down four places. In 2010, the team attracted new sponsors, including Hewlett-Packard and Lada, to plug some of the gap left by ING and it rose to fifth in the standings.
Despite the recovery, the team remains a far cry from its heyday, when it won two championships under Renault's sole ownership. But further improvement is on the agenda for 2011, after the Lotus car company become the team's title sponsor at an estimated annual cost of £25m.
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