How Williams Came Out on Top After Departure of Pastor Maldonado and PDVSA
Toward the end of the 2013 Formula One season, Pastor Maldonado decided he didn't want to drive for Williams anymore.
Many smiles appeared in the vicinity of Grove in Oxfordshire, but it wasn't all good news.
Maldonado's career is funded by the Venezuelan government, through state oil company PDVSA. Since Maldonado made his F1 debut in 2011, they had been paying Williams a massive amount—according to a leaked invoice reported on f1zone.net, at least £29 million per year—in sponsorship fees.
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The money was dependant on Williams having a Venezuelan driver in the car. With Maldonado departing, PDVSA would be going as well—and taking their cash with them.
Williams were facing the possibility of a major financial problem.
But it turns out they've done extremely well from what could have been a very difficult situation.
PDVSA were Williams' only true major sponsor, whose presence on the car was so great it significantly affected the livery. Company logos adorned the sought-after rear wing, a prime spot on the engine cover and two key locations on the nose.
When they departed, that space was vacated and Williams could consider a real title sponsor, something they could not have realistically done before. They soon got one—Martini.
The drinks company is a full title sponsor and partner, and their colours have transformed the car into one of the best-looking on the grid. The value of the deal has not been disclosed, but it will go a long way to plugging the funding gap left by PDVSA.
And crucially, Williams do not have to employ a driver of Martini's choice.
This sort of requirement from a major sponsor is a huge millstone around any team's neck, and it must affect morale to know they have to keep a driver, regardless of how he performs.
There were positives for the team on the personnel side as well, as Felipe Massa replaced Maldonado.
The benefits of signing the Brazilian go beyond the most obvious—that he's simply a better racing driver than the quick but inconsistent Maldonado.
The Venezuelan wasn't always an easy character to work with. Valtteri Bottas hinted at this when speaking to Finnish broadcaster MTV3 (translation h/t grandprix247.com):
"I believe this season is an opportunity for me to learn from a team guy a little bit more than last year. This year the team has a more experienced guy and he is quite different—a little more open and more willing to be more of a team player and to provide more information.
I think if you are sharing information in the team meetings and both trying to contribute to the team’s performance and providing the best possible feedback—it always helps, of course.
"
In addition to being a bit of a lone wolf, Maldonado famously accused the team of sabotaging his car in qualifying for the 2013 United States Grand Prix. He has been involed in numerous collisions since arriving in the sport and has on two occasions (Spa 2011 and Monaco 2012) lashed out at other drivers using his car as a weapon.
Massa will prove a much more pleasant presence within Williams.
There's also the matter of his technical input to consider. A veteran of nearly 200 races, he has been involved in the development of 12 cars since his debut in 2002.
His feedback on the FW36 will prove highly useful, and the less-experienced Bottas—the team's big long-term prospect—will learn far more from Massa than he ever would from Maldonado.
Furthermore, Massa being in the team undoubtedly contributed to their acquisition of at least two new sponsors. A multi-year deal with Brazilian oil giant Petrobras was announced on 14 February, with Banco do Brasil coming on board a week later.
Added to the Martini sponsorship, the Petrobras and Banco do Brasil deals should more than cover the lost PDVSA income.
From the outside it already looked like Williams had done very well from Maldonado's exit but last week it became apparent they'd really hit the jackpot.
Williams are listed on the Frankfurt stock exchange, so have to publish detailed financial statements. The report for 2013 (PDF) was issued on 1 May, and it contained the following paragraph:
"During 2013 the Group received a non-recurring sponsorship receipt. As no further obligation exists in respect of this receipt, the Group has applied the requirements of FRS5 Substance of Transactions to the transaction. Revenue of £20 million is included within turnover and direct costs of £1 million are included within administrative expenses in respect of this arrangement.
"
In simple terms, this means a former sponsor had to pay that sum to Williams to get out of a contract.
The figure in the statement is £20 million but reliable sources including Autosport put the actual number received from PDVSA at £15 million. It's still a lot and was enough to give Williams a profit of £11,957,276.
This compares very favourably to a loss of £4,573,119 in 2012, and it is their best financial result since at least 2007.
So in summary, they lost Maldonado and PDVSA; in return they received Massa, Martini, Petrobras and Banco do Brasil. They also got a free £15 million for doing absolutely nothing.
And to top it off, Williams currently lie a respectable sixth in the constructors' championship with 36 points, having made their best start to a season since 2005.
Maldonado's new team, Lotus, are yet to score.
Things aren't perfect at Williams—the team exists to win and anything shy of victory is a disappointment.
But at least their short-term financial future is secure.
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