There is a lot of conjecture going on about the future of Red Bull in F1, with the stories becoming ever more fanciful, the most recent being a rule change to allow the team to use 2013 engines, and an apparent threat that Red Bull might start a rival series if it is left without engines… This sounds like a plan, but one does not really need to go into detail analysing if it can happen. Such things have often been talked about but they have never happened. Once people start looking at the task and the costs, the idea is always abandoned and an alternative solution found. Personally, I don’t think it is a serious threat.
The obvious solution to the current problem is for Red Bull to get Renault engines and gag clauses in their contract to shut up the people who have got Red Bull into this mess in the first place. That will buy the team time to go out and find (and fund) its own manufacturer deal, be that with Audi, Aston Martin or Chop Suey Motors. The team will lose good people in the interim because rebuilding from such a mess is a lengthy process, but that’s really their own fault for mouthing off too much and getting themselves into the mess.
However the Red Bull situation is important for F1 in other respects. This crisis (if one can call it that) could turn out to be a test of whether Bernie Ecclestone still has the clout to fix problems in F1, or whether the power is shifting away from him, because of the deals that have been struck with the big teams in recent years. If he cannot fix the problems, how is CVC going to react? Will not someone within that empire whisper quietly that perhaps the time has come for change? Bernie’s hold over CVC seems to date to be based on their fear that without him the sport would be chaos. They stuck by him through the Munich trial, which was most unlike the typical risk-averse private equity norm. It was surprising.
What is really interesting is that if you read academic studies that analyse the effect of strong central rule on economic growth in countries, using statistics from different examples, you find that while economies develop well when there is a powerful central figure, largely because of stability and swift decision-making, there is also a clear pattern of much faster and more sustainable growth when the leader disappears and there is more freedom, more transparency and more democracy. Yes, it’s messier and less efficient in some respects, but solutions are more easily found because people are not afraid to negotiate and more decide to take risks and create businesses.
CVC cares only about profits, but it is probably capable of switching from the aggressive earning model we have seen, to a more passive growth pattern that is sustainable in the longer term. There is no need for a fire sale.
Having said that, dominant rulers are never to be underestimated. Some might argue, for example, that the fact that some teams have complained to the EU shows the weakness of the Formula One group. A few years ago no-one would dare do such a thing.
I think it is more complex than that because the Formula One group stands to gain most if the current system is dismantled. The big teams would lose their extra money and power, the FIA would lose its financial deal with the Formula One group, which would leave the federation up a proverbial gum tree, as it has squandered much respect in its handling of F1 in recent times. Thus it could all result in the Formula One group becoming stronger, the FIA going through some changes and finding a strong leader to ensure that the sport is properly governed, and for teams there would be revenues more fairly spread. If everyone is happier, more progress can be made – and autocracy can slip into democracy.