Will Ferrari leave?

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Fifty
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Will Ferrari leave?

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If Chase holds firm and stops giving Ferrari their $80+ million a year longevity pay, will Fiat hold true and pull them out of F1?

(And if so, how long till Mercedes does a Porsche "we conquered and we're done" and pull out?)

Fulcrum
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Re: Will Ferrari leave?

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I think both parties understand the nature of their relationship is too symbiotic to let $80 million be a sticking point.

Were Ferrari to leave, they'd stand to lose more than $80 million a year from lost advertising, merchandising, multimedia, brand awareness, etc...

Were Ferrari to leave F1, I feel F1 would lose more than $80 million a year as a result of a huge component of the fan base no longer having a connection with the sport. Think of the support ratios in the crowds at every race. A large percentage support Ferrari, their drivers, their heritage, etc... If Ferrari left, while a component of this group would support another team, or revert to their favourite driver, some would simply not attend. Likewise with television audiences.

So, while the amount is in question, and the nature of how this money will be paid under the new structure, I foresee Ferrari maintaining some degree of financially lucrative terms with the sport. Whether they meet in the middle, essentially renegotiating the amount downward, or adopt some form of equity-based incentive, I don't know.

If the business lists, I could very easily see Ferrari motivating for, and being given, preference shares, executive voting rights, an increased equity stake in the franchisee scheme, or some combination of the above.

The current payment structure will not, in my opinion, be altered radically. We are likely to see incremental changes that lead to a more even distribution of payments to all stakeholders in future though.

The key hurdle will be facilitating a way for the more cash-strapped teams (Manor, Sauber, Force India, Haas, Williams) to buy-in to the franchise system without adding additional layers of debt to their already marginal financial positions.

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ME4ME
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Re: Will Ferrari leave?

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I don't think Ferrari will leave if their bonus is taken away. It would look awful for them in the media, like they can not compete on equal terms and therefor quit.

Also they haven't won in a long time, and therefor are unlikely in my oppinion to quit. If they want to do it, they first need to win.

wesley123
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Re: Will Ferrari leave?

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No, they will not
"Bite my shiny metal ass" - Bender

Jolle
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Re: Will Ferrari leave?

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There will probably will be a new deal what and how Ferrari has to market the F1 brand as well, so the benefits of Ferrari in F1 is more transparent and the payment is justified.

Facts Only
Facts Only
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Re: Will Ferrari leave?

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They wont quit (they never do), its not like the $80m is doing them any good anyway, they still cant win.

Ferrar and F1 could both continue without each other but Ferrari without F1 has lost a big part of what makes it 'special'.
"A pretentious quote taken out of context to make me look deep" - Some old racing driver

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nevill3
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Re: Will Ferrari leave?

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I do not think that the payment of the $80 million is without just cause, if you were to go to a music concert you would expect the superstar bands and musicians to receive more money than a new band so they would command a higher fee, Bernie has managed successfully to "divide and conquer" the teams and negotiates separate deals with each of them. I do not think Ferrari will leave because they will find a way of "earning" the extra money through some other means, perhaps threatening to charge FOM every time the Ferrari name or logo is mentioned or used in any sort of way.

Hopefully if Liberty manage to increase the revenue and profits of F1 and see this as a long term project more prize money will become available with perhaps a new structure that does away with tier 1 money etc. and a more fair system that rewards a teams progress too.
Sent from my Commodore PET in 1978

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GPR-A duplicate2
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Re: Will Ferrari leave?

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nevill3 wrote:I do not think that the payment of the $80 million is without just cause, if you were to go to a music concert you would expect the superstar bands and musicians to receive more money than a new band so they would command a higher fee,
Definitely not for an outdated superstar performer though.
-Does something like that happen in EPL, that the oldest football club gets paid for BEING OLD?
-Does England cricket team gets paid extra for inventing the game and also being the oldest team?
-Does that happen in any sport?
-McLaren F1 team is just 16 years younger than Ferrari and if Ferrari gets paid for being a 66 year old team, McLaren has also been competing for the last 50 long years. Why not McLaren gets paid extra?

You can't use current Ferrari Formula One team to bring in young/new audiences. For that matter, it's the recent/current champion team/driver that attracts new and young audiences. So, FOM need to sort this and put in a structure of payment, where the best team of A season, gets the highest payment.

So far, there isn't a practical reason established through some kind of survey or results that tells the world that, audiences primarily come to watch a GP, because Ferrari is participating in it. Just in this year, we saw two Grand Prix-es where " A DRIVER" was responsible for pulling in big crowds. One was the British GP and the other one was the Belgium GP.

Attendance for every single F1 GP is dropping around the world, TV viewer-ship is going down significantly. So what is the role that Ferrari is playing to help F1, with regards to be getting paid extra?

GSBellew
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Re: Will Ferrari leave?

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Did this not happen before about ten or so years ago?

A deal will be done, Ferrari won't leave. To me, Ferrari is Formula 1, but Formula 1 is not just Ferrari.

Certainly to the younger generation RedBull is probably more F1 than Ferrari, the longer Ferrari go
without success the less integral they will be.

Fifty
Fifty
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Re: Will Ferrari leave?

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This came about around the 2002 boycott of I'm not mistaken.

I believe it's actually more than $80 million US, and Mclaren and Williams also receive a check...albeit a smaller one.

The problem with Ferrari is that they make total of no more than 9k cars a year to maintain exclusivity and justify the cost.
To go and maintain the cost of racing they need that financial infusion every year.
If they were to loose that money, they would need to find a source of additional income and fiat will not provide it.
I think Ferrari will do what they threatened in 02 with the world Grand Prix, but instead focus on the Ferrari challenge or jump into LM or work with others to create another Gp series.

Mclaren was "bribed" with their smaller check every year, but more so with the contract to supply the mandatory electronic hardware that all the teams must use. This is a guaranteed injection every year that is predictable.

Williams is the ringer that just gets a small bit of cash.

My feeling is that if the new owners piss off Bernie, he will exercise his right to leave before then 3 years, he will collect the rest of his payment (apparently liberty has only paid $700m) and he will be out to die or start something else.
Once he is gone, liberty will axe the special payouts, causing Ferrari to try one season then leave.
Merc will want to leave because they already have multiple championships in the bag and it's not worth coming in first with no competition. So they will bail and support dtm and LM.
Red Bull will then follow suit or leave sooner if Liberty enacts their driver draft system. Red Bull is like the Old Mr Ferrari. They don't like anyone telling them what to do. They have no real reason to be in the game. They can and have shown they will pick up and leave at a moments notice. (Merc said they will bail if RB bailed; this was last year)

That's the three (actually 4) of the top teams all teetering on leaving if things change.

Renault and Honda will be the only manufacturers. Porsche/Audi/VW showed some interest but fall in the same boat as merc and won't play with out a marketable competition.
BMW, I don't think wants that kind of marketing, I think they want the more road race production.
Ford Chevy etc don't want in.
Unfortunately for Sauber, Williams, FI, their world would collapse.
At least manor and haas have the manufacturers or other series to be folded into.

I've always wondered about F1's "value"...
It's a perceived value because their is little to no tangible product. No tracks, nothing is owned by f1.

If the teams don't like the rules. There is nothing.

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GPR-A duplicate2
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Re: Will Ferrari leave?

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Fifty wrote:This came about around the 2002 boycott of I'm not mistaken.

I believe it's actually more than $80 million US, and Mclaren and Williams also receive a check...albeit a smaller one.

The problem with Ferrari is that they make total of no more than 9k cars a year to maintain exclusivity and justify the cost.
To go and maintain the cost of racing they need that financial infusion every year.
If they were to loose that money, they would need to find a source of additional income and fiat will not provide it.
I think Ferrari will do what they threatened in 02 with the world Grand Prix, but instead focus on the Ferrari challenge or jump into LM or work with others to create another Gp series.

Mclaren was "bribed" with their smaller check every year, but more so with the contract to supply the mandatory electronic hardware that all the teams must use. This is a guaranteed injection every year that is predictable.

Williams is the ringer that just gets a small bit of cash.

My feeling is that if the new owners piss off Bernie, he will exercise his right to leave before then 3 years, he will collect the rest of his payment (apparently liberty has only paid $700m) and he will be out to die or start something else.
Once he is gone, liberty will axe the special payouts, causing Ferrari to try one season then leave.
Merc will want to leave because they already have multiple championships in the bag and it's not worth coming in first with no competition. So they will bail and support dtm and LM.
Red Bull will then follow suit or leave sooner if Liberty enacts their driver draft system. Red Bull is like the Old Mr Ferrari. They don't like anyone telling them what to do. They have no real reason to be in the game. They can and have shown they will pick up and leave at a moments notice. (Merc said they will bail if RB bailed; this was last year)

That's the three (actually 4) of the top teams all teetering on leaving if things change.

Renault and Honda will be the only manufacturers. Porsche/Audi/VW showed some interest but fall in the same boat as merc and won't play with out a marketable competition.
BMW, I don't think wants that kind of marketing, I think they want the more road race production.
Ford Chevy etc don't want in.
Unfortunately for Sauber, Williams, FI, their world would collapse.
At least manor and haas have the manufacturers or other series to be folded into.

I've always wondered about F1's "value"...
It's a perceived value because their is little to no tangible product. No tracks, nothing is owned by f1.

If the teams don't like the rules. There is nothing.
And still F1 is existing for close to 70 years, with many a big names (Aston Martin, Alpha Romeo, Lotus, Porche, Maserati, BMW, Toyota, Honda, Renault (in and out) to just name a few) coming and leaving and in the same period, withstanding many an economic meltdowns around the world. That says, no matter who comes and leaves, the business will continue. Yes, momentarily there will be dissatisfaction, but the show will overcome that.

Whether Mercedes leaves or not, here are some interesting statistics for them. If they are at a break even stage, it's essentially not a lot that they are spending to gain high stakes publicity for themselves. F1 is pinnacle of motorsport and engineering and being a champion is the kind of dream every automobile company wants for itself. Who wouldn't want to be in that situation, especially if the investment is almost nothing? Now compare that to the situation, where Mercedes was providing Engines to McLaren for FREE AND WAS PAYING a hell of lot of money, every year for almost 20 years, TO what it is spending today for their own team. And they were getting a much small part of the PR as McLaren was getting the most.

F1 is more business than sport and one team's decision to leave, would hardly influence another team to consider the same decision. More so, when the situation of the teams is vastly different with respect to their return on investment.
As Britain’s Independent newspaper revealed in October the financial statements show that Mercedes spent a record $314.4 million on running its F1 team and a further $220.8 million on making the engines. However, that is only part of the story.

The same financial statements also revealed that the F1 team is nearly at break even, with 85% of the operating costs covered by revenue streams. They come in the form of payments from sponsors and prize money which increased in 2013 due to a new commercial deal with F1’s rights-holder the F1 Group. The expenses of the engine manufacturing division are offset by revenue from selling the V6 hybrids to three customer teams. - Source

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FW17
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Re: Will Ferrari leave?

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Mercedes came into F1 in 1994 and not 2010, I dont think they were in F1 waiting for success before they quit.

Fifty
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Re: Will Ferrari leave?

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F1 didn't cost nearly what it does now for the first 50 years.

Also, f1's existence as more a business than a sport, relies on its fans. It's fans and their number are the reason that the F1 sponsorship group can extract the money they do.
If Ferrari and the Tifosi quit, then a good quarter of the f1 fans will probably walk.
If Red Bull leaves as well, subtract another 5-8%.

You have just reduced the earning potential of the sport by at minimum 20% if my numbers are inflated and 30-35% at worst.

As for F1 being the pinnacle of Motorsport, during the last 5+ years, F1 has shot themselves in the foot with that and has earned itself the reputation as the race series with a cookie cutter subdued technology and utilizing the best funded drivers that are usually mediocre at best.

How often on these forums do you read about how boring and uninspired the cars,drivers and races are. How often do you read in the news the same.
The media makes a mountain out of a mole hill if a tire locks up or a piece of carbon cracks...because that's all there is.

Hardly the reputation (or reality) it had during its hey day.

If Liberty Media turns this more into a spec series I'm out.

(BMW just released they scoffed at the invitation to rejoin F1 due to inflated costs to returns, and lack of technology etc etc etc... WEC and FE for them)

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GPR-A duplicate2
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Re: Will Ferrari leave?

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Fifty wrote:F1 didn't cost nearly what it does now for the first 50 years.
Porsche left F1 because of costs.
...At the end of the season (1962), Porsche withdrew from F1 due to the high costs - Source
It wasn't that the costs have now become higher to run in F1.. Teams used to spend way more than what they are spending today.
F1 2008 - Team Budgets
Fifty wrote:If Ferrari and the Tifosi quit, then a good quarter of the f1 fans will probably walk.
If Red Bull leaves as well, subtract another 5-8%.
That is just emotions. You can never be certain of that.
Fifty wrote:You have just reduced the earning potential of the sport by at minimum 20% if my numbers are inflated and 30-35% at worst.
It's all about identifying the newer markets and exploring newer ways of taking the sport to a new set of audiences, through newer mediums. Bernie has been adamant on milking money from easier ways, than to slog hard and work out different revenue streams.
Fifty wrote:As for F1 being the pinnacle of Motorsport, during the last 5+ years, F1 has shot themselves in the foot with that and has earned itself the reputation as the race series with a cookie cutter subdued technology and utilizing the best funded drivers that are usually mediocre at best.
You will always find people who either support the newer developments OR not. Except for the noise, I like the technology that the F1 has employed. It's the way forward.
Fifty wrote:(BMW just released they scoffed at the invitation to rejoin F1 due to inflated costs to returns, and lack of technology etc etc etc... WEC and FE for them)
Honda had left for similar reasons. They are back, albeit as an engine manufacturer. Who knows what they will do in future. Renault had backed out, but are back again. Audi almost came back with Red Bull, but the emission gate pulled them back. So, never say never. Mercedes was absent for a very long time, but they came back and also winning the championships. That's just the nature and lure of F1 as a motorsport platform.

Fifty
Fifty
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Re: Will Ferrari leave?

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Sure Porsche left due to high costs in 62 vs passing racing costs onto the consumer race teams and still gaining the win Sunday sell Monday theory.
But f1 was way cheaper in 62 than it was in 08 or today (inflation adj of course).

I think Honda got back into the game because the CEO is a F1 fan (and an Alonso fan) and thought they could come in with a PU that didn't have to be restricted by the token system due to pre entry research, and they would be able to wipe up and gain tons of publicity.
It didn't work out.
They think they have it now, I think they are just grasping to save face (cultural) and have hence declared trying for more customer teams.

As to wether the fans leave or not, is a true guess and it is based upon emotions.
I think that f1 has two types of fans:
1) those that will agree with anything they do, believing that any technology is new age and great and must be the way forward
2) those that believe in the core principles of gas fire loud etc. and individual team accomplishment and inginuity vs cookie cutter.

Those who fall in the first group will stick around long enough for F1 to become FOrmula E... and those in the second group will slowly or quickly leave and spend their tv/internet time on wec/dtm/LM/aus v8 etc...

In relation, look at Indy car. It still hasn't recovered and is really just a series that the tv companies say we must like.
With the exception of a few and I mean few races, spectator turn out is pathetic.


And just to confirm. This is all based upon my status as a subject knowledge expert in jack assery