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.
joeblogsf1 
Any chance the Red Bull noise about Renault engines was all an elaborate ruse (cooked up between Red Bull and Renault) to get Renault more historical monies?
I’m going for craziest theory of the year here 😊
Go and have a lie down
Hi Joe, would the easiest solution not be for Sauber to “sell” their 2016 Ferrari engine supply to Red Bull? Sauber is a team in need of funds and RB desperate to get hold of 2016 units. So then Sauber/Toro Rosso have 15 engines & Ferrari/Red Bull/Haas 16 units – Sauber gets a bigger operating budget and everyone is happy..or am I missing something obvious here?
What does Sauber use for engines?
2015 engines next year instead of 2016 engines. Ferrari have stated they do not have the time/capacity to produce more 16 engines for RB at this late hour, so they could potentially obtain Sauber’s contracted supply instead.
Historically, Sauber have had close links with Mercedes…
A very long time ago
There’s no way that Sauber could sell their engine deal. Ferrari will have lots of clauses in the deal to protect their interests and tie the deal specifically to the Sauber team and current ownership.
Pretty sure Ferrari decide who their engines are used by, and such antics would be forbidden in any customer contract.
Joe, regarding Bernie Ecclestone. Did you read the piece by Dieter Rencken on their interview in Autosport? And if so, what do you make of the last paragraph?
I did not read it
Meeting ending, they’re walking to the door. Bernie pauses, asks if Dieter is sure about something he’d said earlier that Bernie had *flat out contradicted him* about. Dieter says that yes, he’s 100% sure.
And Bernie says, “You know, you have me worried, I can’t remember. I’ll go back and check.”
Handshake, exeunt.
~~~
My money’s on mind games.
But I did catch myself reacting like that when I read the article and wondering if I’d now *always* assume that there was a hidden purpose to Bernie’s words and actions, even if in fact he were to have a breakdown and start talking random gibberish (hypothetical thought experiment).
If Red Bull leaves F1 in 2016 doesn’t Herr M have to pay Mr B around half a billion Euros?
Plus the cost of winding down the team, eg redundancies, leases on premises and equipment, etc
Sorry Joe. No doubt you’ve written something very witty and insightful but I just can’t deal with the Red Bull nonsense anymore. I’m over it, as I’m sure many F1 fans are. If I never have to hear about that over caffeinated tiger piss again it’ll be too soon.
No chance of you getting the advertising contract then LOL! – certainly agree I don’t give a can of the fizzy stuff whether they stay or go – although the impact on a lot of jobs would be awful.
Still think Renault should/could by RBR instead of Lotus – it would possibly save a lot of money in the long run than the Lotus route – RBR aren’t too shabby even with supposedly poor engines
Agree, although it is a bit of an insult to tiger’s piss
If Red Bull were to pull out, at least Adrian Newey would have vast resources to build Americas Cup yachts.
Don’t see the point of the point of Red Bull starting a rival series as they clearly don’t have the clout to bring the necessary ‘big teams’ with them. They’d be better trying to make another sport ‘their own’ if going down an alternative route. World Rallycross would be my shout but maybe something like increased Americas Cup involvement / promotion could be an option.
CVC’s ownership will have a finite term, they are unlikely to sstay owners indefinitely whatever the economics. Private equity funds through which investments like F1 are made have a finite life, generally around 7 years. They have such a limited life because the fund’s limited partners who are the ultimate investors who provide the fund with its capital, generally pension funds, want their invested capital back eventually. There has to be a mechanism to ensure that they get it back. So at some point in the not too distant future CVC will sell out so that it can return capital to CVC’s investors. CVC could sell it to another CVC fund but that might not be a good deal for the investors in the second fund because there would be limited upside to them and private equity funds generally only do that when assets are difficult to sell rather than attractive ones. So I’d be interested in whether anyone has asked or knows what the life of the CVC fund is that holds F1. That would give a very good indication of what might be over the horizon. It might also explain som e of Bernie’s recent cryptic comments that some of the shareholders have to sell.
Donald Mackenzie said recently that CVC does not have to sell
The fund has already had one liquidity event, at which point Norges et al bought a stake. This enabled some investors to get out.
Hi Joe, could the regulations allow a team (RB) to source a “base” engine (i.e. one in original release state, before any development tokens were spent on it), then take forward the development of that engine themselves or with a partner (e.g. Ilmor), re-spending the permitted development tokens that have been available since that original release? This way they could accept supply of older technology but pursue a parallel development to that followed by the original manufacturer whilst enjoying the chance to make it competitive at considerably less expense and risk than starting from scratch.
Way to go, I like that idea. Even a base Mercedes engine would lift them to at least a guaranteed third spot on the grid…..Nah, that’d be too close for Toto’s liking so won’t happen 🙂
What ever happened to PURE? I knew it went bust but did anything rise from the ashes ? Would there be a base for Red Bull to use to start developing their own engines ?
If red bull leave would they be missed? Probably not much. Bernie on the other hand is always entertaining as any crackpot dictator should be. Sure he’s made a bit of a mess but imagine a sanitised F1 run by a committee of bureaucrats. The outrageous politicking is a big part of the entertainment and I think you would miss him do that reason Joe.
Charles de Gaulle: “The graveyards of the world are full of indispensable men”.
My father used to say to say to me that if I thought that I was indispensable I should put my hand in a bucket of water. When I pulled my hand out of the bucket, if I left a hand imprint in the water I was indispensable. I understood that I would never be indispensible although the bucket of water explanation left me bewildered.
Similar point though I think.
“The size of the hole left in the water shows how indispensable you are”.
“but imagine a sanitised F1 run by a committee of bureaucrats” it already is, or close a dammit. Why do you think people like Jacques Villeneuve & like Adrian Newey got pissed off with it?
Joe,
Just interested to know, what’s your relationship with Bernie like, you seem to get away with saying lots of things like this piece, and still never lose your press pass?
What am I doing that is wrong? I am asking questions that are – in my opinion – in the best interests of the sport. I cannot be sure, but I feel that I represent the views of many people both inside and outside the F1 Paddock. I can understand that BE may not always agree with what I write, but then I ask similar questions about the teams, the federation, the race promoters and even the drivers, so I am sure that there are times when he appreciates what I write and it works in his favour.
Secondly, a little controversy is never bad for the sport – if you are the promoter. You want the sport to be in the newspapers. I don’t believe that all publicity is good publicity, but most of it helps to get people talking about F1.
Thirdly, I believe that the FIA controls press accreditation. It would not be right for the commercial interests to be doing that.
Joe, I can’t see how the myriad of bad or questionable press about F1 encourages companies to sponsor F1 teams. That may be a reason why it’s so rare to hear about teams obtaining new sponsors (performance woes or not, McLaren’s plight is disturbing).
I think the bigger problem is the payTV development, which is cutting viewer numbers
Joe
I agree completely with that, but the last time I said so on this blog I was shouted down by lots of posters saying for example, “Sponsors want exposure in front of people who are able to pay to view, they are the ones who can afford to buy Rolex watches, drink Martini etc”
This implies that sponsors don’t want or need their products shown in front of less wealthy people who can’t afford Rolexes, or pay-to-view TV.
Do you think all those posters who shouted me down worked for SKY? Canal+ perhaps?
Martin
No
absolutely right IMHO bums on seats are what sponsors want and are getting less and less of – think on Bernie – Monaco not on the beeb – it’s a disgrace!!
should be live on the beeb ( or other free to air broadcaster) but I think you know what I mean
The Beeb isn’t free. I pay annually for a licence fee. ITV is fta. But I don’t want James Allen back!!! 😉
Martin – ITV is not fta. Everything you buy pays for the programmes. Just about every country has a TV license fee, often it’s more than the UK, and you get adverts to boot. Check on the internet, you’ll be surprised. The BBC is a fantastic organisation of which we should be proud.
Couldn’t agree more with this point, Joe. I have cancelled my Sky subscription (the price had crept over the £45 mark for a basic package and sports channels, and we never watch the football!) and couldn’t justify the price tag for endless repeats and a race every two weeks. At least I still have the coverage on the BBC, but it feels like I will only get half the story with only half the races to watch. It sounds petty to drop Sky for £45 a month, but I’m paying for a lot of content I do not have any desire to see. Perhaps a one off payment for a season pass directly from the content provider would be a better option for the likes of me? Or maybe I liked getting it for the cost of my TV license, as had been the case for pretty much my entire life!
Ricky, this why I get so annoyed when people slag off the beeb – we’ve lost half of F1 and now live MotoGP because of SKY and BT. See my comment to Martin above. It’s about time the public supported the BBC before it’s too late. Anyone who thinks the license fee will miraculously disappear without it (particularly in these straightened times) would be sorely disappointed.
I doubt that major corporates would be reassured either at the possibility that their air time might be withdrawn or radically curtailed at the behest of the promoters at any time of the latter’s choosing (and regardless of the competitiveness or otherwise of the team(s) with which they are involved).
So while we’re sorting out F1’s economics it would be a good move to address the perception that this sort of thing goes on, whether or not it is grounded in reality.
Seeing what Trillian and I pay for our old 2012 Sky HD bundle (thankfully included F1 with the HD…) now, ~£40pm, I plugged some package selections into the UK Sky website, the entry price for F1 (entry package plus sport) now appears to be £45.50pm. I didn’t bother checking whether or not that includes Sky Sports in HD or SD. Ouch.
I think Ron sets his sights too high.
Agreed – vaguely remember him chuntering when Williams did their deal with AT&T a few years ago (basically they got title sponsorship but little room on the car) with Ron saying it devalued it.
I’d call that an innovative deal that suited all parties. Like watching an episode of Dragon’s Den – would you rather own 100% of a worthless company or 1% of Apple…
So does that mean if one has one of those VIP F1 paddock passes, that it is issued by FOM (the commercial rights holder) and not by the FIA? So – only accredited journalists can have one issued by the FIA? And if you are not in the paddock with an FIA pass, by logic, then you are just a guest of a sponsor or team or the CRH? Hmm…..
I believe that is how it works.
well spotted, I’d missed that. You are referring to the same VIP’s who don’t have the correct visa’s?
The last time I posed that question you replied, “he keeps his friends close, and his enemies even closer”
I thought that was that was probably about right.
Many thanks for your response, I have no issue with your writing, in fact I really enjoy your candedness, unusual in this PC world! It was really just wondering if you get the dead eye of BCE sometimes!
I thought I’d heard in the past how he’d orchestrated the removal of passes from those that upset him…maybe those where paddock not press.
He’s cleverer than that.
“you seem to get away with saying lots of things like this piece, and still never lose your press pass?”
As Joe has said before: “Better to be in the tent and pissing out, than outside the tent and pissing in”.
I really enjoy not only your blog articles but also your podcasts and subscribe the magazine GP+. I am constantly irritated by the modern world having gone OTT with “political correctness,” BUT your use of the descriptor “Chop Suey Motors” really surprises me; especially coming from a vastly experienced and highly respected journalist such as yourself. By using such words, is it possible that “An Audience with Joe” in say Singapore or even Australia might be less well supported, so the result might have the effect of employing a shotgun on ones own metatarsals is not outwith the bounds of possibility.
For example, your upmarket weekly round up of insider news within the industry as a whole might not gain new subscribers from the Far East (or from someone of that regions ethnicity) anytime soon from a writer who chooses to use such inappropriate language.
But there again it might be me that is out of step with the 21st Century, and what is permissible and appropriate to be written in a blog; that may well be quoted in publications across the globe.
You say you are irritated by the world having gone OTT with political correctness and then you do exactly that. If I had written Jianghuai, Sichuan Tengzhong, Shuanghuan or Shuguang, would you have known the difference? I was simply illustrating the point that there is lot of potential. If I had written about a British firm called the Sausage Car Company, would you be writing in in outrage that I had insulted the British, or would you just smile at the use of a silly name?
People need to lighten up..
I guess you should have said, “Camel Back Motors”…
I’d take Sausage Motors as German!
Do I recall a deal being done for the Virgin team to run Sausage Motors at one point but they pulled out at the last minute.
Really? Blimey. How much of your day did you spend on this exercise in pointlessness, Taffy? L+R, Ned
Why is it that only white westerners are upset by this stuff? Get a life Mr Precious.
Some white westerners–who have the political-correctness/social-justice-warrior infection. Appalled by damn near everything.
And you call yourself…Taffy. Nuff said
I am not outraged, only surprised and a little disappointed.
As you seem to be happy to stand behind your descriptor, I applaud your courageous stand.
CSM F1 team! Brilliant! The driveres could be Charlie Chan and Fred Fumanchu!
Regarding Red Bull engines, with something like a projected $40B out going in VW fines and fixes, I can’t see Red Bull and Audi teaming up. Even if Red Bull underwrites the engine, VW is trying to clean up their image. If they teamed up, the public would see it as The Dirt Bags and The Sleeze Balls teaming up. Aston Martin is partly owned by Mercedes and it no secret that Dieter Mateschitz has never had any love for MB and, actions speak louder than words, they’re not fans of him either. Again, something of Mateschitz’s own doing. So let’s rule out Aston Martin. The Chop Suey sounds promising for the future, however for 2016 I would love nothing better than to see them running 2015 Renault engines and Maneschitz, Marko, and Horner at the races with S&M ball gags in their mouths!
I personally would love for RB to go back Renault, get the ‘new’ engine into a stonking chassis and win the championship. Then, in ’17 Renault tell them to sod off! I doubt it will happen sadly. G.
Highly unlikely that RedBull will use Renault 2016.But I m sure Mr.Mateschitz
also looks at 2017 NOW after they have written off the last two season
My guess is that they will use 2016 as a sabbatical and maybe let run
Torro Rosso with Ferrari or even Honda engine and will try to get back in
2017.Also Red Bull Air race was off for some years
They cannot have a sabbatical. It would breach all agreements and the staff would quit
Well that could be correct but agreements are just a piece of paper.
Would not be the first agreement what would be broken
Nobody can stop RedBull from leaving
Also staff does leave at once.Some will but there are tons of employees
Might I sart a rumor that Geely are developing an F1 Power Unit to be badged as a Volvo and see where it ends up?
In my opinion Red Bull are trying to extract the bullet from the corporate foot.
Joe, a couple of questions:
1. If Red Bull were to reunite with Renault for 2016, do you think it would be gratis a la their previous works arrangement? Or do you think there’s a likelihood that Renault charge them for engines?
2. If the current F1 system is dismantled and the FIA loses it’s commercial arrangement with FOM, doesn’t that mean the FIA would have more say in the operations of the sport? Correct me if I’m wrong, but I understood that the FIA gave up some say in how the sport is run in return for financial compensation.
I do not believe that the previous deal was gratis. I am sure that Renault will want paying again. If the current arrangements were dismantled there would need to be a new one put in place. I guess that the Commission would want to know about that and to clear it.
The rival series is the way to go! Just think of it — standardised chassis, big V8 engines, and the best drivers in the world who have no other F1, sportscar, or touring car commitments! Red Bull would own the whole thing, but they could set it up almost as a racing league, with Red Bull as the promoters. That would be super! And hey, there’s the name! Super League Formula!
Wait, what?
Ever heard of A1 GP series? No? It was exactly what you wanted!
It got as much tv coverage as our local archery club.
A1GP had reasonably good coverage in India – every race was live on Star Sports (now Fox Sports I guess) and since India was one of the teams, people were talking about it…
QED.
Joe do you think there’s any possibility that this “crisis” is an attempt to drive down the value of F1 by a potential purchaser? EIther with or without Ecclestone’s assistance? Someone like… even….Red Bull
I have no idea
Firstly,Joe by the way since you mentioned engines is their any chance that Craig Pollock’s PURE engines project could be revived ? Secndlyo why hasn’t the FIA been completely disbanded yet if we want remove autocracy?
None
The FIA isn’t just losing respect in regard to the way they handle F1, but now also receiving criticism from the WEC for its failure to do more to protect the 24hLM from the Baku race.
I have to say, it really seems more and more like the financial arrangement the FIA made with FOM was as close to selling your soul as you can get.
I sincerely hope Nico Hülkenberg will skip Baku and turns it on again at 24h with his Porsche squad. Baku anyway is a s… race.
Yes the LM24h organisers seem very annoyed indeed, but they seem to think that the FIA has some kind of power over F1.
Thinking back to around March time this year, didn’t Bernie say that he/CVC would sell to Red Bull if they made an offer?
I just wonder how much of the current shenanigans is just to prepare people for exactly that outcome – i.e. the only way for Red Bull to stay around is for them to buy F1.
It wouldn’t be the first time that something was agreed in F1 several months in the past, only to be “announced” when the time is right. I’m thinking mostly of driver contracts, but I have a feeling there are other examples.
Finally, if Red Bull would have to pay $500m to leave, that could equate to a hefty downpayment on buying from CVC…..
I think I have inadvertantly become a conspiracy theorist, I think I need a drink!
It fit with Bernie’s chosen one as his successor.
If the current system is dismantled……Isn’t there a chance that if the dismantling were caused by someone/thing other then Formula One group, then that group could come out somewhere other then in the prime seat?
They seem surest to gain most if they act and only IF they act on it?
How different is a f1 engine to a WEC one?
Option 1
No holds barred engine that lasts 600 miles between rebuilds (DFV)
Option 2
De-tuned one for 6-24 hours (DFL)
More units required
Cost per unit less
More choice
Maybe even a modern day cosworth
Joe – do you think there is scope for a Mechachrome option? Ie that Renault supplies an engine, but distances itself via a RB owned/named engine intermediary?