Orange set to let their Arrows fall

12 April 2012

ORANGE, the debt-strapped mobile telecoms company, is poised to abandon its £15m a year sponsorship of Orange Arrows - the debt-strapped Formula One motor racing team.

'We're at the end of a three year- contract,' admits Arrows. 'We are undertaking a big sponsorship review. But no decision has been made.'

However a renewed contract is unlikely, Formula One sources say. Orange's parent France Telecom is crippled by £40bn debt.

Only the implied backing of the French government, its majority owner, saved the company from the humiliation of having its debt downgraded to junk status.

Arrows' debts to suppliers nearly kept it off the starting grid at the British Grand Prix.

Owner Tom Walkinshaw had to bail it out with £3m at the last minute. The team is in talks with potential buyers.

Formula One faces a deepening financial crisis, as costs soar and sponsorship is hit by the business slump. The Prost team folded before the start of the season.

There is no significant revenue sharing between strong teams such as Ferrari and the others.

Sport controller Bernie Ecclestone recently suggested surviving teams might have to field three cars instead of two, to make up the numbers.

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