What is Mercedes’ place in Formula 1? Is it one of the great names of the sport, given that its cars were winning Grands Prix in the 1920s and 30s, before F1 was even invented? Or is is another flighty car manufacturer which comes and goes as it pleases and as the markets dictate and which was absent from the sport from 1955 to 1993?
This question is at the forefront of people’s minds at the moment as the German manufacturer is at odds with commercial rights holders CVC and Bernie Ecclestone over its place in the sport and what rights and benefits should follow.
Mercedes believes that it deserves better than it is being offered by the commercial rights holder, claiming its history in the sport is significant and its role as a supplier of engines to three teams is fundamental to the running of F1. There is also the question of the history of the Brackley based team that it took over, which was originally Tyrrell, bought by British American Racing, which became Honda, then Brawn then Mercedes. Somewhere in all of that there has to be a bit more added value, surely?
F1 is heading for a partial flotation in the Autumn on the Singapore Stock Exchange and that is why teams are being signed up for 8 years and the issue is focussing minds.
F1 always likes to head for deadlines. Former FIA president Max Mosley used to like impose sudden, short deadlines as a way of getting things done. This one around the flotation is important because its about taking F1 as a business public, selling shares to institutions and private investors. It needs its ducks in a line. I has to look its best when it comes to market and that’s why there have been some tidy back room deals done lately with Ferrari, Red Bull and McLaren, tying them into the sport for the long term with all manner of financial ‘sweeteners’ and even a seat for each of them on the F1 board. Meanwhile the midfield teams have resigned themselves to reality and accepted whatever was the best offer they could get.
Mercedes is isolated. Its not willing to accept the terms on offer because they do not reflect the team’s position among the elite with Ferrari, Red Bull and McLaren. So what to do about it?
One option is to quit the sport, or at least threaten to, in order to put pressure on the other side. Mercedes could survive without F1. It would be tough because it’s been such an important part of its marketing plan for 20 years, but life – and business – goes on.
F1 would lose some prestige without Mercedes, undoubtedly. But they’ve only been present as a team since 2010, so how do you quantify it? It would miss its engine supply, that’s for sure. It would leave only Ferrari, Cosworth and Renault as engine suppliers. In 2014 everything changes with a new engine formula and it’s not yet clear what Cosworth’s part in that will be. They are supplying HRT and Marussia, who as I understood it recently, haven’t yet got a Concorde Agreement deal on the table for the future.
There is PURE, of course, a mysterious engine programme which involves Craig Pollock and Gilles Simon and who knows, perhaps that programme was inspired by the powers in F1 knowing that they may lose Mercedes before 2014?
Mercedes has denied the stories which emanated over the weekend from The Times about the team being ready to quit F1. Motorsport boss Norbert Haug has said that the story is untrue.
My veteran French colleague Jean Louis Moncet, who has sometimes been ahead of the curve on Mercedes news in the last few years, has written in his Blog in the last few days that, “The Mercedes board will vote on whether to stop the F1 programme at the end of 2012, and consequently (Mercedes) will not sign the agreements offered by Bernie Ecclestone.”
But there are many doubts about whether this is actually the case. This looks like a story that did not originate with either Mercedes or Ecclestone, but has been carried by the “Internet echo” where stories are picked up and gain momentum. There are some heavy duty negotiations going on behind the scenes, but it doesn’t feel to me like Mercedes are on their way out of this sport any time soon. Also they announced today a new sponsorship agreement with deluxe watch maker IWC Schaffhausen, starting in January 2013.
If Mercedes were to leave it would leave no major manufacturers participating in F1; FIAT is present via Ferrari, but it’s to promote Ferrari not FIAT, while Renault is there only to make money as an engine supplier. Toyota, Honda, BMW are all gone. There remain lots of small volume car makers like Lotus, Caterham and Marussia. None of the troublesome OEMs which made life so difficult for Ecclestone and the FIA in the last ten years.
No doubt there will be plenty of discussion about this in Barcelona this weekend.
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