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Montezemolo complaining again


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#101 oetzi

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Posted 18 July 2014 - 06:45

Every one :)

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#102 PayasYouRace

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Posted 18 July 2014 - 07:30

That's no different to arguing it's not a myth because there's never been F1 without Ferrari so F1 couldn't possibly exist without Ferrari.

 

As correlation does not imply causation, we cannot make any pronouncements about which needs each other more. Any pronouncements about who needs the other more only comes from speculation.

 

Historically that statement is wrong because Ferrari didn't need or have any special status in 1948. Logically that statement is fallacious.



#103 oetzi

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Posted 18 July 2014 - 07:49

They were hardly going to get special historical privileges at the start of a new series, were they? So that's hardly a sensible argument (and not one anyone made, as far as I remember.)

 

I'd suggest that a very quick thought session, asking yourself whether Bernie would give away money for no reason, and whether the other teams and the FIA would agree to give Ferrari extra money and privileges for no reason, would probably lead you to the answer 'no'.

 

So they must believe Ferrari are needed. And they know a lot more about that than we do. Particularly Bernie.



#104 Fastcake

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Posted 18 July 2014 - 10:31

We went through this last time. Bernie gives away money to Ferrari, and a few smaller payouts to select other teams, to prevent them from working together and ousting him from control of the sport. Bernie knows better than anyone Ferrari have no where to go, but he also knows that they could probably remove him. It's a bribe plain and simple, but unlike the one he's up for in Munich this one can be dressed up as something supposedly legitimate.

The funny thing is that with 50% of the sports revenue potentially up for grabs, if Ferrari were to work with the FIA and the rest of the teams, even a equitable share would net them more cash each year over the current arrangements. Of course, that would mean Monty couldn't strut around the paddock while his cars are lapped by Williams, but maybe feeling special is all he really cares about.

#105 oetzi

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Posted 18 July 2014 - 10:59

So you think Ferrari (and FIAT) have allowed Montezemolo to work against their interests for a fair bit of the past 40 years in order to feed his ego and Bernie's bank account?

 

There may be an element of self-preservation on Bernie's part, but that doesn't start to explain why Ferrari, FIAT, the FIA or the other teams would agree.

 

It also doesn't start to explain what you'd do to replace Ferrari in the affections of the fans (the many hundreds of thousands of slightly less obsessed fans who actually go to races, not the 17 teenagers, 24 old men and half dozen ladies on here) or in the collective global perception of motorsport (everyone draws a racing car red. And that's not for Dallara.)

 

F1 might survive without Ferrari. Ferrari would survive without F1. That's why Ferrari gets paid to stay in F1.



#106 hittheapex

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Posted 18 July 2014 - 11:44

We went through this last time. Bernie gives away money to Ferrari, and a few smaller payouts to select other teams, to prevent them from working together and ousting him from control of the sport. Bernie knows better than anyone Ferrari have no where to go, but he also knows that they could probably remove him. It's a bribe plain and simple, but unlike the one he's up for in Munich this one can be dressed up as something supposedly legitimate.

The funny thing is that with 50% of the sports revenue potentially up for grabs, if Ferrari were to work with the FIA and the rest of the teams, even a equitable share would net them more cash each year over the current arrangements. Of course, that would mean Monty couldn't strut around the paddock while his cars are lapped by Williams, but maybe feeling special is all he really cares about.

 

I hadn't thought about that angle, but do the numbers add up? I could be wrong, but using back-of-a-beermat maths, I've read in various places, forgive me I can't remember where, that F1's profits are anything in the region of $1-1.5bn a year. Let's call it $1.25bn, split that into 12, that's just over $100m. Even if Ferrari get a bit more being a bigger team and manage to squeeze an extra $25m a year, a comment earlier in the thread that said that Ferrari receive $120m a year just for turning up. So, perhaps Ferrari prefer to stick with a guaranteed payment than the possibility of the sport's profits declining and seeing their share decine in parallel with that.

 

Of course, I could be wrong so if anybody has some different numbers that are sourced, would love to see them, cheers.



#107 Heisenberg

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Posted 18 July 2014 - 12:14

Pretty much everyone seems to complain and attack Montezemolo for his comments, but IS HE WRONG? Definetly not I'd say, regardless of the reason he said it (eg. Ferrari sucking hard this year in F1!)! F1 should be about drivers pushing, not drivers going economically and also 1.6 turbo engines don't belong in F1. Downsizing in road cars is one thing, but it shouldn't be in racing.



#108 oetzi

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Posted 18 July 2014 - 12:20

I hadn't thought about that angle, but do the numbers add up? I could be wrong, but using back-of-a-beermat maths, I've read in various places, forgive me I can't remember where, that F1's profits are anything in the region of $1-1.5bn a year. Let's call it $1.25bn, split that into 12, that's just over $100m. Even if Ferrari get a bit more being a bigger team and manage to squeeze an extra $25m a year, a comment earlier in the thread that said that Ferrari receive $120m a year just for turning up. So, perhaps Ferrari prefer to stick with a guaranteed payment than the possibility of the sport's profits declining and seeing their share decine in parallel with that.

 

Of course, I could be wrong so if anybody has some different numbers that are sourced, would love to see them, cheers.

If I remember rightly, the 'special payment' everyone gets upset about is about $25-30m. The rest of it comes from the same formula everyone else gets their money from.

 

That is just based on a vague (and possibly outdated) memory though :)



#109 hittheapex

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Posted 18 July 2014 - 12:29

If I remember rightly, the 'special payment' everyone gets upset about is about $25-30m. The rest of it comes from the same formula everyone else gets their money from.

 

That is just based on a vague (and possibly outdated) memory though :)

Thanks oetzi, that would make more sense, $120m seemed high but in the absence of anything else I went with the figure. It would seem to be in the interests of Ferrari then to go for a more equitable deal as Fastcake pointed out.



#110 oetzi

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Posted 18 July 2014 - 13:33

Thanks oetzi, that would make more sense, $120m seemed high but in the absence of anything else I went with the figure. It would seem to be in the interests of Ferrari then to go for a more equitable deal as Fastcake pointed out.

No worries.

 

It would only be in their interests to do that if they believed that the new series would be able to raise the same amount of revenue as Bernie has managed to (which it may or may not) and if they believed their interests as a niche manufacturer would be given due consideration by the representatives of mass market manufacturers with entirely different (and more transitory) objectives, which they wouldn't.

 

Ferrari are in a unique position in the sport - they've been there since the start, much longer than anyone else, and much, much longer than anyone else who was a wholly independent manufacturer (i.e. built their own engine and chassis). They are inseparable from the history of F1, and it would be seriously diminished without them.

 

On a more practical basis, the only question that really needs to be asked is: 'are Ferrari worth $30m pa to F1?' not 'could F1 survive without them?' Or, put another way, would F1 revenues be likely to drop by ~2.5% if they weren't involved. I think everyone would agree that is likely. In which case, they at least pay for their own bonus, and you could perhaps more fairly look at it as a commission on earnings generated for the sport than an extra payment. No other team contributes to this extent, so no other team is rewarded to this extent, although the global media reach of Red Bull and the corporate gigantism and history of Mercedes has unsurprisingly allowed them to start to claim some of the same privileges.

 

Asking why they get the payment and the other teams don't is a bit like asking why some drivers get paid more than others. Or some salesmen get paid more than others. Because the boss thinks they're worth more to the company than the others are.

 

Even if they weren't 'worth money' to the other teams, think of it another way: say you were the only founding member left at a start up, who'd worked through all the hard times, worked at it for 60 years while all the other staff including various CEOs left, then you finally made it to the other end where the company is profitable - you're still not the boss, but you have a certain standing in what is now a very successful organisation, and in the world's perception of that organisation. Surely only a slightly strange person would think you deserve exactly the same rewards as the latest intern, who's only there because their uncle's mates with the boss?

 

People talk about payment on merit, but dependability, durability and the refusal to quit when things get tough are merits in themselves, and arguably deserve rewarding separately from last year's results which these days (even more so than in the past) seem to depend on being able to outspend everyone else to hire a design team and build the facilities to design a winning F1 car.

 

Anyway, you can see I don't think it's unreasonable Ferrari get a few extra quid. And I think the other teams should consider it a bargain at that rate.

 

ps I reckon the fee to Ferrari would be massively higher based on their value to the sport, but Bernie knocks it down by deducting a fair sized (theorised) marketing budget (which Ferrari don't spend because they do F1 instead) - but that's just my guess.


Edited by oetzi, 18 July 2014 - 13:35.


#111 Gareth

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Posted 18 July 2014 - 13:54

I wonder what F1 would be like if the FOM revenue was shared equally, regardless of history, placing in the previous year's WCC or otherwise.  12 teams on the grid = FOM pot divided by 12.

 

 

A much more competitive grid?  Less chance of teams dropping out?  No need to think about budget caps and the like?  Less rules based on cost saving?  Probably still a similar competitive order, as the bigger teams would still have bigger budgets thanks to their larger revenue elsewhere?

 

What's not to like?



#112 oetzi

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Posted 18 July 2014 - 14:26

Or the backmarker entries could become a kind of motorsport bitcoin/bond, changing hands for ever-higher amounts while their owners skim off a percentage of FOM income. while at the front only 3-4 teams actually try.



#113 Ferrari2183

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Posted 18 July 2014 - 15:14

If I remember rightly, the 'special payment' everyone gets upset about is about $25-30m. The rest of it comes from the same formula everyone else gets their money from.

That is just based on a vague (and possibly outdated) memory though :)

Ferrari get a lot more than that. They get 5% of the total profits + money from a separate fund reserved for the heritage teams.

So let's say the profits for the year are 1 Billion.

Ferrari would get 5% of that which equates to 50 Million + "heritage fund" + constructor placing.

The constructors money is 47.5% of total profits (in this example 1 Billion) for the year which is then paid in terms of placing.

#114 Brackets

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Posted 18 July 2014 - 15:18

I wonder what F1 would be like if the FOM revenue was shared equally, regardless of history, placing in the previous year's WCC or otherwise. 12 teams on the grid = FOM pot divided by 12. […] What's not to like?

“Investors” would show up on the grid, running a team for less than 1/12th of the pot (give or take the rounding errors for whatever sponsorship they might have, including the dough put up by their paydrivers), only to take the full 1/12th of the pot back to their shareholders. If there’s money to be made, money will be made.

That’s no excuse for the current payment scheme though. Especially the Ferrari “bribe” as another poster put it so eloquently.

Edited by Brackets, 18 July 2014 - 15:29.


#115 oetzi

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Posted 18 July 2014 - 15:19

Ferrari get a lot more than that. They get 5% of the total profits + money from a separate fund reserved for the heritage teams.

So let's say the profits for the year are 1 Billion.

Ferrari would get 5% of that which equates to 50 Million + "heritage fund" + constructor placing.

The constructors money is 47.5% of total profits (in this example 1 Billion) for the year which is then paid in terms of placing.

 

Fair enough, said my numbers might be a bit rough and/or out of date. 

 

The principle still stands though - do you think Ferrari's involvement is worth 5% of overall F1 revenue? Or, perhaps more clearly, would FOM get more than 95% of the current deal without Ferrari there?

 

I don't think they would. So I think the payment's worth it.


Edited by oetzi, 18 July 2014 - 15:20.


#116 Ferrari2183

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Posted 18 July 2014 - 15:36

Fair enough, said my numbers might be a bit rough and/or out of date.

The principle still stands though - do you think Ferrari's involvement is worth 5% of overall F1 revenue? Or, perhaps more clearly, would FOM get more than 95% of the current deal without Ferrari there?

I don't think they would. So I think the payment's worth it.

What a lot don't get is that Ferrari is the only team which signs contracts with F1. By being a signatory they guarantee their participation and this offers security to the owners.

This in turn allows FOM to negotiate deals based on the guaranteed participation of Ferrari. Surely they should be compensated for this but it seems a bunch here want Ferrari to offer all this and take an equal share of the money.

#117 Brackets

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Posted 18 July 2014 - 15:42

What a lot don't get is that Ferrari is the only team which signs contracts with F1. By being a signatory they guarantee their participation and this offers security to the owners.

This in turn allows FOM to negotiate deals based on the guaranteed participation of Ferrari. Surely they should be compensated for this but it seems a bunch here want Ferrari to offer all this and take an equal share of the money.

It’s a bit of a circular argument. Imagine Ferrari did run off to “an alternative series”. Which other team(s) would they have to bring with them to make that alternative series attractive for the fans? Because Ferrari on their own running against some mules and beating them comprehensively is not something a lot of people would – pay for to – watch (some of the Schumacher years did have me wondering though). So, they’d have to bring the Other Big Ones (McLaren – yes, I lolled –, RB, MGP, ???) with them in order to make this alternative series make some sense. Ergo, the other big teams are worth just as much as Ferrari…

#118 garagetinkerer

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Posted 18 July 2014 - 15:44

Fair enough, said my numbers might be a bit rough and/or out of date. 

 

The principle still stands though - do you think Ferrari's involvement is worth 5% of overall F1 revenue? Or, perhaps more clearly, would FOM get more than 95% of the current deal without Ferrari there?

 

I don't think they would. So I think the payment's worth it.

:wave: A fellow tifosi here

 

What a lot don't get is that Ferrari is the only team which signs contracts with F1. By being a signatory they guarantee their participation and this offers security to the owners.

This in turn allows FOM to negotiate deals based on the guaranteed participation of Ferrari. Surely they should be compensated for this but it seems a bunch here want Ferrari to offer all this and take an equal share of the money.

It is not just a bunch here, but also some other participating teams for that matter too. As you rightly mention, Ferrari is one of the teams singing up with F1/ FOM assuring participation. Never have read so about any other teams, except when they signed Concorde. You would have thought that Williams GP Engineering at the least would consider doing something like that, but i don't think they have. McLaren now is a car manufacturer, so i don't think they want dependency on F1, as they had before. Skin in game has to mean something as you rightly point out.



#119 garagetinkerer

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Posted 18 July 2014 - 15:50

It’s a bit of a circular argument. Imagine Ferrari did run off to “an alternative series”. Which other team(s) would they have to bring with them to make that alternative series attractive for the fans? Because Ferrari on their own running against some mules and beating them comprehensively is not something a lot of people would – pay for to – watch (some of the Schumacher years did have me wondering though). So, they’d have to bring the Other Big Ones (McLaren – yes, I lolled –, RB, MGP, ???) with them in order to make this alternative series make some sense. Ergo, the other big teams are worth just as much as Ferrari…

Just as much, may be collectively! Even then i have my doubts. Assume all other manufacturers currently involved leave, do you really think Ecclestone and co will just sit about? Honda's coming back after leaving as they did. Surely they could find some other manufacturers by providing them some incentives. Now you may ask why not offer the same incentives to current manufacturers, but then do you keep giving in to demands of people who keep undermining you constantly? What we need to understand is that teams are also somewhat responsible for their plight. That is forgetting the statement by Lord Hesketh who mentioned in '1' that Ecclestone offered each team owner 10% for £100,000. Almost all laughed him off. As far as i'm concerned, they made their bed. They want to renegotiate, i can understand that and respect that, but to act as if they were cheated is a bit rich coming from this lot.



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#120 Ferrari2183

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Posted 18 July 2014 - 15:56

It’s a bit of a circular argument. Imagine Ferrari did run off to “an alternative series”. Which other team(s) would they have to bring with them to make that alternative series attractive for the fans? Because Ferrari on their own running against some mules and beating them comprehensively is not something a lot of people would – pay for to – watch (some of the Schumacher years did have me wondering though). So, they’d have to bring the Other Big Ones (McLaren – yes, I lolled –, RB, MGP, ???) with them in order to make this alternative series make some sense. Ergo, the other big teams are worth just as much as Ferrari…

It's not circular at all. We're discussing Ferrari's value to F1 and not a hypothetical alternative series.

Using your logic I could then ask... Would an alternative series be equally attractive without Ferrari?

I'd really love a series where the teams share the entire profits based on placing (none of this equal share stuff because then it is no longer a competition) but that is not the reality of the situation.

#121 garagetinkerer

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Posted 18 July 2014 - 21:16

It's not circular at all. We're discussing Ferrari's value to F1 and not a hypothetical alternative series.

Using your logic I could then ask... Would an alternative series be equally attractive without Ferrari?

I'd really love a series where the teams share the entire profits based on placing (none of this equal share stuff because then it is no longer a competition) but that is not the reality of the situation.

Don't think there may be a series which will work like that, because of greed on part of people.

 

Teams had Ecclestone involved as they didn't want to deal with the hassles. Ecclesstone is their 'guy' who fixes things, they want more money all the time, for just showing up. They could have bought shares when Ecclestone offered. No one did, so how can one blame Ecclestone?


Edited by garagetinkerer, 18 July 2014 - 21:17.