Malaysian carmaker Proton and its parent company, Lotus Group, have declared that they will challenge Ton Fernandes’ statement that he will brand it Formula 1 team ‘Team Lotus’ for 2011 and beyond.
The airline magnate’s team has operated under the ‘Lotus Racing’ moniker, with the name officially licensed to the British-owned Group Lotus.
But with Group Lotus increasing its motor racing efforts – most notably with a tie-in with GP2 team ART next year – it is understood that the group has decided to retract the naming rights from Fernandes’ team.
In turn, Fernandes then announced he had purchased the rights to the ‘Team Lotus’ name, which was sold to David Hunt – brother of the late 1876 World Champion, James – after the original Team Lotus collapsed at the end of the 1994 season.
But now Group Lotus has come out to state it will oppose Fernandes’ planned move to rename his team in 2011.
“We are the owners of this brand, and will take all necessary steps to protect it,” said Datuk Seri Mohd Nadzmi Mohd Salleh, chairman of Proton Holdings.
Proton is itself currently a sponsor of the Lotus Racing team this season, but the chairman has threatened to pull further sponsorship deals.
“Fernandes has no rights to use the Lotus brand in the 2011 Formula 1 season, and we will strongly resist any attempts by him to use our brand without our permission,” he added.
He claimed that the withdrawal of the naming rights to the Lotus brand was due to “flagrant and persistent breaches of the licence by [Lotus Racing], which were damaging to the Lotus brand”. It is believed that these breaches include – but are not limited to – matters such as merchandising design approvals.
And as for the sale of the ‘Team Lotus’ naming rights, he added: “Mr Hunt’s attempt to acquire the name Team Lotus was ineffective. Group Lotus is the owner of all rights in the ‘Lotus’ automotive brand including those relating to Formula 1.”
One question that has not been addressed is why Group Lotus has only now laid claims to the naming rights, when this has supposedly been a contentious issue for 16 years.
Fernandes’ 1Malaysia-owned Lotus Racing has been quick to return serve in what looks set to escalate into an almighty spat if it can’t be navigated quickly, and in turn claimed that it has the rights to use the Team Lotus name in 2011.
Says the team’s CEO Riad Asmat: “This year, we have established ourselves as the leading new team in Formula 1 as a licensee of Group Lotus, and, although we all dreamt of bringing Team Lotus back to where it belongs, we could not do so in 2010 because those rights were owned by Team Lotus Ventures [Hunt’s company].
“As [we have] now bought Team Lotus Ventures it means we can now use the Team Lotus name for 2011 and beyond. We are all delighted we can go into 2011 with total confidence in what we own, and what we can take to the track.
Asmat confirmed that the team has issued proceedings in the English High Court to seek a ruling that Team Lotus Ventures had the right to use the Team Lotus name in relation to Formula 1.
Describing the license row with Proton as a “non-issue”, Asmat also added that Proton’s one-year sponsorship deal with the team comprised a fraction of the team’s overall budget for the 2010 season.
“Unfortunately we never reached the point where we discussed extending that one year deal. When we signed our licence to compete as Lotus Racing with Group Lotus, they were very clear that we could not make any reference to Team Lotus as they had no rights at all to the Team Lotus name or its rights,” he continued.
“In fact, in the licence agreement between 1Malaysia Racing and Group Lotus the use of the Team Lotus name is expressly prohibited as they had agreed contractually, as long ago as 1985, that they had not rights to use that name. That was obviously something we had enormous respect for, and made no attempt to change until we could do so rightfully, and with a very clear understanding of what we had acquired in Team Lotus Ventures.
“So now the licence we ran under this year has been withdrawn by Group Lotus, and while we accept that this obviously means we have reached the end of that chapter, it opens up a new and very exciting one for everyone in our team. There will have to be some discussions with Proton and Group Lotus about the entitlement to terminate the licence,” he added.
The dispute over the use of the Lotus name in F1 has been simmering beneath the surface for awhile, and it going public today has brought into the consciousness of F1 fans.
Fernandes clearly would like to two sides to be collaborate and to bring the collaboration back to what it was in the Colin Chapman era: a car company with its brand being promoted via the F1 platform – identical to Ferrari’s business model in many respects. This scenario seems next to unlikely, with this now descending to a legal and political battle between the two sides.
Perhaps this conflict stems from the fact that Group Lotus – run by Danny Behar, former part of Red Bull and Ferrari’s commercial management teams in F1 – could have the intention of floating its own F1 entry. That it has set up its own GP2 collaboration with ART (while Fernandes has in turn launched his own GP2 outfit under his ‘Air Asia’ banner) would suggest this to be the case.
The issue stems, however, from Fernandes beating them to the punch, with his F1 entry given the green light last September, and with Bernie Ecclestone particularly keen on reigniting the Lotus name back on the F1 grid.
While this issue creates an unwelcome sideshow for Fernandes and the team, he has plenty of the pound seats in his corner, and he will work hard to defend his position. He has the full backing of the Malaysian government, he’s setting up grassroots systems to bring in talented individuals and drivers, and most importantly, he owns the Team Lotus F1 assets and already has an entry. One of his biggest allies will be Ecclestone himself, who would be unlikely to give the green light to Lotus Group attempting to create its own F1 entry while this conflict continues.