Lotus Automaker struggling but are still in F1 ? - LotusTalk - The Lotus Cars Community
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post #1 of 10 (permalink) Old 12-01-2014, 07:22 AM Thread Starter
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Lotus Automaker struggling but are still in F1 ?

Im confused with the Lotus situation at the moment.

Can someone explain to why a company struggling financially, has money to put towards a Formula One team ? Shouldn't Lotus pull out of F1 if they are struggling so badly as an automaker ?

Or are they not really that bad, and its media hype ?

Thank you for your thoughts to this.
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post #2 of 10 (permalink) Old 12-01-2014, 07:28 AM
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That's easy, Lotus cars and Lotus F1 are two different businesses.

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post #3 of 10 (permalink) Old 12-01-2014, 07:30 AM Thread Starter
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Originally Posted by Almighty View Post
That's easy, Lotus cars and Lotus F1 are two different businesses.
Really ? So any idea where the money is coming from for Lotus F1
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post #4 of 10 (permalink) Old 12-01-2014, 08:10 AM
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I'm not exactly sure how Lotus F1 makes their money outside of money that F1 gives all of the teams and sponsorship deals. Could there be other sources of funds? Probably, but I have no clue what they are.

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post #5 of 10 (permalink) Old 12-01-2014, 09:17 AM
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That's because Lotus really has no relation to the F1 team short of their name. Genii Capital (who owns the Renault F1 team) made a partnership deal with Lotus in 2011 to use their name. The previous Lotus F1 team has no relation to this newly formed Lotus-Renault team.
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post #6 of 10 (permalink) Old 12-06-2014, 08:29 PM
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But it is not called the Renault F1 Team, for years now, has no Renault ownership and will use Mercedes engines next year. The F1 team is funding by loans from owner Genii Capital, sponsorships the team pulls together and distribution of TV monies that Bernie and company unfairly distribute, fare portion based on team standing current year and past average, unfair portion is side deals cut with some of the big names after treats to pull out of the sport. Funny Ferrari threatens to pull out and they get an extra $90m per year, Force India and Lotus complain and are told if you don't like it and can't afford it, don't play.

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post #7 of 10 (permalink) Old 12-11-2014, 07:50 AM
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No matter how rough times may be at Lotus and Lotus F1, Caterham and their F1 team are in FAR worse shape. That's a classic example of getting in way over your head.
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post #8 of 10 (permalink) Old 12-11-2014, 09:17 AM
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Lotus F1 and Group Lotus are seperate companies as mentioned above.

No-one really knows what the deal is but initially when Genii bought the Renault F1 team Dany was still in charge of Lotus. He had his visions of owning an F1 team so dropped the rights to Lotus Racing (Tony Fernandes/now Caterham) and signed up to sponsor Genii. Since the Renault deal hadn't gone through long and the need to keep the same chassis so that they didn't have to pay a new entry fee to F1 the team became Renault Lotus. The naming deal I believe was/is to last until 2017. Once their entry in the following season was set, the Enstone team were renamed Lotus F1 and have been in the championship as such since. This is the team that started in F1 as Toleman, became Benneton, then Renault and are now Lotus F1 so therefore have no connection with Team Lotus or Lotus Racing (Caterham).

Sometime during that year Danys money struggles started, so Lotus/Proton wanted to pull the sponsorship but I think that Genii saw the advantages of having the otus brand behind them and some sort of deal was done where Proton loaned Genii money and if it went into default the F1 team would go to Lotus. By having Proton involved it meant the Lotus name stuck also. Since then it hasn't been released on who owns /is owed what but although they are completely separate entities the F1 team is essentially a free marketing tool for Lotus and the F1 team gain from having the name.

As for where the money comes from - again no-one really knows but Genii is owned by Gerard Lopez who was (I believe) an early investor in Skype so has cash and their business dealings are what finances Lotus F1 along with their prize moneys from F1.

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post #9 of 10 (permalink) Old 12-11-2014, 10:54 AM
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not just separate companies, but un related companies (chapman DID have the car and F1 teams as "separate" companies but very much related.)

Lotus F1 - has absolutely nothing to do with Lotus cars or engineering, and vice versa - there is no money, no talent, nothing. the only connection is Lotus cars gets rights to sell F1 merchandise with lotus name on it, and Lotus F1 get to use Lotus name on car. thats it... otherwise there is nothing there.

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post #10 of 10 (permalink) Old 12-11-2014, 01:10 PM
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To make the Lotus story even more confusing they ran out of the Genii money and sold a large stake of the team to "Quantum Racing," which, not to be confused with the UK suspension manufacturer, are Middle Eastern investors.

At any rate people invest in F1 teams because when they do well, they can be wildly profitable. Teams get a percentage of the F1 track-hosting and TV revenue, doled out by Bernie in mysterious ways supposedly related to the team's performance / winnings. Then, they collect sponsor money. They also merchandise logo products, TV ads, viral marketing stunts, photoshoots, etc.

Some teams like Red Bull collect most of their money from F1 performance payouts while others like Ferrari have such lucrative sponsorship deals that they don't need to win to make money. Phillip Morris pays Ferrari F1 almost $160 million a year and they aren't even allowed a spot on the car since F1 banned tobacco ads!
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