Why Porsche's F1 bid failed.

[WGA]

 

[sleazius]

Bizarre that Audi was able to put up the money, but Porsche deemed it too expensive. Remind me again where the majority of VW group profit comes from?

[JWM]

Could still see them buying AlphaTauri, seems like it’s future is not entirely settled. 

[LeeM]

3 hours ago, JWM said:

Could still see them buying AlphaTauri, seems like it’s future is not entirely settled. 

 Didn't Christian Horner say it wasn't for sale? 

[WGA]

I think they should stay out of F1. It would be huge effort both financially and organisationally with, IMHO, a lowish to middling chance of success in the short or even medium term. More to lose reputationly than gain I think.

And besides, they have enough on their Motorsport plate with a poor outcome so far from Formula E, a less than promising debut in LMDh with the 963 and the new 992 GT3 R being miles off the pace of the competition in the IMSA series in the USA.

[tdc911]

1 hour ago, WGA said:

I think they should stay out of F1. It would be huge effort both financially and organisationally with, IMHO, a lowish to middling chance of success in the short or even medium term. More to lose reputationly than gain I think.

And besides, they have enough on their Motorsport plate with a poor outcome so far from Formula E, a less than promising debut in LMDh with the 963 and the new 992 GT3 R being miles off the pace of the competition in the IMSA series in the USA.

Completely agree with you.

[Grimmy]

1 hour ago, WGA said:

More to lose reputationly than gain I think.

Definitely 

[mc968cs]

2 hours ago, WGA said:

I think they should stay out of F1. It would be huge effort both financially and organisationally with, IMHO, a lowish to middling chance of success in the short or even medium term. More to lose reputationly than gain I think.

And besides, they have enough on their Motorsport plate with a poor outcome so far from Formula E, a less than promising debut in LMDh with the 963 and the new 992 GT3 R being miles off the pace of the competition in the IMSA series in the USA.

I totally agree.  
Focus on their home patch and get wins rolling in gt3 multi marque series. 

[Carrera28]

TBH I think that video is a pretty cursory analysis and has potentially missed a number of key factors as to why the process was unsuccessful.

The original Red Bull proposal was pulled together by Dietrich Mateschitz for two reasons.

Firstly as  the majority owner of Red Bull drinks company and for whom the Red Bull F1 team was his passion piece that he loved dearly.  Knowing that upon his death the Thai part of the business got majority ownership and worrying that they would potentially not be as passionate about the F1 team as him he wanted to arrange a relationship with a manufacturer to reduce the financial burden upon Red Bull drinks company and guarantee the F1 Team's future. 

Secondly by getting Porsche to the table it meant that the VAG was part of the group that made recommendations, Porsche has significant influence with FIA as after Ferrari, and arguably Mercedes, the inclusion of its brand on the gid would have the highest degree of exposure in USA and China.  Red Bull got a significant ally for its preferred simpler engine position which neither Mercedes, McLaren or Ferrari were as keen on as they favoured the status quo.  So effectively by fostering interest in Porsche, Red Bull got an influential ally for little to no financial outlay and the engine regs for 2026 are now closer to their preferred position

However, unlike Toto Wolff, neither Christian Horner or Helmut Marko have any equity ownership in the F1 Team.  Therefore management at Red Bull F1 were not keen on the merger because Helmut Marko would have almost certainly lost his job and Christian Horner would have likely had a more restrictive management culture typical of large corporations.  Plus after Honda's indecisive decisions about its future Horner was reluctant to be beholden to a manufacturer whose board could easily leave them engine less again.  By this point Mateschitz was not in good health and went with their advice which meant the company had a less certain financial future but maintained its control.  We can only watch to see if Red Bull drinks company has the same appetite for spending money into the future to know if this was a good decision or not.

With regard to other buying other teams.  There are two key factors to being competitive in 2026 when the new regs come in aero and engines.  Good aero for 2026 needs to based on a car that has decent aero now and a team that has facilities right now for developing cars.  Audi's first choice was to buy McLaren one of the prime reasons for doing so, is that while their current car is rubbish their 2021 car was not (when preliminary feelers were put out) and they have a world class new wind tunnel coming on line in 2023.  The combination of Audi technicians and a top notch wind tunnel gives the necessary raw materials for a competitive car.  When that deal could not be completed they started negotiating with Sauber, before Porsche finished with Red Bull because surprise surprise Sauber has a really good wind tunnel and very good design facilities.  So with Audi money and technicians they have raw materials for a competitive car in 2026.  Audi's commercial position means they can afford to take a bit longer to win as their brand value is at worst case maintained by being in F1 if they don't win anything for a while but will likely actually increase.

Porsche's talks with Williams didn't flounder because Williams were worried about losing their name, Williams F1 is owned by a capital firm they don't care about esoteric things like the Williams name they care about making money. 

It floundered because they wanted too much money to buy in and because Williams do not have a world class wind tunnel.  They are negotiating to build a new one but it is unlikely it will be ready in time for the 2026 car and any new owner will likely be expected to contribute to the costs of building this facility.  Williams was a poor choice for Porsche as it did not have the infrastructure to be a big team quickly and the value in its brand identity as the second most successful F1 constructor was of little benefit to Porsche which would leverage its own brand identity anyway.

Alpha Tauri was never really for sale. 

An engine relationship with McLaren has poor commercial value for either party as prospective McLaren owners would be thinking maybe I should buy a Porsche instead and vice versa ruining the whole win on Sunday sell on Monday thing. 

Aston Martin are hardly going to change from Mercedes engines since Mercedes owns 5% of Aston and provides their engines for road going cars.

Thus realistically Porsche was left with no existing F1 team being a suitable partner and with Andretti and rumours of another American team wanting to buy in the costs of a new F1 team license and set up are becoming exorbitant and again commercially not viable for Porsche as an advertising billboard.

It was prudent negotiation by Porsche to ensure the F1 regs were set up to their liking and to only buy in on terms that suited them.  Unlike Audi, Porsche's brand value is not improved by being in F1, it's brand value only increases if it wins in F1.  Realistically racing at  Le Mans with a legitimate chance of winning one of the most famous races, provides stronger commercial value then trundling around at the back of the field in a Williams being lapped by Ferrari, Mercedes and potentially Aston Martin.

[Yeatesy]

@Carrera28 thanks for taking the time to share your thoughts, it was very insightful. 

[tomo]

Don't  forget the Ford partner thing fell through as well.

[JWM]

20 hours ago, Carrera28 said:

Unlike Audi, Porsche's brand value is not improved by being in F1, it's brand value only increases if it wins in F1.

This is such a good point. 

[Carrera28]

2 hours ago, tomo said:

Don't  forget the Ford partner thing fell through as well.

I wasn't aware of that, its a shame that fell through. 

Last I read Red Bull was going to sign a strategic partnership with Ford.  The arrangement is (was?) different to what Porsche proposed though, as it was purely a commercial and technical deal, with no exchange of equity or ownership.  Ford would provide the electric R&D on the hybrid motor while Red Bull Powertrains would provide the ICE component.  Red Bull would use Ford's marketing and dealer network to access commercial opportunities in the US.  Ford is seeking to rebrand itself quickly as an electric car company, the challenge is that electric cars are still more expensive than ICE cars and Ford has a reputation, in Europe at least, as a cheap and cheerful manufacturer rather then as a premium brand.  

A winning relationship with Red Bull in the pinnacle of Motorsport would go a long way to increasing brand value in Ford electric cars and might help convince European purchasers to pay the electric car premium for a Ford and potentially consider paying close to Mercedes or BMW money for Ford's electric vehicles.

[tomo]

It was back in this thread on the 9th of Feb.https://flatsixes.com/porsche-motorsports/red-bull-racing-partners-with-ford-after-deal-with-porsche-disintegrates/