Red Bull set to lose $80m sponsorship

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Red Bull Racing will ultimately either build their own engine – or do a McLaren and partner with someone for an exclusive engine supply contract.

However, the very public fall out with Renault and the cancellation by Red Bull of the contract to buy the French F1 power unit in 2016 has appeared to be rather chaotic.

Were Red Bull to simply breach the contract, a $75 million penalty was due, though it is unlikely the full amount of this will eventually be paid. Some kind of agreement must be found quickly given that an F1 manufacturer – such as Mercedes or Ferrari – cannot supply a team already under contract with another F1 engine manufacturer.

However, the termination of the relationship with Renault brings other financial implications for the F1 racing team owned by the fizzy drinks brand. ‘Total’ and Renault ‘partner’ brand ‘Infiniti’ are now set to terminate their contracts with Red Bull Racing worth some $80 million a year.

The German media are reporting this sponsorship money in 2016 will move across to the Lotus team assuming the acquisition by Renault has been completed.

This will finally see the end to the annual round of stories about Infiniti building an F1 engine – because ‘Infiniti Renault’ in the long term incrementally associates the Nissan-Renault Group’s luxury brand more directly with the engineering of power units.

Few will shed tears at Dietrich Mateschitz having to dig deep to replace the money’s lost to pursue his ambitions to once again dominate the so called pinnacle of global motorsport.

However, Red Bull look to be dead set on trying to prove that in marketing land – there’s no such thing as bad news; and all news is a positive repetition of the brand name.

Meanwhile Lotus survived an application for them to be placed into administration yesterday. It appears the possibility of Renault buying them caused Judge Birss to delay matters following an application for unpaid tax by the HMRC. However, Lotus must return on the Friday of the Singapore GP, where again if no progress on the sale to Renault is delivered – they face extinction again.

The court heard that Renault are prepared to buy a 65% stake in Lotus for $90 million, but the sticking point is Bernie Ecclestone’s refusal to grant them payments from the historic funds pot. This despite Renault being by some way the second most successful engine supplier to F1 of all time – together with 2 works team and 2 driver F1 titles.

 

22 responses to “Red Bull set to lose $80m sponsorship

  1. “However, Lotus must return on the Friday of the Singapore GP, where again if no progress on the sale to Renault is delivered – they face extinction again.”

    If Pastor’s sponsor PDVSA pays the $50 million they are due for 2016, there is no problem, so the easiest solution to this is for Lotus or Renault to confirm they will let him drive next year.

    • But would you want Crashtor driving for your team? He must cost more in spare parts than he provides in sponsorship momey. There must be another driver with backing available.

    • PDVSA holds the money back because Lotus may become Renault, but Renault wants guarantees from Bernie that they become a “privileged team” in regards to Bernie money before they buy Lotus. Quite a preposterous stance for a company that’s mainly been associated with asthmatic and exploding engines for the past two years.

      • Alonso hasn’t won anything the last couple of years yet he is considered one of the greats. Renault can’t fall because of two not so good years… got to look at it in perspective. Ferrari has made some shit boxes too, yet they don’t fall of the pedestal either…

        • Well, Vettel was declared a washout for a single bad season last year…
          The thing is, Renault can’t demand “historic treatment” without Williams and McLaren being served before them. They’ve been around longer than Renault and the didn’t run off sulking twice when things didn’t work out.

          • That’s the issue at hand regarding ‘historical’ bonusses. They all have it: Ferrari, Williams, McLaren (?) and even Red Bull.

            So it’s fair for Renault to ask this.

            Or is this the start of the real shit? Lotus, RB and STR gone. Force India, Manor and Sauber in bad shape…

            I hope they all survive and that Red Bull pulls that Cosworth based monster out of their secret basement factory.
            …look an unicorn, near that rainbow!

  2. Wanst it renault that gave is Motorsport all togheter in the first place? Historic enough if you ask me.

      • his·tor·ic (hĭ-stôr′ĭk, -stŏr′-)
        adj.
        1. Having importance in or influence on history.
        2. Historical.

    • Williams and Mclaren already get historical payments. Renault although not a works team in all but name ( redbull were given that unofficial title) , have been the most successful engine supplier in the last 25 years of the sport ( obviously not the last two!). Either as a works team or engine supplier, I think that may warrant historical payments. Hell even Redbull get them and have only bee in the sport since 2005!. ( have we really been listening to them whine for ten years already!)
      I think people forget how bad Renaults engine was in the early noughtie’s with the likes of Jenson button driving for them, three or four years later double world champions. I’m not saying this is going to happen this time, but I think Bernie should do every thing he can to keep them in, to try and prove that they may do it again. Also if only to keep the people at Enstone in a job!.

  3. The thing here is (according to AMuS) that Red Bull has F1 by the balls. Either Merc or Ferrari give them engines or two teams vanish, something that Bernie can’t afford.

    [MOD] polemic aside. 80 millions doesn’t even show up in Mateschitz’s checkbook. In fact, word from AMuS is that Ferrari is only a stop-gap measure for Red Bull going the full mile themselves. Word is, they won’t build the engine themselves, but they will partially fund the effort of a yet unnamed manufacturer. The name Cosworth springs to mind.

  4. I think Bernie will have to yield to Renault and give them a back hander, sorry, I mean a constructor bonus something something payment.

    If the other option is Renault falling out of the sport then it will put him in a predicament. Bernies not the biggest fan of Mercedes, but in losing Renault the sport would become even more dependent on them. Honda doesn’t look up to the task and doesn’t seem interested in giving its mouse wheel to others anyway.

    You could just change F1 for Ferrari1, but I think that would most definitely be the metaphorical straw…

  5. I so hope Renault buy lotus, then leave RedBull racing in their rear view mirror. We have all seen whatEnstone can do on a shoestring budget, so imagine what they can do with double what they run on now (IIRC currently£110-140million), they could really do something special, just a shame James Allison has gone, for now, but you never know when he or his family will get home sick for good old Blighty and a possible return to the Team he helped kill a few giants with.

  6. That’s the 80million they could have quietly passed to Cosworth to develop a better engine.

  7. Just thinking aloud here. We hear many of the teams get ‘Historic’ payments. This means that those teams are basically guaranteed not to go bust. These payments put them at a massive advantage over the rest. So unless you get someone with very deep pockets you are never going to get any other teams joining that club – indeed, it is a miracle the smaller teams are even keeping afloat.

    Why not just take the historic pot and split it between every team who signs up equally?

    • That would require the agreement of each of the teams being paid this historic team bonus money. Why would any team voluntarily give that up? It might be the right thing to do, but when has that be relevant in F1?

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