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Old 21st November 2017, 15:31   #1
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Default Ferrari to consider pulling out of Formula 1

Ferrari’s Chairman Sergio Marchionne has hinted that the Italian manufacturer could pull out from Formula 1 after the end of their contract in 2020. Filings by Ferrari reveal that doing so could save the company around £ 100 million (Rs. 860 crore). Ferrari has been in the sport since the last 67 years and has taken part in all the championships since 1950.

Formula 1 owners Liberty Media are set to change the engine rules and prize money payouts from 2020. The Italian car manufacturer has been present in every season since Formula 1 began. Marchionne said that “(F1) has been part of our DNA since the day we were born. So, it’s not as if we can define ourselves differently. But if we change the sandbox to the point where it becomes an unrecognizable sandbox, I don’t want to play anymore.”

Being the oldest team in Formula 1, the company enjoys a higher share of the payouts to teams. Ferrari is guaranteed an annual bonus of £ 80 million each year for just participating in a season. In 2016, the team was given £ 160 million, 33% more than the Mercedes team, who won the championship. Teams like Manor F1 received only £ 40 million. Formula 1 was sold to Liberty Media in January 2017. They now want to bring equality in the prize money given out as there is a direct connection between this figure and the team budgets.

New engine rules are set to be introduced in 2021. This means additional expenses for engine suppliers like Ferrari. Smaller teams lease engines for a fraction of the cost of development. Ferrari has been unable to win the driver's championship since the smaller 1.6-litre engines were introduced in 2012.

Analysis of filings by Ferrari reveals that the company spends around £ 338 million on research and development, £ 80 million on staff and £ 55 million on running the team. Income for the team comes from sponsorship, supplying other teams with engines and F1 prize money with the total figure around £ 372 million. This leaves a deficit of £ 101 million which is absorbed by the company.

A big reason for Ferrari to participate in Formula 1 was marketing and trickling down of technologies like paddle shifters, carbon fibre composites, and hybrid systems used by the cars on the tracks to the road cars. However, the last driver's championship for the team was won by Kimi Raikkonen back in 2007. Additionally, Ferrari has grown as a brand and no longer needs Formula 1 to improve its brand recognition.

Ferrari to consider pulling out of Formula 1-f1.jpg

Source - The Independent

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Last edited by blackwasp : 21st November 2017 at 15:36.
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Old 21st November 2017, 16:45   #2
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Default Re: Ferrari to consider pulling out of Formula 1

I love this team and they are the team I've supported for 20 years, but they do take unfair advantage of their status in F1. Every time some rule changes that does not suit them, they make threats like this. From past history, this is most probably nothing more than a potential bargaining chip.
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Old 21st November 2017, 16:53   #3
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Default Re: Ferrari to consider pulling out of Formula 1

Fat chance the authorities or Liberty Media will let this happen. They'll do anything to stop Ferrari's exit. If you remove Ferrari from Formula 1, you've lost 30 - 40% of the audience overnight. F1 would feel very empty without Ferrari...it would lack soul (note: I'm not a Ferrari team supporter).

Sergio Marchionne has shown that he'll go to any lengths to save a buck, but I do hope he / the board realise that Ferrari more than makes up the 100 million in publicity. I also believe the Ferrari F1 team is profitable? At least in most years?
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Old 21st November 2017, 17:55   #4
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Default Re: Ferrari to consider pulling out of Formula 1

Manufacturers like Ferrari (and the likes of Lamborghini etc) and even the sport of F1 struggling to find their identity in this age of transformation to electric machines.

"Race on Sunday, sell on Monday" was the earlier motto for these companies. But nowadays the gap is widening more than ever between the technology used for the races, what they ideally sell and what the future is threatening them with (Hint: Tesla).
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Old 21st November 2017, 19:53   #5
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Default Re: Ferrari to consider pulling out of Formula 1

Ferrari at it again ! threatening to make an exit when they know the world will not let that happen. Frankly F1 is mostly about two or three big competitors: Mercedes, Ferrari and the third one keeps changing (Renault/Redbull racing team mostly using one of engines Mercedes/Ferrari ). Take Ferrari out and F1 will lose out on money. Plus, many others will start pulling out which would mean F1 would end.

I am sure they will reach an agreement soon.
This is just like Indian Petrol pump owners always threatening to shut down if something goes against them :P
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Old 21st November 2017, 20:49   #6
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Default Re: Ferrari to consider pulling out of Formula 1

We have been here many times before, but this time around, its not that easy to call this a bluff. Especially since its not Bernie on the other end, but Liberty Media. The final outcome will totally depend on what Liberty Media has planned for sport in the short and long term.

Acting tough on Ferrari will help F1 attract many new brands and teams with a more equal and merit based distribution of revenue. And also keeping a threshold on the overall annual spend will certainly sit very well with a lot of teams, sponsors and circuits. But that will totally piss off a lot of faithfuls which can be detrimental for the sport. And unlike before, the majority stake of Ferrari is no longer with Fiat but the general public. So, a decision isn't easy to make like old times.

Coming to Sergio Marchionne, I do hope he sees the real value of F1 for Ferrari as a supreme car manufacturer and not just count the money and titles. While its true that the recent seasons have been barren for Ferrari, the team has come real close to the title many a times in the last decade. And many many great wins too!

And the £338 million spend on Research and Development which has been filed under the F1 budget is the real deal. Look at the road car division! Once the Michael era of Ferrari started, the company hasn't looked back. Be it performance, cutting edge technology, reliability or the pure joy of driving. All road and track going machines from Maranello after the turn of the millennium have delivered. And I am quite sure, the road car division is highly indebted to the F1 team for that - with the know how and the midnight oil burned.

If Ferrari pulls out of F1, this R&D budget will surely fall and it will definitely have an effect on the cars in the long term.

And I don't think the EV era is going to paint the final chapter for brands like Ferrari like the main steam market. For all we know Ferrari might be able to reduce the output and charge more for their machines once the EV brigade is well and truly here. And I am quite sure, enjoying a car is not just about being the fastest. Great cars need to fill your senses - all of them! And EVs aren't going to do that most certainly. Especially true for the niche segment Ferrari currently operates in.

If there is a choice between a F430 Scuderia and a Tesla Roadster to drive around the Nürburgring for a day, I most definitely know what I am going to pick!

So, let's wait and see how this story evolves!
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Old 22nd November 2017, 15:28   #7
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Default Re: Ferrari to consider pulling out of Formula 1

Quote:
Originally Posted by CrAzY dRiVeR View Post
"Race on Sunday, sell on Monday" was the earlier motto for these companies.
It still is for the big guys. Mercedes' F1 championships add a level of sexiness & allure to the brand, which surely helps their car sales.

Quote:
But nowadays the gap is widening more than ever between the technology used for the races, what they ideally sell and what the future is threatening them with (Hint: Tesla).
Even when all of the world's road cars are electrified, IMHO, petrol-powered racing series will be around. Say, like horse racing today. LOL!

Quote:
Originally Posted by deetjohn View Post
And I don't think the EV era is going to paint the final chapter for brands like Ferrari like the main steam market. For all we know Ferrari might be able to reduce the output and charge more for their machines once the EV brigade is well and truly here. And I am quite sure, enjoying a car is not just about being the fastest. Great cars need to fill your senses - all of them! And EVs aren't going to do that most certainly. Especially true for the niche segment Ferrari currently operates in.
Great post man.
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Old 22nd November 2017, 20:17   #8
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Default Re: Ferrari to consider pulling out of Formula 1

These are standard press releases before a major rule change/contract negotiation.
If Ferrari were really interested in money they would not limit road car sales to 8000 worldwide.

With Mercedes dominance, teams are spending more money than they ever did before. Ferrari too. About time they tried to do something about this.

Next year we should see a closer top 8 but the Mercedes PU will always be the one to beat. Outstanding piece of machinery.
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Old 22nd November 2017, 20:34   #9
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Default Re: Ferrari to consider pulling out of Formula 1

It’s sad to see Ferrari making an exit from the FI.

To an extent, I feel the credit still has to be passed onto the man who made Ferrari name to stand on the podium and it’s none other than the man himself, the legend Michael Schumacher! I only learnt about Ferrari when it was all raining red on the track subsequently getting painted on my wardrobe, picking up Ferrari cars in NFS back in the time! But for what Ferrari earned in those days, Schumi made it the most.

Thought I’d use this forum to pay tribute to the man and wishing him recovery from the accident he suffered back in Dec 2013! It so happened, I posted about him this morning here when I went through the thread where his track car was sold in an auction.

It looks like Ferrari is doing away with all the F1 properties in phases which has already commenced with the cars from the past in the auction referred in the link I attached above. !

Last edited by gururajrv : 22nd November 2017 at 20:36.
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Old 19th December 2017, 12:20   #10
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Default Re: Ferrari to consider pulling out of Formula 1

Ferrari now threatening to pull other teams with them and form a break away series if they have to!

Nice joke to end the year, last time they threatened to do the same, a deal was signed with Bernie containing the $100 million historical bonus, leaving all other teams in the lurch, wondering why they got nothing.
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Old 21st December 2017, 02:13   #11
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Default Re: Ferrari to consider pulling out of Formula 1

Quick question - which feels a sexier, more recognizable brand - Lamborghini or Ferrari? or Zonda? or Koeniggsegg (swedish brand - do not know the spelling) ?

Ferrari are getting a lot more in return than just a $100M bucks! (even RB achieves that and they do not sell cars) About time they start playing on a level field. If Liberty can bring in Porche or Lambo (some global brands), they will be safe without Ferrari. Vettel/Hamilton fans will be recognize him with a Porche as much as they recognize him with Mercedes.

The companies are not bigger than the sporting icons.
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