Whitmarsh believes that F1 is in cost ‘crisis’ (Update)UPDATE F1 "is in crisis as it faces up to" a $2B bill that "it cannot afford to pay and which could spell the end for a number of teams," according to Paul Weaver of the London Guardian. The warning came "from one of the sport's biggest players," McLaren Team Principal Martin Whitmarsh, who is also chairman of the Formula One Teams' Association, on the eve of the Monaco Grand Prix. The teams, which "are absorbing the terms of the next Concorde Agreement, are already angry" that the private equity firm CVC Capital, which holds a controlling stake in F1, takes out more than half of the sport's $1.5B income.
With so much money going out, the teams "cannot cope with rising costs" and Force India Deputy Team Principal Bob Fernley claimed CVC is "the worst thing that had happened to the sport." The 11 teams "pay a fortune to be involved in" F1. Whitmarsh said the situation "really is a threat to the sport." He added, "I cannot see in their shoes [the seven smaller teams] how you can construct a sustainable business model."
These seven teams "are already incensed that most of the money goes to the four biggest operations, Ferrari, Red Bull, Mercedes and McLaren." CVC is "scheduled to increase payments to the teams" from 47.5% to 60% of the sport's income, but the extra money "will go to the big four." Fernley said: "There should be a more equitable distribution." Guardian
Formula One has been on a crusade to reduce costs for the past few seasons following the withdrawal of BMW, Toyota and Honda in 2008 and 2009, but McLaren team principal Martin Whitmarsh believes that the sport is currently facing a crisis.
“Formula One works best in a crisis but it is a shame that we have to create a crisis to deal with,” Whitmarsh explained to British newspaper The Guardian. “This sport needs ten or eleven teams and we should fight to keep the eleven teams we have now. But we are not good at doing these things. We seem to drop the ball.
“I fear that we will have a crisis and then we will have to get real and sort it out.”
An informal budget cap was put in place in 2010 to coincide with the arrival of Lotus Racing (now Caterham), Virgin (now Marussia) and HRT (now defunct). Although costs have fallen, the sport lacks parity between the front and back of the grid. This may be considered as ‘normal’ in F1, but Whitmarsh fears that the sport could become unsustainable for some, especially with the new engine regulations being introduced next season.
“What is frightening is that we have adopted important new engine regulations. They are the right thing to do in many regards. They are technologically interesting and relevant to society. But F1 badly mismanaged the cost of the development and supply of those new power plants. We allowed the engineers to be unfettered in dreaming up the regulations, which means teams are now facing big bills. We got costs down to £10m ($15m) and now we are talking about double that.”
Despite Whitmarsh’s fears, Honda have announced that they will returning to the sport in 2015 with McLaren due to the improved financial landscape, and Tony Fernandes has dismissed all rumors suggesting that he may sell Caterham in the near future. NBC Sports
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