Formula 1 is wary of potential problems if smaller teams become ‘satellite’ arms of richer operations, according to Haas team principal Guenther Steiner.
While only Red Bull has a dedicated junior team, Toro Rosso, its front-running rivals are increasingly relying on engine customers to run their development drivers. Mercedes placed Esteban Ocon at Force India and Ferrari’s Charles Leclerc drives for Sauber.
The smaller teams are becoming increasingly dependent on their larger rivals. Mercedes was involved in Force India’s BWT sponsorship deal and Ferrari’s sister brand Alfa Romeo now supports Sauber.There are concerns this could increase the power of F1’s richest teams and leave the sport vulnerable if one of them leaves. In the DTM, where each team is linked to one of three manufacturers, Mercedes’ impending departure has put a third of the grid in jeopardy.
However Steiner says F1 has anticipated the dangers of smaller teams becoming increasingly dependent on the front runners.
“Everybody’s aware of it,” said Steiner. “I think there will be measures put in place that that doesn’t happen.
“It’s not something which nobody thought about, then after two years: ‘Woah, I never thought about this’. Everybody is actually quite worried about that. So I think there will be measures put in place that it cannot happen.”
F1 owners Liberty Media intends to introduce a budget cap under future regulations to ease the financial pressure on F1’s smaller teams. Steiner said they are looking at how such a limit on spending could be enforced.
“There is talks now with the [chief financial officers] of the different teams with the team from FOM that is looking after this to find a method to do this technically. Because that will be the problem, to technically control it.”
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ColdFly (@)
21st August 2018, 9:15
They are fully independent now. And even when they shared the same CEO it would be illegal to mix one with the other.
FIAT (mgt/board) must have decided that sponsoring Sauber was a good stand alone deal.
Sundar Srinivas Harish (@sundark)
21st August 2018, 9:59
Now they share a chairman. I just want to point out that owning shares in a company is not the only way to control it. A company can also be called a subsidiary of another if the other company may, in any way, influence its business decisions (in IFRS terms, influence its profits). Sharing one out of two executive board members in Ferrari, in this case, Chairman John Elkann, can certainly be a way for Fiat to control Ferrari, or vice-versa. It is just a matter of establishing the element of control.
ColdFly (@)
21st August 2018, 13:48
That’s exactly the potentially illegal part! Even if it is the same person, he needs to drive decisions in each boardroom which are best for the share- and stakeholders of only that company.
Chris Lloyd (@chrisr1718)
21st August 2018, 17:12
@coldfly
You’re talking about an ideal world, not the real world.
Alianora La Canta (@alianora-la-canta)
21st August 2018, 17:45
@coldfly It’s only illegal if it can be demonstrated that joint decisions harmed one of the entities involved. If (as is the worry), a synergy is developed between the teams, that would benefit both. In fact it may be argued that without regulatory control, the chairman might be derelict in their duty to not synergise their teams that way.
anon
21st August 2018, 18:36
@coldfly, what complicates that argument is the fact that the largest individual stakeholder in Fiat-Chrysler is Exor, the investment company controlled by the Agnelli family – Exor has 29% of the company and 44% of the shareholder voting rights.
Now, I might be mistaken, but I think that Exor also owns 23% of Ferrari, although it is not clear how many shareholder votes they get as a result – again, if correct, that also makes Exor the largest stakeholder in Ferrari as well.
It is also worth noting that the investment agency Baillie Gifford & Co. also happens to be one of the next largest investors in both FCA and Ferrari, owning around 5% of the former and nearly 8% of the latter company as well.
That therefore means that the two most significant stakeholders in Ferrari are also the same ones as in FCA, with Exor being able to influence both FCA and Ferrari by controlling a significant proportion of the shareholder voting rights. By having a joint interest in the fortunes of both companies, it potentially does create a situation where the largest stakeholders would want cross-support between the two companies, since they potentially benefit twice if it increases the value of both companies.
Jimmi Cynic (@jimmi-cynic)
21st August 2018, 9:22
FOM? Maybe Steiner is nostalgic. We’re in FOG time now. Or FWONK on the street.
Budget limits will be easy to enforce with F1’s satellite..er.. small ‘independent’ teams – their problem will be spending to the ceiling. Although Force Canada might find a wardrobe to fit the cap.
Aleš Norský (@gpfacts)
21st August 2018, 11:02
Be afraid…be very afraid! I see the biggest danger in the top teams having too much influence in formulating how Formula 1 operates and what the rules are going to be. They can simply force their ‘customers’ to vote in certain way on wide scale of matters that are and will be discussed.
Fer no.65 (@fer-no65)
21st August 2018, 11:15
If they impose the budget cap, wouldn’t it be even more beneficial to have a satellite team? I mean, youre limited in development money, so you could do your development with each team and pass the information so it works both ways.
socksolid (@socksolid)
22nd August 2018, 6:23
https://www.motorsport.com/f1/news/fia-rules-team-collusion-on-aerodynamic-testing-not-allowed/660656/?nrt=54
Teams have been told:
* No competitor may acquire aerodynamic surfaces from an external entity (even if such entity claims to have designed them for its own purposes), unless any aerodynamic testing resource used to develop the surfaces is counted within the relevant competitor’s ATR quota.
* Teams sharing a wind tunnel (or any other aerodynamic testing resource as referred to in Appendix 8, including a CFD cluster) must put appropriate procedures in place to avoid any breach of confidentiality or of the general restrictions of Appendix 6 and Appendix 8.
In other words you can’t just give data to other team to bypass a cfd/windtunnel cap or a possible budget cap if it comes.
José Lopes da Silva
21st August 2018, 11:17
By “Formula 1” does he mean “some regular viewers, myself, Chase Carey and Ross Brawn”? 3 teams collapsed earlier this decade (if you count Virgin, Marussia and Manor as the same!) and no one cared. Mr. Ecclestone never cared, for sure.
Jimmi Cynic (@jimmi-cynic)
21st August 2018, 19:10
Good one!
He didn’t specify which F1 orbit he was concerned about. Although we can infer which satellite in the F1 firmament.
Jere (@jerejj)
21st August 2018, 11:40
I’m still quite a bit wary about how a potential budget cap could work in reality as it’d be hard to police.
Alianora La Canta (@alianora-la-canta)
21st August 2018, 17:47
I think it would be legally impossible to police, given the global nature of the series and the fact that results are set in stone long before some nations collect official financial documents for tax purposes.