Junior Johnson once said that the best way to make a small fortune in motor racing was to start with a big one. While the exact wording might have changed over time, as quotes tend to, the sentiment is alive and well. Particularly at the Lotus F1 team, which started with a fortune and last year turned in a $107.9 million net loss.
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According to Forbes, that loss could be the biggest ever made by an auto racing outfit. The U.K.-based team, which has no affiliation with Lotus the automaker, apart from sharing a name and logos, has just released its financial statements for the year ending December 31, 2013, in which revenue was $154.1 million while net losses increased by $16 million. Much of the additional losses are down to interest payments on inter-company loans, which rose from $1 million in the previous financial period to $22.6 million—erasing any benefits of the team's $5 million cost savings.
The team's cost problems have been highly publicized in recent years. Last year, Kimi Räikkönen repeatedly threatened to sit out races claiming he hadn't been paid, and finally switched to Ferrari for 2014, alleging that Lotus still owed him $24 million. Räikkönen eventually sat out the final two races of the season through back surgery. Lotus F1 is currently owned by private equity firm Genii Capital, founded by early Skype investor Gerard Lopez. Lopez is now looking to find a title partner for the team to stem the company's losses—though he also adds that Lotus expects "further cost savings" this year following an organizational restructure in February 2014.
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Lotus F1's financial struggles echo those on the track this season, as the team lies in eighth in the Constructors' Championship. Despite the team's success in 2013 with Räikkönen—during which the Finn won the first race and finished on the podium seven further times—its best result this season has been a trio of eighth place finishes with Roman Grosjean, with several retirements. The team's other driver is Pastor Maldonado.