Jump to content


Photo
- - - - -

$200million ‘anti-dilution fund’ - Is F1 now a closed shop?


  • Please log in to reply
44 replies to this topic

#1 FirstnameLastname

FirstnameLastname
  • Member

  • 7,745 posts
  • Joined: April 18

Posted 29 June 2022 - 09:29

https://www.motorspo...tment/10327401/

Steiner wants it adjusted up the way to reflect the ‘increasing value of teams’

… does this mean we’ve now gone the American way of a franchise model? Nobody can really enter?

Used to love a new team entering f1 and trying to take on the big guys. Will be such a shame if the only realistic way now becomes to buy an existing team and change the name.

Have your $200million fee if you want… but have it if we go beyond 24/26 cars… not 20!

Advertisement

#2 noikeee

noikeee
  • Member

  • 23,182 posts
  • Joined: February 06

Posted 29 June 2022 - 09:40

Of course he'd say that, the only thing of real value Haas has is the franchise. Bet Gene would sell at the first opportunity, but who wants a team that's partially based in US and partially reliant in Europe.

 

They do have a good car this season but I suspect they'll fall back quickly, they have a huge Mazepin-sized hole to fill in the accounting books.



#3 Slackbladder

Slackbladder
  • Member

  • 2,151 posts
  • Joined: March 09

Posted 29 June 2022 - 09:41

Of course he'd say that, the only thing of real value Haas has is the franchise. Bet Gene would sell at the first opportunity, but who wants a team that's partially based in US and partially reliant in Europe.

 

They do have a good car this season but I suspect they'll fall back quickly, they have a huge Mazepin-sized hole to fill in the accounting books.

 

This.

 

The value of the fund is the value which they can sell onwards when Hass sell up, of course he wants higher as it boosts Hass's value for re-sale.



#4 FirstnameLastname

FirstnameLastname
  • Member

  • 7,745 posts
  • Joined: April 18

Posted 29 June 2022 - 09:43

Of course he'd say that, the only thing of real value Haas has is the franchise. Bet Gene would sell at the first opportunity, but who wants a team that's partially based in US and partially reliant in Europe.

They do have a good car this season but I suspect they'll fall back quickly, they have a huge Mazepin-sized hole to fill in the accounting books.


Yeah, Haas seems a bit of a shell operation. If someone bought it they are just buying the ‘right’ to compete really aren’t they.

Also a bit rich considering Haas didn’t have to pay any of this when they entered!

#5 Risil

Risil
  • Administrator

  • 61,507 posts
  • Joined: February 07

Posted 29 June 2022 - 09:58

Thread title is one of those rare rhetorical questions in headlines where the answer is clearly "yes".

#6 absinthedude

absinthedude
  • Member

  • 5,709 posts
  • Joined: June 18

Posted 29 June 2022 - 10:00

Gene shows no interest in selling the Haas team. It does very well as a way of advertising his CNC business to markets where his share was previously very low. I gather it's been *very* successful in increasing Haas' share of the European CNC market. 



#7 Astandahl

Astandahl
  • Member

  • 5,568 posts
  • Joined: June 18

Posted 29 June 2022 - 10:01

Yes. Also creating a team from scratch is close to impossible.



#8 Anja

Anja
  • Member

  • 10,284 posts
  • Joined: November 09

Posted 29 June 2022 - 10:04

Gene shows no interest in selling the Haas team. It does very well as a way of advertising his CNC business to markets where his share was previously very low. I gather it's been *very* successful in increasing Haas' share of the European CNC market. 

 

Which just makes it a bit of a joke that this low-effort team with seemingly no ambition bigger than just getting its name out there has a place on the grid, but a proven racing powerhouse like Andretti doesn't. 


Edited by Anja, 29 June 2022 - 10:07.


#9 absinthedude

absinthedude
  • Member

  • 5,709 posts
  • Joined: June 18

Posted 29 June 2022 - 10:12

I do feel that Haas adds something to F1. The grid is better for their presence. They entered and operate entirely within the rules, and have scored points all but one season they've competed. 

 

But yes....try convincing me that Andretti Global would be less of an addition....



#10 kumo7

kumo7
  • Member

  • 7,168 posts
  • Joined: May 15

Posted 29 June 2022 - 10:17

Of course he'd say that, the only thing of real value Haas has is the franchise. Bet Gene would sell at the first opportunity, but who wants a team that's partially based in US and partially reliant in Europe.

 

They do have a good car this season but I suspect they'll fall back quickly, they have a huge Mazepin-sized hole to fill in the accounting books.

 

If I were to purchase HAAS, the the deal must include the relationships with Ferrari and all the Human Resources as well. If I had a plan to do something else, the team is nearly empty in terms of manufacturing infra and Human Resources. I would not dive into clearing its financial depth, so to me HAAS is clearly in the no go zone. 

 

This could have happened to Andretti, especially when it was considering Renault PU. Why should Ferrari help this new comer who plan to use other PU?

 

 

At this juncture oly asset that HAAS could argue is the 200mil that F! could distribute. If this is up to 2 billion (wow), then there will be a new buyer... 

I say HAAS is here to stay, unless the owner pull the plug. 

Only when the team has becoe defunct and ceased to exist, the asset could be handled in a proper price value. 

 

I do feel that Haas adds something to F1. The grid is better for their presence. They entered and operate entirely within the rules, and have scored points all but one season they've competed. 

 

But yes....try convincing me that Andretti Global would be less of an addition....

 

Edited by kumo7, 29 June 2022 - 10:19.


#11 Risil

Risil
  • Administrator

  • 61,507 posts
  • Joined: February 07

Posted 29 June 2022 - 10:17

It's all money and power politics and it's intensely annoying when people in F1 try to dress it up as anything else.

#12 kumo7

kumo7
  • Member

  • 7,168 posts
  • Joined: May 15

Posted 29 June 2022 - 10:20

It's all money and power politics and it's intensely annoying when people in F1 try to dress it up as anything else.

 

Its shortening the chances of its death and the destiny to end its presence in a certain form, I think...



#13 Risil

Risil
  • Administrator

  • 61,507 posts
  • Joined: February 07

Posted 29 June 2022 - 10:25

Tbf F1 has been effectively a closed shop since the manufacturer teams left in 2009. The only new entrants since then that stuck have required a patron of some sort and a lot of technical favours from an existing outfit.

It's pretty miraculous what Marussia/Manor achieved, when I think about it.

#14 noikeee

noikeee
  • Member

  • 23,182 posts
  • Joined: February 06

Posted 29 June 2022 - 10:32

Gene shows no interest in selling the Haas team. It does very well as a way of advertising his CNC business to markets where his share was previously very low. I gather it's been *very* successful in increasing Haas' share of the European CNC market. 

 

Are we sure about this? I'm not a marketing expert but would expect dimishing returns the longer an advertising campaign goes on. I think it's served his purpose and now, or in the coming years, would be an ideal time to sell.

 

Put it this way, I hadn't heard about Haas prior to 2016 but now I do. But each passing year they're in F1 it's not giving me any more extra knowledge about Haas machinery. I knew they existed last year and now I still do.

 

Admitedly I'm not exactly the target audience and am not buying Haas machinery for home usage, but still.



#15 HerbieMcQueen

HerbieMcQueen
  • Member

  • 1,574 posts
  • Joined: November 17

Posted 29 June 2022 - 12:23

I think more than ever the answer is yes. Some will say it's a way to shore up the financial health of the sport, other naive romantics like me will say it's one of the handful of pieces of evidence that F1 is F1 in name only these days. Outfits like Minardi, Forti, Jordan etc made up the fabric of Formula 1 and I feel sad that the sport's vibe has gone from a room in a rent-a-cabin to a boardroom in a skyscraper.

 

At least I still get to see small, opportunistic, have-a-go heroes at the 500 each year.



#16 Nathan

Nathan
  • Member

  • 6,927 posts
  • Joined: February 00

Posted 29 June 2022 - 13:46

I don't think F1 was better off with the types of owners like Fernandes, Mallya, Schnadier etc.

 

Fans are going to complain one way or the other.  We can have 13 teams 3 of which will always be teetering on bankruptcy and having to fill the back of the grid with low quality pay drivers. Then we will moan about both.  We moan about the Briatores, Mallya's, and other billionaires tossing their money around for vanity.

 

Most fans don't get the amount of money out there.  To think a $500 mln investment in an F1 team is so astronomic and impossible is rather ignorant, meanwhile you won't find many professional teams participating in leagues of similar exposure not selling for two, three, four times that.  Just the sales of Chelsea FC or the Denver Broncos alone could each fund the creation of ten new F1 teams.   What would the cost be to found a British F.C. and move up to the Premier League?  Most pro soccer teams run similar deficits, and you can't self-brand a soccer club, basketball team, hockey team etc. like you can an F1 car.   It's the only truly global sports league.  F1 is a sport owners bargain.

 

I suppose the issue is people still pine for the day you can wrangle 10 people together in a old warehouse with £100 in the bank and a bag of crisps to pass around and knock out GP cars.


Edited by Nathan, 30 June 2022 - 14:38.


#17 Primo

Primo
  • Member

  • 2,590 posts
  • Joined: March 22

Posted 29 June 2022 - 13:49

I think they are making a mistake thinking that an added team is "diluting" F1 and the existing teams value. A stale F1 without any fresh blood coming in is probably worse. I think max grid size is still 26 and I'd rather see that (with proper enforcement of the 107%) than 18, which we'd have if a team suddenly decide they've had enough. Keep it fresh, that is what give value. Drop the diluting fund altogether. 



#18 FullThrottleF1

FullThrottleF1
  • Member

  • 3,471 posts
  • Joined: October 13

Posted 29 June 2022 - 14:02

Isn't this basically the same thread as the Andretti one?

 

Yes - it's a closed shop and no, you aren't getting in unless you benefit the other teams to some considerable degree



#19 alframsey

alframsey
  • Member

  • 5,034 posts
  • Joined: August 10

Posted 29 June 2022 - 14:51

It's ridiculous tbh and it's ****ing annoying. We need more teams on the grid and a andretti entry would be amazing for the sport imo.

Advertisement

#20 MasterOfCoin

MasterOfCoin
  • Member

  • 4,991 posts
  • Joined: April 15

Posted 29 June 2022 - 15:32

200 million is a crippling amount for a new start up team just trying to enter F1......



#21 FullThrottleF1

FullThrottleF1
  • Member

  • 3,471 posts
  • Joined: October 13

Posted 29 June 2022 - 15:53

That's the point of it



#22 Izzyeviel

Izzyeviel
  • Member

  • 3,172 posts
  • Joined: March 16

Posted 29 June 2022 - 16:05

New teams help grow the sport. The more the sport grows, the more money the teams would earn. I wish I could physically bash their heads together. 



#23 pdac

pdac
  • Member

  • 17,122 posts
  • Joined: February 10

Posted 29 June 2022 - 16:19

New teams help grow the sport. The more the sport grows, the more money the teams would earn. I wish I could physically bash their heads together. 

 

I'd agree that NEW teams can help grow the sport, but I'm not sure that MORE teams do. There's no additional money associated with additional teams - maybe the opposite.



#24 Anderis

Anderis
  • Member

  • 7,346 posts
  • Joined: December 09

Posted 29 June 2022 - 16:22

New teams help grow the sport. The more the sport grows, the more money the teams would earn. I wish I could physically bash their heads together. 

I think F1 should have more than 10 teams (for sporting, not for financial reasons) but I don't see how new teams help grow the sport to such a big extent that it would make the other teams earn more money than they lose from diluting the prize money. If you accept 2 new teams, they would need to make F1 income 20% bigger just to break even- how's that ever going to happen? If, let's say, Haas and Alpine quit F1, F1 won't lose 20% of it's audience. The same way, it won't gain 20% of audience from two new teams.



#25 aportinga

aportinga
  • Member

  • 10,580 posts
  • Joined: November 01

Posted 29 June 2022 - 16:42

Gene shows no interest in selling the Haas team. It does very well as a way of advertising his CNC business to markets where his share was previously very low. I gather it's been *very* successful in increasing Haas' share of the European CNC market. 

 

With the franchise "thingy" I'd say he got in just in time.

 

That said is there a cost difference between buying an existing team and brining in an entirely new team?


Edited by aportinga, 29 June 2022 - 16:43.


#26 HeadFirst

HeadFirst
  • Member

  • 6,121 posts
  • Joined: February 10

Posted 29 June 2022 - 16:43

The idea that adding teams to F1 is a guaranteed positive is ludicrous. Look at the struggles the NHL went through when they were hell-bent on adding teams, without due diligence. Of course I do not claim to know the real motivation for the $200 million. If it was an attempt to save the series from constant bailouts given to teams who fall on "hard times", then it was done in a clumsy manner, lacking in vision. I understand the teams not wanting to be on the hook for another's folly, but this is not the way to do it.



#27 ARTGP

ARTGP
  • Member

  • 29,419 posts
  • Joined: March 19

Posted 29 June 2022 - 16:59

F1 has bigger issues I think. There are only 2 teams competing for the title this season (well...2 drivers really) and it's been like that for the last decade.  Compare that to indycar.  What would help grow the sport is more than 2 drivers fighting for the title each season. 

 

For now, worrying about an 11th team just seems like a side project with no apparent gain. I do sympathize with the likes of Andretti who are being stonewalled for no apparent reason, but F1 seems to have limited bandwidth to solve issues so I prefer they focus on the most important ones. Imagine Caterham on the grid today being Caterham. It adds nothing to the front. 


Edited by ARTGP, 29 June 2022 - 17:03.


#28 pdac

pdac
  • Member

  • 17,122 posts
  • Joined: February 10

Posted 29 June 2022 - 17:12

F1 has bigger issues I think. There are only 2 teams competing for the title this season (well...2 drivers really) and it's been like that for the last decade.  Compare that to indycar.  What would help grow the sport is more than 2 drivers fighting for the title each season. 

 

For now, worrying about an 11th team just seems like a side project with no apparent gain. I do sympathize with the likes of Andretti who are being stonewalled for no apparent reason, but F1 seems to have limited bandwidth to solve issues so I prefer they focus on the most important ones. Imagine Caterham on the grid today being Caterham. It adds nothing to the front. 

 

Yes, it's a big shame, but I don't know how it could ever be resolved. Really this year there should be 4 drivers competing for the title. I know it's an odd thing to say, but they somehow need to massively devalue the WDC and promote the WCC in order to get the teams that create the best car let their drivers compete with one another until the end. But always there is some level of favouritism towards one of the drivers.



#29 absinthedude

absinthedude
  • Member

  • 5,709 posts
  • Joined: June 18

Posted 29 June 2022 - 17:33

Isn't this basically the same thread as the Andretti one?

 

Yes - it's a closed shop and no, you aren't getting in unless you benefit the other teams to some considerable degree

 

You're not even getting in if you do benefit them.

 

Utterly ridiculous and reprehensible. Part of why I personally no longer view the WDC or WCC as anything remotely important. I do still take a modicum of joy watching the races as individual events. 



#30 Bleu

Bleu
  • Member

  • 6,214 posts
  • Joined: February 10

Posted 29 June 2022 - 18:31

Most of the prize money is still set for top 10 teams even if there are more, right?

 

That distribution should be fixed anyway if new teams join.



#31 Nathan

Nathan
  • Member

  • 6,927 posts
  • Joined: February 00

Posted 30 June 2022 - 02:38

You're not even getting in if you do benefit them.

 

Would they turn away Porsche or Audi?


Edited by Nathan, 30 June 2022 - 02:38.


#32 ARTGP

ARTGP
  • Member

  • 29,419 posts
  • Joined: March 19

Posted 30 June 2022 - 02:43

Would they turn away Porsche or Audi?

 

No.



#33 Myrvold

Myrvold
  • Member

  • 15,887 posts
  • Joined: December 10

Posted 30 June 2022 - 07:31

Most of the prize money is still set for top 10 teams even if there are more, right?


IIRC, no.

#34 RedRabbit

RedRabbit
  • Member

  • 3,195 posts
  • Joined: August 12

Posted 30 June 2022 - 07:43

Are we sure about this? I'm not a marketing expert but would expect dimishing returns the longer an advertising campaign goes on. I think it's served his purpose and now, or in the coming years, would be an ideal time to sell.

Put it this way, I hadn't heard about Haas prior to 2016 but now I do. But each passing year they're in F1 it's not giving me any more extra knowledge about Haas machinery. I knew they existed last year and now I still do.

Admitedly I'm not exactly the target audience and am not buying Haas machinery for home usage, but still.


The Haas model isn't about an advertising campaign - they're in F1 with a B2B (Business To Business) model. It's about access to the Paddock Club and decision makers or people with influence in large engineering companies.

It's not just the teams, it's also their suppliers and outside contractors. Even Haas's own engineering contractors are potential customers of theirs.

It's the kind of access that you probably don't get as just a sponsor.

#35 kumo7

kumo7
  • Member

  • 7,168 posts
  • Joined: May 15

Posted 30 June 2022 - 07:44

Tbf F1 has been effectively a closed shop since the manufacturer teams left in 2009. The only new entrants since then that stuck have required a patron of some sort and a lot of technical favours from an existing outfit.

It's pretty miraculous what Marussia/Manor achieved, when I think about it.

 

Yes, indeed.

 

Much long ago, F1 was very much open... Just that there is not a known financial model that allows owners goes bust and join the series.



#36 PayasYouRace

PayasYouRace
  • Racing Sims Forum Host

  • 45,984 posts
  • Joined: January 10

Posted 30 June 2022 - 07:48

F1 has bigger issues I think. There are only 2 teams competing for the title this season (well...2 drivers really) and it's been like that for the last decade.  Compare that to indycar.  What would help grow the sport is more than 2 drivers fighting for the title each season. 

 

For now, worrying about an 11th team just seems like a side project with no apparent gain. I do sympathize with the likes of Andretti who are being stonewalled for no apparent reason, but F1 seems to have limited bandwidth to solve issues so I prefer they focus on the most important ones. Imagine Caterham on the grid today being Caterham. It adds nothing to the front. 

That’s a separate issue. The number of teams has no bearing on how equally the sport’s revenues are distributed amongst them.

 

I also often see this argument seemingly implying that there was a time when having more than 2 WDC contenders was especially common. You say it’s been like that for the last decade. Try the entire history of the sport. Those ultra competitive seasons tend to show up once a decade, on average.

 

Not that I’d argue against making F1 more competitive at the front, mind you.



#37 SenorSjon

SenorSjon
  • Member

  • 17,539 posts
  • Joined: March 12

Posted 30 June 2022 - 09:20

So if you buy in now, will you have broken the budget cap?



#38 cpbell

cpbell
  • Member

  • 6,964 posts
  • Joined: December 07

Posted 30 June 2022 - 09:32

I don't want another Mallya or Fernandes, but what I do want is the opportunity for another Ken Tyrrell, Giancarlo Minardi, Paul Stoddart or Frank Williams.


Edited by cpbell, 30 June 2022 - 09:32.


#39 cpbell

cpbell
  • Member

  • 6,964 posts
  • Joined: December 07

Posted 30 June 2022 - 09:33

 

 

I also often see this argument seemingly implying that there was a time when having more than 2 WDC contenders was especially common. You say it’s been like that for the last decade. Try the entire history of the sport. Those ultra competitive seasons tend to show up once a decade, on average.

Might have to get back to you on that one.



Advertisement

#40 FirstnameLastname

FirstnameLastname
  • Member

  • 7,745 posts
  • Joined: April 18

Posted 30 June 2022 - 14:30

So if you buy in now, will you have broken the budget cap?


We want to be very fiscal in F1 - and not make things too expensive for the teams

Oh new team? £200mil please. And no prize money for a few years.

Make sure you stay within the budget cap, mind.

#41 aportinga

aportinga
  • Member

  • 10,580 posts
  • Joined: November 01

Posted 30 June 2022 - 14:49

F1 has bigger issues I think. There are only 2 teams competing for the title this season

 

I would not say Merc is there yet but they will soon.



#42 Nathan

Nathan
  • Member

  • 6,927 posts
  • Joined: February 00

Posted 30 June 2022 - 15:03

I don't want another Mallya or Fernandes, but what I do want is the opportunity for another Ken Tyrrell, Giancarlo Minardi, Paul Stoddart or Frank Williams.

 

I have a similar feeling, but if you read their stories (Ill exclude Paul here) I don't see how they can be re-created today, even if you removed the entry fee and further halved the budgets.  You can't lay pre-peg in dirt floor rooms, F2 teams can't build their own cars, you can't haul your F1 team to the Belgian GP in a 20 foot trailer towed behind a station wagon.  There aren't even any phone booths to call and beg from anymore.  We traded the Ken's and Frank's for safety and professionalism.



#43 BoDarvelle

BoDarvelle
  • Member

  • 1,357 posts
  • Joined: March 22

Posted 01 July 2022 - 05:06

Of course he'd say that, the only thing of real value Haas has is the franchise. Bet Gene would sell at the first opportunity, but who wants a team that's partially based in US and partially reliant in Europe.

 

They do have a good car this season but I suspect they'll fall back quickly, they have a huge Mazepin-sized hole to fill in the accounting books.

 

Andretti has said several times that he has "called Gene a million times and he won't sell."



#44 pdac

pdac
  • Member

  • 17,122 posts
  • Joined: February 10

Posted 01 July 2022 - 21:27

Andretti has said several times that he has "called Gene a million times and he won't sell."

 

There's some people that are sentimental and won't part with something, regardless. But most of the time, people will part with something if the offer is large enough. Gene, being a businessman will, I'm sure, sell if the price is right. Andretti, being a businessman will, I'm sure, not want to pay more than he thinks it's worth.


Edited by pdac, 01 July 2022 - 21:30.


#45 HistoryFan

HistoryFan
  • Member

  • 7,825 posts
  • Joined: November 07

Posted 03 July 2022 - 13:30

the much bigger problem is, noone involved wants a new team. And that's a shame.