Formula 1: Forgiving ambitions, and mergers & acquisitions

Racing is a generic addiction. People always want to be the best, and regardless of who they are or what they do, they want to be ahead of their nearest rivals. Racing, as such, has been on an evolution. Historically, we can look at various epics, including Homer’s writings where there have been mentions of a one off race using Chariots, Horses or even other methods as per their availability.

It has never been that racing is only restricted to the modern day Europe or the States of the West. There have been several instances of the races, that has been written and witnessed, by the people in the Far East as well. When such an event occurs, it is never down to one particular individual, it’s down to a combined effort of the people who organise, and makes sure that the required components, and machineries are ready on time. It has been always understood that no driver, regardless of their talent, can win races, only with their traits. It takes a toll on the team, and together they achieve success.

Someone told me that, the first form of racing happened way back in 680 BC, an Olympic event as such, where fans would throng to the streets, to witness racers taming the chariots. It has been a major event, and the opposing fans would end up colliding, or even killing the opposite section. It was down to the teams, and teams normally would bargain with the racers, and would offer them some form of salaries to ride their chariots.

Another example is that of George Bouton, and his attempts to start a motor racing competition. In what was termed as the ‘World’s First Motor Race’, where an engine was attached to a tricycle, Bouton arranged an event somewhere in 1887. Unfortunately though, he ended up as the only participant. However, 8 years later, we had our first race between Paris to Bordeaux, a 48 hour event, where the cars were racing at speeds of 24 Km/h. In modern terms, this can be termed as ‘meh!’, but it was the start of an exciting journey.

The first real Grand Prix, featuring 32 cars, happened at Le Mans in 1906, and the event took around 48 hours to complete. A massive crowd reportedly witnessed this event, and due to the anomaly of the event, the roads took much of a beating, as the temperatures were reported to be high. Several drivers had issues with their vision, mainly due to the short wheelbase of the cars, and the smoke coming from the front tyres had a tiring effect to their eyes.

The race was also so extreme, and the drivers were committed to come out on top, that in spite of the injuries that certain drivers suffered, especially to their eyes, they were given cocaine during the pit stops, and managed to continue. The winner of the Grand Prix was Ferenc Szisz, a railway engineer, who left his job in the railways, to join Renault. Szisz’s talent was recognized by a person named, Louis Renault, who gave him the job of a rider’s mechanic during his initial days with the company.

The formation of Renault, meanwhile, has a story of its own. Around 1898, three years after the first motor tricycle race, Louis Renault entered the scene. He built his first car at the age of 21, but he had to team up with his brothers to establish his brand Renault Freres, further. Louis understood the potential of motor racing, especially the financial aspects, and ensured that his brand was a dominant force during the Pre-Formula 1 era. However, his attempts took a beating, when his elder brother died in a race, and this meant that Renault didn’t take part in the professional competition for two years, until 1906, where its driver Szisz won the race, despite encountering numerous punctures enroute to the chequered flag.

It’s important to know that those 32 drivers in the First Grand Prix, actually represented 12 manufacturers.

As time flew by, we had different adaptations of racing, as different countries decided to encash on the growing phenomenon. It was United States of America who first used the word ‘Grand Prix’. However, the traditional bases for the races were in France. Post the World War I, several countries continued to expand the series based on ‘no formal regulations’, but rather their own adaptations of the ‘Formal Regulations’, which was based on Engine or Weight.

The First Formula 1 Championship kick started in 1950, and as many as 18 teams took part in the event. But many of them had to back out due to high costs involved in their project, and the rest, as they say, is history.

The Backmarkers: Forgiving Ambitions

Teams are very important to the sport. The word ‘constructor’ attained a significant meaning, quite late in the history of Formula 1. We were forced to believe that drivers are far too significant in Formula 1. Without a doubt, it’s true. We do have to understand why the likes of Alonso, Hamilton, and Button haven’t won the championship in the last three years. Time and time again, these drivers proved what it takes to be a ‘Champion’. These drivers are incredibly talented, but Red Bull are proving to be a great hurdle for the aspirations of many drivers on track.

We need to wonder which of the drivers will make a jump to Red Bull if FIA allowed teams to run a third car. Yes, Alonso and Button have confirmed their loyalty to their teams; they have stated that their teams are probably the best, and they are not eager to look elsewhere on the grid. Lewis has made his aspirations clear; he has stated several times, that he would be forced to look elsewhere depending on the performance of his team.

Kimi Raikkonen, ever since his comeback, has looked strong. With his amazing connections with that Austrian team, we have to believe that Kimi would make a jump to Red Bull sooner than later, although Lotus seems to be the best place for Kimi, only because of the lack of off-track commitments, that is far too less at Enstone. If there is anything that would stop Kimi from venturing onto the Austrian territory, it would be something to do with the off-track performance rather than the on track ability (Read: Politics, Marketing, and others).

Although, we do believe that Lotus are improving on their on track performances as well, their budget, however, is relatively short, and they lack in the resources, as compared to their Austrian rivals. Nevertheless, things like these would prove that teams play a significant role then one would imagine.

Over the years, we have learnt of those famous teams that ruled the sport, but again, any team that is taking part in Formula 1, possess plenty of attributes that is important for their survival. All the teams are here to win. Yes, we do know that, but then there are teams who survived the competition for years together, to an extent, failing to win a race for decades. They took part in the sport, yet season after season, they never lost the momentum or the golden touch that was required to take part in the sport, something, that most of the modern backmarkers have failed to inspire.

In the present world, surviving without success is difficult. No one cares about the history or the heritage that one possesses. It’s about that instant, and the recent success that mankind remembers, that’s how much the valuations are done in the sport.

Perhaps, these are something to do with the FIA, right?

“I could give all the teams another $20 million. But after a month, there’d be nothing left.” – Bernie Ecclestone

Quotes like that are pretty common from Bernie, whose decision sometimes seems to be a biased to particular teams. Marussia is one team who hasn’t signed the concorde agreement yet, although Bernie has quashed the rumours and has stated that the agreements are in place with all the teams, to which Marussia has confirmed that none of their board members have seen such a type of agreement.

It’s the lack of respect that the majority of the teams have been forced to deal with. In a normal world, the smallest or the poorest will get more attention, but in Formula 1, the rich, and the biggest, gets more attention to every detail of the sport. Small teams like Marussia always demand a level playing field, but no authority related to Formula 1 pays heed to their demands. It’s quite obvious why the small teams get no attention from the sport.

When a team gets no attention, or if lack of success continues to haunt them, they will be left with no option but to leave the sport altogether. It has happened in the past, and will happen in the future.

Will Bernie or the FIA care about these teams?

“We have agreements that require us to treat all the teams equally. They’re a good team and I’m sure there is more than one possible buyer. I don’t want to imagine F1 without Sauber. Ideally, they will find new sponsors in the long term, but even companies who are willing to support them in the short term would be fine. The team deserves to be helped. I don’t know exactly what their financial situation is, but I know it’s not as good as it should be.” – Ecclestone while speaking to SRF

Yet, despite all the controversies, Bernie would come up with a statement as such. We need to wonder if treating all teams equally would refer only to the Top 4 teams in the constructors championship alone.

Sauber, fortunately, seems to have found an escape route to their troubled financial times. With three big partners from Russia, their future looks brighter than ever, although it did come up at a cost, in form of an young driver who, despite the lack of experience, is adamant about his chances at Formula 1 in 2014. Will he be a boon or bane is something we will eventually know.

One of the backmarkers, Caterham, seems to be worried with their current lineup. Although they have maintained on record of their commitment to nurture their drivers, things like these are a common sign in this era, isn’t it?

When we go back in time, we look at the teams like Jordan, Ligier, Minardi and Arrows/Footwork. Although comparisons can be made, they aren’t ideal. We really have to applaud on the work done by Minardi: they weren’t the fastest, yet they were reliable in most cases, which was an incredible stat in those days. No wonder such a team like Minardi have won a loyal fan base over the years.

As compared to other teams, there wasn’t a corporate structure that ruled the Minardi. Instead, we found a bunch of eager, and enthusiastic people working their heart out for the team’s cause. They were one of the few to drop the idea of ‘pay drivers’, until it became a necessity for their survival. Instead, they gave a break to young talent, many of whom are noted drivers in this era. We are speaking of the likes of Alonso, Webber, Trulli, Fisichella, among others. Ironically, their successors, Toro Rosso, continue that tradition even in this era, thanks to Red Bull.

It’s also noteworthy to speak of the merger between Minardi and BMS Scuderia Italia. Towards the end of 1993 season, BMS Scuderia and Minardi were struggling for funds. Giancarlo Minardi and Giuseppe Lucchini decided to pursue their goals with a combined entity, which would ensure better prospect for their struggling ventures. Unfortunately for Giancarlo Minardi, it was a start of a downfall, both to him, and his team. That merger worked in favor for BMS Scuderia Italia, more than Minardi’s ambitions.

Giancarlo Minardi’s equity in the new venture was around 15% while the rest of it belonged to the promoters of BMS. The new venture received another twist in 1996, when Lucchini decided to quit Formula 1 to pursue other genres of Motorsport. That was when Gabriele Rumi decided to try his luck at Minardi, first by sponsoring the team, and later becoming the Co-Owner and Chairman of the team until the end of 2000. Following the withdrawal of Rumi, Paul Stoddart decided to revive the fortunes of the team which was on the verge of a collapse, but this period was way different to the team’s previous guises.

Coming back to 2013, it can be argued that Giancarlo Minardi would have failed in this modern era, as seen in his later days, funds played a significant role in the teams organization, and Giancarlo’s role within the team was relegated to that of a namesake principal. He never did a Peter Sauber by rescuing his team from the clutches, when it was on the verge of a collapse. Instead, he watched the team go through various guises, while retaining his role, until he was eventually shown the door by the team’s new promoter in 2001. Maybe we were just expecting more from Giancarlo but it was the end of a wonderful chapter in Formula 1.

Mergers And Acquisitions in Formula 1:

With the recent announcement of the infusion of Russian funds in Sauber, and with Marussia already showing their Russian Patriotism, could we see another merger of Formula 1 teams in the near future?

Mergers and Acquisitions aren’t new to Formula 1, we have been constantly living with it. In the recent past, there was a potential talk of merger between Caterham and Marussia, and back in 2010, we were hearing about the potential merger between Hispania and Epsilon Euskadi which raised few eyebrows, unfortunately though the talks weren’t fruitful. The deal between Hispania and Epsilon Euskadi were followed closely by some, due to the massive potential that the combined outfit could have shown in Formula 1, Epsilon Euskadi had the facilities and lacked the funds, while Hispania had the funds, and lacked the facilities.

Certain people speculated that Epsilon Euskadi had the facilities which were equal to the Top 5 teams in Formula 1. People weren’t worried about losing Hispania, although many of the Spanish fans were excited about the arrival of Epsilon Euskadi, mainly due to their experience in motorsports as compared to Hispania. Earlier that season, there were talks of a potential merger between USF1 and Stefan GP, which, according to Zoran Stefanovic, failed due to the inflexibility of certain players within USF1.

Perhaps the most successful, and most talked merger is that of McLaren with Project Four in 1981. Teddy Mayer, then principal of McLaren, was coerced by his long term sponsor Philip Morris in merging McLaren with Project Four run by Ron Dennis. Project Four had the design ideas for a successful Formula 1 programme, due to the presence of John Barnard, but lacked massive funds that were required for the development programme. Philip Morris was the backer of Project Four and felt that a combined entity would result in the formation of a dominant force.

A reluctant Mayer then agreed for the merger, and along with Ron Dennis shared the top post at the new combined entity. In 1982, Mayer left the team, but his equity was purchased by the new owners. McLaren had their best era in Formula 1 from the 1984 season, as they could afford the best components, and best personalities, and they won seven drivers championships, and six constructor championships until the 1994 season. This era is often remembered in Formula 1 due to an amazing rivalry between Williams and McLaren, also between the McLaren pair of Senna and Prost.

Sometimes it’s inevitable to avoid mergers and acquisitions in any field. As with the example of McLaren and Project Four, it can lead to a massive turn in fortunes for an combined entity, but it can also lead up to the downturn in prospects. Anyway, there is nothing wrong in a team assessing its scenario.

“These talks with Marussia happened over the Christmas period and as with everything, we looked at whether it made any sense and it didn’t make sense.” – Caterham Boss Cyril Abiteboul

Although Caterham initially refused that those merger talks with Marussia took place, they eventually agreed later, and as Cyril Abiteboul stated, the talks with Marussia was always tipped to fail due to diversified interests between these two teams.

With this Sauber situation, things have certainly changed for Marussia. They are no longer the only team to boast of an Russian nationality, Bernie is still adamant about the 11th team in Formula 1, as his belief rests with the 10 best forces. The shareholders of Marussia should be worried about their finances, as the team is not making any profit, and isn’t showing any recovery signs just yet.

The team lost their best trump card in the form of Pay Symonds, who was showing a fighting spirit on his comeback into Formula 1. The team’s positive signs are rather in form of partnership with McLaren and Ferrari. The Team is expected to continue its technical partnership with McLaren, with Ferrari supplying the engines. Will that be enough on the long run?

Again, we are not in the traditional era of Formula 1, as in the 80s and the 90s. For a team to continue, they need funds, and with the current economic climate, they are something that is probably a bit rare to deal with. Despite the presence of Max Chilton at Marussia, the team is in clear need of sponsorships rather then partnerships, although both are key factors to success.

The Team has stated that they aren’t worried about the deal of Sauber, and that they are still focusing on racing a Russian born driver. The team can do an undercut by racing Vitaly Petrov in the next season, but that could be at the expense of Chilton or Bianchi, both of whom are looking good for their second season in Formula 1.

When Formula 1 enters a new territory, it’s obvious that certain key players in that market will be interested to assign themselves to this new phenomenon. But when they have two different teams to deal with, it could be a tough choice for them. Just as in the case of Indian sponsors who were relatively confused, whether to support their driver or their team, we could end up seeing no one venturing into Formula 1 at all.

It’s important for Marussia and Russia to sort out their priorities in the near future, as Formula 1 is gearing up for invading Russia. This could be the best moment for Marussia to bank on the increasing momentum that is felt in their nation. We are not suggesting a merger between Sauber and Marussia, but we are wondering if such a deal could take place for the benefit of Formula 1.

The new promoters of Sauber and Marussia have a common goal, which is to promote Formula 1 in their region. While Marussia is struggling hard to maintain their place in Formula 1 and if at all they lose their 10th position in the standings, they would lose a fortune of money that is needed for their survival. A return of talks with Caterham wouldn’t be fruitful, and Marussia desperately needs to secure their future to avoid following their arch rivals HRT into demise.

While many of us are keen to see more teams in Formula 1, the top brasses of Formula 1 aren’t keen on expanding the series, which is party agreeable due to the prevailing economic conditions. We do not want to see teams filling up the numbers, we are hoping for a close fight across the series, and if teams combine their forces, this could very well be possible. Considering the lack of support that the 11th team in the standings would be forced to deal with, the best way for teams to mark their presence is to join the forces with like minded teams, and here we are speaking about Marussia and Sauber.

“There are others (Teams) that are spending more money than they have.” – Bernie Ecclestone

Bifurcation of Formula 1: Needless Hope or a Distant Possibility?

We have been hearing this from Bernie for so long now, his statements are often predictable these days. It’s obvious that the teams are forced to spend beyond what they could afford because of the tough competition that exists in Formula 1. They cannot be blamed for that; the midfield and the backmarkers have tried hard for RRA and other conditions to offer a level playing field, but unfortunately the bigger teams always oppose such kind of moves, as it does affect their own performance as well.

The top brass of Formula 1 haven’t reacted yet to the demands of the small teams, but the fans always look for a close competition, and the only way we could get the close competition is when there is a stability in the regulations. One of the reasons for the consistent performances of Force India this season is down to their own improvement due to the lack of a major regulation change, and also due to the advanced and mighty attempt by McLaren.

Since there wasn’t a major regulation change, Force India identified their major problems last season, most of which are due to the issues with the tyres, and tried to overcome their issues, and the result of their development is now visible, although a podium still beckons this team.

With a major regulation change for next season, most of the Formula 1 teams would be pumping more money beyond their ability, to ensure their respective targets are reached. There is a massive risk factor involved with these teams, as it involves their own struggles for profits, and the reward for overcoming the risk factor isn’t massive at all. As stated in this article earlier, Bernie has refused to pump more money into teams, and RRA and other conditions to maintain the level playing field is ruled out of equation.

One of the ways to overcome this situation, and to make Formula 1 more interesting, is to bifurcate the series into certain classes, such a way that each classes has their own objectives, and traits. This has been followed in other genres of motorsport. Maybe Formula 1 should take a lead out of the rivals in making this series a bit more interesting. The benefits of such a move would be racing without any external forces, or artificial racing as you would call it.

Let’s call it this way – Class I would just involve the main regulations, and it would feature the top 4 teams, while class II would be offered more technological freedom, involving the midfield teams, while the class III would be powered with extra horsepower and technological freedom to make the races more exciting. Problems are certainly bound to arise.

Bifurcating the teams would be a problem, and most importantly, Formula 1 would be difficult to get used to, but this can be an escape route for many people who do not wish to see racing in the artificial manner by asking Pirelli to produce softer compound tyres, and risking the lives of drivers, and also the controversial use of DRS.

This can also be seen as a desperate attempt of Formula 1, but it does offer more relativity to teams, especially the backmarkers who are lost in the glory. Since the teams would be fighting within their own classes, more championships are involved, and the sponsors would be happy to assign themselves with the many other teams.

These kinds of suggestions might have arisen in the past, but when Formula 1 pays no respect to the backmarkers, suggestions like these will arise again, along with the speculations of mergers and acquisitions of teams, and also questioning the team’s future, which will lead to an uneasy situation, and also the inclusion of more desperate measures, making racing a bit more senseless while risking the lives of racers involved.

FIA: Time to make some sense?

One of my friends recently was speaking against the FIA, and was really hoping that the International Tribunal (IT) would punish them for being so ruthless with their regulations, especially on granting Pirelli a free test during the in-season at the expense of other teams, and later backtracking on the same.

We have heard many analysis on the controversial Mercedes Test, and how Mercedes escaped a major punishment, only because of the loophole in the regulations. But again, regulations are something to do with those who set them. All we can do is argue until there is a change of guard at the top level.

Can we say that FIA maintained a diplomatic appeal, by not acting against Pirelli or trying to gather sympathy of other teams by backtracking on the regulation?

Some of the recent decisions by the FIA are logged in as controversial. We can also talk of pit lane speed limiter from the Hungarian Grand Prix and the decision to restrict camera persons to only certain locations, mainly due to a faulty wheel nut?

There was a series that was abandoned few years ago, which went by the tagline as ‘The World Cup of Motorsport’. The series was fun according to many, and many are hoping that the series would restart as it was the perfect medium to showcase talent. Anyway, coming down to the point, that series had peculiar pit stops. It’s not that none of the other genres of motorsport follow it, but it’s just that this series had a more intriguing pit stop.

Each team was allowed to use 8 members during a pit stop, but only 4 were used for the purposes of changing tires, even that lollipop man wasn’t allowed until the car comes to a complete halt. The pit stops were mandatory, and the pit stops were done in a stipulated period. The number of mandatory pit stops changed according to the track.

It’s not that this was a foolproof mechanism to prevent accidents or fatalities during a pit stop, but it was something close to that. It’s ironic that F1 desires for more strategy during the race, but failed to introduce a so called mandatory pit stops, that is followed in its feeder series as well. We understand the decision to force Pirelli to soften compounds, but not at the cost of the driver. Something like mandatory pit stops would have forced teams to strategise their races.

Banning camera crew from the pitlane wasn’t an ideal solution, as even the pit crew were hurt by the incoming rookie drivers who mostly brake late due to lack of experience; it happened in the past. Maybe limiting the number of crew members, and asking the crew to come out of their garages only when the car halts, could be a perfect solution as well. Yes, these ideas might have been taken from the rival series, but it would not hurt the reputation of Formula 1. They could make the races long, beyond the 2 hour mark as specified now, but they would make the races safe for the pit crew.

Greed is the ultimate cause of many calamities across the globe. We have lost many teams in Formula 1 due to unfriendly conditions for the backmarkers. It’s hard to find support from those that matter. No, we aren’t blaming Bernie alone. We do agree he has done tons of work to make Formula 1 an global event. Maybe we have ended up blaming him for the amount of work that could be done by him. Time and time again, we have underestimated the importance of teams in Formula 1.

It’s high time that the teams get their deserved respect, especially the midfield teams, and the backmarkers. We are used to those bizarre decisions, maybe a certain more of those could save the future of certain teams, or even the series on the long run. We do hope many teams take part in Formula 1 for now and for the future, because racing is exciting when there are more people at work, but we do hope that teams take part in the races, not just for the sake of it.