MOTORSPORT: Mercedes F1 loses $165m

Winning comes at an extraordinarily high price in the era of Formula 1’s 1.6-litre V6 hybrid power units.

The financial accounts of Mercedes-Benz Grand Prix Ltd, the company name of the Mercedes F1 team, reveal that it lost $A165.5 million on the way to victory in the constructors’ and drivers’ world championships last year.

That was almost twice its loss the previous year, which was the last season of the 2.4-litre naturally-aspirated V8s in F1, and came despite income of almost $A480m.

That suggests the cost to win in F1 is over half a billion dollars per year!!!

Mercedes said the operating costs of its team that won 16 GPs last year and had 11 one-two finishes jumped more than $A106.4m.

It attributed that to “significantly higher performance bonuses payable” for the success that “exceeded expectations” and “increased costs arising from regulation change”.

The biggest beneficiary of the bonuses presumably would have been world champion driver Lewis Hamilton, while the regulation change was the hugely expensive introduction of the hybrids.

The team’s wages bill jumped 30 per cent to about A$140m as staff numbers went from 663 to 765.

Mercedes is well on the way to repeats of last year’s titles – it leads Ferrari by 169 points on the constructors’ table with five races remaining and Hamilton, with eight wins this season, heads teammate Nico Rosberg by 48  points and Ferrari’s Sebastian Vettel by 59 – and expects a much better financial outcome for this year.

“The agreement with the [F1] commercial rights holder has provisions for significantly increased revenue flows based on sporting performance, some of which will be triggered in 2015 as a result of the team’s performance in 2014,” Mercedes GP said.

“The directors are confident the team will meet the required performance criteria for further revenue enhancements in the coming years.”

Mercedes bought the Brawn team that won the 2009 world titles with British driver Jenson Button at the end of that season for a price F1 business expert Christian Sylt has estimated at $US120m.

Sylt has said that team principal Toto Wolff owns 30 per cent of it, chairman and Austrian triple world champion driver Niki Lauda 10 per cent, and the car manufacturer the other 60 per cent.

Lots of driver news in recent days, with Jenson Button confirmed to be staying with McLaren-Honda next season on a contract that will give him a US$5m pay rise.

At 35 and the most experienced driver now racing in F1, Button admitted that he had been “in two minds at one point” about continuing with a project that has been disappointing, primarily because of the under-performance of Honda’s hybrid power unit.

Button said he had “great confidence” that this year’s difficulties could be overcome.

McLaren chief Ron Dennis said Button was “as enthusiastic and as committed and as focussed as ever” for another season in which he could join the retired Michael Schumacher and Rubens Barrichello as the only drivers to start 300 GPs.

The new American team Haas has named Frenchman Romain Grosjean (now racing for the Lotus team about to be acquired by Renault) as one of its drivers for its debut season next year.

Spaniard Jamie Alguersuari, the youngest F1 driver before Max Verstappen and more recently in the Formula E electric open-wheeler series, has announced his retirement at 25 in favour of a music career.

And American Tony Stewart, well known to Australian speedway fans (especially in Sydney and Brisbane) is to quit driving in NASCAR’s Sprint Cup at the end of next year.

A triple Cup champion, Stewart has not won a race since hitting and killing an enraged young rival, Kevin Ward Jr, during a sprintcar race in New York state two years ago. He escaped criminal prosecution but faces civil action from the family of Ward.

Winner of 48 races in NASCAR’s top league, and a lover of dirt-track and Indy racing, Stewart at his best (such as his thrilling success in claiming the 2011 Sprint Cup) was likened to American legends AJ Foyt and Mario Andretti.

“There were times when Stewart was acclaimed as America’s best pure racer since the heyday of his long-time idol Foyt… He’d race anything, anywhere and at any time,” veteran US motorsport correspondent Al Pearce wrote yesterday.

The colourful Stewart, nicknamed ‘Smoke’, won’t go quietly.

Apart from remaining a NASCAR team owner, with Gene Haas (who is starting the new F1 team), Stewart said: “I want to win races [in my last season], including the Daytona 500 and the Southern 500, and I want to win another championship.”

Verstappen hits the road

Max Verstappen has taken part in 14 Formula 1 races, but only last week got his licence to drive on public roads. Verstappen, who made his debut at Melbourne’s Grand Prix in March at 17 years and 166 days, turned 18 last Wednesday and took – and passed – his driving test.

Despite racing in front of hundreds of thousands of fans and many millions of TV viewers, the Belgian-born-and-resident Dutchman wanted to do the test in secret. But he tweeted the news that he’s now licensed, with a photo of him at the wheel of a Renault road car.

“Legal to drive, born to race #driverlicense,” Verstappen said in his tweet.

He had passed his theory test before his F1 debut but only recently started driving lessons.

He said he had been “a bit nervous about making mistakes [in the driving test], but the exam went well”.

“It’s a relief,” he said.

Verstappen said that having a licence would give him more independence, but that he would prefer to remain a passenger on the roads because it was “a moment of peace”.

He now will be allowed to drink champagne if he makes it on to the podium at a GP.

The son of GP centurion and one-time Michael Schumacher teammate Jos Verstappen, he’s already had a fourth place among six finishes in the World Championship points for Red Bull’s junior team, Scuderia Toro Rosso.

There were concerns before his debut at someone so young competing in F1, which prompted the ruling Federation Internationale de l’Automobile (FIA) to introduce a points system for drivers in the junior ranks to qualify for an F1 super-licence designed to prevent a repeat.

However, Verstappen has been the revelation of this year’s championship and already is being linked to a Ferrari drive when Kimi Raikkonen’s contract expires at the end of next season.

Verstappen isn’t the only race driver taking a low-key approach to the news he’s made recently – Australia’s 2014 IndyCar champion Will Power was given the keys to his home city, Toowoomba in Queensland, last Friday but wanted the civic reception kept private.

A book, The Sheer Force of Will Power, is being published by HarperCollins and will go on sale next March. Power has co-written it with David Malsher, the American editor of motorsport.com and previously with racer.com.