Force India exclusive

Force India exclusive: ‘£15m will put us in fight for third’

2018 F1 season preview: Force India

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Force India finished fourth in the world championship for the last two years in a row. And there is no shortage of threats to its position as ‘best of the rest’ behind F1’s top trio of Mercedes, Ferrari and Red Bull.

But the team isn’t going into the 2018 F1 season just looking over its shoulder, as chief operating officer Otmar Szafnauer explains speaking exclusively to RaceFans.

Otmar Szafnauer, Force India, 2018
Szafnauer: “We’re a bunch of racers”
Following the launch of the VJM11 at the Circuit de Catalunya, Szafnauer reveals they want to take the fight to the top teams – and they believe they can do it on a fraction of the budget.

While admitting the team operates on one of the smallest budgets in F1, along with Sauber, Szafnauer says the team is targeting “the budget that’s required to do even better.”

“There’s no secret that there’s a high correlation between money and success in this business,” he says. “Now you can do well on a limited budget but on that limited budget you’ve got to ask yourself ‘can you win it’? Probably not.”

“So we look forward, because we’re a bunch of racers, to doing the best we can. If we can accumulate even more budget such that we can translate that into more performance, that’s what we’re about.”

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His estimate of how much money the team needs to raise its sights to the top three may seem low. “I think where we stand now in the region [of] £15 million more per year [will] take us challenging third.”

“If you challenge third you’ve got to punch clever and actually get third,” he adds. “But another £15 million we should be able to.”

But under F1’s prize money structure the rewards for Force India moving up from fourth to third would be considerably less, in the region of £3-4 million. This illustrates Force India’s predicament.

“If you can get to third then you get that money,” agrees Szafnauer. “But you’ve got to have the money first and then you get to third.”

The root of the problem facing the team is the manner in which F1’s revenues are distributed. Some of it is distributed among all the teams as prize money, but large chunks also go to favoured Constructors Championship Bonus teams excluding, among others, Force India.

It points to why F1 needs “a more equitable distribution of the money”, as Szafnauer explains. “Can you imagine going from fourth to third and you only get three or four million more? It should be a lot more.”

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“The reason you only go up a little bit is because a lot has been taken up by the bonuses. Get rid of those bonuses and you can make those steps chunkier.”

But earlier this year Force India, along with Sauber, dropped the complaint against Formula One it had brought to the European Union. Its objection to F1’s prize money distribution was one aspect of the complaint.

Sergey Sirotkin, Williams, Circuit de Catalunya, 2018
Force India has worries about its midfield rivals
While no change has been made to how the money is shared out, Szafnauer says it withdrew the complaint “because we have a greater collaboration now with the commercial rights holder and they’re saying the right things that they want to do the same.” It’s a clear signal of their confidence in Liberty Media’s intention to rebalance a sport which is tilted against independent outfits like Force India.

They’re going to have to be patient, however. Szafanuer doesn’t expect any change in the prize money situation before 2021. Until then they have a fight on their hands.

Force India’s midfield opposition has become more threatening in the off-season. “We’ve got to box clever,” says Szafnauer “For sure it worries me.”

The rise of rapidly-expanding manufacturer rival Renault is the most obvious threat. McLaren are desperate to come out fighting after three years in the Honda doldrums. And a renewed threat from Force India’s closest competitor of the past few seasons is also on Szafnauer’s radar.

“Williams [have] a chief aerodynamicist that came from Ferrari [Dirk de Beer] and Paddy Lowe’s won a lot with Mercedes so they know what they’re doing.” Plus, he adds, “they’ve got more money than we do.”

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Force India is expanding its workforce, though not as rapidly as the likes of Renault or Sauber. The emphasis is on “hiring the right people.” Doing more with less is this team’s mantra, and without the injection of capital needed to become top-three contenders, holding on to fourth place will be an achievement.

Szafnauer believes it’s a fight they can win. “I can’t predict the future but for sure we can do fourth.”

“If we don’t it’s because it was a close competition and somebody else got us. But for sure we’ve got the potential to finish fourth.”

Otmar Szafnauer spoke to RaceFans at the launch of the Force India VJM11 at the Circuit de Catalunya.

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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33 comments on “Force India exclusive: ‘£15m will put us in fight for third’”

  1. digitalrurouni
    13th March 2018, 11:58

    Ugh I really dislike the uneven payment structure in F1. The backbone of F1 are these middle field teams. I really hope Liberty Media does something to help out.

    1. +1 we need even payment structure asap even if the poisonous Team Red leaves F1.
      Without teams like Sauber who placed good talent behind the wheels of their cars we wouldnt have drivers like Kimi, Massa, Kubika, etc… in F1. Now a days most mid-field teams have become a happy hunting ground for paydrivers with superdeep wallets.

      1. I believe that Massa did actually bring financial backing with him when he signed for Sauber, so it’s not necessarily a good comparison.

        Asides from that, you will find that there are several other parties that are set against any sort of financial changes. Newey, for example, gave an interview to Auto Motor und Sport fairly recently where he was very dismissive of the idea of any sort of budget cap or equalising the payments between the teams – hardly surprising given that Red Bull received very favourable payment terms under the current Concorde agreement and are unlikely to want to give those payments up.

        1. He actually was a Ferrari junior, so that’s how he got his drive with Sauber.

  2. I simply do not believe that. In 2016 they scored 178 points to Red Bulls 398, and in 2017 187 to 368. For pure fun let’s assume this trend continues, then they’re beating Red Bull by 2023 by 21 points (251 to 229)! But that would require Force India to find an additional 5% of points each season, and Red Bull losing 7.6%, obviously assuming Red Bull remains the third placed team.

    Let alone McLaren and Renault finally get things in order by then,…

    Finishing fourth is by no means a given for this team and they very much have the right to call themselves the best team on the grid in both 2016 and 2017. But another £15 million won’t lift them in the constructors…

    1. @flatsix I agree it sounds very optimistic, but they have been punching well above their weight.

      They will have a tough fight this year, that Melbourne package better be good, otherwise they might find themselves fighting for 8th instead of 4th.

      Regardless, for some reason I have the feeling they will do well again, question is, how much has Renault improved, and is the Haas a serious midfield contender now?

    2. @flatsix It is optimistic, but clearly there is something very special about Force India. I assume there are some incredibly brilliant and scrappy engineers, because with a Sauber-like budget, they’ve managed to consistently beat McLaren, Renault, Williams, and occasionally Red Bull and Ferrari. Maybe 15m is not enough for 3rd. But if there is a team that could make progress on the grid with more funds it’s Force India.

      1. But if there is a team that could make progress on the grid with more funds it’s Force India.

        @ajpennypacker Progress sure, if that will result in a different spot on the grid or in the standings, not so sure. The gap to Red Bull is not one of ‘almost there’, it’s one of almost not being lapped at times,…

        1. I’m not suggesting that the relationship between budget size and points/grid position is linear, but there is definitely positive correlation. To illustrate why I think Force India could make massive progress consider the following figures from 2016 (I assume they haven’t changed to significantly):

          Team Sponsors Partners FOM Total
          *Red Bull Racing €266m €35.7m €167m €468.7m
          Mercedes €122m €212.4m €133m €467.4m
          McLaren Honda €144.5m €216.5m €104m €465m
          Ferrari €208.5 €34.5m €175m €418m
          *Force India €49.5m €12.2m €68m €129.7m

          Red Bull’s budget is 3.6 times the size of Force India, but they have only managed to get roughly (1.96) twice as many points as Force India in 2017 and 2.73x in 2016.

          I agree Force India needs quite a bit more funding than 15m to start really bugging the top 3 team. However, Force India is one of the most efficient teams converting euros into points.

          1. If thats right Red Bull want engine parity whilst paying the same as back of the grid teams whilst earning more than Ferrari, Merc and Renault who have to spend loads on them to then sell them to a richer team at a loss….force Red Bull to make their own engines.

        2. Yes, true, the difference between red bull, or any of the top 3 teams and force india was crazy in performance last year, the really strong part of force india was the reliability, there was a point where one of their drivers was ahead of verstappen in points because of verstappen’s bad luck and some crashes he was involved in, which is impressive with such a performance deficit. So they might get closer with 15 more mill, but nothing threatening to the top teams imo, even if I applaud the results they get with their little budget.

  3. ‘Would.’

  4. The profits Liberty Media get are way bigger than the bonuses paid out to Ferrari and co. Maybe instead of pocketing all that cash generated by F1, invest it back in the form of a bigger prize money pool. Imagine how huge F1 team budgets could be if F1 was a non-profit (or owned by the teams/fans). Even without additional sponsorship, each team could have hundreds of millions per year. The only people that would “suffer” would be a bunch of board of directors/shareholders of Liberty.

    1. so you are asking for the shareholders that recently bought the entire circus to say goodbye on their investment and make it a non-profit?

      Can you see where that won’t work?

      1. Yeah, it is a for profit deal for Liberty. Additionally, they took on a lot of debt to make the purchase and that debt has to be serviced. Revenue fell last year and viewership is in decline because of paywalls; the offering of streaming services will probably help offset that, but it will take a while for that to happen. Unless Liberty can increase viewing payments might get even smaller; the audience is aging and they’re not attracting younger viewers mostly, in my opinion, because of the circular logic of paywalls. If you don’t show the product how will you attract new fans? No on will put out the money for F1 unless they know about F1; rinse, repeat.

      2. yes. the key word there is “imagine”. of course this wont happen.

        what it does show is how inefficient the system we have is.

        the same could be said of the US health industry for example. they have the most expensive healthcare with the worst results, because it is designed to maximize profits. Do i think that the US health insurance companies making billions will give everything up? no. would it be better for everyone if they did? yes. (just look at other developed countries).

        The next time F1 is for sale (or bankrupt), the teams and fans should set up a non-profit and buy it. Everyone will win. But i agree with you that Liberty will not give up this cash cow as long as its profitable. And as long as thats the case, tickets will always be expensive, and teams will be struggling for cash.

        1. @vjanik the Healthcare system in the US isn’t a good example, the companies that make billions in the US also make them in other parts of the world (med devices companies for example). The US just lakes a proper social security system, where health and education should be tendentially (not sure this is the word that I’m looking for, pardon my English) free and paid for by tax money, the thing in the US (I think) is that the Hospitals aren’t public and they are run to make profits (is this right?)

          I see where you are trying to reach though, but I think it would be a better option if all the entities could have a profit and teams could have a fair share of the prize money. I believe they are trying to capture more fans and make them spend their money both on TV and tickets. Ticket prices are obviously high because of the unrealistic fees asked by Bernie, and circuit owners want to make a profit as well, Liberty will have to work on this and on future deals to make things affordable.

      3. Formula 1 is a business. It needs to make money to justify more investments. There is nothing immoral or wrong with that. The only immoral thing is for Ferrari to get a larger chunk of cash regardless of their performance in the championship. It’s wrong for Ferrari to have veto power and hold F1 hostage to whatever will allow them to maintain unfair competitive advantage. It’s wrong for powerful teams to harm the sport in order to preserve the status quo that allows them to dominate. But making money? No, that’s great. I hope Liberty makes lots of money.

    2. This will only happen after all of the shareholders have seen a good return on initial investment. They’ll need to make sure plenty of cash is flowing back into the various pots that were required to finance the buy out in the first place. It’ll be very complicated and multi faceted. They need that money.

      This will take years. Plausible, but very unlikely to happen in the short, or mid term.

      Either that or they start making so much money that they don’t know what to do with it.

      The extra revenue required to reform the prise money will have to come from elsewhere.

      One solution to help smaller teams would be to raise the profile of F1 to such an extent that companies start to compete with each other to get their name on the side of the cars. Easier said than done, but I suspect that this will be Liberty’s approach.

  5. Maybe it’s my left-leaning ways, but I’d like to see a better distribution of wealth in F1.

    There should absolutely be bigger financial prizes for the top teams, winning has to count for something. But there shouldn’t be such massive discrepancies where some teams (in particular, Ferrari) are getting large bonuses just for showing up. Yes they are a legacy team and yes I’d hate to see F1 without them – but that doesn’t give any team the right to hold the sport ransom by having a bigger say and overall veto.

    The playing-field is never going go be level, and I’m fine with that. A team like Mercedes will always have more resources than an independent team. But at least have the prize money properly distributed and get rid of legacy bonuses. Perhaps my non-business brain is over simplifying things, but a standard payment for taking part and meeting the criteria for participation along with prize money based on finishing position in the WCC would make things more transparent and maybe encourage more manufacturers to join if winnings are based of performance rather than the fact you’re part of the furniture now.

  6. The new content is fantastic, @keithcollantine.

    I expect lots of traffic during the racing year.

  7. Why the hold on this article? Trying to stand out from other sites or just planning for news shortages.

    1. @peartree As you and many others will know we now have the luxury of a full-time journalist prowling the paddock on our behalf. This means we have more and better quality content than ever before to publish. That means many more decisions of the type you’re alluding to need to be taken. In this case I felt the material we had wasn’t time-sensitive and would work best as part of a season preview piece. You’ll see some similar material over the next few days.

      But naturally I want RaceFans to stand out from other sites and that doesn’t just go for articles like this.

      1. @keithcollantine @peartree make sense to me. Not much is going to happen between now and melbourne anyway so i am happy with a daily exclusive interview from the testing. Fulfil my daily dose requirement :)

      2. @keithcollantine Thanks for the candid answer. Congratulations for exclusive.

      3. @keithcollantine I wouldn’t know whether you stand out or not, I don’t read anything else on F1 bar some occasional Autosport articles I end up clicking when I’m done reading GT news.

  8. Sounds like the kind of over optimistic rubbish McLaren come out with. Merc, Ferrari and Red Bull must be falling over themselves for all Force India staff as they could fire their own and deliver similar performance for 10’s of millions less. This sounds like one last hurrah before they end up around 8th this year.

  9. @keithcollantine This exclusive stood out much more clearly, Keith. Nice title and artwork!

    1. @shimks Thanks very much!

  10. Force India have done well to make hay while the sun shined. A consistent, solid driver lineup, the Mercedes power unit, and not being over-ambitious with the chassis has meant that they’ve been ideally situated to capitalise while their competitor’s flounder.

    McLaren is certain to surpass them this year, Renault looks good to do so, and Haas has come out of nowhere as a dark horse who looks good to beat them.

    If Honda make consistent progress, and the extra funds for the Alfa deal with Sauber pay off then Force India are in real trouble.

    Hopefully, Williams suffers for its driver choices and Force India can still be the second best of the Merc teams.

  11. @philipgb precisely why it seems we have a very exciting midfield season on our hands :)

  12. Interesting that instead of distributing money more equally between all competitors, he prefers to increase the difference between top and bottom, but make the pot bigger. That sounds like a recipe for killing smaller teams who bet everything on not finishing last.

    I’d guess his opinion might differ if his team hadn’t finished higher than expected for the past three seasons…

  13. And then he woke up.

    It’s cure that he dreams it takes that little, but of course even he must know that’s nonsense. Of course it;’s a good play to try and get at least that 15 million added to his budget.

    Reality is that they are in a fight only with the teams with a reasonably similar budget. Which is Williams. At some point Williams was slightly ahead and now FI is slightly ahead. Still quite close to each other though.

    They’d be lucky if they don’t end up behind both Renault and McLaren this season. While FI remains locked in their fight with Williams, but then for 6th and 7th instead.

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