Aston Martin Must Learn from an extinct British F1 Team.
Or risk a total project failure.
(Originally Posted on the 26th September 2022)
After a double disaster at the Italian Grand Prix, Aston Martin reminded me of another troubled British outfit that folded only four years after its debut.
Jaguar had all the promise to become a big name in F1, the funding from Ford, a big driver and a decent team. But it all came undone when Ford sold the team for $1 to Red Bull in 2004.
After doing some research and a lot of maths I unearthed some similarities between the two green British teams.
Jaguars' Expenses
Ford bought out tiny race winning Stewart F1 Team in 1999 for £100 million, the deal was announced on Jackie Stewart's 60th Birthday. A nice gift.
Ford first partnered with the Stewart F1 Team in 1997.
Soon after Ford announced the identity of the team, with Jaguar taking the helm, one of many car companies under Ford's umbrella.
Numerous sources suggested that Jaguar spent up to and approximately £177 Million per year (roughly).
Italian Financial newspaper, Il Sole 24 Ore, argues that the Stewart Team had a budget of £105 million per year for the 1999 season.
So with Ford's involvement you can say that over the 4 seasons from 2000 - 2003 the Jaguar team spent roughly £708 Million to get 2 podiums?
These are just estimates.
Aston Martins Expenses.
With the Aston Martin team, it’s slightly different. As the team is being backed by one person, as well as a consortium, rather than a manufacturer like Jaguar.
Lawrence Stroll acquired the team when Vijay Mallya's Force India team went into administration.
But after many groups of people went after the team, it was Stroll’s led consortium that got the winning bid to own the team.
After the team was transferred to Stroll the newly named Racing Point team gave a loan of £15 Million to repay sponsors and paid £90 Million to gain the assets of the previous guise of the team.
Then Racing point was ordered by the FIA and F1 to pay the creditors in full to continue under its new identity. Some creditors included Mercedes, BWT and Sergio Perez, but the total to pay back to all creditors was £28.5 Million.
The team then changed it's name from Racing Point to Aston Martin in 2021 after Stroll bought a large stake in the Aston Martin.
So before the team had even raced in the summer of 2018 they had to pay £133.5 Million.
£33.5 Million more than the total expenditure that Ford paid when acquiring the Stewart Team.
Then you have even bigger costs.
Stroll has put in a further £250 Million into his F1 team, building a state of the art new base for the Silverstone team, which is set to be the most advanced on the grid.
Aston Martins F1 Base worth £250 Million. Credit: Motor Sport Magazine
Although he is not doing it all himself. For the factory he is using bonds.
To raise capital for it, £100 bonds will be issued over a five-year period and pay a rate of 7%.
Plus Aston Martin has had huge investment from Aramco and Cognizant that has helped massively with funding too.
So the real costs of the building are unknown. So for now we’ll just use £250 Million as a benchmark.
It also costs money to run an F1 team. A lot more than it did in the 2000s, costing an average of £87 Million a year to run a team.
Now it costs a huge amount, with Mercedes’ cost being an average of $459 million (£395) in their 2020 title winning season.
However now with the new 2022 budget cap at (only) £140 Million per year, teams will be expected to spend less and save more.
Calculating costs from the Aston Martin era to get a rough estimate lets say that they hit the budget cap for both seasons £145 million (2021) and £140 Million (2022).
Adding from Spa 2018, when Stroll took over the team, Essentially Sports has a run down of the teams budget from 2018 - 2020.
Although taken with a pinch of salt we will use them.
2018 - £60 Million (From Spa Onwards)
2019 - £188 Million
2020 - £147.5 Million
Budget Cap Figures:
2021 - £145 Million
2022 - £140 Million
They have spent roughly £680.5 million since Stroll's/Aston Martins involvement.
Add that with the approximate costs of the factory and the funds used to buy the team Lawrence Stroll and co have spent £1.064 Billion, so far since Spa 2018. Roughly!
The Drivers
A strange coincidence with both British teams, is that the first big driver signing was a driver who had come close to winning the world championship with Ferrari and was at the twilight of their careers. Eddie Irvine took that role in the year 2000.
He stayed with Jaguar for 3 seasons, with his best results coming with third place finishes at Monaco in 2001 and Italy 2002.
Other drivers included: Mark Webber, Johnny Herbert and Pedro De La Rosa, although I could not find the figures for their salary's.
Eddie Irvine joined the team for an estimated £15 million per year over 3 seasons.
So that's £45 Million added on the Jaguar bill.
In fairness I will only add the main driver for Aston Martin.
Speaking of, it just so happens that there was a Ferrari driver, who had come close to winning the championship and was also in the twilight of his career.
Here came Sebastian Vettel. He joined in 2021 for an estimated, you won't believe this, £15 Million as well.
So far he has just one podium in Baku but time will tell how his career will end in 2022.
So £30 Million needs adding on the Aston Martin Bill too.
The Maths
Here are the totals so far:
Jaguar - £708 Million in 4 years - 2000-2003
Aston Martin - £1.094 Billion in 4 years - 2018-2022
Ah, right. Maybe my theory was wrong.
Clearly Aston Martin and Stroll have spent way more since owning the team, but Aston Martin have only one podium to Jaguars two, and have spent way more than Jaguar ever did.
So clearly they are worse than Jaguar at this point, right?
Hang on a moment.
The year 1999 doesn’t seem that long ago, but with the rise of inflation, £1 Million in 1999 is not £1 Million in 2022.
So in that case, how much has Jaguar spent compared to Aston Martin, adjusted to inflation?
If you had £100 back in 1999, in 2022 that £100 would be worth £192.62p. Meaning inflation has increased 2.89% per year since 1999. The British pound has lost 48% of its rate since then.
Using this maths, Jaguar had spent a rough total of £708 Million over 4 years from 2000-2004. In today’s money that would equal £1,363,962,000.
£1.3 Billion in today’s money.
So Final results: (rounded up)
Jaguar - 1.3 Billion (2000-2004)
Aston Martin - 1.1 Billion (2018-2022)
So are Aston Martin really heading down the same path as the failure Jaguar was?
No. Not yet.
Unlike Jaguar, Aston Martins majority of the cost have gone into producing one of the best, if not the best, F1 facility in Modern times. Arguably better than Ferrari, Mercedes and Red Bull when it will be complete.
So it’s a bit of a loss now, but in 2 or 3 years that factory will be a huge helping hand to the team.
Also F1 is a very different place than it was 20 years ago. There’s a budget cap now which can stop stupid spending allowing teams to be more careful and calculating with the stacks of cash they have.
Aston Martin also have a great line-up of technical talent. With Dan Fallows, Mike Krack and Martin Whitmarsh all joining the team.
Not to mention Fernando Alonso Joining in 2023.
Even though the similarities are remarkably similar, Aston Martin is in a much better position than Jaguar was and it was sad to see Jaguar disappear from the grid.
Although, the former Jaguar team has won multiple World Championships under its most recent guise - Red Bull.
My Estimates
Now you have to take into account these rough approximations based on the information I have access to and my bad maths.
Yes I did miss past driver salary's but with the information at hand it is staggering how two British F1 teams owned by a billionaire and one of the biggest automotive companies, are so closely linked.