Back when the Formula 1 cake was last sliced up among the teams and the rich made richer, one of the biggest beneficiaries was Red Bull, with an annual premium payment of more than $70m just for being Red Bull, unconnected with its share of prize money. This is second only to Ferrari among the five teams that receive payment based on their historical record and perceived drawing power.
Four of those five teams operate with a staff of 800-1000 – and fantastic facilities that can only be funded by such massive pay-outs. The remaining teams are struggling, with none of these ‘legacy’ payments but still a major proportion of big-team cost bases for the facilities they need. Even if they somehow are successful, they still receive only performance-related payments – not the extra near-$100m of Ferrari or Red Bull’s $70m-plus. The smaller teams are essentially subsidising the excesses of the bigger ones.
Those smaller teams – Sauber, Lotus, Force India – are struggling to remain viable as a result. These are good, high-calibre teams with a proven record of success over the years. So with questions over their viability – and therefore their future usefulness to the big teams in subsidising them and ensuring none have the embarrassment of being at the back – are the major players looking at ways to ease the financial burden of the minors? No, of course not. They are making plans to replace them, if necessary, with ‘franchise teams’ – small, independent teams that buy customer cars from the big teams. That way, the big teams get two additional income streams to keep feeding their bloated excesses: 1) the money that would no longer be paid to the small teams because they were not ‘constructors’ but merely customer teams, and 2) the money the smaller teams would pay the big teams to supply them with cars. Those smaller constructors that have remained loyal to F1, that exist only to race in F1, that have a fine race-winning pedigree, that have been part of the sport’s fibre for decades – well, they can go and sink, can’t they?
There is a possibility of EU action to address the iniquitous payments. But by the time that happens – if ever – we may already be into the franchise team era. Meanwhile the sport will be reliant essentially on the five teams currently being subsidised by the smaller ones. But those five teams are rock-solid, right? Ferrari, tick. McLaren, probably – though it faces financial challenges if it continues to under-perform on track. Williams, tick – though it has a hungry cost base to feed. Mercedes? Only for as long as its marketing objectives are being met.
Red Bull? Ah. Here’s what Dietrich Mateschitz said recently: “Renault take from us time and money, will and motivation… the aerodynamic rules do not allow our designer to use his full talent… when we see that we don’t have any chance to win the championship because of the restrictions on aerodynamics as well… then we lose the desire. We are bad at being support actors.” And on the matter of his team having committed to the sport until 2020: “You can’t force one to stay when he wants to go out. I don’t know if we will have our teams still.”
Renault Sport’s inability to create a competitive engine is central to this, and it’s difficult to see it continuing beyond its contract, which runs to the end of next season. Which all compounds the situation further – making the sport reliant on Mercedes and Ferrari for engine supply. Which points F1 even further down the scary vulnerability of the customer-car route.
Can you spot what’s gone wrong, the catastrophic errors that have been made along the way? It’s not difficult, is it?