08/12/2008
NEWS STORY
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Following Friday's shock announcement of Honda's departure from F1 the teams' finances have got coverage in the media like never before. The only problem is that accurate information is, as ever, thin on the ground.
The upshot is that that a whole host of greatly different figures about details core to the teams are being bandied around. However, accuracy couldn't be more crucial given that industry commentators are making judgements on the future of teams based on these figures. Unfortunately, some of the figures couldn't be much more wide of the mark.
Take for example an article in The Guardian on Saturday which contains a list of team budgets. One of the first red flags for Pitpass' business editor Chris Sylt was its assessment of Red Bull Racing's budget as $370m which translates to approximately £250m.
Red Bull Racing is one of the few F1 teams whose budget can be accurately measured. The team is managed by UK company Red Bull Racing which had revenues of £97.9m in 2007 and is wholly owned by Red Bull Technology - the business which designs and builds the cars for both Red Bull Racing and sister team Toro Rosso. As Pitpass reported yesterday, Red Bull Technology had revenues of £130.8m and total costs of £130.3m - all far from the £250m budget that the Guardian attributed to it. But there was worse to come.
The Guardian put a $440m budget on this year's world champions McLaren. This translates to around £300m at the latest exchange rate so you can imagine Sylt's surprise when he read an article yesterday in the Observer, which of course has the same owner as the Guardian, claiming that McLaren's revenues are 20 million less.
To be precise the article's author got this information from none other than McLaren boss Ron Dennis and wrote that he "said his team's turnover would fall by 37 per cent. 'We predict that our turnover will drop from £280m a year to as low as £175m a year.'" But Sylt wasn't only surprised by the fact that the left hand of the Guardian didn't appear to know what the right hand of the Observer was writing.
The 2007 accounts for McLaren Racing, which runs the F1 team, show turnover of £127.4m - again, far from the £280m reported by the Observer and the £300m suggested by the Guardian. True, the accounts show last year's figures whereas Dennis was surely referring to those for 2008 but there's no way that the team's turnover has more than doubled.
What's more likely is that Dennis was referring to the turnover for the McLaren Group which, amongst other things, builds the SLR Supercar, manufacturers the electronic systems for every F1 team and runs the Lydden Hill circuit along with the F1 team. This powered the Group's turnover to £242.3m in 2007 and is expected to rise a great deal this year due to the introduction of the SLR Roadster at the end of last year.
In other words, it seems highly unlikely that Dennis did in fact say that his team's turnover would fall by 37% as reported by the Observer and then picked up by media outlets including Reuters. He may well have said that the McLaren Group's turnover would fall by that amount but there is clearly a big difference between it and the F1 team. After all, it is perfectly possible that the group's turnover could fall but the team's turnover may increase.
At a time when the eyes of the world are on the finances of F1's teams, this kind of slip up is something that the sport could do without.