Formula 1 has attracted very few new teams in recent years. But interest has grown as the sport prepares to confirms details of a new regulations package for 2021 which many hope will bring down the cost of competing.RaceFans revealed the first details of in August and spoke to at the Singapore Grand Prix last month, is one of them. There is at least one other, possibly more.
But any of these potential new entrants face the same tricky question: What is the best way to establish a new team in Formula 1?
I am sure that in framing their business models, the various shareholders have considered all the options. This could mean taking over an existing team or setting up a new one. But the latter covers a broad range of further option. At one end of the spectrum is the McLaren approach, where all parts save for engines and some specialist components are manufactured in-house; at the other lies the Haas model, under which they procure all permissible part from an existing team and manufacture (or sub-contract) production of the rest.
It is unlikely that any new team could not have the necessary infrastructure ready in time for 2021 to do a ‘McLaren’. Therefore any incoming team essentially has two options: buying an existing team, or doing a ‘Haas’, even if it does not go to the same level of being what is basically a full satellite operation (in Haas’s case, of Ferrari).
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Both routes into F1 have advantages and disadvantages for the sport and whatever team. The implications for F1 are greater if an existing team is bought, for then the grid would not grow. If an existing operation subsequently exited for whatever reason, F1 grid sizes would be down to 18 cars.
In 2008-09 four brands exited, three of which were purchased while Toyota’s entry disappeared (and its TF110 chassis unraced after being bought by Stefan GP). F1 would have been down to nine teams had three start-ups not stepped into the breach. That they ultimately collapsed was down to their funding models, but that is a separate issue, for they entered under a budget cap that failed to materialise – whereas the 2021 cap is effectively set in stone.
I believe it is vital that F1 grows its grids as insurance against teams leaving for whatever reason. Thus, I believe the best path of action for F1 as a global sport (and the existing grid) would be for any well-funded and ‘serious’ operation to establish itself as a new team, but using the (proven) Haas model with a team other than Ferrari.
Ferrari already supplies Haas plus has a ‘rear-end’ deal with Alfa Romeo. Mercedes has a similar deal with Racing Point (which is expected to be extended for post-2021 shortly) and an engine supply contract with Williams. From 2021 McLaren can be added to that roster as engine customer, having served notice on Renault.
The two Red Bull F1 operations co-operate via Red Bull Technology and both draw engines from Honda. That makes six of the current 10 teams operating under some sort of co-operative deal with one or other of three ‘motherships’ from 2021, leaving Renault out in the cold thereafter.
Thus, in order to ensure its continued participation in F1, Renault needs to attract an F1 partner team. This is partly due to practical considerations: a customer would help fund engine and transmission costs and could share permissible technologies.
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But there’s a potential political advantage to having a customer team as well: Such a team would likely back whatever commercial stances Renault adopts. This would be a welcome bonus, though it would not necessarily be integral to a satellite deal.
Renault is part of a manufacturing alliance with Nissan and Mitsubishi, which between them produced almost 11 million units in 2018. Having Asian investors, as Panthera appears to, could sweeten a satellite deal between them and Renault (as, indeed, might the Russian money rumoured to be connected to another potential F1 entrant, given Renault’s ownership of Lada).
Given the lateness of the 2021 regulatory package it would be extremely challenging for any incoming teams to establish themselves in their own rights – regardless of their levels of funding and expertise – and thus the satellite option is the most viable, certainly initially.
The beauty of such a business model is that teams can always progress to full independent status, whereas regressing from independent team to satellite is ultimately fraught with overhead issues, as Sauber/Alfa Romeo discovered when it embraced a ‘half’ satellite model.
I believe with its current infrastructure Renault is capable of supplying two satellites, making for 12 teams in total, assuming none of the existing entrants drop out. Wouldn’t the F1 field look healthier with a 24 cars on the grid: Eight powered by Mercedes, four by Honda, and six each Ferrari and Renault?
Read @DieterRencken’s in-depth interview with Renault managing director Cyril Abiteboul in tomorrow’s RacingLines column on RaceFans
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27 comments on “Should Panthera go it alone or buy an existing F1 team?”
8th October 2019, 13:21
They should build a competitive team from scratch – there are many facilities up for grab (Manor, e.g.). And they should perhaps hire two competitive drivers, no experiments.
8th October 2019, 13:38
It is highly unlikely that any team could start from scratch and be ready for 2021
8th October 2019, 21:38
“competitive” and “from scratch” make f1 look easy, which it is not. Look at McLaren struggle to get barely in front of the midfield.
8th October 2019, 22:15
If it were so simple, I would have started a team years ago.
Nulla Pax (@nullapax)
8th October 2019, 14:02
I would prefer – and dearly love – for new teams to be genuinely NEW teams.
Unfortunately with the insane amounts of money needed to compete for points (never mind podiums) and with the obvious drawback of not being able to attract substantial sponsorship unless you are already doing well, then I think we have to accept the reality that the Haas model makes the most sense for now.
Buying up an old team and re-branding it is good from the perspective of keeping the grid alive and maintaining a degree of continuity within the sport.
I am delighted with what the Strolls have done with Force India and the fact that they have kept that team alive. I think it makes sense to maintain a proven team in this way.
(Don’t ask me to describe my disgust at Alfa Romeo for scrawling their name on an established team as though they are back in racing though …. I used to admire Alfa when I was a kid.
I suppose I will have to hope for a balance.
New teams that try to bring as much personal innovation to F1 as they can whilst supplementing their deficiencies by sourcing from existing teams.
It might work.
Stephen Crowsen (@drycrust)
8th October 2019, 20:04
I really don’t know if Sauber would be racing now if Fiat hadn’t bought the team. I can’t see them ever employing a driver of Kimi’s calibre.
Red Pill (@redpill)
8th October 2019, 20:37
You would need at least $750+ million minimum laying around to burn just to start off. Then add the time needed to develop enough equipment and technology to start a race and finish it and hopefully not get lapped.
Think of it in the same terms of starting a space agency and rocket, it doesn’t happen overnight or within a couple of years unless you buy an existing organization.
8th October 2019, 21:40
So, Strolls are right but Alfa Romeo doesnt? 🤔
Nulla Pax (@nullapax)
8th October 2019, 22:05
@drycrust @redpill @spoutnik
I have no objection to a once proud and respected motor company rescuing and/or buying into a racing team.
What I detest is that they expect the world to now think that they are somehow a company of F1 calibre when the reality is that they are in it because their salesmen think it will sell more cars.
At least the Strolls are trying to keep a team alive (for whatever reason) rather than trying to profit simply by writing their name on someone else’s achievement.
8th October 2019, 22:23
LMAO isn’t selling more cars the bottom line for any manufacturer to enter into motorsport? And isn’t Lawrence Stroll doing the same thing by having purchased and rebranded Force India into Racing Point? Sure, the whole “my kid is a racing driver” thing is there, but he wouldn’t invest in Formula 1 if he didn’t think it was viable from a business perspective.
In a perfect world, everyone on the staff of each team, owners included, would be there because they have a passion for motorsport and want to race. But that isn’t remotely close to true. It’s all about the money, whether we like it or not.
9th October 2019, 11:16
Not invest, no. But he might choose to spend his money on something he considers more fun than another private jet or whatever.
Quite possibly it’s some combination of the two, and he’s subsidising the team year on year, but not expecting to lose the money spent buying the team.
Red Pill (@redpill)
9th October 2019, 1:37
I think it’s way tooo early to make any judgment or negative comments on Alfa Romeo. They only just been given intellectual assets, advance technology/data and a shot in the arm of money; not to mention a world champion driver now on the team to give the engineers valuable feedback. The Swiss team had none of that prior to Alfa Romeo. They’re now more of a Toro Rosso like team but I think there should be more visible improvements next year.
I have less faith than you do with Racing Point, I’m afraid of the nepotism but hey its dad’s team and he can do whatever he wants to, I just hope it doesn’t hurt the team. I really enjoyed Force India’s resource-fullness and punching way about there size.
8th October 2019, 14:28
I think you are correct Deiter, if any new team wants to even survive, it will have to form a cooperative partnership with a manufacturer team. Renault is the obvious choice, and could only benefit both, Renault gets more data from its engines and the new team gets to avoid all the new team pitfalls and having to make every little bespoke part from scratch, which cannot be understated in both complexity of engineering and manufacturing time wasted.
8th October 2019, 14:43
Buy an existing team if an existing team decides to leave F1 after next season.
Trayambak Chakravarty (@major-dev)
8th October 2019, 15:20
Teams from the lower Formula ladders should be used to graduate to Formula 1. Someone like a Carlin or especially Dams would be very useful to Renault, using them like how Red Bull uses Toro Rosso. The operational and managerial bits will already be in place, and more than grateful and willing to work with you.
8th October 2019, 16:14
From my point of view this is all conjecture by Dieter as Ross Brawn has stated clearly that Liberty are quite happy with 10 teams and doesn’t see the need for more in the immediate future. Jean Todt has also stated that there have been no serious discussions with potential new teams and nobody has yet applied for new grid spots.
NS Biker (@rekibsn)
8th October 2019, 16:51
Likely, the majority would prefer to see entirely new teams lining up in a couple of years. I know I would, new people, new ideas, new approaches … For a host of reasons … not going to happen.
There are lots of references to the Hass model of doing a scratch start, but I suspect that the Hass background is not being considered. The Team was a very successful operation for many years in the US, Indy car and NASCAR. They had facilities, people, resources, marketing tie-in to a large machine tool conglomerate and a rather unique “wind tunnel”, which they can’t use for F1.
Not likely there are many potential start-ups that could bring even a fraction of the Hass resources to the grid.
The fact that Hass does not design or build their own car is certainly a performance handicap, especially at the latter part of the season when development really shows who is on the ball.
Can any group do it … never sat never, but most unlikely.
Best approach, buy an existing team that wants to make an exit, either financially forced or just from the lack of corporate desire. It is looking more and more as if Renault might fall into this category.
8th October 2019, 18:33
I don’t think dooming the new teams to renault engines is necessarily the best thing for f1 or renault. Last time when new team entered f1 they were all sort of forced to use the cosworth engines and despite their legendary name their engine performance was lackluster. Slowing down the backmarkers even further. Even if the v8 tech rules were better for competition and the engines were still pretty close. Unlike now.
In the end it is the job of engine manufacturers to make sure their engines are desirable. But because there are so few engine manufacturers in f1 we have to constantly battle the rediculous issue of which of the four can and is willing to sell their engines to which team. And because there are so few engine manufacturers and because there are not any more coming it is a sort of a game of people running around group of chairs and every once in a while the music stops and the ones left standing have to take the renaults. Only that the music is constantly playing and stopping but only the people with renault engines are running. Is the solution to force them to take their seat or should f1 have more chairs?
In larger scale this is nothing more than yet another issue with these current engines. These hybrid engine rules have only attracted one single engine manufacturer into f1. Proof of the many failures of this engine formula on that front as well. Yet we have all gotten so used to to this small number that we think 4 is enough for 10, maybe even for 12 teams. It is not. But who is going to come in if entities such as porsche and volkswagen deem the current rules too expensive and essentially not worth the cost and effort? Nobody. Especially when the political games are what they are there is little chance to catch up no matter how fast you are tearing through million dollar checks.
The last time f1 had this few engine manufacturers was in the 1980s (or in 2014) when everybody else except ferrari was running cosworth engines (and you had one alfa and one renault). Only thing that changed in 2014 was that cosworth left because the current engine rules are designed only for the richest big corporations. What we have is a chair problem. To have more teams f1 needs more engine manufacturers. And for that to happen we need to get rid of these horrible engines as quickly as we can.
8th October 2019, 20:20
@socksolid, under the V8 era, Cosworth ended up running at a loss and in rather severe financial difficulty. Their financial accounts indicated the V8 programme was a loss making enterprise by 2012, making it a drain on the resources of the company instead of being a benefit to them.
9th October 2019, 0:18
@socksolid, I’m afraid the days of manufacturers entering F1 to develop and publicize their engine building skill is over. All manufacturers are now rushing into all-electric vehicles, ICE engines will continue to be built and sold for some time to satisfy demand from countries with wide open spaces but development will take a back seat to electric drivetrain research.
9th October 2019, 1:43
F1 is still just about selling cars. I’ve heard some people claim that the idea of win on sunday and sell on monday is dead but I don’t think it was ever about that. Not to mention that is just a quip and not a business strategy. F1 is all about upselling your brand image. Winning in f1 is not about who has the best skills at making v6 hybrid engines or v8 engines. It is about projecting that perception of quality to your car sales when you win a race or the championship. It was never about “these guys make the best v8 engines – I’ll buy my next v8 car from them”. It was always about “these guys make great f1 car, surely their road cars are also pretty good”. Regardless of any similarities or differences between the two. What ever marketing slogan is stamped on top of all that is just part of marketing strategy and f1 is just one part of that strategy and nothing more.
I think it is also somewhat questionable how much f1 is about developing technologies for road cars. I think this is mostly a myth that makes it easier to sell the idea of having an f1 team to board of directors who know a lot about how to make money but have very limited understanding how the same tech is in reality completely difference in a road car and in an f1 car. The whole hybrid with all of its components works totally differently in a road car and in f1 car and there just isn’t anything similar between the two. But it is an easy marketing campaign right there and if the board of directors buy it then your average folks will be all over it.
I also disagree with the idea that future development is about electric drivetrain. Future is about self driving cars. How they move is totally irrelevant. The more eager f1 is about following this path from hybrids to electric the clearer the end game becomes. It is a dead end for f1 because that future leads to formula 1 roborace. Not formula 1e. The current cars are already pushing the limits of how much the driver is in control. The electric output of the hybrid is controlled by the computer and the team control the power units from the pit wall. The change to electric cars and then self drivng f1 cars won’t be a big sudden change but a long string of smaller changes and with these current engines we are already pretty deep into that direction. Slowly but surely by following this road relevance nonsense f1 is slowly driving its computer controlled road relevant sport into a dead end where one day the board of directors want to sell driverless cars and for that you need a driverless sport.
9th October 2019, 7:18
@socksolid, Maybe, but I still don’t see a new manufacturer (even less a private entity) being keen to become another F1 engine supplier, at least not until F1 wants unstressed parity engines.
12th October 2019, 0:50
Even if we say that road relevance is overstated in F1 act of the matter is car manufacturers are not going to come in and spend millions on them.
It is not that ICE is dead already but it is in its sunset stages. Companies are not going to come in and spend huge money on engines that will further hurt their brand image. They will want some degree of electrification in it, even if that electrification is all marketing.
9th October 2019, 12:29
You’ve given too little weight to the tendency of F1 teams to converge on the better solutions to any given problem. There was a time when F1 was practically a one-engine series – not through regulation, but because that engine was unbeatable.
Currently, we’re several years into an engine era. In that time, one of the four manufacturers – Renault – have proven incapable of building a competitive engine. The other teams have converged on the other three engines. No one has to use the Renault.
Far from F1 having too few engine suppliers, it actually has at least one more than is optimal this far into the cycle.
9th October 2019, 18:32
Dave, that is indeed illustrated by the comment that socksolid makes about the V8 engines that “the engines were still pretty close”.
That might have been the case towards the end of that period, but they definitely weren’t close to begin with – and that closeness in engine performance only came about because of extremely heavy development restrictions and forced equalisation to cap the high spending that was taking place during that period.
8th October 2019, 21:48
Heavens, buy Torro Rosso.
Look at everything Haas is going thru-it’s a real struggle and they are not completely from scratch.
Life is too short, and the bar in F1 is too high now with manufacturers involved.
Jimmi Cynic (@jimmi-cynic)
9th October 2019, 0:26
I’d be happy if F1 had fewer teams. Fewer slow teams that is. Haas/AlfaSauber/ToroRoso/Williams provide needed employment to aspiring and retiring F1 drivers. And more filler for Liberty and the media. Those slower, cheapskate teams don’t add to the show or better racing though.
I’d prefer to see 5 F1 teams than 3 F1 and 7 F1.5 ones. Liberty have missed a big marketing breakthrough. Could have created a proper F1.5 series. A semi-spec series ala Haas-lite with reverse qualy sprint races, sprinklers and FanBoost with a 48 race per season calendar.
The winning ‘constructor’ of the F1.5 series could then apply to join the rarefied group in F1.25 for the glorious chance to compete in the pinnacle(ish) F1.1 and so on. Liberty could keep it going until the world’s remaining supply of gullible billionaires and corrupt regimes are bankrupt.
This obvious solution to F1’s troubles would leave F1 to do what it does best: racing to spend obscene amounts in the shortest time possible.
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