News and views on motorsports

Tuesday, July 19, 2005

Red Bull Signs 2008 Concorde

I don't think anyone is surprised that Red Bull have announced that they have signed up to the new Concorde Agreement that will see them racing in Formula 1 until 2012. They are the second to do so after Ferrari signed up earlier this year. Red Bull of course will be using Ferrari engines from next year onwards. I wouldn't be surprised if they switched to Bridgestone tyres as well. Bridgestone will definitely welcome it.

Just a reminder on some of the salient points in the new 2008 Concorde agreement. Quoted from this article in the BBC :


* Ferrari are guaranteed $67m (£34.8m) every year - an estimated 15-20% of their budget - before any money is distributed to the other teams.

* Ferrari have absolute veto over all changes agreed by the other teams, even if the other teams agree unanimously.

* Ferrari would get more of F1's commercial revenue if they finished last than any other team would if they won the world championship.


Despite the young, trendy and sporty corporate image Red Bull likes to project, make no mistake they are first and foremost marketing (and hence business) driven. Because of that there is no difference between them and the GPWC manufacturers. I suppose, like Bridgestone, the suits at Red Bull seem to think that being associated with one of the most glamorous and well known names in the world, Ferrari, will give them enormous exposure and promotional benefits.

Now why would I think that? Well, just look at what they signed up to. The new Concorde gives Ferrari unfair commercial benefits and unacceptable veto powers. Is that sporting? No. And do you really think Maranello would allow Red Bull to consistently beat them? I don't think so. Therefore, I conclude that Red Bull must be in it simply for the marketing exposure. Yes, just like the manufacturers. The difference is the manufacturers want to win and win it fairly.

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