The truth about Ferrari's power in F1

Honestly, I don´t have a clue about fashion.

But I suppose Benetton is posh, as everything related to F1 is somewhat posh.

 

I fully agree with you. Red Bull in F1 is not an office branch of the people who sell drinks. RB itself is the name of a team with next to unlimited resources, and the ability to pick and chose from some of the absolute best people in the world. For that sake they could have been called "Walmart Racing" and still been as competitive. They've spent years building up a good team. OFC the technical leadership Newey is the key, and they were lucky getting him all those years ago. Not only do they have tons of money, but they've managed the HR bit, finding the right people, going the right direction. Even when Toyota had the biggest budget in F1 they failed at this.

Not a huge fan of RB, but I do admire their success. They don't have superpowers at the FIA (vetoright as explained and the tailor made Bridgestone tires) as SF had during the Schumacher years, nor do they cheat like Benetton (tc). Of course they bend the rules sometimes, but so does every other team around them, it's the same for everyone. Horner's lack of authority though is foolish, they need to fix that. Compare Horner vs. Vettel radio to Brawn & Rosberg. Horner is pleading his driver "this is silly Seb", whereas Ross just gives a cool "Negative Nico" on the same situation. I think Turkey 2010 stands out as a highlight of what they need to fix the "everybody be friends" mentality which doesn't work for individual athletes competing in a team sport.

Just my .02

 

I wrote the story and have got the original documents. I am happy to answer any questions you might have about it. I can confirm that it is 100% accurate and there is a link to one of the relevant pages from the IPO prospectus here (other sensitive data has been obscured for security reasons):
https://twitter.com/FormulaMoney/status/319280005010051072/photo/1

Happy to help if you would like further details

 

I've got a question, why do you and Mike Lawrence produce so much Ferrari and Alonso hatred out over at pitpass?

 

Cool! Welcome to Fchat.... "One of the better F1 boards" IMESHO.

Even cooler!....

The same Q I asked above;

I don't understand;

"Security reasons"....?

Isn't an IPO prospectus a public document available to all? Why the redacting? On Twitter of all places!.....

Cheers,
Ian

 

well it does off-set the Massa 'hate' so prevalent around here!

Nice welcome message to the new poster by the way. Love the tact.

 

For the life of me I just don't understand how a "Ferrari" forum can have so many negative sentiments expressed against one of our own. Personally I'm a fan of Felipe and just hope he can continue his form revival and that he can get back in the winners circle very soon.

.... as to the welcome to the new poster, fair comment I guess, but, I don't see the real Chris Sylt as a "noob" in any F1 sense, and given the history of his site, well, I still think its a fair question

 

Why is that surprising if you have a driver who doesn't deliver the goods and fails to help winning the WDC and WCC?

Just because they're Ferrari drivers doesn't absolve them from scrutiny. Quite the opposite.

That said, Massa has shown some good performances since Monza last year (I had a word with him ). I hope he stays the course for the entire season.

 

Completely agree. Sometimes the 'hate' is a bit much but we all have our favorites as well as bias no matter. Lets see if the positive trend for Massa continues. It feels somewhat tenuous at this early stage. His return will be complete(Massa), when he quals and finishes ahead of FA, assuming the team allow it.

 

Wouldn't mind if he qualifies ahead of Alonso a couple more times. Keeps the motivation of both drivers up.

 

FA has said the same himself. I think he means it.

 

The prospectus had limited distribution within the financial community last year before the IPO was postponed. You will not find it online now because when it came to light that the IPO would not take place the document was not released to the public. When(/if) the IPO gets the green light the prospectus will be made available widely. I got a copy last year through my contacts in the financial industry.

For the record, I have no hatred for Ferrari or any particular team. I am independent since I don't report on the sports side of F1 (it is completely separate to the business behind the racing). Likewise, I rarely travel to the races because it is irrelevant to my job and it means that I am not accepting hospitality (or employment) from the teams. I write for most of the national UK newspapers which has led to me being offered media passes to all the races but I very rarely take them up. I was previously in the paddock at the 2010 British GP.

To give you an example, someone who reports on the finances of Nasa does not need to travel on the space shuttle or know about the science behind it. In turn, they are unlikely to prefer Nasa using a particular scientific method and I don't prefer particular drivers.

Hope this helps and, as I mentioned, if you would like to know any particular details from the prospectus I'm happy to help.

 

Any chance of FOTA getting its act together ?
That would put a wrench in the gears.


It would have been nice if F1 was IPOed on the NYSE or in the USA in general.
I guess Singapore is hot right now and probably less scrutiny/rules.

 

OK, gotcha, thanks.

Personally, and I haven't read a whole lot of your stuff TBH, I've never thought you did. Just that some here tolerate *zero* criticism of the Scuderia. Ever. Under any circmstances.

I suspect you may regret saying that!

In addition to Lightguy's (often asked!) question about FOTA, how about the lightly reported formation of FOPA a year or so back. Seems to me if the promoters could ever get their act together Bernie could have some problems. IIRC, Rob Walker is the head guy, and he's no dummy.

Next is the "Ferrari veto power" question - We postulated above that it must be pretty limited as they didn't want the new engines for example. The only example I can think of where maybe they stuck their oar in was the banning of active suspension after theirs failed to work.

For sure, as you say, its long been suspected they had this "ability", but I'd love to know exactly what, when and how they can mess with the rules makers.

I too guess there's good reasons for doing the IPO in Singapore. Do you know why? Is it, as us in the peanut gallery will no doubt postulate, due to "lax" rules on what must be in the prospectus etc?

Finally (for now at least ) I dunno the timeframes, but does it mention any possibility of Bernie getting in deep doo-doo with the Germans and possible "implications" thereof?

Cheers,
Ian

 

Thanks for the advice about Ferrari 'hatred'. I can assure you that there is none from my side. My colleague and I regularly speak to Stefano and he kindly arranged these lovely photos for the auction we arranged last year:

Stefano Domenicali, Zoom Gallery, Zoom is an innovative new charity project in aid of the renowned Great Ormond Street Hospital
Fernando Alonso, Zoom Gallery, Zoom is an innovative new charity project in aid of the renowned Great Ormond Street Hospital
Felipe Massa, Zoom Gallery, Zoom is an innovative new charity project in aid of the renowned Great Ormond Street Hospital

You are right that the Promoters Association could put tremendous pressure on Bernie but it is early days at the moment. As you will see from the article on the link below, Ron has a big meeting planned with his counterparts in June so maybe more will become clear then:
F1 risks losing manufacturers over new engines, says Ecclestone - Autoweek

I don't have more details about Ferrari's veto beyond the material in the float prospectus. I suspect that it is pretty comprehensive! The IPO is planned for Singapore to take advantage of the popularity of F1 there and also because it isn't that unusual to have 80 year-old company bosses there!

The litigation in Germany is covered extensively in the prospectus but it doesn't go into any more detail than that which has come into the public domain already. However, it does reveal that the investigation into Bernie by the UK Internal Revenue Service is not as serious as previously rumoured. The details about it are at the bottom of the report on the link below. Hope this is useful
Ecclestone, the French race circuit and the real story behind that $44m 'bribe? - Telegraph

 

As I challenged Chris's publications both publicly on the forum and privately via PM, I will go on record that I most certainly tolerate and enjoy reading fair criticism of Ferrari. What I object to are cheap shots, unfounded opinions and above all outright erroneous comments (and when found erroneous no apologies forthcoming).

I'd happily buy Chris a beer and discuss this with him if ever that opportunity arose, and nothing I say is personal - it only relates to comments and things written. And, once written, things can be challenged - and that's what I'm doing

 

On finances - an article in Autoweek claims that the 2011 total revenue of F1 was 1.5 Billion.

For 2013, the top three teams - Ferrari, McLaren, and Red Bull will share a new funding which is 7.5% of the F1 profits - estimated at 100 Million dollars.

F1 is strongly committed to the strongest teams.

Ferrari is the only team which has been in F1 since 1950, and has won more championships than any other team.

The big three are deemed vital to the continued success of F1, and Ferrari is the biggest of the big three.

 

Also reported in post #1 above. Dunno "who" found the #'s originally, but that's certainly the one that's "doing the rounds". More significantly IMO though is that turnover returned profits of 1.17bn! "Not a bad biz" I guess......

I think this "clause", wherever it may be contained, is down to there not being a Concorde in place right now. That always defined the payout for each WCC place along with a "carry over" from the previous few years - Rumored to be the past 3, now looks like 4. If any team drops outside this top 3 for a few years their earnings will drop sharply. (Outside of Ferrari of course with their own 2.5% or new equivalent).

Anyone (Christian?) have any idea of the status of the new Concorde? IIRC, Merc has now signed and only Marussia eek are yet to join - I'd have thought they'd have been the first, but maybe they were holding out to see if they could wangle some $ for 11th spot? [Although, based on early returns it seems they're ahead of Caterham this year anyway.]

The "deeper" question is where is all this detailed without a Concorde? I'm sure they're not working from a now out of date prospectus for example. Neither are they racing on an "ad-hoc" basis; There's gotta be something, somewhere, that I'd love to get a peek at...

Cheers,
Ian

 

Fair enough. Although I now realize it seemed to be aimed at you, my comment was really more "in general" than anything personal. Certainly no offense intended.

+1 I don't think we're too bad there though; BS'ers get called out PDQ.....

Better get used to those!

Couldn't agree more. A polite challenge is the way to address these IMO. Particularly as they have a habit of becoming "facts" as they spread thru cyberspace..... For example, I'm still not convinced that Phil's car was used as an R&D mule last season as we seem to have decided here.... Someone (may have even been me!) suggested the possibility and it took on a life of it's own, AFAIK without any further corroboration. (Anyone seen any other reports on this?)

Cheers,
Ian

 

Welcome aboard Christian, I'm a big PitPass fan. Hope you stick around a bit, this forum can be very informative and entertaining.


Mark

 

+1

I've even gone as far as having a Pitpass tab open!...... Glanced at it occasionally previously, but now added as it does seem to be another pretty good site.

FWIW, many claim the dreaded Jalopnik garners many of it's stories from here. Pretty good SnR too; We don't suffer fools gladly. [Mostly anyway ]

Cheers,
Ian

 

Not to mention a large number of media and formula 1 team employees dig around F-chat too.......lurking of course, none post.



I have to agree with Andreas' position regarding Red Bull. There's something quirky about a drinks company who have their nose dipped in every extreme sport on the planet and dominating motor sports' top field of battle, and for what? Bettering their brand recognition of car and furthering their automotive technology? Of course not. In the end, they're one of numerous companies who have had the same position, racing to win (or try) because they enjoy it and no real other reason. Nothing wrong with that I suppose.


As for Ferrari's veto position, I thought on this for a couple days and believe Ferrari's veto authority is almost honorary in nature, the power they wield from such authority hasn't changed the sport since they had Bridgestone altering compounds specific to their needs so I don't find myself overly concerned over any -almost artificial- authority they have.

I certainly understand the reasoning behind providing Ferrari with this authority. Formula 1 as a brand is worth updwards of double or even triple with Ferrari than without. Ferrari's involvement is a double-edge sword though, they need Formula 1 to benefit their road machines and keep their brand heritage, yet Formula 1 and all the various teams need Ferrari's involvement to keep Formula 1 what it is and as profitable as it is. So, which is more important to Fiat becomes a major question. If Ferrari did drop out for a season or two, they would come right back if their sales and brand value diminished I suspect at the behest of those in charge at Fiat rather than Ferrari. I somehow highly doubt the Italians would want to test that puddle though.

 

The Autoweek article I was referring to was written by Christian Sylt - editor of a newsletter Formula Money. He is supposed to be an expert on the money and politics behind Formula One.

In a summary box, his article points out six keys to continued profits for F1 financial success:

1) - Teams commit to every race, which guarantees TV coverage.
2) - Race Organizers hand over trackside advertising and corporate hospitality money to F1.
3) - Emerging markets drive up race hosting fees as they bid to host new races.
4) - Race hosting fees increase up to 10% annually.
5) - Teams receive 50 percent of F1 profits so prize money decreases if F1 has financial trouble.
6) - The most well-known teams get the biggest rewards, which ensures F1 does not lose its stars.

Thus, Ferrari (by their history and success in F1) is assured great power in the F1 world.

 

Dude!..... No offense intended, but the Autoweek article you reference is the exact same one as contained in post #1.... Hopefully, Christian got paid for both iterations! (? ) Hopefully, he'll also continue to hang around here as it seems he's got some pretty good insights.

I'm sorry, but please read before posting. Thanks.

Cheers,
Ian