Friday, 15 November 2013

The Electricity Bill

In Switzerland, we are fortunate with the cost of electricty. When we've got tired of skiing in March or April, the snow all melts and flows down through gulleys, gushes over waterfalls and ends up in lakes somewhere.

The water has a bit of a rest there, and then carries on down a river, where at some stage, it'll end up turning a turbine and making electricty for the local population to use as they see fit. For example, quite a lot of new houses just use electricty for heating, as it's clean and doesn't cost much. Finally - something in Switzerland is cheap!

So it was a bit of a surprise to read this morning, that Sauber had paid their electricity bill. Well, not a surprise that they had paid it, but a surprise that the fact that they had paid it was newsworthy.

Switzerland has a relatively sophisticated system of getting bills paid. You get the usual couple of reminders, and if they are not paid, the creditor has the opportunity to request payment from your local council.It being Switzerland, the local council are quite happy to add a charge for this service.

The council maintains a register (Betreibungsregister) of any such requests, and it is generally considered to be a bad thing to have entries against your name. According to the article, Sauber currently has 57 such open entries against its name, totalling well over half a million Swiss Francs.

Nothing compared to what Lotus owed Kimi, and probably less than The Hulk was due. But not pleasant all the same, and any one of these requests could lead to the company being closed down. (Incidentally, I would translate the statement that Sauber made regarding Nico's salary as "a payment has been made" and not "we have paid Nico")

Motor racing companies are notorious for not paying bills quickly. It can often be a hand-to-mouth style of existence. But we are talking about the pinnacle of motorsport here.

F1 is a sport generating greater revenues than pretty much any other annual championship - larger than the Premier League for example. And there are only 11 teams to keep going, so it really shouldn't be too hard to make ends meet.

But clearly it is hard. Looking at the teams, you'd have to think that Force India, Caterham, Marussia (along with Sauber and Lotus) are struggling to bring money in that isn't being provided by the team owner - which isn't an effective business model.

There seems little point in continually harping on about the cash that CVC take out of Formula 1. But I can't help thinking that half a billion dollars could fix a lot of problems.

Or pay a few bills.

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