Red Bull profitable sans Vettel; a lesson in driver selection and profit?

Perhaps reducing your expenses seems like a good way to increase your profitability and that’s apparently what Red Bull did last year when they parted ways with 4-time champion Sebastian Vettel. Vettel accepted an offer to go to Ferrari and this list a gaping hole of £13m in expenses they didn’t have to factor into their balance sheet.

As the Independent reports:

“Recently-filed accounts for Red Bull Technology, the company which owns the team, show that its costs in 2015 fell by 11.3%. They came to £225.5m on revenue of £235.6m which primarily comes from three sources: prize money, sponsorship and payments from its parent, the energy drinks company Red Bull.

…Red Bull remained with Renault and boosted its research and development spending by £17.5m to hit a total of £98.3m in a bid to improve its chassis and return to its winning ways this year. The team also added 36 staff, mostly in the design, racing and production departments, giving it a total of 730 who were paid a combined £70m. It paid off.”

On one hand, you have teams looking for younger and younger drivers with serious financial backing to get to the F1 ranks and the big teams are looking for younger drivers that have the skills to win championships such as Lewis Hamilton back in 2007, Vettel in 2009, Max Verstappen this year at Red Bull. These young drivers are a good combination of youth, skill and low cost to the teams unlike world champions such as Vettel, Alonso or Hamilton are now.

It brings to point the notion that Ferrari have always gone for proven race winners if not championship winners and they pay dearly for the opportunity. Is there a sweet spot that catches young driver right at their rise to the top without incurring the at-the-top salary expense?

On the other side of that coin, and in defense of Ferrari’s traditional approach to driver selection, a champion can gain you several tenths in lap times in your car. There is no question that Honda McLaren’s decent results this year are due, in large part, to the experienced driving of Fernando Alonso and Jenson Button. It takes a team but these two drivers have placed that car in positions it most likely wouldn’t have been able to place in an average driver’s hands.

There used to be this notion, and I hope I have the exact time correct, but the paddock would often say that Michael Schumacher was worth five to seven tenths in any car such was his skill and the same has been said of Alonso. We could argue that but the point folks are making with this kind of comment is that champions bring more than just large salaries, the question might be, how many Daniel Ricciardo’s and Max Verstappen are out there who are serious contenders but aren’t representing a $40m yearly salary?

Hat Tip: The Independent