The ticking clock behind Williams's potential team sale

When George Russell and Nicholas Latifi leave the pits at the Red Bull Ring for free practice this Friday, their cars will look noticeably different from when a Williams FW43 last graced the track in Formula 1 winter testing.

Williams has adopted a new colour scheme after splitting with former title sponsor ROKiT at the end of May. Now the team's 2020 challenger is a sleek overall white with blue flashes, where once it was jarringly splashed with red.

The FW43 does now look very clean, but definitely a little bare - with 'Williams' writ large on the rear wing in place of a sponsor's logo a reminder of what the team has recently been through. Off-track developments over the past few months point to deeper change at Williams than merely new colours. Indeed, if certain suggestions play out, they could result in the biggest change in the family-run squad's 42-year history as an F1 constructor.

In December 2019 Williams sold the Advanced Engineering entity - which among many projects runs the Jaguar Formula E team - with WGPH (Williams Grand Prix Holdings) retaining a minority stake. In April WGPH refinanced its corporate borrowings, which resulted in a loan package worth £28million via a mortgage on its land and building assets, with more than 100 of its historic F1 cars included as security.

The new agreement meant HSBC, which issued loans to the company in 2015 that have now been replaced, is retained as Williams's long-standing banking partner, and Latifi's father Michael also contributed to that lending.

The refinancing was conducted against the dramatic backdrop of the unfolding coronavirus pandemic, which by that stage had forced the cancellation of eight F1 races, with many more subsequently cancelled or shifted before a start to the season, at this weekend's Austrian Grand Prix, could be arranged.

The lack of races impacted the distribution of F1's prize money, with Liberty Media even having to move assets between its own divisions to give F1 $1.4billion in extra cash. Some squads were provided with advance team payments to see them through.

Then, at the end of May, Williams made the bombshell announcement, alongside the split with ROKiT, that it's now considering the partial or even full sale of the team to ensure its survival. In short, the operation that Frank Williams established as a constructor in 1978 alongside co-founder Patrick Head could soon be heading out of the family's hands - something to which it had long been opposed.

Analysis: Why Williams is up for sale

"The WGPH board is undertaking a review of all the various strategic options available to the company," the team said at the time. "Options being considered include, but are not limited to, raising new capital for the business, a divestment of a minority stake in WGPH, or a divestment of a majority stake in WGPH including a potential sale of the whole company.

"While no decisions have been made regarding the optimal outcome yet, to facilitate discussions with interested parties, the company announces the commencement of a 'formal sale process'."

Williams's status as a listed company means its financial dealings must be dealt with transparently, which is why it has been so open about seeking investment and the potential sale of the entire team

At that point, Williams revealed that it was not in discussions regarding the full sale of the team - and it noted that any subsequent talks would be covered by non-disclosure agreements - but said it had been approached regarding investment.

At the same time, the team revealed its financial plight. WGPH Group revenue declined to £160.2m in 2019, which was down from £176.5m in 2018, while F1 revenue had reduced to £95.4m from £130.7m in 2018. This resulted in a loss of £10.1m for 2019 compared to a profit of £16m in 2018.

Ultimately, Williams's financial struggles are the result of its woeful run of F1 results, something that was acknowledged by team CEO Mike O'Driscoll. Considering how dramatic the fall has been, it's worth recalling that Williams finished third in the 2014 and 2015 constructors' championships - the opening two years of the turbo hybrid era when it enjoyed a performance boost from the dominant Mercedes engines.

From there it fell to respectable finishes of fifth in 2016 and 2017, before collapsing to 10th and last in the two most recent seasons. In 2019, it scored just a single point.

How the mighty has fallen - from seven drivers' and nine constructors' championships to a potential future ownership that may be markedly different from that which established the squad's storied history.

It's interesting to consider at this point that Williams is not the only famous F1 marque enduring financial struggles, as McLaren is considering selling up to 30% of its F1 team, while its parent company also seeks ways to address a cash shortfall. Like Williams, McLaren has endured some terrible recent results, but it has at least made moves back up the grid, finishing as the best 'Class B' team in 2019.

Williams's status as a listed company means its financial dealings must be dealt with transparently, which is why it has been so open about seeking investment and the potential sale of the entire team. There is also something of a time limit to consider, as all F1 squads will need to sign up to a new Concorde Agreement to ensure their participation in 2021 and four more years beyond.

As a result of this, deputy team principal Claire Williams said at the end of May that the squad would like the investment process to be completed "within the next three to four months". This would put the conclusion at the end of September.

She also went on to say that the potential investment/sale process "shouldn't be looked on in a negative way, in a disappointing way, or anything other than positive", and that the team is fully funded to compete in the campaign finally about to get under way.

Timing is everything in Williams's situation. Its apparent financial peril stems from its lack of results, and is therefore a legacy of F1's much-maligned financial rules. But these are changing.

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As well as an expected fairer distribution of income in the new Concorde, the past few months have finally heralded the arrival of the cost-cap rules. The main intent behind this move - which operates alongside upcoming new sporting and technical rules, such as restricted windtunnel testing for the more successful squads - is to close up the grid.

If Williams can secure better results in the coming years, then it will be rewarded in terms of prize money - a virtuous circle that has squads eyeing breaking even (and whispering about making profits) as opposed to the previous system of kicking ever harder those that fall down the constructors' table.

So, Williams is in its current state because of what has gone before, but there is hope that it and the other 'Class B' squads can enjoy a brighter future - if they can weather the storm. The cost cap will be $145m in 2021, $140m in 2022 and $135m for 2023-25, but the teams will have to spend all of that money to compete with the pacesetters. Hence Williams's call for fresh financial support.

The consensus from testing was that although it remained the slowest car in the field, it had at least begun closing the gap to the midfield

F1 sporting boss Ross Brawn suggested last month that several "fairly serious" parties were interested in investing at Williams. One obvious party would be Michael Latifi, given his son's position and the fact that he already has financial skin in Williams's game - plus his Sofina Foods company logo now features prominently in the team's updated livery. But his possible investment is somewhat complicated by his 10% ownership share at McLaren.

Putting the potential seismic change of ownership at Williams to one side, the squad is at least heading into the new season on a positive note - despite it being five months since the FW43 produced it.

Back in pre-season testing, Williams ended up with the seventh fastest time, but the consensus was that although it remained the slowest car in the field, it had at least begun closing the gap to the midfield. "No doubt we're in a better position," concluded Russell.

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The team has brought in new faces to its technical department, which has been shaken up with the departure of several big names, most famously Paddy Lowe. Ex-Red Bull and Renault employees David Worner and Jonathan Carter have been signed as the team's chief designer (Worner) and deputy chief designer plus head of design (Carter), while long-time McLaren operations director and later chief operating officer Simon Roberts has joined as the race team's new managing director. Claire Williams called Roberts's appointment the "final piece" of restructuring.

The world as we know it has changed, in many ways beyond recognition, in the past few months. And it is now entirely possible that the same will happen at one of F1's most famous teams. But the critical aim is to keep it in the championship - and so the results that Williams can now achieve on track, alongside those from its desired financial influx, will be crucial to achieving that goal.