Skip to main content

Lotus chose to spend cash on car rather than pay Kimi Raikkonen

updated 8:47 AM EDT, Wed September 25, 2013
Ferrari will pit two world champions against each other in 2014 as Kimi Raikkonen (left) returns to join Fernando Alonso. The pairing could be one of the most sensational in the history of Formula One. Ferrari will pit two world champions against each other in 2014 as Kimi Raikkonen (left) returns to join Fernando Alonso. The pairing could be one of the most sensational in the history of Formula One.
HIDE CAPTION
Ferrari fireworks?
Flying Finn
Class of 2001
Malaysian maiden
Race of champions
Ferrari party fizzles out
Rally run
Laconic Lotus man
The car's the star
<<
<
1
2
3
4
5
6
7
8
9
>
>>
STORY HIGHLIGHTS
  • The Lotus Formula One team says it prioritizes spending on developing the car
  • Driver Kimi Raikkonen is leaving Lotus at the end of 2013 because he was not paid
  • Lotus is financed by investment company Genii Capital, which loans the team the money
  • The team is looking for a lucrative title sponsor for the 2014 season

(CNN) -- When it comes to deciding where the money goes, the Lotus Formula One team says its main priority is the car -- not the star driver who sits in the cockpit.

Kimi Raikkonen said last week that he decided to leave it and rejoin Ferrari for the 2014 season because Lotus "haven't got my salary."

But the team, owned by Luxembourg-based investment group Genii Capital, has now responded by explaining that it prefers to focus its finances on developing the car, even if it means seeing their driving talent walk away.

Raikkonen has posted Lotus' only victory this year, with himself and the team both fourth in the respective driver and constructor standings.

"Our suppliers and key people who develop the car were our priority -- maybe not Kimi," Lotus team principal Eric Boullier told the official F1 website.

"Kimi was in a similar position last year and it was all settled by the end of the year. And Genii had the plan to do the same this year.

Lotus hopeful on Raikkonen
In the pits with Lotus F1 Team
Kimi Raikkonen returns to Formula 1

"It is public knowledge by now that we've been late in paying him, and he got upset.

Read: F1 championship standings

"To manage the cash flow -- and I don't mean the money itself or the budget we have, which is guaranteed by Genii, or at least most of it as we don't have the revenue stream to allow us to live independently from Genii -- this cash flow is an issue if you have fixed costs and want to keep up the development level.

"You have to decide where you want to spend your money."

Genii Capital took full control of the team -- which has raced in F1 since 1981 under its previous guises Toleman, Benetton and Renault -- from previous owner Renault in 2011.

Ownership by a private investment company, instead of car manufacturers such as Mercedes and Fiat, which owns Ferrari, or a global company such as Red Bull, can provide a more risky financial backdrop for an F1 team.

But Boullier says that Lotus' alternative business model does not mean it is mired in a financial crisis, as the rumors circulating in the sport would suggest.

Read: Raikkonen returns to Ferrari

"Red Bull or Mercedes, those companies are sponsoring the teams," said Boullier, whose driver management company Gravity also has connections to Genii. "Genii has a different strategy: they loan the money.

"It is part of the strategy that partners join the team and Genii will get back their investment.

Niki Lauda on F1's most dangerous years
Paul di Resta's Italian ancestry
Watch adrenaline-filled tour of Spa track

"Seventy-five percent of the debt Lotus has comes from Genii. They could write it off tomorrow by saying this money is a sponsorship -- and then our debt would be drastically reduced. Our normal debt is similar to most of the other teams."

Genii's strategy of choosing to bankroll the team before looking for sponsorship deals to recoup their investment is a gamble.

Having 2007 world champion Raikkonen on board would have inevitably helped attract sponsors, but now Boullier is looking at alternatives.

He says the team plans to emulate the business strategy of some of rivals, including Red Bull and McLaren, by looking for a title sponsor.

"It is no secret that for quite a while Genii have been looking for partners to make sure that we can bring more money to the team and have access to a bigger sponsor portfolio," the Frenchman added.

"We need to secure sponsors, as this is the only way to step up.

"Formula One depends massively on the people -- and to attract the best people to a team you need to have money, to be able to build something for the long term.

"Genii's plan was to bring the team up within five years -- which we are trying to do -- but to move to the next step you need another five-year plan in place. And that is what we are working on."

ADVERTISEMENT
Part of complete coverage on
Track the buzz of the 2014 Formula One season, race by race, with all the latest social reaction from motorsport experts.
updated 7:13 AM EDT, Fri April 18, 2014
Too weak. Can't handle the pressure. Susie Wolff has heard it all -- but she is determined to become the first female F1 driver in 20 years.
CNN's Amanda Davies visits the headquarters of Mercedes, the dominant team in Formula One this season.
updated 9:08 PM EDT, Fri March 14, 2014
The big winners of this Formula One season could be road drivers rather than F1 racers, according to one former world champion.
updated 1:30 PM EDT, Fri March 14, 2014
The Williams team welcomes the biggest rule changes to Formula One cars for a generation.
updated 3:16 PM EDT, Thu March 13, 2014
Mercedes driver Lewis Hamilton sums up the dawn of a new Formula One era in three juicy words -- weird, mind-blowing and challenging.
updated 8:16 AM EDT, Wed March 12, 2014
Formula One is taking another step in its techno evolution this season, which could be more unpredictable than it has been for a long time.
updated 12:36 PM EST, Mon February 24, 2014
Jann Mardenborough on the similarities and differences between driving a race on a video game and driving a real F1 car.
updated 7:26 AM EST, Sat February 22, 2014
Russia's President Vladimir Putin watches the men's cross-country 4 x 10km relay event at the 2014 Sochi Winter Olympics on February 16, 2014. AFP PHOTO/ RIA-NOVOSTI/ POOL/ MIKHAIL KLIMENTYEV (Photo credit should read MIKHAIL KLIMENTYEV/AFP/Getty Images)
How Russian president Vladimir Putin helped turn a muddy hole in the ground into a $400 million futuristic grand prix track in Sochi.
updated 7:13 PM EST, Thu February 20, 2014
Russian Prime Minister Vladimir Putin (R) and Formula One racing director Bernie Ecclestone talk during a ceremony of signing of an agreement to bring Formula One racing to Sochi for a Grand Prix Russia to be held in 2014, the same year the Black Sea resort hosts the Winter Olympics in Sochi on October 14, 2010. Putin, whose backing was crucial in Sochi winning the right to host the Games, is due in the city on Thursday to sign an agreement for work to begin on the construction of a new 200 million dollar circuit. AFP PHOTO/ ALEXANDER NEMENOV (Photo credit should read ALEXANDER NEMENOV/AFP/Getty Images)
Vilified by the the international community for his government's attitude on gay rights, Russian president Vladimir Putin has found an ally.
updated 12:13 PM EDT, Thu March 13, 2014
Red Bull's Sebastian Vettel is bidding for a fifth consecutive drivers' championship in 2014.
He is Formula One's undisputed No. 1, and next season Sebastian Vettel will have proof of that fact emblazoned on his Red Bull.
updated 11:33 AM EST, Wed December 4, 2013
A new era of F1 looms large on the horizon in 2014, but what do the new rules mean for how we watch the sport? Get up to speed here.
updated 6:56 AM EDT, Thu October 17, 2013
Explore our interactive of one of F1's most important and complicated pieces of kit.
ADVERTISEMENT