Notebook from Sochi

There was a lot of paddock chatter in Sochi, much of it relating to the predicament that Red Bull Racing has fallen into. The handling of the relationship with Renault has been almost as ham-fisted as Kimi Raikkonen’s attempt to overtake Valtteri Bottas on the last lap of the Russian GP. Since telling Renault that it did not want the engines next year, Red Bull has been turned down by Mercedes, Ferrari and Honda, which means that the only choice for 2016 is… Renault.

The French, naturellement, are not keen to slip back between the sheets with the lover that spurned them, but no doubt they can be convinced because Bernie Ecclestone is keen to keep Red Bull in F1 and wants Renault as well, so he can simply suggest that being nice to Red Bull would be a good idea if Renault wants the thumping great nine-year prize money deal that is on the table, which will enable the French to clear up the mess at Lotus. The word in Sochi is that Scuderia Toro Rosso already has a deal to run 2015 Ferrari engines next season, which is perfect for Ferrari as it will provide them with all the data from a youngster called Verstappen, which will enable them to assess whether or not he is a better bet in 2017 than Raikkonen. Incidentally, with Romain Grosjean driving for Haas, Ferrari will also have access to his data as well… So Kimi will need to keep himself sharp next year.

Lots of Red Bull people (and others with vested interests) are flogging the idea that Red Bull will pull out of F1 if it does not get what it wants – which is not an engine from Renault. There is no sympathy at all for the Red Bullies, but the sport would be poorer without them. Or would it? You see, the word is that in the super-secret deals that were signed by the big teams and the Formula One group there are clauses that involve a $1 billion guarantee over the 10-year term of the deal. Bernie Ecclestone, quite rightly, felt that if he was going to give these teams vast sums of cash, he wanted undertakings from them that they would not bale out when the going got tough, as happened in 2008 with Honda, Toyota and BMW. Big companies generally do as they please and so you need something eye-waveringly painful to get their attention. I hear, but I could not prove it, that the deal is as follows: the penalty for an early departure reduces by $100 million each year, so that if Red Bull quits F1 in 2015, it would be required to pay $500 million to the Formula One group. This might not be sufficient to stop it happening.

However, Red Bull could simply keep up appearances for another five years.The team name and the livery could remain much the same as it is now but the company could cut back to virtually nothing, while the team ownership could be slipped across to Christian Horner. Thus, Red Bull Racing would remain for the term of the deal. Alternatively, it could reduce its spending and look for a buyer, so as to get some money out of the sport (not that money is a commodity that Red Bull needs).Remember that back in about 2001 Sauber and Red Bull fell out over whether to hire Enrique Bernoldi or Kimi Raikkonen. Red Bull own the team and was the primary sponsor but Peter Sauber held all the voting rights. In that case, Red Bull remained on the cars until the end of 2004, although the relationship was broken. Dietrich Mateschitz went on shopping around to buy a new team (the end result being Jaguar Racing), while his Sauber shares were passed on to Credit Suisse. My feeling is that Red Bull needs F1 as much as F1 needs Red Bull and so all the sabre-rattling is simply an attempt to get a better deal in the short term. Red Bull and Renault is not going to be a long-lasting marriage whatever happens and so Red Bull needs to find a suitable long-term alternative. The answer is for the drink-maker to fund the engine development for someone else and the obvious choice in this respect is still the Volkswagen Group, even if the firm is still reeling with the punches raining down on it from the diesel emissions scandal in the United States. What Volkswagen needs now is a quick way to rebuild its credentials as a tree-loving kind of firm and one can imagine that strategists will be saying that the answer is probably to be seen as the market-leader in forms of automotive activity other than diesels. Super-efficient hybrids are a good alternative and F1 is the perfect place to push that message. However, this cannot be done overnight and it would take Audi a couple of years to have all the equipment and people required to take on the big guns of today. However, it would be possible in 2018 and so Red Bull really only needs some donkey engines to get them through the next two years at as sensible a level as possible. The team might lose a few people, but if there is a long-term goal and ambition and money, then most will stay.

On the subject of credentials, there were some funny goings on in Sochi relating to people using VIP passes while apparently working as journalists. The folk in question are unable to get media accreditation but have managed to score some VIP passes this year. They try to convince readers that they are proper media by tweeting pictures of credential envelopes with their names on them. Rather rashly, having got into the paddock in Sochi using these techniques they then began tweeting news stories from the Paddock, which the average Russian Immigration official might confuse with the job that real journalists do. Going to Russia as a member of the media is a complicated business, involving all kinds of forms, documents and invitation letters, not to mention listing the birthplaces of your parents and (my favourite) all the countries you have visited in the last 10 years (the computer programme they have gave up with my list). We all go through this pain because anyone who goes to Russia without the right paperwork and then starts behaving like a journalist is thought to be taking a rather big risk. However, if some can get away with it, perhaps we will all be doing the same next year.

Getting into trouble with the authorities is not something that most people want to do and poor old Force India have had more than their fair share of grief with the Indian authorities of late. Team partner Roy Sahara has been in jail in India for 18 months, trying to raise a mammoth bail bond that will convince the authorities to let him go. They are insisting that he do this by selling his foreign hotel properties, notably the Grosvenor House in London and the Plaza in New York. The word is that there are Qataris interested (but then that is true with most financial transactions in F1 these days). If Sahara does get the bail bond he is expected to retire to live quietly in the Republic of Macedonia (I’m not joking) as his days in big business in India seem to be over. Vijay Mallya, for his part, has filing cabinets full of legal actions that have to be dealt with, in relation to most aspects of his crumbling empire, notably Kingfisher Airlines, but also United Spirits. He owes money here, there, everywhere and everywhere else and several banks are trying to get him declared a wilful defaulter, which will mean that the only money he can borrow in the future will be extraterrestrial. Now, to add injury to injury (with insults likely in the future) Vijay and his associates have had their houses and offices raided by India’s Central Bureau of Investigation (CBI), the country’s premier law enforcement agency, in connection with an alleged criminal conspiracy involving them and officials of the Indian government’s financial service company, known as the IDBI Bank. It is claimed that they colluded to sanction credit limits in violation of banking norms.

Elsewhere, Ferrari has been showing how big business should be done with plans for its IPO going ahead, with a valuation expected of around $10 billion. This will give the Fiat Chrysler Automobiles a payout of about $1 billion and it will stay in control as well. The word is that FCA boss Sergio Marchionne will announce plans as soon as the IPO is over to push supercar production up from the current 7,000 to around 10,000. There have also been suggestions that Ferrari may try to emulate Porsche and add some more vehicles to the range, in order to become more profitable and to meet US emissions limits which are calculated across the range of each car company. As Ferrari will be independent of FCA, it will need some very efficient machines to offset the gas-guzzlers. There is even talk of an SUV… Some fear that this might affect the company’s image of exclusivity, but Porsche has shown it can be done. Marchionne believes that the Ferrari brand can be developed into more luxury goods, which would help its market value.

The news that Prema Powerteam is to enter GP2 should also be taken seriously because behind Prema is the Canadian fashion billionaire Lawrence Stroll, who has made massive amounts of money by developing brands such as Tommy Hilfiger and Michael Kors. He has a long record of F1 sponsorship with brands such as Pepe Jeans, Hilfiger and even Asprey. He has sold most of his fashion businesses now and is concentrating on other things, including his son Lance’s racing career and owning the Mont Tremblant racing circuit. There is always a lot of talk about Stroll and often nothing much happens (he was rumoured to be buying into the F1 Group not long ago, not to mention Sauber and Williams). However Prema has now taken over the GP2 entry from Lazarus and it is quite likely that in a year or so, the younger Stroll will pop up there in GP2. After that, perhaps we will see Dad buying into an F1 operation.

Elsewhere, Hong Kong has become the latest city to try to emulate the success of the Singapore GP. It will host a Formula E race in just over a year from now, on a street circuit that will include the Central waterfront area and the Star Ferry terminal.

There was more going on, but the remainder of the good stuff is reserved for my Joe Saward Business of Motorsport weekly newsletter, for which you can sign up if you really want to know the ins and outs of the F1 Paddock. Check it out here.