Ferrari (NYSE:RACE) says it is making financial sacrifices in the negotiations over their future in F1 after Y 2021. The move will assist the smaller teams in the sport to make sure it is economically viable as a venture. Ferrari’s F1 2021 ‘rule model’ pictured above.
A budget cap of $175-M is going to be set from Y 2021, but it is not going to be applied for the engine development or the driver’s salaries, while other exemptions like the Top 3 teams will be allowed.
According to Ferrari, the negotiations have shaped something allowing for an equal share of the wealth for the 10 teams.
Ferrari CEO Louis Camilleri told the automotive media before Christmas that the team’s credibility meant it had to make sure the ability to innovated remained while still being aware costs had to be reduced.
He said they had been in favor of the move because it was preferable for the economic sustainability of the sport.
He said they saw it as their responsibility to make sure F1 racing remained viable and so the smaller teams would gain more revenue from the sport.
He added that when there are 10 teams in the championship with different views, there is going to be continuing discussion.
Ferrari is going to see their heritage bonus cut under the new deal. The previous arrangement meant they were the highest-paid team in the sport, though CEO Camilleri claimed the history of the team in F1 makes it significant to consider everyone’s interests.
He reiterated the central role of Ferrari in Y 2021 was the bigger picture and how its interests coincided with that.
His experience in the past on other matters and businesses implies when there is competition, it can be tough to match the intention of everyone in the league. However, it ultimately becomes possible to see the overall benefit.
He finished by saying team principal Mattia Binnotto, especially, has played a leadership role within the FIA considering the other teams. He is delighted with the progress in that sector.
Ferrari has not always been a fan of the budget cap policy.
It is worth noting when the idea of capping the team spending was introduced though, Ferrari even threatened to leave F1.
Enzo Ferrari’s iconic Italian Supercar manufacturer claimed the title according to the latest Brand Finance Global 500 2019 report launched at the World Economic Forum in Davos.
HeffX-LTN overall technical outlook for RACE is Very Bullish, overhead resistance is 167.27, and Key support at 164.06. Now 3 Key indicators are Very Bullish, and the stock has established strong long term support ahead of this coming breakout North.
Ferrari finished at 165.54, +0.24 Tuesday in NY.
Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I see it at 200+/share in that frame.
Have a Happy New Year Week