>


Advertisement
Hot News
for your iPhone
for your iPad
Go to our forums to discuss this news
DATE News (chronologically)
06/19/09
f1
Why FOTA will not succeed  A reader asks, Dear AR1.com, who do you think will win the FOTA/FIA battle?  Steve S.

Dear Steve, Interesting that the FOTA teams want to start a rival series.  We don't think it is all about the budget cap, but it is interesting to take a look at the budgets of those teams and their greed.  The "FOTA" teams happen to make up the most budgets of all of the teams according to SportsPro Magazine.  In their 2009 budget analysis, this is what they estimate the budgets to be:

Ferrari: $404 million
BMW: $386 million
McLaren:  $377 million
Toyota:  $329 million
Renault:  $265 million
Red Bull:  $264 million
Brawn:    $146 million
Torro Rosso:  $112 million
Total:  $2,283,000,000

Now, These teams were spending $2.2 billion dollars to run 16 cars at 17 races.  I can see where these teams don't want to try to reduce their companies to fit into a "budget cap" of $80 million (not including driver salary and some other "marketing" expenses") as they will have to work on less money and thus will not be able to afford 300 person staffs, massive "garages", private jets, yachts, luxury hotels, and other extravagant spending all being paid for by their sponsors and car manufacturers.

Taking a look at a "new series", each of these teams will lose somewhere between $30-50 million in F1 TV money that is reserved for each team.  Plus, they will have the expense of setting up a series,  such as staff, marketing, infrastructure, venues, etc.  If I am a shareholder of Daimler, BMW, Renault, or Toyota, then I am going to be pretty upset that they are going to be spending money on a new series, and not on trying to sell more cars.  Here is the latest data regarding car sales in the USA year to date vs. 2008:

BMW: -30%
Mercedes: -29%
Toyota: -39%
Nissan (Renault): -35%

The reality is... do we really need teams spending $400 million each year to put on a, sometimes boring, show?  At a budget cap of $80 million, the F1 series will still be the most expensive racing series in the world, and probably become more innovative as well, since the engineers will have to build a competitive product with less financial resources, kinda like the real world.

To put it into perspective, the 21 "Year long teams" probably spend roughly $115 million combined to run their cars.  So, the question remains, why does it take $2.2 billion to run 16 cars for 17 races, when you can run a series with 21 cars for 17 races for $115 million and have similar, if not better, racing for the fans.  At the end of the day, it is about the racing.  Mark C.

Hot News Archives
2000 2001 2002 2003
2004200520062007
2008200920102011
2012201320142015

Search Hot News
Search Help