About the F1 Resource Restriction Agreement

[Cam]

Red Bull Racing and Red Bull tehnology are not same company. Newey and some engineers are employees of Red Bull Tehnology.I dont know how many Red Bull Racing have people, how many people who work on their cars as mehanics, how many as engineers, etc...

Exactly, hence they are not under the same restrictions as designers or Engineers from other teams.

Spot on - and back to where we started - again.

There can be as many arguments, with as many figures as one can find, about the 'spirit' of Red Bull and the RRA, fact is, Red Bull Racing complies with the RRA and has won 3 x championships with 52 people.

Remember, there is no 'spirit of the RRA' - there is only compliance and non-compliance. The rest is, to some upsetting, but ultimately, inconsequential.

[CHT]

The know how from f1 trickles down to the road cars sometimes.

But there is hardly any road car tech that comes into f1. The gearboxes and shift mechanisms, clutch, assembly and even materials are different beasts. You cannot compare the 2.
However, Ferrari do learn from F1 and apply that to their road cars. But it's important to remember, whatever they apply has to last however long the warranty is, and it must be usable in all conditions.

I don't see how a manufacterer can learn something from a road car, and then apply this to an F1 car effectively.
I'm not saying its never happened. But in modern day f1 it is aero that is the dominant factor. Engines and gearboxes matter little, given that it's frozen(within reason) and that the playing field is fairly level in comparison to aero.

I am not sure where did you get the impression that anybody is talking about road car technology being transfer to F1. What I was talking about is road car division transferring money into F1 division in exchange for F1 technology, brand, goodwill to their road car. And this create a possible loop hole to use road car operation to finance the F1 division.

[Crucial_Xtreme]

I am not sure where did you get the impression that anybody is talking about road car technology being transfer to F1. What I was talking about is road car division transferring money into F1 division in exchange for F1 technology, brand, goodwill to their road car. And this create a possible loop hole to use road car operation to finance the F1 division.

I'm not really trying to get into the financial debate here, but Ferrari get enough money from sponsors and from FOM to not have the slightest need in the world for money from the road car division. Ferrari gets paid a bit extra from FOM because they've been in the sport so long that any contribution from the road cars would be laughable, in all honesty. It's not like Ferrai is selling a million road cars a year. Regardless, they get enough from sponsors, results & FOM that the F1 division helps keep the road car division afloat in trying financial times. Let's be realistic here

[CHT]

@Henra

I have given lee way for supplier status. I'm not saying every penny of the 350 million is used towards Red Bull.

1.What I'm saying is that if you are using the argument that Red Bull technologies is a supplier to other teams including Red Bull(Torro Rosso and caterham the other 2) and that the the 350 million reflects that, I would like to know why?

2.Why can Mercedes achieve 100 million for it's Mercedes HPE arm, yet supply 3 teams with Engines and KERS units which are vastly more expensive to produce and supply than suspension arms and gearboxes.
http://www.coreindex.co.uk/company-prof ... stryid=226
http://www.worksmart.org.uk/company/com ... d=01760288


Mercedes can produce an F1 car, run a factory and supply 3 teams with engines and KERS for less than Red Bull technologies supplies 1 top team and 2 lower rung teams. And I havent even started on the 250m RBR has for it's own team...
This doesn't strike you as strange in the slightest?

I think its a pretty straight forward issue here.

in the company statement, Turnover is refer to as income or revenue from sales of product and services to their customers, which include RBR, STR, Caterham, Lotus etc. And that figure is US$350m. If you have no customer, you have no turnover.

Cost of Sales is refer to the cost of providing the sales, which could include fixed overhead, material, operation cost, employee cost, outsourcing, licensing cost etc, and that figure is US$300m. And this is actually what is more important if you want to talk about spending.

As to how much of that $300m or US$350 goes into RBR or STR is up to us for guessing, but my ball park is that it will be around 60-70% as you cant expect that RBT is giving freebies to STR and other F1 companies

As for the RBR $250m budget you talking about, I would reckon that $200m of that money will go to RBT, while the rest ($50m) will be spend on operating cost for attending 20 races, testing, hospitality, crews, hotels, road show etc etc.

Yes, merc might be spending less, but they are going to spend more this year and then again, why are we using Merc as a benchmark as comparison to RBR? Why not talk about more successful team like Ferrari and Mclaren?

[CHT]

I am not sure where did you get the impression that anybody is talking about road car technology being transfer to F1. What I was talking about is road car division transferring money into F1 division in exchange for F1 technology, brand, goodwill to their road car. And this create a possible loop hole to use road car operation to finance the F1 division.

I'm not really trying to get into the financial debate here, but Ferrari get enough money from sponsors and from FOM to not have the slightest need in the world for money from the road car division. Ferrari gets paid a bit extra from FOM because they've been in the sport so long that any contribution from the road cars would be laughable, in all honesty. It's not like Ferrai is selling a million road cars a year. Regardless, they get enough from sponsors, results & FOM that the F1 division helps keep the road car division afloat in trying financial times. Let's be realistic here

What i am highlighting are possible way Ferrari or even Mcalren could possibly do to hide their expenditure in F1 to make them look like they are not over spending. And their road car and engine operations are just 2 examples which i have highlighted.

In big corporation, accountant does this all the time to invade taxes etc, so lets not assuming that RBR is the only culprit of big spending in F1. And btw, Ferrari F1 operation is actually the biggest and only marketing campaign for Ferrari road car and I am sure you cant expect their road car division to free ride on their colleagues at F1.

Plus, lets not forget that Redbull energy drinks is the biggest sponsors of RBR

[Crucial_Xtreme]

lets not assuming that RBR is the only culprit of big spending in F1.

First off, nobody is saying Red Bull Racing is wrong for doing so, only trying to highlight its being done. Furthermore, nobody has said there are no other teams doing this. It is your and others reluctance to admit that Red Bull Racing is taking advantage of Red Bull Technology not being restricted by the RRA and spending tons of money that is the problem.

Yes other teams spend lots of money. Can they hide it? I'm sure they can. But let's not act like only the larger more established teams are capable of doing so. Obviously there could be a debate about who is spending the most but that is not of my concern. If you have it, can spend it and still make a profit, be my guest.

My problem is the competitive advantage Red Bull gets from this partnership with Red Bull Technology. Again I point to the fact that the designer of the Red Bull Racing F1 car is not part of the actual Red Bull Racing team, therefore he is not subject to the same restrictions that Pat Fry or Paddy Lowe are. Red Bull Technology can run CFD analysis 24 hours a day, 7 days a week on whatever the current season RBR is and other teams cannot for fear of repercussions from the FIA. The same goes for Wind Tunnel testing, which has its own set if restrictions, of which Red Bull Technology is not held to but other actual "race teams" are. Do you not see the discrepancy here mate? Do you not see the inherent difference?

[CHT]

lets not assuming that RBR is the only culprit of big spending in F1.

First off, nobody is saying Red Bull Racing is wrong for doing so, only trying to highlight its being done. Furthermore, nobody has said there are no other teams doing this. It is your and others reluctance to admit that Red Bull Racing is taking advantage of Red Bull Technology not being restricted by the RRA and spending tons of money that is the problem.

Yes other teams spend lots of money. Can they hide it? I'm sure they can. But let's not act like only the larger more established teams are capable of doing so. Obviously there could be a debate about who is spending the most but that is not of my concern. If you have it, can spend it and still make a profit, be my guest.

My problem is the competitive advantage Red Bull gets from this partnership with Red Bull Technology. Again I point to the fact that the designer of the Red Bull Racing F1 car is not part of the actual Red Bull Racing team, therefore he is not subject to the same restrictions that Pat Fry or Paddy Lowe are. Red Bull Technology can run CFD analysis 24 hours a day, 7 days a week on whatever the current season RBR is and other teams cannot for fear of repercussions from the FIA. The same goes for Wind Tunnel testing, which has its own set if restrictions, of which Red Bull Technology is not held to but other actual "race teams" are. Do you not see the discrepancy here mate? Do you not see the inherent difference?

Before we point our finger at RBR, may I know at which point did Ferrari Mclaren or Merc started going into voluntary resource restriction? Did they announced how many hours or how much money they spent in from 2009 to 2012?

[Cam]

My problem is the competitive advantage Red Bull gets from this partnership with Red Bull Technology. Again I point to the fact that the designer of the Red Bull Racing F1 car is not part of the actual Red Bull Racing team, therefore he is not subject to the same restrictions that Pat Fry or Paddy Lowe are. Red Bull Technology can run CFD analysis 24 hours a day, 7 days a week on whatever the current season RBR is and other teams cannot for fear of repercussions from the FIA. The same goes for Wind Tunnel testing, which has its own set if restrictions, of which Red Bull Technology is not held to but other actual "race teams" are. Do you not see the discrepancy here mate? Do you not see the inherent difference?

There is also nothing stopping any of the other teams doing exactly the same thing. You cannot call it an unfair advantage when all the other teams have the same capability - they just don't for whatever reason.

There is no competitive advantage to Red Bull, as any other team can go off and setup exactly the same themselves. Who is stopping them?

[Richard]

The 600m claim is nonsense, it's double counting as many have pointed out. A bit like adding up the actions and reactions on a structure

RBR is a 100% subsidiary of RBT. So the RBT accounts include the RBR subsidiary, this is explained in the company accounts noted below. The conclusion is that RBT have a turnover of £215m, of which £177m goes to RBR, £3m to STR. So there's £36m floating around for an unknown purpose, presumably research as opposed to direct F1 activities.

Red Bull Racing Link to annual report



Red Bull Technology Link to annual report

[bhall]

[Moot point]

[FoxHound]

The 600m claim is nonsense, it's double counting as many have pointed out. A bit like adding up the actions and reactions on a structure

Fair enough. I stand corrected. Although I will be posting some interesting findings later in the month regards this particular issue.

So there's £36m floating around for an unknown purpose, presumably research as opposed to direct F1 activities.

Sure there is. 36 million dollars for a tech company that lists only F1 teams as it's clients....what sort of research "as opposed to direct F1 activities"?
You get an idea, you research it, then you put it on the car. F1 no?

Also, something that has also niggled me recently is that STR use RBT. RBR use RBT. RBR may not directly share with STR.
RBT is the middle man that can transfer information from one to another. Particularly tyres, exhaust aero etc.
Sure I can't prove it, but I'm not so sure anyone can disprove the theory either.

[Richard]

Sure there is. 36 million dollars for a tech company that lists only F1 teams as it's clients....what sort of research "as opposed to direct F1 activities"?
You get an idea, you research it, then you put it on the car. F1 no?

I was referring to accounting terms of "direct" and "indirect".

I would say direct activities are design, production, running a car and going to races. I think those are the only activities in the RBR accounts.

However undertaking an abstract activity such as wind tunnel maintenance or the generic properties of carbon might not be passed onto RBR.

[bhall]

I dunno, man.


("We just made up some of this ---.")


("Not only did we just make up some of this ---, we did it differently each time.")


("Not only did we just make up some of this --- and do it differently each time, we chose the lowest value." EDIT: stock in this context means materials, not company shares.)


("And you'll never know those values or how we determined them.")

There are also quite a few tax deferrals, unfunded liabilities, and depreciations listed, all of which count in the "real world," but not in the financial world. Don't get me wrong here; these are all perfectly legitimate business practices. But, they muddy the water considerably.

Sadly, Red Bull GmbH is private, which means this is the best we can do regarding its numbers.

Edited for grammar.

[turbof1]

Red Bull Racing
Employees 52
Turnover 176,844,000 GBP
Cost Of Sales 171,107,000 GBP
Gross Profit 5,737,000 GBP

I'm not so much talking about budget here. Look at what is bolded above. Do you not see the stat that is worrisome? Red Bull Racing has 52 employees. Mercedes has 400-500. Ferrari, more than that. McLaren close to Ferrari.

But a racing team with 1/8th the employees of other racing teams has dominated F1 for 3 years. Amazing how so few people can do such a good job eh?

The problem is the Chief Designer, Aerodynamic Engineers, CFD guys, Wind Tunnel guys that work on Red Bull Racing F1 cars are not employed by Red Bull Racing, therefore they are not subject to the same restrictions that McLaren or Ferrari F1 teams are. They can do as much CFD analysis as they can stomach, other teams cannot. RBT can spend 24hrs a day in the Wind Tunnel with the RB8(or a car that bares a strikingly similar resemblance), but other teams cannot.
This is a huge advantage in Red Bull Racing's favor.

Red Bull Racing, with less than a quarter of the employees that other teams have, do as much work as companies 20 times their size. Amazing team.

This setup looks remarkably like a ussual big, international company, which divides itself under numerous sub companies to reduce a huge chunk out of the taxes it has to pay.

Xtreme is right here. It's one thing to outsource some of the operations as a F1 team, but we have RBR here: a race team which is almost hollow. The 52 people in that team basicilly are people like mechanics, marketeers, etc, pretty much fixed costs throughout the year. All of the other costs are brought into "outside" companies like RBT. With that structure RBR effectively nullifies the RRA.

What is even more troublesome: Ferrari and McLaren probably can't do the same that easily. They have all of their equipment and personel invested already in their real racing teams. They also are big companies, meaning they can't just change their structure from one day to another. RBR is a fairly young team, with the added avantage that the parent company Red Bull doesn't really have any ties with racing (it isn't their core business). They were able to put RBR into any kind of structure they want, and are infact able to do so quickly.

If there ever was something like "the spirit of the rules": RBR whiped its feet COMPLETELY on it. Legally, of course, but it's still something unethical.

[CHT]

I dunno, man.

("We just made up some of this ---.")

("Not only did we just make up some of this ---, we did it differently each time.")

("Not only did we just make up some of this --- and do it differently each time, we chose the lowest value." EDIT: stock in this context means materials, not company shares.)

("And you'll never know those values or how we determined them.")

There are also quite a few tax deferrals, unfunded liabilities, and depreciations listed, all of which count in the "real world," but not in the financial world. Don't get me wrong here; these are all perfectly legitimate business practices. But, they muddy the water considerably.

Sadly, Red Bull GmbH is private, which means this is the best we can do regarding its numbers.

Edited for grammar.

I actually find the RBR and RBT financial statement are very simple and informative, if you look at Ferrari report under FIAT group, you could hardly see anything regarding their F1 activities. I bet it could be the same with Mclaren as well.