Elite Traveler July-August 2016

elite traveler JULY/AUG 2016 102

Daniil Kvyat of Red Bull (top) and Nico Rosberg of Mercedes (below) during qualifying at Abu Dhabi 2015

title doubles along the way. Red Bull also owns a junior team, Scuderia Toro Rosso, bringing the company’s annual F1 outlay to around $500m between 2004 and 2011. It’s worth it, though, reckons Mateschitz, so great has been the marketing bang for his buck. Opportunities – and pitfalls – are part of F1’s fabric. Over the 2015-16 off-season, one-time former owner Renault bought the imperiled Lotus team from a consortium of venture capitalists. That’s an investment costing about $250m for every season Renault chooses to remain involved. Should they win, or dominate (as Mercedes have) then every dollar can be justified as high-value marketing spend. Should they fail, then Renault have bought little more than an expensive trinket. “The directors of F1 teams run them to break even, which involves spending whatever is available to them,” says Sylt. “They do this on the premise that it is better to win and make no profit rather than make money and do badly on track. Victory on track increases the value of the team, which gives the owners a payout when they come to sell. It also increases the team’s ability to bring in more money from sponsorship.” “There are so many financial issues throughout the sport that it is hard to see where things will go,” adds Lotus deputy team principal Federico Gastaldi. “I know that both Mr Ecclestone and the FIA have been trying to change things and I also know that teams aren’t always the easiest to work with when we have to join forces. Our agendas and situations differ too much and are almost always proceeded with self-preservation.” With this instability, it is easy to see why

filmmaker George Lucas and Mexican billionaire Carlos Slim. It’s also becoming a popular choice for superyacht owners the world over. The classic hotspot of Monaco or the contemporary, stylish Yas Marina in Abu Dhabi are popular destinations for gas-fueled fun. Equally, the F1 drivers, owners and celebrities find the freedom of traveling by yachts to track venues liberating. And, of course, chartering a yacht out for VIP events brings in a good return. “Superyachts add an extra layer of freedom that [drivers] wouldn’t otherwise enjoy – and well away from the eyes of the paparazzi if they want to be,” says former F1 team boss and current BBC presenter Eddie Jordan. JOIN THE TEAM F1’s teams are amongst the biggest beneficiaries of the sport’s success, as their prize money – their second-biggest revenue stream at 35% – comprises 63% of its underlying profits. F1’s total costs increased by just 5.2% in 2014, fueling an increase in underlying profits and therefore prize money, which rose 8.2% to $863.1m. It makes F1 teams valuable vehicles. Last year Stephen Fitzpatrick, director and co-founder of energy firm Ovo, rescued the Manor Marussia F1 team, which had $52.2m coming in from prize money for finishing ninth in 2014. Its rival Force India’s prize money in 2015 was around $63.5m, and a stake in it is up for grabs as 42.5% of the team is owned by businessman Subrata Roy – in prison in India since 2014. “Roy has requested permission to sell his stake in Force India to repay investors who the Indian courts say he duped,” says Sylt. “Roy owes $5.3bn and Force India is one of his most valuable assets. A cheaper alternative is buying shares in Williams, F1’s only floated team, which is listed on the Frankfurt junior exchange with a share price of $16.45, at the time of writing.” One notable wealthy individual who’s so far had success is Red Bull magnate Dietrick Mateschitz, who bought the Jaguar F1 team at the end of 2004, renamed it Red Bull Racing, and has since funded the team at car manufacturer levels, winning four Photo: Sahara Force India, Getty Images, Getty Images/Red Bull Content Pool, Sauber Motorsport

investing in F1 is not for the faint-hearted, but those that take the plunge will have a lot of fun along the way, and maybe make some money.

“The directors of F1 teams run them to break even, which involves spending whatever is available to them. They do this on the premise that it is better to win and make no profit rather than make money and do badly on track. Victory on track increases the value of the team, which gives the owners a payout when they come to sell. It also increases the team’s ability to bring in more money from sponsorship”