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Mercedes now fully in control of its Formula 1 team
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Mercedes now fully in control of its Formula 1 team
Posted By: James Allen  |  28 Feb 2011   |  1:31 pm GMT  |  43 comments

Mercedes has announced today that parent company Daimler and its partner Aabar has bought the final 24.9% stake in the team, which had remained in the hands of Ross Brawn, Nick Fry and the management team.

That management team, which saved the Brackley outfit from closure in 2009, operated as Brawn GP that year and then sold a controlling interest in the team to Mercedes, will remain on board but without holding equity.

Brawn: In the money (Photo: Mercedes)


This is a very logical step for all parties. For team principal Ross Brawn this is the completion of a process which has made him a very significant amount of money in the last 24 months. As technical director of Ferrari for 10 years and then team principal of Honda for two years his salary will have been in the multiple millions of pounds a year. But this Honda to Brawn to Mercedes transaction is likely to have netted him in excess of £50 million, even if the valuation of the team was significantly less than the €265 million Williams is valued at in its current flotation document.

Dr Dieter Zetsche, CEO of Daimler AG, said that this move by Daimler shows how serious they are about succeeding in F1, despite the fact that most other manufacturers in the last two years have gone in the opposite direction; either pulling out completely like Honda, Toyota and BMW or scaling down to having merely a presence as a supplier, in the case of Renault. Incidentally there is another interesting announcement due in the next 24 hours regarding a Renault backed deal for Red Bull with Infiniti – the Renault/Nissan luxury brand. There are various theories at large about the nature of the tie-up, but all will become clear shortly.

Daimler will hold 60% of the stock with Aabar the rest. With Mubadala having been requested to sell its stake in Ferrari back to the company at the end of last year, Aabar’s stake in Mercedes represents the main interest of Abu Dhabi’s sovereign wealth funds in Formula 1 teams.

Operationally the team will still operate out of Brackley with engines coming from Brixworth, near Northampton. Brawn remains as team principal in charge of all technical operations, but will no longer sit on the board, which will have three Daimler representatives and two from Aabar.

Brawn reports to Norbert Haug as head of Mercedes motorsport, who in turn reports to Zetsche. But I checked with Mercedes and on all decisions on the technical side Brawn has final say. He had spread himself a bit thin last season, trying to cover too many areas and so recently hired former Renault man Bob Bell as technical director to take a lot of the load off him. This should result in a stronger management structure.

Zetsche said: “The acquisition of a majority stake holding in our Silver Arrows team sends a clear signal that we intend to achieve technical and sporting success on world motorsport’s biggest and most important stage – and to do so in cost-effective conditions,” he said.

For all the complaints from union leaders in Germany about the company splashing the cash at a time of global cutbacks, withougt doubt the attraction to Mercedes is that they are going racing at a time when the Resource Restriction Agreement means that costs are under control and a well run, well sponsored team such as Mercedes, can even run at a profit. Mercedes has some of the strongest partners in the sport, so sponsor revenue is high.

They also have a solid customer base for engines, which is a profit centre.

As for Ross Brawn, he made the point that he plans to stick around for a few years yet, “Daimler and Aabar’s acquisition of the remaining 24.9 per cent stake in Mercedes-Benz Grand Prix will be a further step in the consolidation and strengthening of our team for the future, ” he said. “I remain fully committed to our team for the long-term, along with the management team and all of our employees. We all look forward to the challenge of making our team successful, and proudly representing Mercedes-Benz and the racing tradition of the Silver Arrows.”

Mercedes has had a tricky start to its second iteration in F1 (the first was in the 1950s). Last season the car suffered from lack of investment, resource and focus during the design phase of 2009, while this year’s car has not been very quick in testing. There are some cooling issues on the car, but it would be a mistake to judge them before we see the full package at Melbourne as they always planned to test a fairly basic car and then bring an update kit before the first race with refinements, especially in aerodynamics.

That said they will be coming from quite a long way behind when they bolt on the update pack next week for the final test in Barcelona. The cancellation of the Bahrain test and race will have bought them an extra week, but it will also have given the competition an opportunity to refine their cars too. Based on what we’ve seen so far, Mercedes has a good 7/10ths of a second a lap to make up to its rivals, possibly more.

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43 Comments
  1. Thebe says:

    James,
    I know we’ve had a discussion on this before but I’m still uncertain as to the reason for using a very basic car for testing. In your opinion what could be Mercedes’s reason for running such a car, I would have thought with their performance from last year they would be eager to see how they compare against their rivals.

    1. David McVey says:

      The strategy is a compromise of sorts. They have used the test to iron out reliability kinks as big technologies such as KERS and the moveable rear wing need to be bang on come race 1. Problems with these devices would more than likely be race ending so they have been wise to get these things right in the early running of the new car.

      This has allowed them to keep the race spec car in the wind tunnel for longer before fabrication giving them the longest possible time to refine their aero solutions. Ross is a clever man and has made bold strategies pay off on countless occasions during his career so I wouldn’t be surprised if come Melbourne Ross bolts on the 7 10ths of a second that they appear to be missing at the moment.

      Consider this. Last year the car was heavily compromised in the design phase because there was very little money available. As the independent Brawn team they had very little money to do any development let alone run two distinct programs. However, they were forced to because with their 2009 machine they were in the title hunt but still had to divert some resources to work in the 2010 machine.

      It was this compromise that led to the Brawn going from the class of the field to probably 3rd fastest by the end of the year and the 2010 Merc design not as fully realised as Ross would have liked. So, to bag the title in 2009 and then take 4th in the WCC and a few podiums the following year with what was basically an updated BGP001 was quite an achievement. It was plate spinning of the highest order!!

      Further to this, Ross is normally a reticent chap so for him to come out and say he’s “quietly confident” should serve as a warning to his rivals. If you’re a Merc fan, I wouldn’t worry too much. Personally I am a Mclaren fan so this sort of revelation does disturb me but as Ross brought the titles home to blighty I will always be happy to see him succeed in any team.

      1. David McVey says:

        Also, teams introduce new aero packages at every race throughout the season so to stick some new bits on and run with them is nothing new to the teams. They are well used to rapidly getting to grips with new pieces of kit whilst in the heat of battle as it were.

      2. Born 1950 says:

        Nice summary, David. Thanks.

        I agree about Ross Brawn, he’s a hell of technical director/team principal/whatever he turns his hand to. I doubt that pocketing all this dosh will turn his head — he’s very focussed.

  2. Daniel says:

    Hi James,
    Very insightful…
    What specific role does Nick Fry now hold in the team? And do you know how the 24.9% would have been divided between Brawn, Fry etc?

    1. James Allen says:

      Mostly Brawn, little bit with the other four.

      1. Bec says:

        Is that 4 or 5?

        Because when 75.1% of the team was sold to Daimler and Aabar in 09′, the beneficiaries were Brawn, Fry, Kerr, McGrory, Marsden and Blair.

    2. It’s ashame we’re not seeing as much as Nick Fry as much these days, I really liked him, sort of the new ere of team bosses, ie Martin Whitmash, Christian Horner, Stefano Domenicali (sp) etc etc…

  3. jonrob says:

    With the basic car they can get a benchmark before parts are added, then you can see how much effect the extra new parts are helping or hindering. If you start off with everything on, you then have to take bits off to test the effect. That is assuming you are not Adrian Newey, who can get it pretty much right first time out.

  4. Red5 says:

    A number of teams will bring significant updates before first race. Not sure we have a clear picture where all the cars are relative to each other.

    A cynic might say that the top teams have nothing to gain by putting their cards on the table so early. Whereas backmarkers need headline times to attract/ensure sponsorship money for the upcoming season.

    The mind games have already begun.

  5. jonrob says:

    The Infiniti is actually going to be exactly the same Renault engine (I understand) but using one of Renault’s partner Nissan’s, brand names.

    This is a move to take the Renault name completely out of F1. I wonder if Bahar has embarrassed them back in Reggie Renault.

    1. Young Slinger says:

      …and of course, the engines are free, more cash for development…..!

      1. Kedar says:

        Exactly!!
        Seems like they found a loop hole to break the budget cap?!

    2. Hussein S Lokhandwala says:

      Doesn’t make any sense. If Renault are embarrassed by the Danny Bahar scenario then why take their name off the ONE team that has nothing to do with Lotus/Proton, and is incidentally, currently the most successful of all teams. I reckon theres a lot more going on here then Danny Bahar.

      An aside question; Didn’t Renault upsize a lot of their branding on the Red Bull for this years livery, in a move I regarded as sort of making them the main Renault team, while they wound down their association with Enstone. Seems strange to have done that if they knew they were going to brand the Red Bull engines, which means the branding decision must have happened at a much later date. I wonder what changed their minds?

    3. Rich C says:

      I dont get the Infiniti branding at all.
      Is it not sold solely in the States?
      And why would it be cheaper anyway?

  6. Happy to hear that Ross Brawn has made £50 million plus out of the Germans. His tax bill will go some way to paying of the national debt!

    1. Jo Torrent says:

      Don’t worry, Germans take a lot of money out of anyone with their cars alone

  7. jmv says:

    with all this shuffling and reshuffling going on it’s no wonder mercedes produced a car 0.7s off the 2011 testing pace.

    Ross’ mind was on negotiating his millions of buy out. I really wonder what motivates him these days:
    - he’s won multiple and consecutive WCCs and WDCs with a legendary marque, with a legendary driver
    - he’s won a WCC and WDC with a team baring his name that only had a scrapheap of resources.. by God..they fitted the mercedes engine a week or so before its first test)

    So what can motivate a man more? He’s shown Mclaren, Newey, Williams etc and everybody else that is part of the F1 establishment his authority.

    Does he need to take orders from the “Herrs” and “Doktors” at Mercedes.. and try to convince them of how to run a proper F1 team.

    If I were him I’d be enjoying another fishing trip down in Argentina and Chile, together with Michael, some fresh salmon on a fire.. cigars, good wine!

    I am sure both would be enjoying that much more than stressing F1 in 2011.

    *Maybe you should ask both gentlemen James (to test their motivation): “would you like to get through 2011 fighting for podiums with an ill car, or would you rather together take a year of in a jeep through Argentina and Chile, fishing, cigars and drinking wine”

    1. jose arellano says:

      fishing and drinking sounds good for a weekend not a year

    2. RickeeBoy says:

      You don’t get it do you …. he’s not here for the money ….. he’s here because he loves it. Like most of the people in F1. I shouldn’t think he really gives a stuff about another 50 mill. But he does give a huge stuff about his reputation and his excellence. His saving of a team after Honda and most of the jobs was very deserving of the OBE on its own.

  8. JJ MUPPET says:

    They are running late?

    Their performance upgrades are easy to copy in the winter break but difficult at the 1st fly away races?

  9. How silly does this all make Honda look?
    Gave the team plus £100 million to Ross Brawn, he goes on to win both tittles worth 100s of £millions in added value that Honda could have had, then Ross Brawn sells it for 100s of £millions!!!!!!

  10. Andy C says:

    Ross is one of the few guys who has proven time and time again to be a very shrewd and talented operator.

    He took a risk (and it was a risk) to take over the team from Honda, gamble paid off and he put a nice little bunce into his pension fund.

    Much rather a racing guy like ross makes the money than a fly by night operator (some of which are already in F1).

    I’m still to be convinced a large manufacturer will ever get the success of the more adaptable, focussed race teams.

    Politics in manufacturers as with all large businesses get in the way of a very focussed strategy (i.e lets win).

    Ferrari are the exception, because basically they work as a separate entity with a well defined and financed team.

  11. Adam says:

    What if the planned update package for Australia is actually a step backwards?

    I’m not in favour of introducing major update packages having not had substantial time to test them. Mercedes will have the practice sessions to test the package. If it doesn’t increase the performance of the car it is a waste of resource and time.

    1. blewis says:

      maybe he doesn’t deserve this?

    2. Stevie P says:

      Me too, Adam.

      We saw last year a lot of the “bigger” teams put large updates on to their cars, in season, with no real performance gain whilst they ironed out the teething problems (usually on a Friday). HRT, on the other hand, had no new updates, but learnt about the car as the season progressed and made it quicker that way… although, yes, HRT were starting at the back (bottom) so there was only one way they could go (with the exception of a complete capitulation).

  12. Michael M says:

    I think Ross deserves all that he gets from his shares in Mercedes.
    Let’s not forget that when Honda pulled the plug Ross put his own money into keeping the jobs at Brackley.
    He did not know what the future held for this team at the time.
    Well done Ross

    1. blewis says:

      no ross dennis is better.

  13. Hmm… The folk at Daimler better keep “Ross the boss” – they’ll need him for yet another management buyout in maybe 2012 or 2013. Let’s face it: neither Japanese, nor Germans know how to run a successful F1 team. The culture is different, they’re gonna stall every important decision because of the fear of losing their bonuses or whatever. Especially Germans, F1 management is not their territory.

    Daimler should learn from Ghosn-master: no F1 teams under Renault ownership but he managed to promote 2 brands at the same time. Maybe Dacia will power 1 Malaysia Racing aka Team (G)Lotus? Or possibly Lada power is coming to F1? Car companies are not suited to the sport, as engines suppliers they’re alright but otherwise it’s a waste of time.

    1. RickeeBoy says:

      Wake up, can’t you see changes afoot – Limited budgets therefore all Major Manufacturers can guarantee their outlay. F1 continues to be the biggest advertising board anywhere – TV adverts are disappearing therefore – F1 is cheap. Even if you don’t win. It’s like to have a race in your country ( to put your country on the world map ) but cheaper for a manufacturer. Also I expect that Mercedes will be in it for the long term and will slowly move the expertise from UK to Germany – they want the expertise that the Brits currently have – its good for development of normal cars. The Germans are fully capable of producing superb race winning machines – Sportscars / Saloons – Beware of the Germans, the Brits have had too good for too long.

      1. No way, man! I’m talking mentality here. Toyota’s F1 team was based in Germany and won nothing at all, with or without restrictions on testing and budget. Germans do win in DTM (kinda natural given total lack of foreign competition) and stuff like endurance racing, but in F1 they’re only good as engine suppliers.

        In January 2013 the team will be known as Fry GP (I mean they have already used Brawn, so why not try something else entirely?). I’d vote for Tyrrell myself to restore the original name, it’s sort of popular to go retro these days.

  14. CJD says:

    /off topic

    @james: please get a transcript of todays “Talk im Hangar 7″ on “Servus TV” it’s naturaly in german -but maybe you’ll able to find a transcrpit – but great talk with vettel, hulkenberg, wendlinger and blick reporter – about pirelli, kubica, paying drivers – is a great talk -and much input for at least 3 articles from your view!!!!

    greetings from Austria

    .. i recorded it – if you need a copy ;)
    Servus TV on 19,2

  15. CJD says:

    /sorry still offtopic

    .. Servus TV is Mateschitz privat TV Channel (in German language serving Swizerland, Austria and Germany)

  16. Obster says:

    VERY fortunate of them to have won the Championship as Brawn…added significantly to the team’s value.

  17. Chris Severin says:

    What’s the story behInd mubadala being asked to sell their stake in ferarri?

    1. blewis says:

      mubadala is islamic company?

    2. Bec says:

      That is so Ferrari can be sold off or floated at a future date, but more crucially for Mubadala (and the Abu Dhabi Investment Authority), it is so they can buy the commercial rights to F1 off CVC without having a conflict of interest.

  18. Christopher Snowdon says:

    Jmaes what does this mean for Mclaren, if anything? Do you expect them and Mercedes to increase their current deal when the time comes?

    1. James Allen says:

      Merc is the benchmark engine in F1 under these rules. Will be interesting to see how everyone adapts to 2013 regs which are quite different. No real reason to move elsewhere unless they decide to do their own engine, which would be both brave and expensive.

  19. JJ MUPPET says:

    James your Ferrari caption says F150? Mr Ford wants a cheque! :<)

  20. Carl Craven says:

    I’m not a mercedes fan as such, but pedigree wise, they have a place in F1 as well as in it’s history already.

    It’s the place for strong privateers like Mclaren Williams and even sauber and the best of the motorworld, Mercedes and Ferrari.

    Renault are the odd one out in way. But they are more F1 than BMW ever were.

  21. Luke Harrison says:

    Great article by Peter Goodman on the legal issues that are likely to arise out of the cancellation of the Bahrain Grand Prix (see http://www.legalnewsupdate.co.uk/2011/03/bahrain-grand-prix/). It would be good to get him on the first BBC show to talk to Jake, Eddy and David about the likely issues.

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