The Official Concorde, money and RRA discussion thread! ;)

With Vlad the Impaler on a tear they may be keeping their heads low.
Murky money. Just like the good old days.

 

+1

OTOH, murky-money needs to go somewhere before The Impaler finds it......

F1 would seem to me to be one of the very best ways to get rid of it!

Cheers,
Ian
EDIT; see definite of 'F1conomics' elsewhere for details of how this may be accomplished.

 

Well entering F1 is a faster way than just burning it.

 

Hi guys
Marussia's budget is around $100m - it's circa half that in Pounds Sterling which is their home currency. Should be able to get back to you soon about the questions for Bernie. Got a long meet coming up this week and the questions are prepped for it! Totally swamped with work at the moment as I've been asked to produce the content for a new monthly business magazine about F1. Will keep you posted about that too!

 

Thanks for stopping in with that info, much appreciated!

 

Wow!

Seems "we've" (me anyway ) been very wrong about the current spending levels for a while then.....

Wasn't Mad Max's initial "budget cap" proposal around £30MM ($50MM) / year? OK, we know he was pretty much laughed out of town by the big guys with that number but I thought it was the baseline that got the 3 noobs sucked in?

Anyway, if that's the case, mind me asking what the "big 3" are spending? Double? Triple? How about Caterham?

Very cool!

Congratulations! Obviously someone believes there's a demand for such a thing..... Experience here suggests about 50% of folk are interested in "the business" and the remainder glaze over. Online or a real paper magazine? Good luck with it either way.

Cheers,
Ian

 

Here are some links which could be useful. In 2011 (the most recent year for which accounts are available) McLaren had a budget of £150m (which is around $230m) whilst Red Bull Racing's was slightly higher at £176.2m ($270m). Mercedes is lower than both of them at £125.7m ($195m).

McLaren profits boost driven by sponsors and prizes | City & Business | Finance | Daily Express
Revenue record for Formula 1 team Red Bull Racing | This is Money
Mercedes F1 team breaks record¿for cash spent as it announces its 2013 F1 car | Mail Online

So you are absolutely right that the big boys have between two to three times as much money to spend as Marussia. There are no public records of Ferrari's precise spending on F1 since the team is directly owned by the car company rather than being a separately incorporated business as with McLaren and Red Bull Racing. Likewise, Caterham's annual budget isn't published in public documents so it can only be estimated and comes to something close to Marussia's.

By the way, I know this is off topic but I thought you may be interested in the piece on the link below if you haven't come across it yet. There is definitely something going on behind the scenes! Speak soon.

Bernie Ecclestone confirms Long Beach talks | Formula 1 | Formula 1 news, live F1 | ESPN.co.uk

 

Interesting stuff. Thanks Christian.

Given the intricacies of F1 finances how much can we know with certainty about the profitability (and so viability) of the various teams?

 

In a nutshell, the only teams which are bulletproof (this year) are Ferrari, McLaren and RBRl. There are question marks (to greater or lesser degrees) over all the others. I can see another team going under by the end of this year but I don't think that would cause a significant problem.

If two fail then that's a different matter because it could cause a 'run' on the series. I think that is when Bernie would step in to assist but this is purely hypothetical because I doubt that two teams will collapse any time soon. There are question marks of them but they aren't on their knees (yet)...

 

Thanks.

 

+1

Interesting indeed. IIRC, Bernie is on record as saying 10 teams is "perfect", so whoever winds up 11th this year is going to be hurting (even with carry-over money if applicable). OTOH, always worth noting that Bernie is on record as saying *many* things!

I'm also under the (misguided?) impression that his deal with the promoters guarantees a minimum of 18 cars - Less than that and he needs to step in (or get someone else!) to cover his own ass? [Dieter & STR obviously come to mind here.....]

Cheers,
Ian

 

The real risk is to Marussia because some of the prize money payments (too complicated to explain in a brief post here) are awarded to teams who finish in the top ten in two out of three years. Accordingly, Caterham, Sauber, Force India etc could slip to 11th this year and they would still get some prize money even though the fixed $10m has been scrapped. Since Marussia has never finished in the top ten it wouldn't get any money if it comes 11th again.

The point about the minimum number of cars is a complicated one too. Here's the official line directly from the F1 flotation prospectus:

"We must attempt to procure that at least 16 cars participate in the World Championship provided that the FIA makes such regulatory changes as are necessary to enable this to happen. Under the Current Concorde Agreement, each Team is required to enter two cars in each Event (and in certain circumstances, three cars) and, under the Team Agreements that have been agreed or are in the process of negotiation, the Teams have or are expected to have an obligation to enter two cars in each Event (and in certain circumstances, three cars)."

Hope this helps

 

Thanks again.

What are the "certain circumstances" that would have a tean field three cars?

 

+1 That's a new one on me too. Could be nothing more than nebulous "lawyer speak" to cover all possible bases? [But then, why not 4 cars?]

This is probably more the basis of an article for Christians new magazine, and it's been done before.... But, FWIW I did some quick numbers to see "cost per point" in 2011 based on the above;

RBR; $270m, 650 WCC points; $0.42m / point
Mclaren; $230m, 497, $0.46m / point
[Although unknown, I put Ferrari mid way between these two at $250m. 375, $0.6m / point]
Mercedes; $195m, 165, 1.2M / point

Merc need to improve seems to be the only conclusion here.....

Cheers,
Ian

 

It will be interesting to see how well Merc does on this metric this year!

I think that the special circumstances for when teams need to field three cars are when there are less then 8 teams. If there are only 7 teams and each fields two cars there will only be 14 in total yet the minimum requirement is 16.

By the way, I haven't yet had a chance to ask Bernie the questions from you guys because my meeting with him was cut short due to changes in his schedule. Rest assured that I will be in touch with you guys as soon as I get responses at an upcoming meet.

 

Thanks again.
I assume that the extra cars would be added between seasons. It seems tough to think that any team could put an extra car and driver in play mid season. I'd also guess that there would be financial assistance provided.

 

+1 to all. I don't believe they could handle that kind of change midseason. In fact, I'd go as far as to say "they'd" have a hell of a job convincing any of 'em to run 3 cars without some serious "payback".

Then there's the Q of WCC points - Designate just two for the WCC? [Talk about being a second class citizen if you're the odd man out!] How about DC points? Who gets to run 3 cars versus 2?

OK, we know there's still no Concorde but rather individual agreements. I'd almost be willing to bet that not one of these agreements mentions running 3 cars and AFAIK that was always explicitly outlawed in the previous Concordes (?) and/or the sporting regs.

I can't see it happening personally; I reckon Bernie would step in to save a team if needed. [More likely, he'd use someone else's money to do it, but that's just Bernie of course ]

Cheers,
Ian

 

Just making pit arrangements for the extra car would be a huge adjustment.

 

Does anyone have link to an actual text of the Concorde Agreement. I can't seem to find it.

 

You'll be lucky!.....

Which version? I believe the latest (now expired) was either rev 3 or 4. But none of 'em have ever been "officially" released. Someone here once PM'd me what I'd call "parts" of it with some pretty heavy redaction on the "interesting" bits - I'll see if I can dig it up, but TBH it wasn't really terribly interesting.

If you want to know the rules, they're published as PDF's on the FIA's site:

Federation Internationale de l'Automobile[0]=field_regulation_category%3A82

FWIW, the current sporting regs say:

No mention of minimums beyond:

Cheers,
Ian

 

It's kept with the Holy Grail.
Protected by unicorns.

 

Pretty much!.....

Given the nature of the beast, and how the players tend to come and go over the years, I remain a little surprised that it's never surfaced in its entirety. At least once it's expired.

I guess they sign some pretty heavy duty non-disclosures before being allowed to the party (?) Wouldn't even surprise me if everyone gets slightly different versions so the unicorns would know who leaked it......

Cheers,
Ian

 

Those unicorns play rough. Ever been beaten senseless with a rainbow?
Needless to say I have.

 

It's not often I find myself lost for words......

 

Go two rounds with a unicorn.
Talk about seeing stars.