Formula 1

The F1 engine supply mess

THe current complicated negotiations involving Mclaren, Honda, and Scuderia Toro Rosso are said to be reaching a conclusion over the Monza Grand Prix weekend.
The situation is complicated partly because none of the other F1 power unit suppliers are keen to supply Mclaren. Earlier in the season, Mclaren was said to have an outline deal in place to return to being a Mercedes customer from 2018. However, that proposal seems to have disappeared off the table. Mclaren cannot sensibly obtain Ferrari power units because the two companies compete in the luxury car market. That left only Renault, but the French company is publicly reluctant to expand to supplying a fourth team.
Numerically, the three other power unit suppliers currently supply three teams each. Under the terms of the current power unit regulations, if Honda withdraws from Formula 1, one of those suppliers will end up supplying Mclaren in 2018. Here is a summary explanation from Fabrice Lom, the FIA Head of Powertrain:

For the obligation to supply: the idea was to have no team that is not able to have access to a power unit. This was a big part of the discussion because we also don’t want people to be able to play with that and to change from one power unit to another from one year to another in order to have the best one. So there is a quite complex system in place, but the basic [premise] is that if you are a team with no offer, so nobody is offering you a power unit, you can ask the FIA to have one and there is a system of ballots. So we will take the power unit that has the smallest number of customers. If there is only one, this will be the one that will be required to give the power unit. If there is more than one there will be a ballot between the two to decide which one will supply, and there is a low price of €12m from 2018 for this supply.

This rule is one that none of the power unit suppliers wants to see invoked. If Honda does withdraw, one of the current suppliers will, by ballot, be told to supply Mclaren with power units for 2018 for the bargain price of €12m, a price which may not even cover their costs.
So…Mercedes, Ferrari and Renault would much prefer that Honda stays, in order to avoid that scenario. They want to negotiate their own power unit supply contracts, not have a supply contract mandated for them.
So, there is a deep imperative by the FIA and LibertyF1 to ensure that Honda stays in F1. The ideal current solution is essentially a power unit supply swap where Toro Rosso has Honda power units in 2018, and Mclaren has Renault power units. However, that requires Mclaren to negotiate an end to its current contract with Honda. Since that contract was 10 years in duration with lots of money attached, that is proving difficult. Honda is also said to be demanding that any Toro Rosso contract contains the option for Honda to supply Red Bull racing from 2019 onwards, since the Toro Rosso driver line up does not contain a world champion.
So, all of this, as Jean Todt admitted, complicated…

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The edges of legality in F1 – the FIA approach evolves and not for the best

An interesting article in Auto Motor Und Sport (WARNING: It is in German) explains how the FIA, in its attempts to crack down on cheating by the top teams in F1, has been relying on complaints or observations submitted by other teams, and as a result, have been tightening regulations and modifying comppliance testing processes.
The article gives some examples from this season:

1. The suspicion that one or more teams (the suspect team was ID’d rapidly as Ferrari) were using engine oil partly as a fuel, diverting some oil into the combustion process. The FIA has reacted in two ways (a) they have reduced the allowable consumption limit per 100km, and (b) they will be fixing the precise specification of oil at the end of the season
2. The use of special airflow devices on the front axle of the Ferrari cars in Baku to increase straight-line speed
3. The excessive deflection observed on the t-wings of some cars early in the season, believed to be an attempt to increase straight-line speed
4. A ban on pre-heating hydraulic suspension actuators in the garage prior to running the car. The practice was designed to ensure that the cars enjoyed a constant ground clearance from the moment that they entered the track.
5. Further evidence of flexing of car floors and underbodies has been countered with a new series of expanded deflection tests.
6. More stringent deflection tests for front wing components, after Red Bull (surprise surprise) was caught with a wing part that was clearly deflecting at speed to reduce drag.

While superficially, the changes seem to be perfectly sensible and smart, there is a point made in the article (my tidy-up of the translation of the article):

The policy of the long leash has been well received by the big teams. They can experiment at the edge of the rules without being disqualified. The smaller teams are annoyed by the new approach of the World Federation. Because they do not have the means to bring risky technology tricks to the car, with the fear that they end up in the dustbin.

In my opinion, the FIA is being way too lenient with the top teams. If teams are violating the regulations, then they should be penalized. The “fix this by the next race or there will be trouble” approach may be non-confrontational and ensures that there are no public rows, but it is the equivalent of a “tsk tsk ” slap on the wrist. This is not going to stop teams from attempting to circumvent the regulations. The objections of the smaller teams are correct. If they cannot afford to try numerous different evasion tactics to circumvent the regulations, they will perpetually be watching the large teams to see what innovations they bring to the race track and what circumventions are allowed or ignored by the FIA. This is not a correct way to enforce technical regulations.

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If I Ruled The World, F1 Style…

Revenue Distribution
1. All current distorting “legacy” payments that do not form part of the constructors performance prize money system to be scrapped
2. System shall reward teams for positions in constructors championship in a transparent and consistent manner, with no teams enjoying special prize money increases due to “legacy” or other status
3. A special bonus of $5m shall be given to the team that wins the Drivers championship

Technical and Sporting Regulations
1. All significant technical regulation changes to be stable for 10 years, after an adjustment period at the end of year 1. No constructor is allowed any preferential input or veto on any aspect of the F1 technical regulations.
2. Allow underbody ground-effect downforce once more
3. Severely limit size and shape of front wings
4. Limit the size and downforce generation from rear wings
5. All components not considered to be the source of competitive advantage such as wheel hubs, uprights, differentials will be standardised and provided from a common supplier to all constructors.
6. Introduce an engine formula based on limited development avenues, but with no token system and less onerous engine life requirements
7. Minimum weight of the car to be reduced.
8. Weight limits on car/driver combinations to be measured in a way that does not penalize taller and heavier drivers, while still allowing for movement of ballast to strictly defined areas of the car
9. DRS to be converted to a limited-use push to pass tool
10. Penalties for engine usage or regulation infractions and car regulation conformance infractions to be levied as constructor points and fines, instead of car starting grid penalties, unless significant performance advantage can be proven, in which case disqualification, up to the entire team for a race event, is an option
11. Driver penalty point system to be abolished. Initial driver infractions to be dealt with by putting a driver on probation for a set number of races. Further infractions will result in the driver being immediately suspended for one or more race weekends.
12. Appeal management – if an appeal by a driver or a team is deemed to be frivolous, the FIA shall, at its discretion, have the ability to (a) immediately impose the penalty, (b) increase the penalty or suspension by up to a further 50% as a penalty for the waste of governing body resources.

Broadcasting and Media relations
1. Teams to be required to make most telemetry data available to broadcasters in real-time, with some more sensitive data (such as fuel usage and engine modes) available on time delay.
2. Teams to be required to perform a minimum number of media functions every race weekend with both drivers present

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Vettel vs. Hamilton incident at Baku – what it tells us about rule enforcement in Formula 1 and sports

A lot of light heat and sound is being created over the incident during a Safety Car period in the European Grand Prix at Baku where Sebastian Vettel, angry at what he thought was an incident of Lewis Hamilton brake-testing him at the exit to a corner, drove alongside Hamilton and then deliberately bumped him.
Vettel was penalized for the incident by being given a stop-go penalty. Predictably, opinion is split between people who believe that Vettel was not punished severely enough, and should have been disqualified, run out of town on a rail etc. etc. and people who believe that the incident was a storm in a teacup between two competitors, and that the media is against Vettel (in the case of the UK media, it must be because Vettel is German and “Don’t Forget Ze Var!”).
Lost in a lot of the discussion is that Vettel has a track record of behaving petulantly on-track. There was the infamous “Multi 21” incident in a race in 2013, where Vettel essentially refused to obey team orders to let Mark Webber pass him on-track, and then lawyered up to weasel out of punishment from the team. More recently, last season Vettel unleashed a string of expletives at Charlie Whiting in a race after another incident. So his behavior in Baku was not exactly new, nor was it totally unpredictable.
There is a simple reality at work here. Competitors in any sport will do what they think they can get away with. They will read the rules, watch how other successful past and current competitors and their role models in the sport behave, and then go out and push the rules to their limits. Talk about “the spirit of the rules” would be regarded by hard-core sports competitors as so much naive fluff. In the case of Sebastian Vettel, he has made no secret of the fact that Michael Schumacher was his hero growing up, and Lewis Hamilton has made no secret of his reverence for the late Ayrton Senna. Both men, as drivers, were bristlingly and uncompromisingly competitive, and both pushed the rules and norms of the sport up to (and in some cases, beyond) previously accepted limits.
It is up to the rule enforcement bodies in a sport to determine what the competitive limits are, and what to do about incidents where competitors go over those limits.
Unfortunately, most competitive sports governing bodies merely fine competitors or put them on probation. Partly this is because many sports leagues are essentially run by team owners, and team owners, as a general rule, do not like to see their highly-paid star performers sitting disconsolately off to one side while the game or event takes place without them. The same applies to Formula 1, where teams like Ferrari would be publicly indignant if one of their drivers was suspended. However, as Joe Saward explains in this commentary, the FIA may be about to come down hard on Vettel for several reasons, and Ferrari, who have been behaving like a bunch of horse’s asses towards the media for months, are likely to find that there is no reservoir of sympathy for them.
However, trying to regulate competitor behavior with fines and probationary warnings never works. Most fines are chump change to athletes earning millions (and some cases, tens of millions) or dollars annually. They will regard a fine as merely part of the cost of doing business.
Competitors will only change their behavior if their actions cause them to be denied the opportunity to compete. Competing is what they live for.
So…any discussion around consequences for Sebastian Vettel’s actions in Baku involving monetary fines, penalty points or minor losses of grid position is total fluff. If he is guilty of dangerous driving, the FIA should have suspended him for 1 race, or disqualified him from the race in Baku and then made him start the next race from the pit lane with a 10 second penalty on the rest of the field.
It is my belief that if the FIA had suspended Ayrton Senna for 5 races and docked him 25 championship points for running into Alain Prost back in 1990 at Suzuka, we wouldn’t have to had to watch this incident, or the Schumacher-Hill and Schumacher-Villeneuve incidents in 1994 and 1997. The message would have been sent along time ago to formula 1 competitors “if you collide with another driver deliberately, it WILL cost you a championship”. The current behavior patterns by drivers are the direct consequence of 20+ years of pussyfooting and inaction by the FIA.
UPDATE – Whenever I read articles talking about “making an example” of a competitor to “send a message”, I know I am dealing with a scenario where a sport has failed to correctly regulate competitor behavior in the past. If Sebastian Vettel, for example, knew in advance that running into Lewis Hamilton would have resulted in an immediate black flag, preferably supported by past incidents where drivers were black-flagged, he would most probably not have run into Hamilton.

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No, Honda and Ilmor cannot re-badge their Indy V6 engines for F1

The FIA and FOM are going to ask engine manufacturers to tender for the supply of a 2.2 liter twin turbo V6 engine from 2017.
Some of the first comments that I saw on discussion forums were that it would be easy for Ilmor (who provide engines for Chevrolet) and Honda to re-badge their Indy V6 turbo engines for use in F1 from 2017.
Nope, this is not going to happen, for commercial and technical reasons.
Leaving aside the question of whether an existing engine supplier in F1 is allowed to bid on the new engine contract (I am unable to determine whether that will be allowed), it is difficult to see why Honda would want to bid on this contract when they have a program under the current regulations. Now…Mugen might bid on it, or Honda could fund another third party to develop a second tier engine (as they did in 1988, when they sponsored John Judd’s V8 F1 engine program in order to help keep F1 grids full).
Ilmor appear to have no such restrictions, although they have been helping Renault this season with ICE design and reliability. Nobody knows how that contract might restrict their own involvement in F1 as a separate entity.
That is just the commercial side. The real issues are in the technical regulations, in several key areas.
1. Size and weight
The Indycar engine formula was designed to minimize costs of development and operations. The engines have a minimum box size (i.e. a minimum overall set of engine dimensions) that is a very large by F1 standards. They also have a minimum weight which is also high by F1 standards. Both of these rules were introduced to the series to prevent suppliers from engaging in “arms race” spending to reduce the size and weight of their engines, as was happening in F1 at the time. A visual image of an Indy V6 shows an engine that is tall and large by modern F1 standards.
2. Rotational speed
Current Indy V6 engines are limited to 12200 rpm. This is an rpm limit substantially below that of the current F1 engine technical regulations and ICE capability. In practice, current F1 engines are rarely exceeding 12000 rpm except in qualifying, due to current fuel flow limits. However, those limits are due to be lifted for 2017 and beyond, which means that ICE rpm will be a lot greater than 12000 in races.
3. Boost levels and power outputs
The boost levels in Indycar, as they have been for a long time, back to the CART era, are modest compared to the historical and current boost levels in F1. The maximum current boost level allowed in Indycar is 1.6 bar (23.2 psi) which is substantially less than boost levels in F1. Indycar engines, because of the lower boost levels, rotational speeds and fuel, do not use intercoolers.
Because of the modest boost levels and rotational speed limits, Current Indy engines generate a maximum of 750 bhp. Current F1 engines are generating 800-850 bhp in races and in excess of 900 bhp in qualifying. The F1 power outputs are expected to rise above 1000bhp when fuel flow limits are increased in 2017.
4. Fuel
Indy engines use 85% ethanol, which has a massive latent heat of evaporation, which reduces thermal stress in the top of the engines. F1 uses gasoline, which has less of a cooling effect.

To sum up: the current Indycar regulations have created an engine which, compared to the current hybrid F1 V6 engines, is heavy, large, with lower rotational speeds, boost levels, no intercooling, and no energy recovery systems. Even a basic F1 V6 turbo engine for use from 2017 onwards will need to be capable of much higher rotational speeds and boost levels in order to generate competitive power outputs, while being much more compact and lighter than current Indycar engines. This will require a brand new custom engine design, not an adaptation of current Indycar engine designs.

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Honda and F1 – remember the 1980s history

As people continue to chortle and poke at Honda’s poor track record on its return to F1, supplying hybrid powerplants to McLaren, it is worth remembering the history of Honda’s involvement in the last turbo era.
Honda returned to F1 in the Summer of 1983 with a V6 twin turbo engine that was initially supplied to Spirit Racing, who had been the lead Honda team in F2. The engine was an all in house effort, with all ancillaries farmed out to Honda sister companies. The engine was powerful, but that was about the only thing it had going for it. Williams, needing a turbo engine desperately, soon signed on to become the lead Honda team in F1, leaving Spirit out in the cold for 1984. (The 1983 Honda engine installation for the interim Williams car was designed totally by Williams, Honda having no idea about heat rejection or ancillary positioning in a car).
In 1984, the Honda engine was powerful, but overweight, with bad throttle lag, and a poor power curve that made Honda-powered cars difficult to drive. There were also questions about engine and chassis rigidity. Keke Rosberg won in a Williams-Honda at Dallas, but that was a fluke win, with all of the faster rivals retiring their cars due to collision damage. The extreme heat of the race caught out a number of drivers, but Rosberg, equipped with a cooling system in his helmet, kept his car on the circuit.
Elsewhere, the cars would qualify well but usually go backwards or retire in races, as the engine’s inconsistently high fuel consumption made it difficult to even get to the end of some races. Rosberg ran out of fuel in one race, coasting to a halt in the pit lane in front of none other than Nobuhiko Kawamoto of Honda, who was visiting for the weekend.
Honda ended 1984 with one lucky win, a couple of podiums, and little else. The engine was regarded by most observers as crude, and uncompetitive compared to rival engines from TAG, Renault and BMW.
For the first half of 1985, nothing much changed. Williams had a new all-carbon car, but the drivers still found the car difficult to drive because of the engine’s bad throttle lag and power delivery. The breakthrough came at Detroit in the early Summer, when Honda debuted a completely new engine design, with a seriously stiffer block, all new internals, and re-designed control systems. The drivers found an engine in the back instead of an on-off switch, and results soon came. Rosberg set a new record by qualifying faster than 160mph at Silverstone, and Williams began winning races. The engine was now more powerful than the Renault and TAG engines, with only BMW beating it on peak power.
In 1986, Honda raised the bar further with the new engine now boasting lower fuel consumption than rivals, which allowed higher race boost and horsepower. By now, Honda was leading the engine supply field, and would do so through the turbo and normally aspirated eras until 1992, when it retired after its V12 normally aspirated design proved overweight and insufficiently competitive.
Highlights included the famous “steamroller” season of 1988, when Honda produced an incredibly frugal engine that allowed McLaren to build a dominating turbo car, winning 15 out of the 16 races.
So…when people write off Honda today in F1, we have to remember that it took 2 years from their debut in F1 in the 1980s before they produced a competitive engine. However, within 12 months they were in the lead, and stayed there for a long time.

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The F1 engine token system and why it is not working

When the F1 rule-makers were formulating the current hybrid engine formula, the usual negotiation and horse-trading took place between the potential (mostly then-current) engine manufacturers. Renault, perhaps worried that a spending competition would leave it with an inferior power unit, was one of the proponents of what became known as the token system. The power unit was divided into a number of sub-assemblies, and changes to each sub-assembly were given values expressed as a number of tokens. The number of tokens allowed for development would be fixed after homologation, development would not be allowed in-season, and the number of tokens for off-season development would reduce over several seasons. The idea being that massive engine component development would be curtailed, and as engine manufacturers refined their powerplants, everybody would converge on more or less the same performance.

This looked like a good idea, and all of the engine manufacturers signed up to it. Renault, Ferrari and Mercedes all built power units for the 2014 season. But…by the second day of pre-season testing, it was clear that, relative to Rernault and Ferrari, Mercedes had built a par more powerful unit. The difference was so large as to be embarrassing. Hampered by the rule against in-season development, Mercedes powered cars enjoyed a significant horsepower advantage through 2014. Ferrari and Renault were limited to reliability changes, and improvements obtained by changes to fuel and engine electronics. That helped them some, and Renault scored 3 victories, but all came when Mercedes powered cars hit problems.

At the end of 2014, two teams, Manor/Marussia, powered by Ferrari, and Caterham, powered by Renault, ceased operations. In addition, Lotus moved from being powered by Renault to being powered by Mercedes. Renault therefore lost 2 out of 4 teams running its power units, with a commensurate loss in revenue and mileage for data collection. Ferrari lost 1 of its teams.

Honda’s entry to F1 in 2015 complicated matters. When the engine manufacturers got together to discuss how many tokens should be available for development, it became clear that the rules had not been written tightly enough to preclude in-season development from 2015 onwards. So design and construction improvements to the power units were possible in the 2015 season. After yet more negotiation, the engine manufacturers determined how many tokens were available for development in 2015, and Honda was awarded the average of the other 3 engine suppliers’ token number, since their engine, homologated in March 2015, would otherwise have been frozen.

In 2015, it has become clear that while Ferrari is a lot more competitive with its power unit, Renault is less competitive and less reliable. The more restrictive rules on power unit life have already led to Renault-powered cars accumulating grid penalties after they ran over their allocation of power unit components due to reliability issues. The Mercedes powered-cars are enjoying almost bullet-proof reliability from a more powerful power unit. The non-Mercedes powered cars, with the exception of Ferrari, are struggling to stay on the same lap in races.

By common consent, Renault needs a completely re-designed power unit to have any hope of approaching Mercedes. The challenges are (a) lack of money to develop new components, due to loss of 2 teams (who were, if reports are correct, paying around $40m per team for engine supply in 2014), and (b) lack of enough tokens to support a complete re-design.

Renault is now hamstrung by the very system that it proposed back in 2012 when the new engine formula was being finalized. They are unlikely to be able to create a competitive power unit within the current token system, and the shift to in-season development has further moved the engine development process away from their original vision, which was focussed on out of season development based on defined limits to the number of changes. Honda is also hamstrung not only by the token system, but also by the onerous engine life rules, which are also resulting in Honda-powered McLaren cars collecting massive grid penalties.

There is a real risk that Renault will leave F1 soon, especially given the appalling relationship that they currently have with Red Bull Racing (and, by extension, Toro Rosso). When a team with which you won 4 drivers and constructors championships as recently as 2013 is publicly excoriating you weekly, it is difficult to see any positive upside to remaining in F1.

No privately-funded engine development company can afford to enter F1 under the current rules. Although it is difficult to determine how much money Mercedes has spent on its F1 program, numbers upwards of $300m seem to be a starting point. Only a large-volume manufacturer could afford that size of outlay on an engine design and build process. The high cost of the power units is also distorting the power balance in F1, with the “grandee” teams now threatening to swallow up the smaller teams. To be fair, part of that is due to the teams now controlling the rules via the Strategy Group, another crazy adventure of the “fox given keys to hen house” variety.

The token system might have worked if all of the engine builders had produced power units of relatively similar performance. Then a smaller number of tokens would have been used for incremental improvements.. That is not what happened. Mercedes produced a far superior power unit, and the rivals are now unable to easily catch up due to the engine reliability rules, token limits, and, in the case of Renault, lack of money.

If F1 wants to continue with multiple competing engine suppliers under the current formula, some way has to be found of giving Renault and Honda a better chance of catching up with their power unit designs. The easiest way would be a combination of a scrapping of the token system and a relaxation of engine reliability rules. Mercedes is bound to vote against such a move (why would they vote for it? They have the best powerplant by a large margin) and their customer teams will vote the way that they are told, so it is unlikely to pass the Strategy Group.

My short summary: with the current Strategy Group process, any engine supplier not named Mercedes Benz High Performance Engines is, to a varying level, screwed.

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F1 – customer cars…maybe?

The four “big” teams (Ferrari, Mercedes, Red Bull and McLaren) met prior to the Canadian Grand Prix to discuss design and regulation changes for 2017. Included in discussions was the issue of how to allow for customer cars.

Most of the regulation changes being floated about (including refuelling and a move to 13 inch rims) appear to be unpopular with the teams due to a combination of cost and workload. So it seems like the only major agreements were to “turn up the wick” on the existing power units to make them more powerful, and to look at wider tyres. There was lots of talk about making the cars look “sexier”, but form follows function, and right now, with aerodynamics being the most important factor, the car looks are not going to change.

It appears that there was little discussion of what is really needed – a total binning of the current aero rules in favour of limited front and rear wings, and a return to a level of underbody downforce generation. That, plus wider tyres, would make it easier for cars to run nose to tail, and would increase the importance of mechanical grip in car set-up at slow circuits..

The two major agreements that they reached on the topic of customer cars appear to be:

1. An entire package of cars and engines will be offered to a team for EUR 50m.

2. Each major constructor can only supply one other team with a customer car package.

As this article from James Allen makes clear, the EUR 50m figure is only a starting point. It does not include spare parts for example.

(2) is essential, as without it, Mercedes would probably supply at least 4 teams with chassis and engines in 2017, and the other major constructors would not have any customers since their power units are currently uncompetitive.

Right now, the big teams are seemingly in the driving seat. However, that unity is tenuous. Red Bull keeps making noises about leaving. Renault is not a lock to continue (yes, they are supposed to be buying a team but they still have an unreliable and poorly developed power unit, and they seem to be trying to do F1 on a budget, which is not how Mercedes approached it).

Bernie Ecclestone keeps reminding people of his alternative plan to provide smaller teams with 2013 Red Bull chassis equipped with Renault V8 engines serviced by Mecachrome, which might only cost teams around $30m a season for chassis and engines. That plan, however, would never pass a Strategy Group vote, which explains why it does not have any traction in 2017 discussions at present.

The unknown in all of this is whether F1 will find itself the subject of a complaint to the EU over the governance of the sport. If a complaint is lodged, it is unlikely that the current structure of F1 can continue. The sport’s current broken governance system will almost certainly be declared in violation of EU competition rules.

I remain skeptical that the franchise car system will ever be implemented. Right now, F1 is in such a mess strategically that anything could happen in the next 18 months, and I am sure that what everybody is publicly saying is likely to happen is nothing like what will actually happen.

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Rumors re forced takeover of Sauber F1 team

There are rumors and speculation that the underlying motive behind the attempts by Giedo van der Garde and his lawyers to claim his seat in the Sauber team at the Australian Grand Prix is that it is part of an attempt to force the Sauber F1 team, either into bankruptcy, or to a point where the team has no choice but to accept an offer for it to be bought, or it will go bankrupt.

The theory behind this is that van der Garde’s father in law is the Dutch businessman Marcel Boekhoorn. He is estimated to be worth $1.5bn. If those estimates are anywhere close to true, he could probably buy the entire Sauber team out of pocket change.

One thing I have learned over the years, from reading biographies and news articles, is that highly successful wealthy business people seldom frivolously invest their own money in projects with a low chance of success. Wherever possible, they try to invest other peoples’ money, and limit their own personal exposure. They know the value of money and what it can do, and they are experts at making it work for them.

It is therefore far from obvious to me why Marcel Boekhoorn (or anybody else for that matter) would want to buy the Sauber F1 team. Based on what has been happening to the team over the last 3 years, it appears that the team is struggling to survive. It’s sponsorship revenues have declined as external sponsors depart. The most recent departure was NEC, which sponsored the team last year. NEC left Sauber at the end of 2014, and is now a sponsor for Force India. The only current visually significant sponsor on the car not brought to the team by drivers is Oerlikon, whose name adorns the top of the dorsum next to the engine air intakes.

Rumors in the F1 journalist community have Felipe Nasr’s sponsors providing around $25m this season, and Marcus Ericsson’s sponsors providing another $15m. Let’s add $10m for Oerlikon, and $10m for other smaller deals. That gives a total sponsorship revenue stream of $60m. Now we have to add revenues from FOM. In 2014 this estimate was published about the revenue distribution in 2013. This showed that Sauber may have been paid over $70m in 2013. However, that number will have reduced significantly this year since the team failed to score a point in 2014. Let’s say it is $40m.

This gives total team income in 2015 as $100m. That sounds a lot, but in reality, according to recent stories, to run a properly functioning team takes at least $125-150m a year. That does not include further investment in people and facilities to move the team up the grid over time.

There is also the matter of what debts Sauber has accumulated over the years. If the team owes money to banks or other financial institutions, it will have to fund interest and principal payments on the debt, which will eat into its free cash flow. The fact that Sauber spent a lot of time and effort  in 2013 and 2014 trying to find investors from Russia, prior to finding it’s current drivers, suggests that they were trying to find external investors to stay solvent. It is almost impossible to know what debts the team currently has.

So if Marcel Boekhoorn was to dip into his pocket and buy the team, his committments would be the money to buy the team itself (believed to be owned 66% by Peter Sauber and 33% by Monisha Kaltenborn), and money to pay off the debts. Then there is the ongoing funding of the team. The economic model of F1 currently requires buyers to stump up seriously big money every month just to keep back of the grid teams afloat, since those smaller teams all get low payouts from FOM. The payouts are skewed heavily towards the historically successful teams.

There is also a severe lack of new sponsors in F1. The sponsor changes in 2015 seem to mainly comprise sponsors changing teams (two examples visible are Rexona moving from Lotus to Williams, and NEC moving from Sauber to Force India). There are no new big-money sponsors visible on most cars, and many of the visible sponsors are either brought by drivers, or are companies owned by the team owners.

If Marcel Boekhoorn is serious about buying any F1 team, he had better have a very good business development plan…

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