Infiniti Red Bull Racing 2015

[FoxHound]

Look, to end this discussion about Red Bull building their own engine: it's not going to happen. It's rather pointless to discuss whether or not they can and point to cosworth, while this is not on the table at all. Ain't gonna happen. C'est pas une possibilité.

So let's stop going in circles. There are only 2 options: Red Bull stays in the sport as a customer, or leaves the sport. About the former part we can discuss what kind of hardware they are going to get, and about the latter we can talk about the repercussions to the sport.

Turbo,

It's not if they will buy or not....But that it is a possibility if they choose.
There's a difference.

Now I'm going to use some crude acquisition calculus which puts value at 4 times turnover(high tech engineering commands more on turnover than standard business) plus assets, plus profits, minus amortisation and depreciation.

https://www.duedil.com/company/05177945 ... th-limited
Turnover is 20 million, and from some news clippings profits are pretty marginal. The assets have been listed at around 80/100 million a couple of years ago. Debts are unlisted at this time, but I'll be generous and say zero, with zero depreciation.

In all that gives me a rough figure of 160-180 million to buy Cosworth, and this could be generous as I don't have debt figures.
And it was only a month ago that Cosworth came out to say this....

Cosworth's business is on an upward trajectory and remains focused on three core pillars: automotive, performance aftermarket and motorsport. Formula 1 has always played a key role in Cosworth's business, and the company will always remain close to the sport. However, we are not in a position to comment on specific rumours

We also know they have a V6 turbo knocking around.

If this is all beyond Red Bull, then how is it they can spend 600 million a year on running 2 GP teams? No one has answered this question yet.

[wickedz50]

RBR can look at the Cosworth option as a serious alternative. The only problem I see is Cosworth is as similar to Honda with a more disastrous engine. Where do RBR go then?
I feel the best way to go about in this situation is stay with Renault for 2016, (a known devil is better than an unknown one) let the Ferrari engine start beating Merc one consistently in 2016 along, Honda engine joining the party in 2016 where they are able to pick up the pieces, that will be the time to negotiate a more competetive deal because everyone will be looking to sell their engines. 2017 will be a better year for RBR to pick the best engine with the best deal (Greater negotiation power with equal power engine supplier).

[turbof1]

Look, to end this discussion about Red Bull building their own engine: it's not going to happen. It's rather pointless to discuss whether or not they can and point to cosworth, while this is not on the table at all. Ain't gonna happen. C'est pas une possibilité.

So let's stop going in circles. There are only 2 options: Red Bull stays in the sport as a customer, or leaves the sport. About the former part we can discuss what kind of hardware they are going to get, and about the latter we can talk about the repercussions to the sport.

Turbo,

It's not if they will buy or not....But that it is a possibility if they choose.
There's a difference.

Now I'm going to use some crude acquisition calculus which puts value at 4 times turnover(high tech engineering commands more on turnover than standard business) plus assets, plus profits, minus amortisation and depreciation.

https://www.duedil.com/company/05177945 ... th-limited
Turnover is 20 million, and from some news clippings profits are pretty marginal. The assets have been listed at around 80/100 million a couple of years ago. Debts are unlisted at this time, but I'll be generous and say zero, with zero depreciation.

In all that gives me a rough figure of 160-180 million to buy Cosworth, and this could be generous as I don't have debt figures.
And it was only a month ago that Cosworth came out to say this....

Cosworth's business is on an upward trajectory and remains focused on three core pillars: automotive, performance aftermarket and motorsport. Formula 1 has always played a key role in Cosworth's business, and the company will always remain close to the sport. However, we are not in a position to comment on specific rumours

We also know they have a V6 turbo knocking around.

If this is all beyond Red Bull, then how is it they can spend 600 million a year on running 2 GP teams? No one has answered this question yet.

I will answer only the only last part because again, building their own engine is not something that is on the table. The 600 million they spent on both teams has its benefits concerning exposure. It pays off due the whole project being marketing for selling their product. The costs can be justified as long as Red Bull feels it gives enough exposure to generate the revenue.

One has to understand why Red Bull is in the sports, from the days they sponsored Sauber to the present: it's not that they love the sport so much that they want to spent money on it for no return. Infact, not one company in F1 does that. F1 is a marketing tool for bigger companies. The moment that costs overshoot the benefits, they pull out.

Think about that one relative to creating their own engine. If you'd like to continue on that subject, please either PM me or make a new topic. Again, that discussion is not relevant here since it's not something Red Bull even remotely considers.

[FoxHound]

As for dwindling viewing figures, the decline has been for over 5 years. And the switch to subscription services means this has had a greater impact over the last 2 years than anything else. Bernie want's paid subscribers over free to air.
The only way to overcome that is not be a paid subscriber, which many have done.

TBH i think that to move to pay tv has only made using the internet as a source more viable for folks - I personally refuse to give that crook Murdoch a single cent of my money after he stole the F1 rights away from FTA here in Aus.

I hear you.

I don't have a subscription service, but make full use of the internet. Make of that what you will...
But this has a knock on effect in terms of "official viewership". And I'm not sure bernie is making anymore money for CVC than pre-subscription days.

[FoxHound]

One has to understand why Red Bull is in the sports, from the days they sponsored Sauber to the present: it's that they love the sport so much that they want to spent money on it for no return. Not one company in F1 does that. F1 is a marketing tool for bigger companies. The moment that costs overshoot the benefits, they pull out.

Before I PM you, I just wanted to ascertain publicly, why Red Bull are unique to the rest.

1. Why is it, Red Bull

love the sport so much that they want to spend money on it for no return

but don't build an intrinsic part of the car (the engine), for this said sport they love?

2. Are Red Bull not in F1 simply and solely for marketing purposes?

3. Have Red Bull not threatened to quit because the "costs overshoots the benefits"?

[turbof1]

One has to understand why Red Bull is in the sports, from the days they sponsored Sauber to the present: it's that they love the sport so much that they want to spent money on it for no return. Not one company in F1 does that. F1 is a marketing tool for bigger companies. The moment that costs overshoot the benefits, they pull out.

Before I PM you, I just wanted to ascertain publicly, why Red Bull are unique to the rest.

1. Why is it, Red Bull

love the sport so much that they want to spend money on it for no return

but don't build an intrinsic part of the car (the engine), for this said sport they love?

2. Are Red Bull not in F1 simply and solely for marketing purposes?

3. Have Red Bull not threatened to quit because the "costs overshoots the benefits"?

I made an error in my previous message. I had that corrected before you posted your message, but apperently you missed out on that, so my apologies. I meant to say "it's not that they love the sport so much that they want to spent money on it for no return. Infact, not one company in F1 does that."

Red Bull is not unique at all.

Maybe we need to get the banhammer out for our moronic moderator?

[FoxHound]

That's fine, no qualms.

Rest the hammer, but I do think that discussing the possibility of Red Bull making their own engines valid.
They have the money, and they have options.

For 2016 I understand this to be a pipe dream, but 2017 could just be possible given the changes to engines for that year.

That's the last I'll say of it.

[djos]

I hear you.

I don't have a subscription service, but make full use of the internet. Make of that what you will...
But this has a knock on effect in terms of "official viewership". And I'm not sure bernie is making anymore money for CVC than pre-subscription days.

Same here, however If I could pay $100aud per year for the "F1 Channel" on my Roku Media streamer (or Amazon FireTV or AppleTV) and get the equivalent of Sky's full race weekend coverage, I would happily pay for it.

[alexx_88]

Speaking of 2017, I think I've read somewhere that the changes will be pushed forward to 2018 and beyond. In order for the PU pecking order to change significantly, there would need to be big changes in the regulations and those changes surely can't be pushed just a year and a half before the deadline.

As to Red Bull spending 600 mil. on the two teams, the correct amount is actually 0. The bottom line of the two teams is 0, as they are able to cover the money they spend through sponsorship and prize money. Obviously, now their cost is probably not 0 anymore, since they aren't dominating, but it's probably less than 10% of those two teams' budgets.

I have to agree with turbo on the RB building their own engines thing (as I've said a while back). No matter how much we want it, it makes 0 sense for them, as shown by the fact that it's not even a rumor, so it was probably dismissed very early. For a fraction of the budget required to maybe challenge for the top again, they could probably become main sponsor of F1 or any major team in the paddock. I mean, they have the best knowledge on how much money the F1 business has generated for their brand. Their total revenue has grown by about 800 million (http://www.statista.com/statistics/2751 ... worldwide/) during their championship winning days, although we can't say how much of that is due to F1. If we take a gross profit margin of 20%, it means that the increase is only about 160 million euros. How could anyone justify such a gargantuan effort for such a small gain?

[FoxHound]

Alex,

Ok so if it makes no sense to build their own engines(I disagree, for the record), then they are just going to have to accept whatever comes their way in terms of supply.

Yet they aren't. They don't want Renault, or Honda. They have not approached Mercedes, Lauda seems to believe Mateschitz has some long running fued with Merc, and are accusing Ferrari of playing games by offering 2015 engines.
That's state of play as it stands.

Do you think it right for a team who do not build engines, to cherry pick what they deem fit, how they see fit, from whom they see fit, when they see fit?

[turbof1]

Alex,

Ok so if it makes no sense to build their own engines(I disagree, for the record), then they are just going to have to accept whatever comes their way in terms of supply.

Yet they aren't. They don't want Renault, or Honda. They have not approached Mercedes, Lauda seems to believe Mateschitz has some long running fued with Merc, and are accusing Ferrari of playing games by offering 2015 engines.
That's state of play as it stands.

Do you think it right for a team that who do not build engines, to cherry pick what they deem fit, how they see fit, from whom they see fit, when they see fit?

Well, their choices are to accept or leave the sport.

Again, the engine manufacturers have every right to decide if and what they want to give Red Bull. Red Bull on their side have the right to evaluate if F1 is a viable project. They don't deem it viable with a customer-spec engine.

That's real life, kids. Not everything can end up in an agreement. If supply and demand don't hit eachother, you don't have a deal.

And it also now looks that if Red Bull drops out, Pirelli sees the supply of F1 dropping outside a cross point with its own demand:
http://www.autosport.com/news/report.php/id/121088

I'm fairly sure that if Red Bull leaves, it'll cause a domino effect.

[FoxHound]

Of course this is the choice they face, Turbo.

But do we know what Red Bull and Torro Rosso will have to pay if they ditch F1? I'm reading 500 million plus.
Now I'm going to be really cheeky and say a competitive engine programme will cost a few dollars short of that.
So realistically, Red Bull would need to sell both their own and Torro Rosso's slots to make any quit threat plausible.

If this happens, those placings will be taken up pretty much immediately. Torro Rosso, will have to be sold at less than market price to guarantee a quick sale.
With Red Bull, it could be that the team is kept to run other activities and the slot is sold to a prospective buyer, like Prodrive, that will run 2016 Red Bull's with support from Red Bull themselves.
The end result is that we still have a full grid plus Haas coming on board.

Failing that, Red Bull quit, pay the 500 million and we have Ferrari, Mercedes and maybe Williams and McLaren running 3 car teams.
The end result here is that we have a more competitive front end of the grid, and we get to see a long heralded experiment and whether it works.
The numbers will be higher than today too and the 500 million could be split among the lower teams ensuring survival.


Will Buxton had an article recently, and he sums it it up emphatically.
https://willthef1journo.wordpress.com/2 ... it-let-it/

Taurine, or 2-aminoethanesulfonic acid, is an organic acid widely distributed in animal tissues. It is a major constituent of bile and can be found in the large intestine.

It is also one of the main ingredients of Red Bull.

[ecapox]

Timeline:

1. Redbull opens 2015 with Renault engines. The same engine manufacturer that won them MULTIPLE drivers and constructors titles. (albeit in a different engine configuration)

2. Renault engine is bad, not terrible, but bad. Redbull complains.

3. Redbull complains some more.

4. Redbull complains a lot more and threatens to drop Renault as engine supplier.

5. Redbull drops Renault, even though they have a contract to supply engines for another year.

6. Redbull has no engine for 2016 and beyond.

7. Redbull doesnt want Honda or Renault. They want Mercedes or Ferrari.

8. Mercedes denies Redbull and engine (imagine that)

9. Ferrari says "Sure, we will give you an engine....but not the new one."

10. Redbull says they will not accept said situation with Ferrari and threaten to quit.


looks to me like they painted themselves into a corner and now since none of their competitors want to help them out (i wouldn't either by the way) they are going to take their cars (without engines) and go home, even though they have a contract with CVC to stay in until 2020. They complain that the position they are in is unfair and that no one willing to supply them their top engines is unfair.

They should have thought about that before they cancelled the engine supply deal that they had. I dont feel sorry for them, nor do i care if they leave. Will it hurt the "sport", yes. But the alternative is better than allowing a team, who isnt a manufacturer, to strong hold the entire "sport".

Also, is anyone sad that Pirelli "could" leave as well???

[ME4ME]

Some strong words from Pirelli:

"So from our point of view, as a sponsor, any risk of losing both those teams would be a significant disaster for Formula 1."

http://www.autosport.com/news/report.php/id/121088

[alexx_88]

Well, I reckon they'll do what every 'honest' company would do when their liabilities are much larger than their assets: file for bankruptcy. This says https://companycheck.co.uk/company/0312 ... ED/summary that their net worth is only about £4m, which would make it impossible for Mr E to recoup his 500m. In any case, the very limited showing of Mercedes in Suzuka just went to show that Mr E. is not feeling particularly comfortable with Mercedes right now, most likely anticipating the domino effect that Mercedes not supplying Red Bull and RB leaving will have on the product he's selling.