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Future of Formula 1: 2013 Concorde Agreement, Preferential treatment and IPO [merged]


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#301 Ross Stonefeld

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Posted 25 May 2012 - 20:32

F1 is already run to maximise profits, opening it up to other shareholders is hardly going to make it worse.

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#302 jjcale

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Posted 25 May 2012 - 20:41

This is about share price. Though share price is obviously a reflection of the health and potential of a company. As I type this post FB is valued at 87billion. And yes I think it's completely overrated. They make three times as much money as F1 despite having ten times the audience.


yeah but ... its easier to do a snow job on "the next big thing" than on something that's been going for decades... and is a pretty well know quantity. Whilst this is going to be the first IPO, its going to be the third or fourth sale/transfer in the last 10 or so years... its not like people have not gone over these books before or the business has changed radically over the last few years.

Share prices/valuations are not a complete black art. Its based on pretty standard formulas. What matters is how you assess the factors going in. I dont understand how they can have such a different assessment post CVC as there were for the previous sales/transfers... do you mean to tell me that F1 has doubled in value in the last 5 or so years???

Relatively credible institutions say the right valuation is $10bn and though I dont believe them, I dare not dismiss them - so I asked if anyone has any idea what they used to come up with this... but its OK. I'll have to come off line and ask someone about this one.

#303 rabbitleader

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Posted 25 May 2012 - 20:42

F1 is already run to maximise profits, opening it up to other shareholders is hardly going to make it worse.


Yes but would n't it be a million times better if those profits or a significant share were retained by teams so that more of the profits are reinvested back into F1 rather than leaking out of the sport?

Are you not sick of hearing montezemolo's whinging, especially as Ferrari are always very quick to sign away rights to Bernie Ecclestone rather than standing firm with the teams...isn't that really why Redbull and Ferrari broke ranks with FOTA in the lead up to doing another dirty deal with Bernie??

#304 ivand911

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Posted 25 May 2012 - 20:51

Mercedes may get F1 board seat
http://www.pitpass.c...t-F1-board-seat

#305 Ross Stonefeld

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Posted 25 May 2012 - 21:09

Yes but would n't it be a million times better if those profits or a significant share were retained by teams so that more of the profits are reinvested back into F1 rather than leaking out of the sport?

Are you not sick of hearing montezemolo's whinging, especially as Ferrari are always very quick to sign away rights to Bernie Ecclestone rather than standing firm with the teams...isn't that really why Redbull and Ferrari broke ranks with FOTA in the lead up to doing another dirty deal with Bernie??


But they aren't going to put it back into the sport, they're going to put it in their pockets. And I do mean the teams. So their budgets will climb every year, and so will ticket prices. No one will sensibly say "you know, we're exploiting the fans, we can reduce the prices for everything a little".

#306 rabbitleader

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Posted 25 May 2012 - 21:31

But they aren't going to put it back into the sport, they're going to put it in their pockets. And I do mean the teams. So their budgets will climb every year, and so will ticket prices. No one will sensibly say "you know, we're exploiting the fans, we can reduce the prices for everything a little".


Well, it is still a million times better that the the profits do go into the pockets of the teams (as it's their core business afterall!) And if they choose to spend all th extra money that comes their way on trying new ideas and testing etc, well that is still far better than what we have now.

Who want's to see only 5-6 teams on the grid, with most F1 teams living on the edge of existence.......

URM.... yes Ferrari don't care do they, especially as they are keen to get three cars on the grid! .....and if you are a Ferrari fan, why would you give two hoots about the racing F1 teams....the "garagiste's" I think was the terms that was coined disparagingly by LdM! Well they should because without a strong grid line up with many flavours, F1 is nothing!

Edited by rabbitleader, 25 May 2012 - 21:33.


#307 slmk

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Posted 26 May 2012 - 11:12

This is more than a simple difference that ends with 'all else profits'.

If I own and operate a privately a held corporation that produces 'anything', I can operate the firm for long or short term gain.

If I operate a publicly held entity which is beholden to investors, I have a responsibility to its investors first, last and forever. When I am an investor my concern is a return on investment (ROI). If I don't see 9% profits every 3 months, you will be in very hot water.

~


Believe me, investors in privately-held companies are as much after profits as anybody else. I think you think that privately-owned businesses are "mom and pop" shops or family businesses. That's so not the case. Some of the largest corporations in the world are privately-owned. Every corporation has a responsibility to investors, may they be DEBTholders or STOCKholders.

Have you heard of Private Equity/LBOs? Those guys raise an awful lot of money from wealthy people and funds, and they buy-out companies they think are undervalued, they re-shuffle them and sell them (or sometimes float them, like for CVC/F1) for a lot more than they bought them.



#308 slmk

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Posted 26 May 2012 - 11:16

This is about share price. Though share price is obviously a reflection of the health and potential of a company. As I type this post FB is valued at 87billion. And yes I think it's completely overrated. They make three times as much money as F1 despite having ten times the audience.


They are not in the same business though, so a straight comparison is futile. And Facebook is growing at a much faster pace than F1. Growth is very "valuable" in terms of stock price. Investors will definitely pay for growth, which is why a company like Green Mountain Coffee was America's most expensive stock (on a relative basis of course) at some point last year... it's growth in the coffee industry was out of this world and investors thought it warranted a much higher valuation.

#309 Fastcake

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Posted 26 May 2012 - 11:35

Well, it is still a million times better that the the profits do go into the pockets of the teams (as it's their core business afterall!) And if they choose to spend all th extra money that comes their way on trying new ideas and testing etc, well that is still far better than what we have now.


I think what Ross was trying to say is that the money is hardly going to go into team budgets, it's going to head directly to a few shareholders pockets. Just look at a few of the current team shareholders, Mumtalakat and McLaren, Aabar owning a part of the Mercedes team, Williams being publicly traded and that venture capital firm that owns HRT - you think they're all there for the honour of helping a team or to extract as much money as possible?

#310 slmk

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Posted 26 May 2012 - 11:42

There is a lot of info available on F1.... some of it is guesstimates ... but F1 has a track revenue record and has been sold before for known amounts and there have been lots of law suits over the years that have pulled back the covers.... so we are not completely in the dark.

Even Facebook, to take a recent example, was a pretty easy call for a ridiculous valuation... based on the publicly available info (God knows why anyone wants to sue the banks for the failure to have a pop on the first day... its not like there was not enough info out there to know that there was a big risk that it would not happen this time - but I digress) .... similarly the $10bn figure strikes me as similarly unrealistic. Up to this point people were talking about £2-£3bn.... where the hell did $10bn come from :stoned:

No offence, but someone telling me in abstract terms how the process works is not what I was after.


I told you, $10bn = Market Value of Debt + Market Value of Equity. The equity is not worth $10bn...

#311 jjcale

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Posted 26 May 2012 - 13:56

I told you, $10bn = Market Value of Debt + Market Value of Equity. The equity is not worth $10bn...


Is the bit that I was asking about... but it seems to be consenus that at least $7.1bn is correct ... which is still a surprise to me.... That's still effectively double what it was "worth" when CVC entered the scene.

... there is almost a £1bn of fluff in the £10bn valuation by the way... that figure always did look too round to me.

I am still as yet no wiser as too how they decided that future cashflow is currently worth $10bn or $9bn ... and I dont mean what formula they used, I mean what they could possibly have estimated revenue to be... and whether that is based on current revenue or is it another projected increase job (the best guesstimate that I have seen said if current revenue is stable it is about $6bn... but I have not really had time to look into this. I am mostly going off memory).

#312 Owen

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Posted 27 June 2012 - 08:15

@f1enigma twitter
German media suggest that Daimler might leave F1 if the Gribkowsky trial also affect directly Bernie ... Lets see

#313 puxanando

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Posted 14 August 2012 - 08:18

More rumors about Mercedes leaving F1.

Aug.14 (GMM) Mercedes is considering a partial withdrawal from formula one at the end of 2013, the French weekly Auto Hebdo is reporting.
The Stuttgart carmaker, still yet to agree a new Concorde Agreement deal with Bernie Ecclestone, reportedly could then field only a 'semi-official' team from 2014.
Mercedes would however continue to supply customer engines, as it does currently to McLaren and Force India, whilst its 'semi-official' works team might be known as 'AMG F1', Auto Hebdo said.



#314 Sakae

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Posted 14 August 2012 - 10:30

True or False, I wonder where people are getting all these details, unless Sales let out some trial baloons just to probe broader reaction. On the other hand, Ross taking over the team yet again under different Mgt/ownership structure, while having all engineering and research done by Mercedes, could be an interesting concept (which could use some further explanation).

Edited by Sakae, 14 August 2012 - 10:31.


#315 Timstr11

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Posted 15 August 2012 - 10:13

More rumors about Mercedes leaving F1.


Auto Hebdo wants to desperately draw buyers to its magazine it seems. Sales must be very low. They could have at least tried to fabricate a story with some believable facts:

-At least state that Mercedes will withdraw and not say the team will be re-branded to 'AMG', which would be a futile excercise since Mercedes-AMG is a 100% owned by Mercedes.
In any case, what would be the point of withdrawing by just putting the name of another part of your business on the car. It's still owned by the same company.

-Officially, the performance arm of Mercedes-Benz is not called 'AMG' but 'Mercedes-AMG GmbH'.
And quess what, the F1 team is already named after the performance arm of Mercedes-Benz and is already aligned to R&D and marketing activities of "Mercedes-AMG GmbH".

-Same as above for the F1 engine operation which is named 'Mercedes-AMG High Performance Powertrains' with activities aligned to "Mercedes-AMG GmbH".


-And last but not least:

The magazine speculated that Brackley based AMG F1, currently known as Mercedes AMG, would continue to be run by team boss Ross Brawn, with Michael Schumacher in the cockpit.

:rotfl: :rotfl: I mean, really!?...

Edited by Timstr11, 15 August 2012 - 10:45.


#316 V8 Fireworks

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Posted 15 August 2012 - 12:22

But they aren't going to put it back into the sport, they're going to put it in their pockets. And I do mean the teams. So their budgets will climb every year, and so will ticket prices. No one will sensibly say "you know, we're exploiting the fans, we can reduce the prices for everything a little".

It seems that only series like WRC are not getting in on this act? Why aren't WRC teams (privateers rather than manufacturers) showered with cash as a reward for showing up time and time again, as F1 or V8supercar teams are!? :confused:

#317 V8 Fireworks

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Posted 15 August 2012 - 12:25

More rumors about Mercedes leaving F1.

It all seems reasonable.

Make the team pay for itself and only supply engines. They are also-rans anyway so the team is already a flop (where is the dominant wdc win as Button savoured??), nothing will change-- the team will not perform worse!

#318 Sakae

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Posted 15 August 2012 - 13:38

I am not sure that any one of present teams view F1 as money making, and long term self-contained business entity. If you do, than you need to have your head examined. For many (if not all), money comes from (someone's) limited advertising budget, and accounted for as cost of doing business, isn't that so?

#319 ali.unal

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Posted 15 August 2012 - 13:52

I am not sure that any one of present teams view F1 as money making, and long term self-contained business entity. If you do, than you need to have your head examined. For many (if not all), money comes from (someone's) limited advertising budget, and accounted for as cost of doing business, isn't that so?

Well, there are Williams and Force India (and McLaren to some extent), whose core or only business is racing in F1, thereby making money out of it should be a concern for them. Granted, Williams Hybrid is a standalone entity which is making money from Porsche at the moment, but it's the direct result of efforts Williams put in F1.

Edited by ali.unal, 15 August 2012 - 13:53.


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#320 Sakae

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Posted 15 August 2012 - 14:27

Well, there are Williams and Force India (and McLaren to some extent), whose core or only business is racing in F1, thereby making money out of it should be a concern for them. Granted, Williams Hybrid is a standalone entity which is making money from Porsche at the moment, but it's the direct result of efforts Williams put in F1.

I do not want to quibble, but you could be mistaken. All three teams you named are supported from sources other than F1 dividents by the end of year. I am not implying they do not need revenue shares, but you cannot make your business model totally dependable on F1 because you might quite easily end up with all the cost in pay-column, and no points/revenues in the second column.

Edited by Sakae, 15 August 2012 - 15:50.


#321 rsaca

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Posted 15 August 2012 - 15:08

Unlike Facebook F1 is a real business with a track record and reasonably transparent projections... in fact it should be a nice little consistent dividend payer. It should actually be OK for an IPO once the Facebook debacle blows over in a couple of months - subject to overall market conditions - in fact, they could contrast it with something like Facebook as a selling point.

What I dont understand, is how they came up with the $10bn valuation .... It might have been said earlier in the thread and I missed it... but has anyone got a clue how they got to that figure?


Actually, the danger of Facebook vrs. F1 is not that F1 is a real business which I agree with your point, but on the valuation itself.

Numbers don't lie and that's where Facebook got screwed. They valued their company 1/5th of Apple with 1/56th of its income.

Therefore, I hope F1 is being valued in accordance with the brand value and its income, since it can really be huge business in many years to come.

#322 Sakae

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Posted 17 August 2012 - 04:28

Since we are led to believe that we have snooping bloggers everywhere, has anyone actually seen a copy the CA, or at least would know something about it's structure? I guess it's probably a contract of a sort between FOM and the Teams, but as far as I can tell it's most guarded document around F1. People apparently claiming to know what's going on in boardrooms of private corporations, but zip about this one. Most interesting reading could be about differences between next and last versions.

Edited by Sakae, 17 August 2012 - 04:29.


#323 packapoo

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Posted 17 August 2012 - 07:45

Since we are led to believe that we have snooping bloggers everywhere, has anyone actually seen a copy the CA, or at least would know something about it's structure? I guess it's probably a contract of a sort between FOM and the Teams, but as far as I can tell it's most guarded document around F1. People apparently claiming to know what's going on in boardrooms of private corporations, but zip about this one. Most interesting reading could be about differences between next and last versions.


It doesn't exist in fact - it is all a smoke and mirror game, put out to achieve an end.
Image and prestige are what makes it apparently successful - no one team owner, manager or principle wants to admit that they haven't seen it, signed it or have a copy because, in their eyes, they loose prestige to their peers.
They've been sucked in, in other words.
This is the reason no-one has leaked it because there's nothing to leak.


#324 Sakae

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Posted 27 September 2012 - 19:23

FORBES | BUSINESS OF F1

Is Formula One's IPO Delay The Latest Sign Of Struggle?
http://www.forbes.co...gn-of-struggle/


#325 bourbon

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Posted 09 October 2012 - 16:58

now the Snubbing of Red Bull by FOTA - where Ferrari and Sauber, also not FOTA members, attended the last meeting to "discuss F1 and its interests". I suppose they figure RB and STRF would not be interested, lol.

http://www.autosport...t.php/id/103242

This type of dealing is why there will be no universal harmony and I feel nothing but acrimony at top teams whining about RBR. I'm no fan of any particular constructor - but I am a fan of adulthood and when these bobble heads act like 5 year olds on a playground, you have to wonder at the intellectual integrity of the sport.

#326 Timstr11

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Posted 09 October 2012 - 17:27

now the Snubbing of Red Bull by FOTA - where Ferrari and Sauber, also not FOTA members, attended the last meeting to "discuss F1 and its interests". I suppose they figure RB and STRF would not be interested, lol.

http://www.autosport...t.php/id/103242

This type of dealing is why there will be no universal harmony and I feel nothing but acrimony at top teams whining about RBR. I'm no fan of any particular constructor - but I am a fan of adulthood and when these bobble heads act like 5 year olds on a playground, you have to wonder at the intellectual integrity of the sport.

There is more to it than meets the eye. The respected Dieter Rencken wrote a few things about this meeting at motprsport-total.com.

Redbull is vehemently against what they were discussing there: namely further RRA restrictions to be controlled via FIA or an independent company.
What they were also discussing is RedBull's 2011 annual report, which reveals increased spending by RBR in 2011

McLaren and co's paranoia about RedBull spending does not seem completely unfounded: While outwardly emphasizing that Formula 1 "slimming down" [in expenses], the filings with the British Chamber of Commerce accounting documents of Red Bull Racing and Red Bull Technologies companies reveal that costs and staff have increased from 2010 to 2011. Red Bull Racing increased the number of staff in 2011 from 51 to 52 employees. Red Bull Technology went from 595 to 605 Overall, which gives a headcount of 657 employees.

Interestingly, Redbull's turnover rose from 159.4 to 176.8 million British pounds (218.9 million euros), at Red Bull Technology from 178.2 to 215.2 million pounds (266.4 million Euro). Say: Turnover of both companies based in Milton Keynes rose by 13.9 percent from 2010 to 2011. This results in a simultaneous increase of 4.8 million pounds (5.9 million euros) and thus a similar increase of budget expenditures.


http://www.motorspor...a_12100906.html
http://www.motorspor...r_12100815.html

So rather than laying in on the teams at the table, the majority, I would ask why RedBull remains in-cooperative.

Edited by Timstr11, 09 October 2012 - 17:27.


#327 Sakae

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Posted 09 October 2012 - 17:35

now the Snubbing of Red Bull by FOTA - where Ferrari and Sauber, also not FOTA members, attended the last meeting to "discuss F1 and its interests". I suppose they figure RB and STRF would not be interested, lol.

http://www.autosport...t.php/id/103242

This type of dealing is why there will be no universal harmony and I feel nothing but acrimony at top teams whining about RBR. I'm no fan of any particular constructor - but I am a fan of adulthood and when these bobble heads act like 5 year olds on a playground, you have to wonder at the intellectual integrity of the sport.

I am guessing in here, despite that it would be interesting to know full story, but perhaps it is so because DM aligned himself with FOM this year without much concern what others think, and his position is probably not seen being aligned with interest of other teams but his two.

#328 Sakae

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Posted 29 April 2013 - 06:32

IPO is going ahead...

#329 Clatter

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Posted 29 April 2013 - 08:10

And Bernie is turning the screws.

#330 Ross Stonefeld

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Posted 29 April 2013 - 10:44

Just give everyone the same amount and let them earn more through sponsorship. McLaren will still earn more than Marussia and Ferrari will still get a premium for being Ferrari.



#331 Clatter

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Posted 29 April 2013 - 10:53

I don't mind them paying out on a sliding scale based on championship position, but the amounts are just wrong at the moment.

#332 Slackbladder

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Posted 29 April 2013 - 11:04

And Bernie is turning the screws.


Bye bye either Marussia or Caterham... probably Caterham given current form.

#333 Sakae

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Posted 29 April 2013 - 11:04

Setting aside a sliding scale or amounts paid to the teams, there is a difficult question to ponder, and I have no solution, to be frank. Hypothetically speaking, difficulties with sliding scale alone are exemplified by the case of Ferrari. They might be by a year-end off the podium, yet demographics will show, that they pull significantly large audiences to TV sets than season winners. Legitimate question is then, why they shouldn't receive an extra bonus as an addition to sliding scale enumeration for what they are - name, which payers came to watch?

#334 Clatter

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Posted 29 April 2013 - 11:23

They would still receive extra via sponsorship. If the sport and all it's participants agree they should receive extra because of their name, then that's their decision. Personally I don't think they should, but any money after that could and should be more fairly distributed amongst the teams.

#335 Ross Stonefeld

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Posted 29 April 2013 - 11:27

I don't mind them paying out on a sliding scale based on championship position, but the amounts are just wrong at the moment.


I just think it'd be better for everyone if they did. Marussia need that money a hell of a lot more than McLaren and more cars is generally better. It would tip the competitive balance fractionally towards more equality which isn't a bad thing either. It's almost like a budget cap.

#336 kar

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Posted 29 April 2013 - 11:30

Pretty risky investment I would have thought. Like for example, what if the FIA were to withdraw the commercial rights, or if the teams decided sod this bye bye.

While I'm sure contracts are in place, it's still pretty tenuous, and F1 is pretty tapped out commercially I think, unlike Facebook which promised (and is delivering) potential growth, it's hard to see where F1 is going to grow. It's already conning most of the world's third word regimes out of their citizens money...

I wouldn't invest my money in it, that's for sure.

#337 Slackbladder

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Posted 29 April 2013 - 11:34

Setting aside a sliding scale or amounts paid to the teams, there is a difficult question to ponder, and I have no solution, to be frank. Hypothetically speaking, difficulties with sliding scale alone are exemplified by the case of Ferrari. They might be by a year-end off the podium, yet demographics will show, that they pull significantly large audiences to TV sets than season winners. Legitimate question is then, why they shouldn't receive an extra bonus as an addition to sliding scale enumeration for what they are - name, which payers came to watch?


If its the case of a one off event, then sure, but I can't see that to be equitable in a yearly regular contest, which should be fair for all. Teams like Ferrari have the ability to make much more than the smaller teams because of their name in other areas (merchandising etc)



#338 Ross Stonefeld

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Posted 29 April 2013 - 11:46

Pretty risky investment I would have thought. Like for example, what if the FIA were to withdraw the commercial rights, or if the teams decided sod this bye bye.

While I'm sure contracts are in place, it's still pretty tenuous, and F1 is pretty tapped out commercially I think, unlike Facebook which promised (and is delivering) potential growth, it's hard to see where F1 is going to grow. It's already conning most of the world's third word regimes out of their citizens money...

I wouldn't invest my money in it, that's for sure.


If F1 floats I'd be happier investing in it than racing in it. If you thought Bernie was profit motivated now wait till he has shareholders to appease. Right now he needs to keep the teams from rioting and that's about it. Now we have two groups in direct competition. Teams get more = shareholders get less. And the reverse is true.

#339 kar

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Posted 29 April 2013 - 12:49

If F1 floats I'd be happier investing in it than racing in it. If you thought Bernie was profit motivated now wait till he has shareholders to appease. Right now he needs to keep the teams from rioting and that's about it. Now we have two groups in direct competition. Teams get more = shareholders get less. And the reverse is true.


It's a good point, I mean the executives of a company have an obligation first and foremost to shareholders and their interests. I have a suspicion that a lot of money will be thrown at Ferrari since along with McLaren they are the only sacrosanct teams. I'm not even sure Williams is that important any more given how long they have been away from the top.

Bit unfair (and I say this as a Ferrari fan) to the rest of them though.

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#340 Sakae

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Posted 29 April 2013 - 15:38

Teams are spending a lot of money annually, working relentlessly day and night, practically whole year around, basically paying for privilege being enslaved. You piss teams off, and you will see what happens to your overpriced stock should they walk away on you, and you will end up with series in which Marrusia and likes will be racing Caterham(s). Good luck with that.

Edited by Sakae, 29 April 2013 - 15:40.


#341 Clatter

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Posted 29 April 2013 - 16:23

I just think it'd be better for everyone if they did. Marussia need that money a hell of a lot more than McLaren and more cars is generally better. It would tip the competitive balance fractionally towards more equality which isn't a bad thing either. It's almost like a budget cap.


It would be OK if the money is reinvested into the team, but I can imagine a team being run on the cheap just so someone could pocket it. I think there does need to be some incentive to improvement.

Edited by Clatter, 29 April 2013 - 16:24.


#342 Clatter

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Posted 29 April 2013 - 16:27

Pretty risky investment I would have thought. Like for example, what if the FIA were to withdraw the commercial rights, or if the teams decided sod this bye bye.

While I'm sure contracts are in place, it's still pretty tenuous, and F1 is pretty tapped out commercially I think, unlike Facebook which promised (and is delivering) potential growth, it's hard to see where F1 is going to grow. It's already conning most of the world's third word regimes out of their citizens money...

I wouldn't invest my money in it, that's for sure.


Can they do that? Didn't MM sign them away for 100 years?


#343 Fastcake

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Posted 29 April 2013 - 16:45

Can they do that? Didn't MM sign them away for 100 years?


Theoretically, but their must be some severe penalties for doing that. We know Bernie ain't stupid.

#344 TC3000

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Posted 29 April 2013 - 20:43

.......
case of Ferrari. They might be by a year-end off the podium, yet demographics will show, that they pull significantly large audiences to TV sets than season winners.
Legitimate question is then, why they shouldn't receive an extra bonus as an addition to sliding scale enumeration for what they are - name, which payers came to watch?


Now, we could turn this argument on it's head, by pointing out that during the time they (Ferrari) dominated with Schumacher, general interest and TV viewership declined somewhat.
Nobody (apart from some hardcore fans maybe) would want to watch a "Ferrari Challenge".
So why they are important, they need some opposition to make it a interesting sporting contest for most of the general public (hard core fans aside) and thereby a business.
No foe - no glory

Based on this, one could say all the teams are "equally important" as far as the business o the show goes, and thereby deserve a equally share of the pie from FOM.
There will be still winners and losers, and the winners will have opportunity to cash in on their success, in terms of sponsoring, as Ross says.
You could see it as a business in which the teams are the shareholders. If the business is strong (profitable) and decides to pay a dividend, then every shareholder will participate
according to it's share of the business.
I think, that it would be sensible to distribute the FOM money, o at least a large part of it (maybe 2/3) on such a base.
This would put a baseline to any team budget, and provide a foundation (more or less fixed/guaranteed income), on top of this, you have your sponsoring income, maybe pay drivers,
and maybe success bonuses based on WCC points.
The teams would be less likely to "walk away" because their is money to be had. End if someone decided to call it time to move on, he has something to "sell", as the franchise (the share packet)
would be worth something.
Today IMHO a team like Marussia or HRT is worth nothing. (no offense against the teams or their fans).
But why would someone want to buy Marussia, who have racked up debt in order of ~180 Mill over the last 3 years? What does he get? A couple of trucks, tool boxes, some cars and maybe a engine lease?
Before it was a "closed Club" membership by buying in only, so even a small team like Jordan or Minardi was "worth something" if you wanted to be in F1.

Unless the teams become shareholder in the business of F1, they are just like normal employees, who get paid to do their job.
If you are happy with your pay and your job, you will stay. If not, you can either stay and be unhappy or leave, but that would require a different job, which pays more, or make you at least happier.
If the owners "piss off" enough of their "employees" they are maybe left with an empty shell, dysfunctional business, so in their own interest they have to strive for a balance.
All in all, the teams should seek to become shareholders IMHO, in doing so, they will have a say in how "their" sport is run.
By the look of it, that is what Ferrari and RBR are planing to do anyway, which will give them even more clout/leverage compared to what they already have (in the case of Ferrari).
I'm not sure where McLaren, Lotus (Enstone) and Mercedes sit on this, the others may not have the financial muscle to buy into it at the moment.


#345 Ross Stonefeld

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Posted 29 April 2013 - 22:05

It would be OK if the money is reinvested into the team, but I can imagine a team being run on the cheap just so someone could pocket it. I think there does need to be some incentive to improvement.


Well if you had ten teams each one would get 50 or so. But Force India has an income of about 45 and spent 70+ last year, so I'm not sure they're automatically going to use it as a money spinning idea.

I do take your point. With a 50m payout no matter what we'd suddenly have 11th, 12th, 15th teams; pushing the team share lower and lower. I'm sure McLaren would *love* it.

But you know what? That'd be AWESOME. I don't think it'd quite be back to the 40-car late 80s, but you might get 30. So there'd be a battle to get on the grid, and since a few teams probably wouldn't be able to qualify for every race, an almighty battle to be the last team to get the prize money(which I guess would be Team 13? 26 starters max?). So everyone would get 38 in the end.

There. I've given you a championship and tail-end-charlie battle royale :p

Although within a few years it might solidify into 13 permanent teams with no newbies because how are you going to compete against a team that's getting 38m + sponsorship. Unless we put in a catch that the last place team gets dropped every year.

I dunno, 26 car grid with decent funding would be pretty fun.

#346 DutchQuicksilver

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Posted 29 April 2013 - 22:47

Bye bye either Marussia or Caterham... probably Caterham given current form.

Exactly Bernie's plan behind this decision. He wants just 10 teams and if you have to choose between Caterham and Marussia, the Russian team seems to have a brighter future really, with their technical partnership with McLaren.

I think it's safe to say that with this decision, the whole bring more teams into F1 idea from end 2009 has been a complete failure. I still believe F1 or the FIA could have done more to keep the likes of Honda, BMW and Toyota on board. At least they were competitive.

Edited by DutchQuicksilver, 29 April 2013 - 22:48.


#347 rasul

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Posted 29 April 2013 - 22:48

the case of Ferrari. They might be by a year-end off the podium, yet demographics will show, that they pull significantly large audiences to TV sets than season winners. Legitimate question is then, why they shouldn't receive an extra bonus as an addition to sliding scale enumeration for what they are - name, which payers came to watch?


I might be a bit biased, but I agree with this. Ferrari is the brand that draws audiences and, therefore, money. It's only fair that Scuderia gets an extra bonus for the use of her brand. As Bernie once said, "We’d rather have 10 teams as long as we don’t lose Ferrari." And it's true. He can't afford to lose Ferrari. The funny thing is, Ferrari doesn't even need winning to keep drawing audiences. The magic of the red car is enough.

#348 Ross Stonefeld

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Posted 29 April 2013 - 22:57

But Ferrari benefit immensely from being involved in F1, and the power of their brand means they'll always be able to charge a sponsor more than Red Bull or McLaren have. So they already get an extra benefit that only they have.

It's not like F1 is a huge pain for Ferrari and they're entering the series to be loyal/charitable and we should all be so grateful that they're here.


#349 rhukkas

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Posted 29 April 2013 - 22:57

I might be a bit biased, but I agree with this. Ferrari is the brand that draws audiences and, therefore, money. It's only fair that Scuderia gets an extra bonus for the use of her brand. As Bernie once said, "We’d rather have 10 teams as long as we don’t lose Ferrari." And it's true. He can't afford to lose Ferrari. The funny thing is, Ferrari doesn't even need winning to keep drawing audiences. The magic of the red car is enough.


I think that will start to wain as the market changes. Times are a changin'

#350 Sakae

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Posted 30 April 2013 - 05:13

Christian Sylt, caught up with the soon-to-be 83-year-old ring leader of the world’s most advanced form of racing and discovered the reason for the lack of a commercial agreement between Marussia and Formula 1:

“they don’t have a commercial agreement because they are not in the top ten. We pay the top ten, that’s what we do. For three years we did something different because we had an agreement with Max but from now on we will pay the top ten and that is it.”


I wonder what is impact of this; bye bye VW, Honda, Toyota, Hyundai, and others..?

Edited by Sakae, 30 April 2013 - 05:14.