Why Mercedes are unlikely to follow Red Bull’s lead on purchasing a second team

Thomas Maher
Max Verstappen leads Lewis Hamilton over the line. Formula 1 Australia April 2023.

Max Verstappen leads Lewis Hamilton as he crosses the finish line to win. Australia April 2023.

Mercedes’ Toto Wolff has said Red Bull’s ownership of a second team in Formula 1 gives them a “great advantage” over the rest of the field.

Red Bull are the only entity on the Formula 1 grid to own outright two teams racing in the sport, with the drinks company owning reigning Champions Red Bull Racing and midfield outfit AlphaTauri.

Under founder and long-term owner Dietrich Mateschitz, Red Bull entered F1 by purchasing the former Jaguar team in 2004 before entering their eponymous team the following year. Mateschitz quickly followed up by buying the Minardi team, renaming them Toro Rosso (Italian for Red Bull), and entering that team for 2006.

Over the intervening years, a clear structure formed: Red Bull Racing are the team to target wins and championships and represent the company, while Toro Rosso was renamed AlphaTauri three years ago in a marketing move. While a largely independent outfit, Red Bull use AlphaTauri as a training ground for drivers to prove themselves for a chance to climb into the senior team.

More importantly for Red Bull, ownership of a second team allows for strategic advantages also, including extra voting power at team level for the purposes of F1 Commission debates, while Toro Rosso took the initial risk of taking on the then-unproven Honda power units in 2018 as Red Bull sought a replacement for Renault. Once Red Bull had the benefit of seeing how Honda operated together with Toro Rosso, the company signed the Japanese manufacturer as its own engine supplier – to rousing success ever since.

Toto Wolff: Owning a second team undoubtedly an advantage for Red Bull

“It is undoubtedly an advantage to be able to have a team like they have (Red Bull) in which to evaluate the drivers on the field,” Toto Wolff told Motorsport.com

Having a secondary team allowed Red Bull to sign Max Verstappen to Toro Rosso when the precocious Dutch driver was being shopped around. Had Mercedes had a secondary team, Verstappen’s path could have been very different.

“I didn’t have a Formula 1 steering wheel to offer him,” Wolff explained.

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“We had Lewis [Hamilton] and Nico [Rosberg] and both had long-term contracts, Max was clearly an interesting youngster but at that moment we could have offered him a place in GP2 and then maybe a contract.

“But Helmut [Marko] was able to offer him a seat in Formula 1 and I finally advised him to go that route too. And that meant seeing him leave the Mercedes orbit.”

Toto Wolff suggests cost prevents Mercedes from following suit

Wolff also acknowledged the huge advantage for Red Bull of being able to test out the Honda power units without risk to the main team – a luxury no other outfit on the grid could have taken, and not one he sees Mercedes ever being able to emulate.

“It was a great advantage in their case to have the possibility to evaluate Honda before moving to the main team, but it is a very expensive operation,” he said.

You have to be able to afford to spend 100 million a season to be able to judge the drivers, and I repeat, it’s the best way to do it, but it’s also very expensive.”

Too late for Mercedes to purchase a second team?

With Red Bull owning 20% of the F1 grid outright, it’s an advantage Toto Wolff would love to copy, particularly now he is leading a team playing catch-up rather than dominating the sport.

However, there are some significant hurdles that prevent other teams from being able to copy the Red Bull model nowadays.

The Mercedes F1 team has a different ownership structure to Red Bull, with Wolff owning 33% of the outfit – Mercedes’ parent company Daimler, and INEOS chairman Jim Ratcliffe each own a further 33%. This means either significant investment from Wolff himself (possibly less scary now he’s a billionaire!) all on his ownsome, or convincing Daimler and Ratcliffe to follow suit.

However, the cost of purchasing a satellite team has escalated significantly since the days Red Bull did it. Under the latest Concorde Agreement, the value of the teams shot up as a result of F1 imposing a $200 million entry fee, while the ownership of almost every single team on the grid now lies in the hands of well-funded corporate entities or investment vehicles. Privately-owned Haas, under Gene Haas, are an outlier in that regard, but Haas have made it clear their operation is not for sale – the opportunity having arisen as the Andretti outfit circle the camp looking for a way in.