Death of the wildcard?

[GTRMagic]

Interesting to read mr Fogarty's article in AA this week regarding TEGA's intention to apparently buy back 2 L2 franchise licence slots.

The article discusses how the #7 Rod Nash Racing (RNR) franchise licence slot is apparently agreed to be purchased by Paul Cruickshank Racing (PCR) to run Mr Sci Fleet in the ex-888 BA.

Note that the article quotes Mr O'Reilly stating that TEGA wants to buy back 2 L2 franchise licence slots if they come onto the open market.

Imagine for a minute a theory.... where Mr Nash wants to buy a L1 franchise licence slot from somewhere, and needs to flog off his L2 franchise licence slot to do it.

Why upgrade to an L1? Well the income generation potential from the Team's Agreement suggests an L1 provides the teams with probably two and a bit times more income than an L2.. and a seat on the board if you can garner enough votes.. and indeed more votes in TEGA licence holder decisions.

So Mr Nash has discussions with an L1 franchise owner... and agrees to buy an L1 franchise licence slot for the well-known going rate of $1.5m per slot.

Mr Nash has to sell off his L2 franchise to fund the L1 franchise purchase. So he agrees to terms with PCR to do just that, for the alleged going rate of $900k per slot.

Uncle Kelvin gets into the mix... and with the power vested in him by the state of TEGA-dom, makes notice of TEGA's intention of reclaiming this particular RNR L2 franchise licence slot.... for the $900k mentioned.

Under the rules of the Supercar game, TEGA can reclaim licences if it sees fit... quite how it would stand up in the courts of the land I am not so sure.

So PCR has been gazumped out of a licence. They have a sponsor, a car, and a team... and want to go racing.....

There is another option.... Mr Tratt has announced to the world that his Toll backing is off to HSVDT, and that his L2 Paul Little Racing-owned (PLR) franchise licence slot is for sale... reportedly (in AA ) wanting $900k for the thing.

PCR wanders up to Mr Tratt, and agrees to terms to buy the PLR franchise licence slot from Mr Tratt.... for the $900k, same as on offer to Mr Nash. It costs no more, is arguably as good a franchise (albeit at the Winton end of pitlane)

Uncle Kelvin gets into the mix again... continuing the use of the power vested in him by the state of TEGA-dom, makes notice of TEGA's intention of reclaiming this particular PLR L2 franchise licence slot.... for the $900k mentioned.

So PCR has been gazumped out of a licence. Again! They have a sponsor, a car, and a team... and want to go racing..... but cannot do so. A lesser team may figure that TEGA is out to get them....

There is funding in the budget for a $900k buy of an L2 franchise licence slot, but it is a big jump up the road to $1.5m to buy the other L1 franchise licence slot still around.

So what do they do... find someone to stump up the extra $600k... take TEGA to court for the double gazumping... or indeed end up back where the rumour started many months ago, with a Dynamik franchise being used to operate the PCR car next season...

The AA article suffers a critical failure in understanding what franchise values are likely to do.... Imagine if the 2 lazy L2s on the market are taken out by TEGA.... that leaves only the single aforementioned L1 around available to buy. Mr Fogarty thinks this L1 franchise licence slot will be worth less because it is unable to participate at the grid restricted rounds....

.... except... the TEGA manoeuvres of taking out the RNR & PLR franchise licence slots from the market have meant that every other franchise holder has a place on the grid at every round in season 2006!

Lets say that again... every other franchise holder has a place on the grid at every round in season 2006!

This means Britek will be able to field 2 cars at every event (and may give Mr Seton another shot at the title....) and Dynamik may be able to continue at every round as well.....

Quite what this does to the 6 remaining L2 franchise licence slot holders is a little scary. PMM, TKR, Britek (2), Romano & Perkins Engineering own the 6 L2 franchise licence slots left after the repurchase.

What will TEGA do?
- Take into account the considered arguments into mediation PMM have had thus far regarding the complimentary upgrade to L1 status?
- Hold the gap in the franchise income between an L2 and an L1 as a payment towards an upgrade of a licence of ~$600k over 3 years
- Automatically convert the L2s to L1 status because TEGA doesnt need the surpluses of the last 2 seasons to buy out any more franchises?
- Sit on its hands and retaun the '2-class' franchise arrangement
- Keep buying L2s till there are no more left

Decisions, Decisions, Decisions.... all convoluted, and all arguably unenforceable at common law.....

Presuming any of this actually happened of course