http://story.news.yahoo.com/news?tmpl=story&u=/nm/20050128/sp_nm/motorracing_meeting_dc An interesting read It may have been posted but i did not see it.
Sooner or later Renault, Toyota and Honda will buckle under the pressure and sign the new agreement that Ferrair has already signed. Then it will be upto Williams and McLaren to decide whether to participate or not. Development partners BMW and Mercedes won't be too pleased if Williams and McLaren do not enter into an agreement to race in F1. The money invested into technology and marketing is simply too great not to join F1. Ferrari did the right thing by sticking to F1. The GPWC was a noble idea while it lasted, but everyone new it was too good to be true.
They have a right to be pissed, but to sit out and sulk is childish. Now they have only substantiated their fears by allowing Ferrari exclusive say in the rules meeting, irony at its best. The GPWC was suicide-- letting corporate boards of directors run the show is a good way of ensuring that the show would only continue as long as the stock price was up. Nevertheless, there is a major rift developing here. Just looking at the catastrophe in US racing, series do split, and it is never a good thing. The other teams need an olive branch, Bernie's arrogance is showing by his sitting back and expecting them to return home. Right or wrong, they can and will split if they continue to be antagonized, and then Ferrari will be left racing themselves.
Agreed. Where this differs significantly from the civil war of the early 80s is that F1 is such an immense animal right now, and the mere thought of the land-grab that would ensue after any breakaway is staggering. Rules need to be sorted out, but management needs to maintain some continuity.
I don't agree and I think you've listed two contradicting ideas here. First these manufacturers are poring a lot of money in to F1 as a business expense. In order for them to continue to do so they're going to have to see a return on their capital expenditure. If you think the "technology" their getting from participating from F1 is trickling down in to their road cars you're sorely mistaken. There is nothing being developed on an F1 car that is directly applicable to a modern road car. That ended in the 90s when active suspension and other driver aids were tossed out. The only thing they get from F1 is Marketing bragging rights. And if they're not winning there isn't any bragging rights. The only thing left is a monetary return on investment. That means they need a share of the revenue that F1 pulls in. If they don't get it the board of directors of these companies will pull their funding. Period. I'll bet it's BMW and Mercedes looking at the other options not Williams and McLaren. They arent in racing to make you and I happy by funding cars to go round and round. They're in it to help make a profit. Second, while many people believe that Ferrari is F1 I know that's not the case. Being a former racer I know what matters. We all do. If you want to race and prove yourself you go where the Fast Guys are racing. If 9 out of 10 teams start their own league that's where the majority of viewers (and future teams) will go. If they (the 9 teams) leave were is F1? What quality of team is going to be racing against Ferrari then? Who cares?! I mean their wins (Ferrari in F1) won't matter to anyone if their just racing against some elevated F3000 teams. True there are a lot of Ferrari fans. But, they make up, at most, 30-40% of the fans. That leaves 60-70% of the fans to follow their teams and say, another 10% of the Ferrari fans, to watch the other teams in a new series. That's more than enough fans. If this happens Ferrari will have to follow. They will either then do so (with their tail between their legs) or just not go racing altogether. Which given the expense of F1 and the profitability of Ferrari Road cars I would argue would suit Fiat just fine. They haven't been profitable in a long time and the extra 300-400 million annual free cash from scrapping the F1 would help it quite considerably. Sure you'd say "but this is what makes Ferrari Road cars so wonderful." True to many of us. Not to all of the suits in the board room though. I'm sure many would argue that the road cars don't need any help and would be even better if they could employ the F1 engineers on their development rather than on developing a new F1 car every year. But, more than likely they'll follow. Why? Because in order to prove yourself the fastest you have to go race where the Fast Guys are racing. Period.
On the contrary it is the other way around. Ferrari has nothing to prove to anyone. The rest of the manufacturers and race teams need to prove that they can compete with Ferrari. They want to race at the pinnacle of motorsport against Ferrari to prove that their products too are as worthy as Ferrari. The Percentage of Ferrari fans in F1 depends upon the market demographics you choose to include or ignore. For instance, in large Asian markets such as China, India and the Middle East, 7 out of 10 F1 followers are Scuderia Ferrari fans. In Europe for instanace 50% of the F1 fans are Ferrari fans. the lowest following of Ferrari fans is in North America. Now let us compare that to F1's growth strategy. F1 is certainly not targeting growth in North America and Europe. In fact, the new tracks that have been built are in Bahrain and Shanghai. Thus it was important to have Ferrari on board since the Asian markets are Ferrari's stronghold. Scuderia ferrari profitability. FIAT AUTO has not been profitable. FIAT AUTO has nothing to do with the Ferrari-Maserati profits. Ferrari-Maserait as a division has been extremely profitable and the $800 million Dollar annual investment into F1 by Scuderia Ferrari has had an ROI of close to 50%. Most of the revenue for Scuderia Ferrari comes from the caps, t-shirts, and team memorabillia that is sold. Trust me Ferrari would have quit F1 a long time ago if they had not made a profit. F1 also serves as a marketing tool for the Ferrari cars. Many people associate themselves with the team and the drivers and purchase Ferraris partially because of the racing history and current performance. So your theory about Ferrari-Maserati being not profitable and that FIAT would gladly accept not having a Ferrari F1 team is wrong. As I said, the GPWC was a nice dream. But now the dream has ended. Renault, Toyota and Honda will follow. McLaren and Williams can either go race by themselves with kit car teams like Jordan or Minardi or join the "Fast Guys" in real F1 races. Pressure from engine suppliers BMW and Mercedes will force them to continue racing in F1. However, if Williams and McLaren decide to continue with the GPWC, there will always be engines needed by the new Midland F1 teama and the F1 team being established by the royal family of Dubai. Bottom line, Formula 1 is here to stay as long as Ferrari is on board. Whether people like to accept it or not if Scuderia Ferrari is F1. Even if the GPWC does occur it will never measure up to Formula 1. Formula 1 will continue to be the pinnacle of motorsport... as long as Scuderia Ferrari races in F1.
This is a good discussion. However I disagree with the above quote. Perhaps in OUR minds Ferrari don't have anything to prove. But everything I've ever read or heard about Ferrari F1 is that they are successful because they absolutely feel they have something to prove - every single time. It's the relentless pursuit of excellence that has them out front, not resting on their laurels. Also, I too hope that F1 doesn't split. It hasn't worked out well in the US with IRL and CART, at least not from the fans' perspective. And the fans pay the advertisers, and the advertisers....This game needs to stay the pinnacle of motorsports. I hope they don't "dumb it down" too much! Hopefully Ferrari's signing on with F1 will keep the ball rolling there, and the other teams threatening to sign on with GPWC will simply use that threat as leverage to get themselves better deals. I think you guys are right. I think Toyota, Honda, BMW, Mercedes, etc will follow. (And as a Ferrari fan, I'll say, "that's nothing new!")
I won't argue your demographic data since I don't know. I'll assume it's accurate. But your argument that other teams want to prove their products are as worthy as Ferrari kind of twists two different issues together. Manufacturers like BMW, Honda and Mercedes have long produced the world's best road cars, and now in F1 they want to show the world that they can go racing with the big boys. Ferrari in my and many others' eyes are the epitome of racing. However, over the last 50 years the biggest chink in their armour would have been criticisms of reliability. So while Ferrari IS racing, and even though their road cars have always been big sellers, they have had to overcome this issue of "iffy" engineering. Granted, lots of hard work and money have accomplished that feat, but don't forget that Ferrari won't always be #1, nor have they always been #1--some seasons quite far from it. Before you know it, Ferrari will no longer have Schumacher to lean on. And no matter how good their chassis' are, they won't be piloted by a difference-maker the calibre of Michael. Sure, right now they seem to have a tremendous amount of leverage, and I can't fault them for wielding it in their interest. But don't assume that the world will automatically genuflect at the feet of Maranello.
The market demographics I got directlly from Formula One Administration Ltd. and I trust its accuracy. I agree that Ferrari's have had issues of reliability in the past. However, given the current performance and quality of their road cars it is safe to say reliability is no longer an issue. The question here are: Is the Ferrari brand bigger than Formula 1? Is Ferrari Formula 1? Will Formula 1 cease to exist if there was no Ferrari? On all counts, the answer is Yes!
It's only on the last point that I hesitate to resolutely say "yes". Say the other teams split off without Ferrari. Well, as a racing fan, you find yourself eating potatoes for dinner without any meat. But I truly believe fans will still go to the races and watch them on TV. And in this case, what of Ferrari? They've got a pretty significant investment in F1. Like we discussed elsewhere, it's very much a two-way street and they stand to lose out as well. Think about it; all that PR and marketing revenue you spoke of would diminish, not to mention all the facilities built solely for Grand Prix racing. To those of us here, Ferrari is "FERRARI" in 20 foot-tall letters. But future generations won't automatically accept them as the end-all in sports cars, especially with nearly every manufacturer throwing their hat into the supercar ring, and F1 is one of the few ways Ferrari will be able to distinguish themselves and continue to hold its place on top of the sports car Olympus.
" Montzemolo recently agreed to sign Ferrari up to the new Concorde Agreement simply because there was $150m in cash on the table and that might help to reduce Fiat's overall troubles as Ferrari is owned by the main Fiat company rather than Fiat Auto" http://www.grandprix.com/ns/ns14197.html They didn't stay because it's F1. Trust me if the others break away Ferrari will go with them. This is about corporate profits... the days when it was about the racing is long gone.
I have to agree that Ferrari cannot put up a champiship series on its own and if those other nine teams break apart Ferrari will follow.
Now what was discussed without the others... http://www.motorsport.com/news/article.asp?ID=176579&FS=F1 There's more in the article. I found it very interesting that Ferrari F1 found the sale of their F1 cars to be considered a valuable enough profit center to be mentioned in this meeting and to have it influence the rules being proposed. As I stated before. It's no longer about the racing. It's about profit.
Learn to read "There are many in F1 circles who believe that Montzemolo recently agreed to sign Ferrari up to the new Concorde Agreement simply because there was $150m in cash on the table and that might help to reduce Fiat's overall troubles as Ferrari is owned by the main Fiat company rather than Fiat Auto." There are many in all kinds of circles who believe that... there is life on pluto and that one day they will come in spaceships and take away those of us who are worthy!!! People can believe what they want to believe. The Ferrari-Maserati Group has been extremely profitable in recent years and do not need the $150 million to survive. Does the $150 Million increase profitability? Yes Would anyone on the face of this planet say no to $150 Million? No Ferrari has walways been in it for profits... but unlike McLaren, Williams and Renault they do not let hard headedness and stuborness get in the way of increasing the bottom line.
Learn to read yourself. "Fiat Auto is not in good shape. It has $10.4bn in debt and falling sales and the debt of the Fiat parent company is now around $18.5bn. This needs to be reduced to $13.5bn in order for the firm to avoid liquidity problems. It does not really matter where the money comes from so long as it arrives." I'm not talking about Ferrari-Maserati group not needing the profit to survive. I'm talking about parent company Fiat needing it. Montzemolo is no longer President of Ferrari. He's President of FIAT. There was a very large article in the Economist on his new role. His concern is no longer for Ferrari. It is on keeping FIAT alive. Which doesn't look too good at the moment. Now you need to learn your Ferrari history. Ferrari was never conceived for profit. Enzo Ferrari's one and only purpose in life was to race and win in Formula 1. Everything else was secondary. All road cars built while he was alive were done in order to fund the F1 racing program. Only when the F1 team was doing well did Enzo allow funds to be used for sports car racing. As soon as the team showed signs of faltering he'd pull all resources back to F1. Now that he's passed and FIAT has taken over there has been a shift for it to be a source of profit. Porsche raced to help sell road cars. It was always seen within their organization as a marketing tool. Ferrari on the other hand used to sell road cars to go race.
I read somewhere, sorry can't remember where (Old fart attack), that the licensing fees Ferrari collect compaired to the road car sales was HUGE! The car sales (not margin) was less than 5% of the licensing total. F1 expense was something like 20%. Please do not quote me on this. The point is, the road cars do not mean diddly squat in the grand scheme of things. So, who buys all the licensed stuff (besides me...)? Is it the handfull of roadcar enthusiasts/owners? Heck no!!! It's all the MS and RB fans!!! It's the thousands of folks who pack the stands and wave the flags and walk around in those gawd-awe-full red plastic tennies! If Ferrari did not race, they would lose a heck of a lot more than they would gain by not spending $300-$400M every year. Someone please verify my numbers. Thanks, Jim
Excellent Point! And I'd love to see those numbers as well. But, my point is that if Enzo were still in charge and Ferrari was still it's own entity all of that money would go right back into the F1 budget. Now that FIAT owns Ferrari, they'll still outspend everyone else, but most of those funds will find it's way to help pay down the debt of FIAT which is in the BILLIONS. There is more at stake here with FIAT being this far gone. We're not just talking about tens of thousands of jobs that could be lost, pensions gone, we're also talking about Italian national pride that their number one auto-maker will be taken over by foreigners because they were unable to run it properly. To tie this back to the original argument if Ferrari is to have its wins mean anything (which is what all of those licensing sales of T-shirts, flags, models, pins, are linked to as you so well pointed out) theyll have to race and beat the best. If the best go to another series Ferrari will have to follow.
I think that it's probably true. Luca is a very hard nosed business man, and he does what he needs to do to succeed. This move seems in character for him. I can't say I'm very impressed and the other teams have every right to be pissed! Fiat's finacial woes are not the responibility of the 9 other teams principals.
I think this whole thing is a publicity stunt, so that Bernie Ecclestone can get all the other manufacturers to follow. I don't think Ferrari were every going to quit F1 . Sure Jean Todt stated that, but thats all part of the plan. As we all know, the other manufacturers wanted to leave because Bernie was not willing to give up more share of his TV revenue profits. This deal between Bernie and Ferrari is to show the others that Bernie is willing to make some kind of deal. Bernie can't afford losing Mercedes, BMW, Renault, Honda and Toyota. It will destroy the F1 image and the series. As for Ferrari quitting because of costs, is B.S. . Ferrari were never hurting financially, if they were than why would they pay Schumacher's salary of $35 million a year? I understand they gave him such an attractive salary to have him join Ferrari. But today, Micheal has won 5 titles for them and they have extended his contract till '06 with a salary increase. The way Schumacher is, if Ferrari was really hurting, he would take a pay cut.
I just read where Vodaphone just re-uped for another 2 years for $200M. Now THAT will pay for a few engines. Ferrari needs to race more than they need to build road cars. Long gone are the days where the road cars paid for the F1 venture. And there's lots more ad space on that car..... Jim
