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Wednesday, February 6, 2013

Marussia Confirm Luis Razia as second driver

Marussia this morning, just before testing, confirmed that Luis Razia, the GP2 runner up last year, would take up the position of race driver with the Marussia F1 Team for 2013.

The announcement, which has been expected for some time, was made just before he sat in the car this morning to take the new car out for an installation lap.

Razia was part of the young driver's development programme for Marussia and was their reserve driver in 2010.

With Max Chilton in the other seat the Marussia team are fielding the only rookie pairing on the grid for the coming season.

Razia ruined the surprise a week and a half ago when he put the news up on his website that he had secured the seat.  It remained there for long enough that every F1 news website had the story.

Of his appointment he said,
I know this Team rewards determination and success in its young drivers
They weren't in a position to reward the success of their older driver Timo Glock, letting him go in order that they could get the money to continue in the sport for another year.

As I was saying yesterday it is unclear whether they will be able to generate a budget of a size to enable them to complete the season.  With most teams getting a slice of the F1 profits by way of the Concorde Agreement, Marussia was excluded this year as they finished outside the top 10 in the WCC.  The only operational cash to which they can lay claim therefore is the paying driver and sponsorship.

In general terms it is accepted that sponsorship brings in about 48% of the operational budget of the team.  The other 52% is brought in from the profits made by F1 over the course of the season.  Marussia would appear to be operating on 48% of its necessary budget this year.

This is not simply ranting on my part, last year it was reported in the Guardian in November 2012 that the previous 2012 season had seen Marussia record a loss of £49 million, bringing their total debt to around £80 million.  The team itself is valued at around £45 million, about a quarter of the value of Williams F1 Team.

To the end of 2011 the turnover of the team from sponsorship and prize money declined 5% to £28.6 million (£10 million of that coming from the 3 year Concorde Agreement structure put in place for the 3 new teams which, in their most recent guise were Caterham, Marussia & HRT F1). The team's running costs rose by 11% that year, 2011, to £70 million.

Lloyds Banking Group own 29.4% of the team with Marussia owning the remainder of the group.

The Guardian reported that the team currently "finances its operations with debt from Lloyds Development Capital (LDC), the [British] Government owned bank's private equity arm" and said that "Last year [2011] LDC handed the team £38.4 million bringing its total loans to £77.7 million".

£61 million of that fell due at the end of 2012, however the team would appear to have been relying upon a cash injection from FOM of around £25.6 million for coming in 10th in the WCC.  As we now know, that never happened, with Caterham taking the place back in Brazil, and the team has to date received no money from FOM.

To progress, this car needs to start scoring points from early on in the season, otherwise, the future does not look bright.