BasCB commented on the post, The game changed and they didn't: The true cause of Williams' decline

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“To be very clear we aren’t going down that road of a B-team. Any of you that know me well know that it would be over my dead body. You will never read in the press that Williams has turned itself into a junior team or a B-team.”

In these defiant words to her staff last year, seen in Netflix’s new F1 documentary, deputy team principal Claire Williams made it clear the team will continue to forge its own path in F1.

But facing the might of F1’s heavyweight teams plus their ever more closely aligned satellite operations, does Williams possess the drive to survive? Or is one of F1’s few remaining outfits which is neither an A-team nor a B-team at risk of becoming an ex-team?

Last in the championship, showing up late for testing, making changes at the top of its technical team on the eve of the new season. The state of Williams is a painful sight for its many fans and, no doubt, present and past employees and their families.

Much has been written over the past five years about the gradual decline of this once bulldog team which regularly took the fight to the likes of Ferrari and McLaren. Win or lose, Williams fought proudly, and always with genuine humility.

Claire Williams, 2019
“Over my dead body”: Williams refuses to accept ‘B-team’ status

However in typical F1 fashion, there is no single reason for the team’s slide, and no single individual can be held solely responsible. Indeed, as is regularly written in this sport: teams win together, and they lose together. On that basis there is collective responsibility.

Technical direction seems have been woefully lacking in recent years – make that almost a decade. Certain management decisions appear to have been suspect, not least the company’s acceptance of F1’s inequitable revenue structure in 2012, which now lies at the root of its spending dilemma, as Claire Williams told RaceFans last year.

The fact is that, as outlined in that interview, Williams has found itself squeezed between ‘A’ and ‘B’ teams – the manufacturers plus Red Bull, and their satellite operations. Thus Williams’s dilemma cannot simplistically be blamed on the actions of one individual. Their situation is a consequence of bigger rivals out-spending them, and smaller competitors aligning themselves with those manufacturers.’

However we can pinpoint when the downward spiral started. The date looms large in F1’s timeline for it is the day the sport of F1 as a whole changed forever, and Williams’s fortunes with it. That date is 1 January 1998.

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Jacques Villeneuve, Heinz-Harald Frentzen, Williams, Melbourne, 1997
Williams’ last championship was over two decades ago

The previous year Jacques Villeneuve was crowned champion in a Williams-Renault and the team beat Ferrari to the constructors’ championship by 21 points – more than two wins under the structure of the time – despite the Scuderia enjoying the not inconsiderable advantage of having Michael Schumacher at the wheel.

It cannot be purely coincidental that those titles were the last Williams claimed. True, the team came close on subsequent occasions, but, in F1, second is simply ‘first loser’.

The beginning of 1998 marked the first day under the 1998-2007 Concorde Agreement. Significantly, this was the first tripartite covenant to govern the sport after Bernie Ecclestone acquired F1’s commercial rights from the FIA. Previous Concordes had been entered into between the governing body and the teams, the latter acting collectively under the Formula One Constructors Association umbrella. The new one added the commercial rights holder to the mix.

What was the difference between the new deal and what had gone before, and why was the date significant to William’s future? Simply put, the money distribution changed substantially, and the fact that where Ecclestone had previously acted (mainly) in the interests of FOCA, he now acted in the interests of his family trust SLEC, which held the commercial rights to F1.

Where before the teams shared 85 per cent of F1’s underlying revenues, from 1 January 1998 Bernie and SLEC – named after his then-wife Slavica Ecclestone – retained around 77 percent of the sport’s bottom line, with 12 teams sharing 23 percent between them. Subsequently most outfits sold out to Big Money: Benetton to Renault, McLaren a significant share to Mercedes, Stewart to Ford/Jaguar and Tyrrell to BAT.

The rest, bar Ferrari and one proprietary team, either folded (Arrows and Prost), or struggled to make ends meet – Jordan, Minardi and Sauber, all of whom eventually sold out, all of them variously so. The dogged exception was Williams, whose majority owner – the-not-yet-knighted-Frank Williams – carried on as before, determinedly keeping his team going via a mix of F1 revenues (mainly TV income) and sponsorship.

During the late nineties this was easy, for TV ratings were sky-high and thus commercial support a (relative) cinch to find, particularly as tobacco livery was legal in many F1 territories. When Williams, though, snared BMW as engine partner from 2000, a condition was that nicotine was shunned, but the Bavarians more than compensated for lost income by naming the team BMW Williams, and insisting on white-and-blue livery.

Thus Williams didn’t feel the squeeze, even after Bernie discovered pay-TV – until 2005, when BMW chose to acquire Sauber rather than stick with Williams. It cannot be coincidental that the last race won by Williams on pure merit was the 2004 Brazilian Grand Prix – saliently the final round of that season – after a characteristically ballsy drive by Juan Pablo Montoya against the McLaren-Mercedes of Kimi Räikkönen.

There would be a 114th victory, eight years later in Spain after Pastor Maldonado defied all odds, but, as subsequent events proved, it was fluky and falsely flattering.

Sergio Perez, Force India, Baku City Circuit, 2018
Force India – now Racing Point – achieved more with Mercedes last year

Through it all Williams stuck to its constructor model: producing virtually the entire car in-house, sourcing only engines from outside, whether on a works basis (BMW), or as a customer – whether of Cosworth; of Toyota; back to Cosworth; a brief reunion with Renault power; then, from 2014, of Mercedes.

Meanwhile F1 evolved: the first team to adopt a “B team model” was Force India, which in 2009 signed a deal to acquire complete (Mercedes) back-ends from McLaren, which also seconded senior engineers to oversee the team. When BMW exited and Peter Sauber (re)acquired his eponymous team, a similar deal was struck with Ferrari; Haas, as we know, went one further in its relationship with Maranello.

The net result is that, of ten teams on the current grid, three – Racing Point (formerly Force India), Haas and Alfa Romeo (formerly Sauber) – are effectively ‘satellite’ teams fed by motherships, first-named via Mercedes, and the remaining two by Ferrari. Red Bull Racing effectively enjoys a similar relationship with sister outfit Toro Rosso. Count them – that accounts for 70 per cent of the grid, leaving three in the cold.

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They are, of course, Renault (formerly virtually bankrupt ‘Lotus’, now supported by the largest motor manufacturer by volume on the planet), McLaren (majority owned by Bahrain’s sovereign wealth fund, with a slice of Saudi money for good measure), and, er, Williams: still majority owned by the admirable but ailing Sir Frank, the man who signed the original company incorporation documents in 1977.

Along the way costs exploded but income remained, at best, static. Indeed, it is a tribute to the money men in Grove that Williams has survived at all, for every year the company posts profits, or, in a worst case scenario, light red ink.

Pierre Gasly, George Russell, Circuit de Catalunya, 2019
The team look set to start 2019 on the back foot

In the interim, all its grid peers have changed markedly, and out of all proportion. From 1998 onwards Tyrrell mutated to BAR, Honda, Brawn and Mercedes – after the Three Pointed Star sold its McLaren interests; Stewart became Jaguar, then Red Bull; and Minardi changed hands twice Red Bull acquired the team, and renamed it ‘Toro Rosso’.

Renault’s backstory is more convoluted: having purchased Benetton, the French company sold to Genii Capital eight years later, then (re)acquired the ailing team. Sauber, having been dropped by BMW, finally found itself indebted to new investors who claimed ownership before restructuring and cutting a branding deal with Alfa Romeo.

By not being manufacturer-owned or with an own engine division Williams found itself betwixt and between: Larger than the satellites, yet smaller than the major teams, all of whom have wealthy owners, be they car brands or drinks companies. Thus Williams is neither satellite nor mothership, yet, crucially, carries all the overheads of the latter while not having access to parent company funding.

Heck, Williams still builds its own gearboxes – with aluminium casings…

F1’s commercial environment, too, changed massively over the past decade: Eyeballs dropped 30 per cent as pay-TV bit, compounded by new-gen viewer patterns and switch-offs due to increasing domination by the ‘Big Three’. Sponsorship revenues went south – forcing Williams to sign so-called pay drivers, with Maldonado being the first, but not the last. Where once sponsors were blue-chip, now they’re start-ups.

All the while the Big Three, against whom Williams had once fought so valiantly, pulled bonuses that alone substantially exceed Grove’s performance-based income. Exploding costs, inequitable earnings in the face of an ongoing global economic crisis and a stale business model could only spell one thing: regression. Consider the number of teams that disappeared or restructured since 2012: seven, including three start-ups…

Worse (for Williams): in the five years since the discriminatory revenue structure was introduced no team outside the top three – the primary beneficiaries of F1’s obscene bonuses – has won a race.

Thus, where once the legendary Williams team was once spoiled for choice having the pick of Ayrton Senna, Nigel Mansell and Alain Prost, last year’s line-up saw a toss-up between Sergey Sirotkin and Robert Kubica for the ‘other’ berth, with Lawrence Stroll’s billions covering the primary seat for son Lance.

Just as most ailments creep up rather than strike without warning, so the team’s slide did not occur abruptly. There have, though, been occasional bright spots, but mostly these flattered to deceive – and the team is now paying a heavy price for such deceptions. Once the competitive order was properly shaken out, it was clear Williams had been left on the wrong side of all F1’s divides.

Paddy Lowe, Williams, Circuit de Catalunya, 2019
Paddy Lowe stepped aside after the FW42’s late arrival

Is Williams truly a 10th-place team, its championship placing last year and ranking during recent pre-season testing? On facilities, personnel, dedication and commitment – certainly not. Is it a front-runner? Equally negative. Midway? Well, its average championship classification over the past five years is fifth…

Given the company’s listed status the full story to technical director Paddy Lowe’s “leave of absence” is unlikely to be emerge and will ultimately be subject to non-disclosure clauses. But his departure is step in the right direction if for no other reason than the chemistry between employer and employee seemed lacking. Yes, Paddy started his F1 career with Williams, but a return to an old relationship is not always constructive.

In the short term there is likely to be a temporary allocation of responsibilities to existing senior staff while the company restructures the technical division.

There is simply too much potential within the Grove campus for Williams to follow fellow multiple champions such as Lotus, Cooper and Brabham into oblivion. But, in order to survive, Williams needs to reinvent itself and embrace the future rather than clinging nostalgically to the past. Times have changed, Williams has not, certainly not enough in its key performance areas.

The team must to decide whether it wishes to be a family-run listed company, or a top-performing engineering company managed by professionals who in turn delegate race team operations to seasoned racing professionals. Again, it is betwixt and between.

Antonio Giovinazzi, Alfa Romeo, Circuit de Catalunya, 2019
F1’s ‘satellite teams’ are on the rise

Equally, it needs to decide whether to be a healthy satellite or weak constructor, regardless of the founder’s principles that F1 teams can survive as chassis constructors powered by outside engines and fed by strong sponsorship and equitable performance revenues. That model is dead, as attested to by the satellites, all of whom finished 2018 well ahead of Williams.

The record shows that the only other team to have operated to that model last year was McLaren, which went private after its divorce from Mercedes, yet needed shareholder injections of $ 100m last year simply to survive. That speaks volumes about both state of F1, and the inner core strength of Williams.

That the team has survived at all in the face of the raft of challenges outlined above bears testimony to the steely determination of Sir Frank, who in turn instilled it in all the dedicated men and women who toil daily in search of results despite F1’s shifting sands. Indeed, the innate stubbornness Williams is well known and respected for and which ultimately propelled it to such heights, is partly the reason for its refusal to adapt.

The inescapable fact is, though, that F1’s sands have shifted faster than Williams recognised to date, and one fears that the team has one last chance: during the next two years it simply needs to adapt; not, though, to the current Formula 1, for it is too late for that, but to the model Liberty plans to introduce from 2021. The issue is that no one, not even Liberty, yet knows what that landscape looks like.

That could be Williams’s saving grace. But only if the changes mean that all teams start the new era from zero.

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