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The Signing of a Star
By by: Anooj Shah
Dec 22, 2005, 11:59

The world of baseball had an unexpected surprise with the signing of Johnny Damon to the Yankees. Not to be outdone, McLaren had pulled the covers on a similar surprise with their acquisition of Fernando Alonso, the Formula 1 2005 World Champion. All the F1 headlines screamed "Alonso to McLaren in 2007!". The move was out of the blue as many expected Alonso to renew his contract with Renault for 2007 and beyond, after winning a Drivers Championship with them as well as giving them the Constructors Trophy.

The F1 circus is used to back-all deals being made between teams and drivers as well as seeing key people being poached from successful teams. One has to look no further than Red Bull to experience this. During the winter break they have successfully taken the chief mechanic (Jonathan Wheatley)& a designer (Rob Marshall) from Renault as well as the biggest coup of them all, luring away Adrian Newey from McLaren. However, it is not often that one can successfully hide the acquisition of a current WDC from the prying journalists! According to recent reports it was a surprise to Renault team boss and Alonso's manager, Flavio Briatore, as well. This makes this acquisition orchestrated by Ron Dennis, the team boss of the McLaren-Mercedes F1 team, an incredible deal that shows his tactical prowess and foresight. Not only does this give McLaren bargaining power when it comes to driver negotiations, but it also destroys the moral of the Renault team as they prepare and contest the 2006 season. The possible outcomes and scenarios are described below

•JPM and Kimi try to out peform each other to hold on to their seat

•brings bargaining power to McLaren when it comes to salary negoitations with Kimi since Ron can argue he already has a WDC on the team, so how badly does he really need Kimi?

•guarantees McLaren with a WDC on the team which will undoubtedly attract sponsors

•de-moralizes the Renault F1 team for the 2006 season since they know ahead of time that their star player is leaving them.

Clearly, McLaren are in a very strong position for the next few seasons. They have signed on a new title sponsor, Vodafone, which will bring stability to the team as tobacco sponsorship fades away due to new regulation banning tobacco advertisements. It is worthwile to note that one of Alonso's biggest sponsor is Telefonica, a direct competitor to Vodafone. It will be interesting to see how that unfolds.

Another piece of this complex puzzle is Flavio Briatore. It would be of his personal interest to see Alonso go to the highest bidder as he gets a cut (it is rumoured that Alonso will be making $24 million a year at McLaren, roughly double of what he would be making at Renault). Now if Heikki manages to win a WDC in the next few years with Renault, no doubt he will generate a lot of income to Flavio should he join another top team. It seems that Flavio uses the Renault F1 team to polish his managed drivers into World Champions before letting other teams buy their services for a princely sum, a percentage of which can go to building Flavio's next mansion or yatch. While Flavio has stated that he had nothing to do with Alonso's move, he does have much to gain.

More importantly, this gives insight into what is happening behind the scenes at Renault. Carlos Ghosn, the current leader on Renault & Nissan and a ruthless cost cutter, has made it obvious that the Renault F1 project is a money pit in the eyes of the company and it can only survive if the company's has strong financial health. The current divide in Formula 1 between the manufacturers and the F1 management doesn't help their chances either. Could Alonso have some knowledge that Renault might leave the sport? It seems unlikely but is still a possibility. This definitely has an impact on the Renault F1 team as the mechanics, engineers, and designers don't know their future with Alonso's departure leaving them in limbo. The way they deal with the defection in 2006 will show the team's strength and solidarity (or lack of).

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