It was announced this morning that the Force India team has requested an advance on their championship payments due to an expected cash short-fall during the winter off-season.
Currently, the ten Formula 1 teams receive a monthly payout from Formula 1 Management (FOM) between the months of February and November.
The current payment schedule creates a large deficit in cash flow between December and January for many of the midfield and back marker teams; with all outfits coming under additional pressure from external suppliers to settle outstanding balances.
With former F1 team Caterham folding at the end of the 2014 season and Manor’s near exit under the previous guise of Marussia last year, suppliers have become less lenient with late payments to make up for the shortfall of cash.
In an interview with Autosport this morning, Force India deputy team principal Bob Fernley has stated his team has approached Bernie Ecclestone for an earlier payment, which will still need to be agreed by the other nine teams. Fernley stated the following:-
‘We start to lose payments as soon as a season finishes. So what we’re trying to do is balance things better, get a better cash flow, because cash flow over the winter for us is the worst time. But this is not necessarily about us, it’s about making our suppliers’ lives a bit easier. They are under a lot of pressure, and can be stretched too far, especially when other teams are struggling as well.
‘We’re trying to get ahead of our programme, as opposed to last year when we were slightly behind it. We just have to be pragmatic because if we know now we’re going to have to tighten up a bit then we have to act.’
From what Fernley has stated this morning, it is clear that the Force India are trying to manage its financial affairs in the best possible circumstance during the off season in order to avoid the situation that occurred for them this season. We cannot afford for another team to leave the grid and it should be avoided at all costs.
But whilst I understand why they have done this, I do believe that they may not get their wish granted by FOM. I suppose you are probably asking why. Well the reason being is that if the rest of the grid can manage during this period, then why can’t they? You can’t also get away from the fact that the Force India team have lodged an EU complaint recently which will also be causing them serious expenditure that they haven’t got and may not go in their favour which will not help their troubles in the slightest.
However overall, I commend the team for asking for this, but I do not feel that their wish may not be granted and this will only cause them more problem further down the line. With the remainder of what happened for Force India this season and also with their well documented financial issues, this is another situation that Formula One does not need but will the sport help them out? I beg to differ; even if I believe they should.