Ferrari CEO Again Threatens F1 Exit, Implies Start of Competing Series

At the company’s annual Christmas meeting, Ferrari (RACE) CEO Sergio Marchionne reiterated that the team will be leaving F1 (FWONK) if Liberty Media execs institute plans to standardize parts and revise power plant rules. Marchionne said, “we are not interested in cars being the same, with simple and cheap engines like NASCAR. If they decide to make us all the same, we will go in 3 seconds”. Should the team decide to leave the sport, Marchionne indicated Ferrari would look to form an “alternative championship from 2020/2021.”

Howie Long-ShortFWONK fell 4.7% on Wednesday following Marchionne’s statement. Shares are down 12.3% over the last 30 days, a loss of nearly $1 billion in value. As for RACE, the company posted strong Q3 results with net profit +24% YOY (to $166 million). Now there are rumors circulating the company may be looking to increase production 12% (from ’16 numbers) by 2019, which should excite investors.

Fan Marino: Standardizing engines take away one of Ferrari’s biggest advantages, as one of the series’ biggest spenders. Any leveling of the racing field will have a direct negative impact on the team’s bottom line, in a sport where the winner’s pool was already cut 13% this (down to $273 million); so, it’s understandable why the team is opposed. Former F1 CEO Bernie Ecclestone certainly doesn’t think F1 should cater to Ferrari’s demands, saying, “democracy has no place in Formula 1”, adding this type of behavior is nothing new from the sport’s most famous team “if they don’t win there is usually panic.”

Ferrari Claims It Could Leave Formula 1, Start Its Own Series

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Author: John Wall Street

At the intersection of sports & finance.

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