- Today - Terry Fenwick Turns 54
- QPR Report Messageboard -
- Follow QPR REPORT on TWITTER!
-Photos: From the 1880s to the 21st Century - The Bushman QPR Photo Archives
- Year ago Today: Mark Hughes Final Game in Charge of QPR (Southampton Loss)
Today: Ian De Cotta
Fernandes keeps faith in QPR and Caterham
Unlike the AirAsia success story, Tony Fernandes’ Midas touch appears to have deserted him when it comes to investing in sports teams. But the Malaysian entrepreneur disagrees. In an exclusive interview, he tells Ian De Cotta (email@example.com) about his belief that English football club Queens Park Rangers and the Caterham F1 racing team will eventually live up to their potential.
SINGAPORE — He paid more than £30 million (S$60.3 million) in 2010 to start the Lotus F1 racing team and another £35 million the following year to take over the majority ownership of English Premier League (EPL) club Queens Park Rangers (QPR).
But, so far, Tony Fernandes’ forays into sports through his Malaysia-based Tune Group have not panned out the same way his storied acquisition of AirAsia 12 years ago has.
Two years after their return to the Premiership under Tune’s ownership, QPR were relegated to the second-tier Championship.
The London club’s financial statements covering the 2011-2012 season announced in March this year also revealed losses of £22.6 million and debts of £89 million.
Lotus, which was renamed Caterham last year after the team bought the British sports car maker of the same name in 2011, are also having their worst Formula 1 season. They are currently in last spot with two races to go, ahead of this morning’s United States Grand Prix.
But Fernandes told TODAY the stories of both QPR and Caterham have yet to play out the way he envisioned. He pointed out that QPR are currently third in the Championship and poised to earn automatic promotion to the EPL if they finish in the top two.
“You buy a team for its potential, and both QPR and Caterham have amazing potential,” said the Malaysian entrepreneur.
“QPR are doing well in the Championship. Relegation was the hard reset we needed. It gave us the opportunity to rebuild the club into something better. If we return to the EPL, it will be different.”
After their new car with new technical inputs struggled last year, the Group’s F1 team, which run on an annual budget of £60 million, are beginning to recover lost ground, he added. They have also strengthened the technical department with key appointments, and he is confident there will be a boost in their performance next season, which will see major rule changes that will affect car design.
Said Fernandes: “For Caterham, we got a little too clever last season and paid the price. But we have made some modifications and got much closer to midfield. Next season will definitely be one to watch.”
The performance of Fernandes’ two sports teams is unlike that of budget carrier AirAsia, which was weighed down under RM40 million (S$15.6 million) of debt when he bought it for RM1 from Malaysian government-linked company DRB-Hicom in 2001.
Within a year, he turned debt and losses into profit and it started his meteoric rise in the corridors of power in the corporate world. In just more than a decade at the close of the 2012 financial year, AirAsia also reported revenue of RM5 billion and assets worth more than RM16 billion.
Fernandes’ successes also include quick profits in the roll-out of the group’s Tune Hotel in 2009 and Tune Insurance two years later.
But despite QPR and Caterham’s less-than-ideal performance on and off the sports arenas, Fernandes said they are playing key roles in the Tune Group.
Their biggest value is the captive audiences they deliver at a fraction of the price they would otherwise have to pay sports teams they do not own.
For one, it costs AirAsia only £2.5 million and £1.2 million a season to have its brand splashed respectively across QPR players’ shirts and Caterham F1 cars.
But their power to reach eyeballs instantly is priceless to Fernandes. He said: “F1 and the English league are phenomenally successful sports watched around the world. That’s a huge captive market. Having AirAsia and Tune Hotels beamed straight into people’s homes is more powerful than putting out a print ad.”
“Sport helps to put the Tune out there. Branding impacts the bottom line, even if you can’t measure it. The aura of our brand has attracted a lot of partnerships and sports is a large part of that aura.”