F1 finances - be afraid
Discussion
Be very afraid. Go to:
http://www.pitpass.com/fes_php/pitpass_news_item.p...
A very interesting article.
Thanks to the likes of Flemke, I've got a basic undestanding of the financial circumstances of the CVC debt so I can appreciate what it means to have the £2.3bn reduced by a factor of 4 or probably more. But the article is very worrying over what it doesn't specify and what it is extremely careful to enure cannot be assumed it has said.
What they said never happened might well be why Eccs is so touchy of late and comes out swearing whenever things don't go his way, which seems all the time at present. Further, there is a hint about teams pulling out: well more than a hint. This might be why Eccs has mentioned that there are, was it thousands of, teams in the wings just waiting on the opportunity when one of the big teams leaves a vacancy and then they can all fight for it.
The circumstances of whatever was or wasn't paid to McLaren and Renault are in dispute. What does not seem in any way denied is that two manufacturer's teams at least are distinctly unhappy. Renault have gone through a major cost-cutting exercise on top of which Alonso and Piquet have taken a cut in wages. (I thought Piquet bought his drive?) Perhaps to pay for the shortfall.
All in all a deeply worrying situation.
If teams are not getting what they assumed they would, and no doubt budgeted for, in times when they are probably renegotiating with their sponsors, then the Renault poor showing in qually is unremarkable, as is that of McLaren.
It would seem that there are unlikely not only to be winners in all of this but no one who doesn't lose something. And if the recent, Mossy era of F1 is anything to go by, the ones who suffer the most will be the fans. You and me.
Regardless of convenants, there appears to be a worrying drop in confidence in F1.
Who was it said: We have made a convenant with death and with hell are in agreement? Was it someone commenting on the sale of the TV rights to Eccs?
F1 is all image. There is nothing else to it. Noise, history, glamour, speed and macho posturing are all needed to support the perception that there is something in it all that matters. But having to tout the wares as if the soul of F1 was for sale to the highest bidder in some souk, in the middle of some desert, then the announcement that it might be Korea next as if this was something to be proud of, doesn't help. And then to abandon the traditional, history sodden venues.
The title of the piece, Follow the money, is only too true. If the teams do feel that they are not being paid their due, they will leave. F1 has weathered many crises in the 43 season I've followed it but this seems to be the most threatening.
http://www.pitpass.com/fes_php/pitpass_news_item.p...
A very interesting article.
Thanks to the likes of Flemke, I've got a basic undestanding of the financial circumstances of the CVC debt so I can appreciate what it means to have the £2.3bn reduced by a factor of 4 or probably more. But the article is very worrying over what it doesn't specify and what it is extremely careful to enure cannot be assumed it has said.
What they said never happened might well be why Eccs is so touchy of late and comes out swearing whenever things don't go his way, which seems all the time at present. Further, there is a hint about teams pulling out: well more than a hint. This might be why Eccs has mentioned that there are, was it thousands of, teams in the wings just waiting on the opportunity when one of the big teams leaves a vacancy and then they can all fight for it.
The circumstances of whatever was or wasn't paid to McLaren and Renault are in dispute. What does not seem in any way denied is that two manufacturer's teams at least are distinctly unhappy. Renault have gone through a major cost-cutting exercise on top of which Alonso and Piquet have taken a cut in wages. (I thought Piquet bought his drive?) Perhaps to pay for the shortfall.
All in all a deeply worrying situation.
If teams are not getting what they assumed they would, and no doubt budgeted for, in times when they are probably renegotiating with their sponsors, then the Renault poor showing in qually is unremarkable, as is that of McLaren.
It would seem that there are unlikely not only to be winners in all of this but no one who doesn't lose something. And if the recent, Mossy era of F1 is anything to go by, the ones who suffer the most will be the fans. You and me.
Regardless of convenants, there appears to be a worrying drop in confidence in F1.
Who was it said: We have made a convenant with death and with hell are in agreement? Was it someone commenting on the sale of the TV rights to Eccs?
F1 is all image. There is nothing else to it. Noise, history, glamour, speed and macho posturing are all needed to support the perception that there is something in it all that matters. But having to tout the wares as if the soul of F1 was for sale to the highest bidder in some souk, in the middle of some desert, then the announcement that it might be Korea next as if this was something to be proud of, doesn't help. And then to abandon the traditional, history sodden venues.
The title of the piece, Follow the money, is only too true. If the teams do feel that they are not being paid their due, they will leave. F1 has weathered many crises in the 43 season I've followed it but this seems to be the most threatening.
The way I see it is that the debt, if sold on cheap, is someone elses loss.
Didn't Bernie sell high and buy back cheap a few years ago before selling on to CVC? Perhaps he has a plan that will re-make the billion or so that seems destined to disappear with his divorce. Or maybe the whole thing is a plan to reduce his settlement?
Anyway, now that the teams are thanking their people for their hard work by laying them off and with budgets due to be cut to 10% of what some of them apparently were I am looking forward to admission prices falling by similar amounts. How long will I have to wait?
Presumably the deal with Donington will also be adjusted. So Simon Gillett presumably only needs to find 1 million per year. That sounds quite achievable. Will my TV licence also be reduced?
On the other hand with the green beardo joining the party, subject to reducing costs and even more 'greenness', what is there to care about?
Didn't Bernie sell high and buy back cheap a few years ago before selling on to CVC? Perhaps he has a plan that will re-make the billion or so that seems destined to disappear with his divorce. Or maybe the whole thing is a plan to reduce his settlement?
Anyway, now that the teams are thanking their people for their hard work by laying them off and with budgets due to be cut to 10% of what some of them apparently were I am looking forward to admission prices falling by similar amounts. How long will I have to wait?
Presumably the deal with Donington will also be adjusted. So Simon Gillett presumably only needs to find 1 million per year. That sounds quite achievable. Will my TV licence also be reduced?
On the other hand with the green beardo joining the party, subject to reducing costs and even more 'greenness', what is there to care about?
Edited by LongQ on Sunday 29th March 11:30
LongQ, I am not sure that I can share your optimism, although I wish I could.
Yes, it could be that the little man is planning/plotting to buy back F1 at a bargain rate (if his soon to be ex wife will lend him the money from her trust) but beyond that it seems unlikely that anything would change if he did. He has been talking about being able to reduce the fees paid to teams if they have lower budgets, and I doubt he is joking in reality. Donington will have signed a contract. They will only have one way to change it, which will be to walk away leaving a large compensation payment behind.
New teams coming in would be great, but there wasn't a long line of really serious offers to take over a fully equipped team without having to hand over much, if any, money over this winter so I am not sure why there would be in the near future. Fundamentally, at the moment we need manufacturers for the sport to survive - some can come and go, but if the expenditure gets too high because the income is reduced from other sources then they will be out, especially if there is no contract obliging them to stay.
Yes, it could be that the little man is planning/plotting to buy back F1 at a bargain rate (if his soon to be ex wife will lend him the money from her trust) but beyond that it seems unlikely that anything would change if he did. He has been talking about being able to reduce the fees paid to teams if they have lower budgets, and I doubt he is joking in reality. Donington will have signed a contract. They will only have one way to change it, which will be to walk away leaving a large compensation payment behind.
New teams coming in would be great, but there wasn't a long line of really serious offers to take over a fully equipped team without having to hand over much, if any, money over this winter so I am not sure why there would be in the near future. Fundamentally, at the moment we need manufacturers for the sport to survive - some can come and go, but if the expenditure gets too high because the income is reduced from other sources then they will be out, especially if there is no contract obliging them to stay.
LongQ said:
Didn't Bernie sell high and buy back cheap a few years ago before selling on to CVC? Perhaps he has a plan that will re-make the billion or so that seems destned to disappear with his divorce. Or maybe the whole thing is a plan to reduce hs settlement?
What settlement? He has no money. It is all in her name. 
Why else do you think he comes up with these crazy ideas. He has just lost a couple of billion and has to no ask for pocket money.
elster said:
LongQ said:
Didn't Bernie sell high and buy back cheap a few years ago before selling on to CVC? Perhaps he has a plan that will re-make the billion or so that seems destned to disappear with his divorce. Or maybe the whole thing is a plan to reduce hs settlement?
What settlement? He has no money. It is all in her name. Why else do you think he comes up with these crazy ideas. He has just lost a couple of billion and has to no ask for pocket money.
The recently published snaps of Bernie shopping in a supermarket might suggest all is not well - but then it was Waitrose so things might not be that bad.
I also read a report that Mrs. E rather likes Mad Max, now that's food for thought on a number of levels.
Bernie, bless his little cotton socks, can't last for ever but Max would be somewhat at sea without his commercial ally. I wonder if there is an opportunity for him to forge a different power sharing relationship in readiness for BE's exit? MM could then 'do a Putin' and take over the commercial operation of F1 whilst ensuring a suitable puppet takes control at the FIA. Todt might fit the bill - his Mrs. already seems to spend much of her life travelling the world on behalf of the FIA telling people to drive more slowly or some such safety message.
With Branson joining the party one can only assume that things will not improve much and that there is likely to be an even strnger drive towards greenness and 'sustainability'. Who knows what that might lead to? Whatever it is is unlikely to be F1 as we have known it for the last few decades.
Will that matter? Probably not. Things move on. Hopefully there will always be alternatives, possibly more rewarding alternatives.
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