At a London press conference today, Sir Richard Branson formally launched his new Formula 1 team, Virgin Racing. The new team was initially formed as Manor GP, but was rebranded after Branson acquired an equity stake in the team.
Present at today’s event was Virgin’s new driver team, Timo Glock and Lucas di Grassi. Glock has been a driver for the now defunct Toyota F1 team for the past two years, while di Grassi, has spent the past four years in the Formula 1 feeder series, GP2. He was also Renault’s reserve F1 driver last year.
Branson’s Virgin Group was the primary sponsor for Brawn GP in 2009, albeit for a the relatively minor sum of $250,000 (171,000 euros) per race. This would have amounted to about 3 million euros for the entire season. The lion’s share of Brawn’s budget last year came from Honda, which had left roughly 140 million euros in the team’s treasury as a provision of the takeover by Brawn.
With the enormous success of Brawn last year, it was a foregone conclusion that Branson would be unable to get the same kind of exposure with that team for the same price. Therefore, Branson sought a means for getting better leverage for his money. The best solution seemed to be partnering with a smaller team, which would give him greater brand exposure, if not the same kind of press coverage that Virgin enjoyed with Brawn.
Virgin seems to be an example of the new model of F1 team ownership. They’re backed by a consortium of investors, which also includes the venture capital division of Lloyd’s, which has a 20% stake in the team. Team management will not be centralized, which is typical in Formula 1, but will be run from an archipelago of offices: Nick Wirth will head design in Oxford; John Booth will lead team management in Sheffield; and commercial operations will be run from Virgin’s Hammersmith offices, by Jim Wright, formerly of Williams. The team chairman is Etienne de Villier, formerly of Disney and ITV. According to Alex Tai, team principal, Virgin already has 10 commercial partners (i.e. sponsors) lined up, and they’re fully funded for 2010, at a budget of approximately 45 million euros.
As reported in The Times, Branson said of the new deal, “Our first year in F1 was tremendous for the Virgin brand. So why not go in again with a new team from scratch? “Money’s not everything. [The team] are determined to prove that via engineering prowess, great drivers and a great affinity with the public they can do well.”
Branson went on to draw a comparison between his involvement with Brawn last year, and this newer venture. “Last year with Brawn, they started the season as a David and it ended it as a Goliath,” he said. “So we searched around for another great team, another David team, we have one and we will see how it goes.”
Image by Esthr, licensed through Creative Commons.