F1 formula is unsustainable
Gentlemen, formula one is becoming unsustainable." That was the top line of a letter sent to the teams by Max Mosley, president of formula one's ruling body, the FIA, in July.
Mosley had just emerged victorious from his privacy action at the High Court in London. Champagne might have been the order of the day. He recognized that for him in his personal predicament and F1 in its financial crisis, the champagne days were over. It was time to put the kettle on. F1 could no longer afford itself.
Mosley has been banging the cost-cutting drum for the past five years introducing any number of initiatives from long-life engines to development freezes. It is a recurring theme in the fastest show on earth. Twenty years ago, when F1 was last in the grip of global financial ruin and down to half a dozen teams, its creator Bernie Ecclestone stripped the cost out of competing overnight by introducing normally aspirated engines to run alongside the ultra expensive turbo monsters favored by the big spenders.
Thus in 1988 March pitched up running one normally aspirated car at a cost of $1.5 million for the season. McLaren spent $20 million to send Ayrton Senna and Alain Prost into turbo-charged wonderland. Within two years the turbos were gone and teams were flocking to the sport once more.
A generation later with F1 again feeding too high on the hog Ecclestone is required to fashion a response. Last Thursday before news of Honda's demise broke the teams met to discuss further cost-cutting measures to be rubberstamped at next week's World Council meeting. Outgoing Honda chief executive Nick Fry estimates savings of $70 million a year in 2009.
That won't go far enough for Ecclestone who wants to see an immediate end to the $500 million annual budget spent by the likes of Toyota and McLaren. Even Ferrari is feeling the pinch. Ecclestone understands that F1 is first and foremost a sport, not a marketing exercise for manufacturers.
Investing huge sums on innovative technology that might or might not have consequences for the wider motoring industry misses the point. People tune in to watch a race. They can neither see nor care about the space-age drama occurring beneath the engine cover.
The community of petrol heads might convince themselves of the sovereignty of drive trains and air flows over the importance of the driver, but the wider sporting public does not invest in that. The question for them is who won the race, not which car. Ecclestone and Mosley understand that and will use Honda's disappearing act to ram the message home.
They will get no argument from sponsors, whose millions allow teams to fund their madcap schemes in return for the global platform F1 provides. F1's pulling power is three times that of Premiership football given the £100 million-plus Ferrari culled from Vodafone over their four-years relationship compared to the £36 million Manchester United received in the same period.
Dutch Insurance firm ING, the title sponsor of Renault, considers its £15-20 million-a-year-deal a lump well worth paying for the increased brand awareness. But the show cannot go on without cars on the track.
In 2001 after Ford had completed the purchase of Stewart Racing, Eddie Jordan used the occasion of his team's pre-season launch to remind observers of the transient nature of manufacturer involvement in F1. Come on down EJ the prophet. Ford has long since gone. Now Honda, too. Who's next? Toyota?
Ecclestone and Mosley have been itching to reduce the reliance on manufactures by making F1 affordable to independent teams, a move that would allow the sport to reconnect with its post-war heritage of kit-car outfits, or garagistas as they were dismissively known. The Williams empire grew out of a lock-up in Harrow, from where Sir Frank would distribute parts at the right price.
F1 knows how to survive a crisis. It is managed by the most successful impresario sport has known and governed by a political genius. The only mistake made by Ecclestone and Mosley has been to give the teams license to indulge technological fantasies and marketing men to distance the product from its core market.
F1 is a sport first and advertising platform second. You can't sell a dream without action on the track. The Daily Telegraph