03/02/2009
FEATURE BY MARK GALLAGHER
With each passing day bringing further bad news to the international motor sport community, and Formula One in particular, it's been hard to decide the point at which we knew things were getting really serious. I have been trying to pinpoint that pivotal moment when the global financial crisis hit Formula One so hard as to send us wheeling in the direction of the nearest drinks cabinet, shaking our heads in disbelief at the extent of the catastrophe.
Now, however, we know. Because when McLaren and Ferrari make up, start visiting each other's factories for a corporate love-in and tell the media that they are working together in harmony for the future of the sport, we know things must be bad. It's like Bill Gates popping in to Apple to say he much he loves the iPhone, oh and by the way he just adores the Airbook.
I think we all knew that the financial crisis which dawned in late 2007 was the hors d'oeuvre to the main course of a broader collapse in global business fortunes in 2008. Little did we know that this was going to develop into a mutli-course 'banquet for the damned', with industry sector after industry sector posting ever more depressing results, the car industry in particular imploding as sales and shareholder confidence disappeared faster than Lewis Hamilton off the starting grid.
With Formula One sponsors such as the Baugur Group, Credit Suisse and Dell disappearing, ING 'cutting back' - which probably means they wish they could cut and run - and the recent launches showing us that (a) the new cars fell out of the ugly tree and hit every branch on the way down, and (b) have more space available to explore than the USS Enterprise, it's no wonder that the future of Formula One seems even more difficult to imagine.
Back in the days when RBS was a successful bank, Honda had a Dream and a sudden contraction was something felt by women rather than the manufacturing sector, McLaren and Ferrari didn't like each other very much. One man, from Ferrari, apparently popped their secrets into his briefcase and offered them to another man, from McLaren, whose wife nipped down to the local photocopying shop and kicked off the biggest scandal in recent F1 history. One that made Ferrari appear bitter, damaged the reputation of McLaren - unfairly in my opinion - and ultimately cost them one hundred million dollars.
Now however, that's all forgotten. What's one hundred million dollars between friends, after all, when you've both just realised that fighting each other is the least of your worries.
In his interview on the Official Formula One web site this week, Ron Dennis gave a typically comprehensive response to the questions, including the statement that, "I firmly believe that the business model of a Formula One team operating as a financial entity on its own is an anachronistic one. It used to work, but it won't work in the future."
Hmmm. Interesting statement that. If you read further, you'll see he believes that a team should either be subsided by a car manufacturer or billionaire as an 'entity' that presumably does not really make money, or else is part of a group - like McLaren or Ferrari - which Does Other Things That Make Money.
So there we have it. Formula One teams cannot stand on their own two feet unless subsidised to win by a car manufacturer or crazed billionaire who has forgotten how he made a billion in the first place. Not much of a future for the sport is it?
A Formula One team should really be an asset. Something that makes money, given that your team is one tenth or thereabouts of a multi-billion dollar sport that still produces vast global TV audiences and generates fascination for hundreds of millions of fans. So when someone of Ron Dennis's acumen states that 'independent' teams are an anachronism, it really is time to take stock of where we are - and where we will be in the coming years.
I remember Eddie Jordan's speech at his car launch in 2000 warning against the dangers of car companies buying F1 teams, pointing out that their involvement would only last as long as it suited their commercial needs and the patience of their shareholders. His comments came about specifically because of Ford's purchase of Stewart Grand Prix and the creation of Jaguar Racing. Honda, too, was starting its partnership with British American Racing (remember them?), one which would lead to its eventual take over of the team in 2004.
Both companies are now gone. Ford withdrew with a whimper at the end of 2004 thanks to people in Detroit who knew the cost of everything and the value of nothing, while Honda is the most recent casualty. Everyone now seems to spend his time trying to figure out who's next. Is it Renault as a result of its share-price collapse? Toyota after posting its first ever loss and having to revise its forecasts in a significant downward direction? Only Mercedes, Ferrari and BMW seem to have the unwavering commitment of their car-backers, and it's not difficult to see why; you are at the front, get most of the TV coverage, the lions share of the TV revenue and are the first port of call for any new sponsors evaluating the sport.
But Formula One cannot be contested by three or four manufacturers and an energy drinks company. It's just not that interesting, it doesn't allow for a proliferation of new drivers, new nationalities, new sponsors, new blood.
As a sport which has gone global in terms of events, it really ought to be doing so in terms of teams and drivers. In 1999 there were 16 races split 11 in Europe, three in Asia-Pacific, two in the Americas. For 2009 there will be 17 races split nine in Europe, five in Asia-Pacific, two in the Middle East and one in the Americas. The trend is obvious - the sport has gone east, embracing the Middle East and Asia at the cost of Europe and North America.
However, when you look at drivers there were 10 nationalities in 1999, the same in 2009, yet the geographic spread does not reflect the changes in the location of events. In fact the majority of drivers used to come from Britain and Germany, and still do. Last year the season started with nine drivers from these two countries. Nine from 22. A further look shows that 20 years ago, in 1989, there were 15 nationalities of driver - 47 in total, with 20 teams - and whilst a few of the drivers were very average and some of the teams an embarrassment, it was certainly a bigger show in terms of participants.
The reason for today's smaller spread of talent is, I believe, is fairly simple. Thanks for the explosion in budgets the few remaining teams are principally British and German in location and/or ownership. Throw in the usual dose of talented Italians, Brazilians and Finns plus the token Asian, from Japan, and there you have your driver-pool.
This is not good for the sport, and especially now. The world has gone global, indeed the races have gone global, yet the teams and drivers remain local - essentially European - and are desperately trying to maintain that structure.
One of the most satisfying aspects of competing in A1GP is the proliferation of new blood - whether drivers, team owners or sponsors from all over the world - and I can't help but feel that Formula One would benefit from a similar injection of world-appeal in its line up.
Rather than wondering how we can maintain the status quo in Formula One, and stop existing teams from collapsing under the strain of being a liability rather than an asset, we really need to be looking at how to attract new teams. New teams, from new markets, attracting new nationalities of drivers, with new sponsors and new fans. Maybe even a team based in the Middle East or Asia-Pacific, since almost half the races are there. More of the same is no longer enough because we have been in a financial and technical cul-de-sac for some time.
How come every other industry can rationalise, merge, integrate, cost-cut and streamline, but Formula One (teams especially) find change so difficult? So much of what is suggested is aimed at maintaining the status quo, protecting the hegemony of the few and prolonging the protectionism created by making the sport unaffordable.
As an example of what can be achieved you only have to look at the FIA Formula 2 series, new for this year, with its £195,000 cost to drivers (that's USD$285,000 in real, American money…). Quite why any aspiring driver would spend seven times the amount to race in GP2, or three times the amount for Formula 3, defies understanding. It isn't good for teams, because in the case of F2 there aren't any, but it shows what can be done when people put their mind to the task of making the sport affordable, attractive and sustainable.
And so to Formula One. As Gerhard Berger put it earlier last month, "What is being done now with budgets of $300 million per year can also be done with $30 million, when reason returns." And if a figure of thirty, forty or even fifty million dollars could be achieved as an operating budget for an F1 team, then I believe that rather than worrying about losing the tenth, Honda, we'd be interested to see who the tenth, eleventh and twelfth teams would be, with the resulting increase in numbers of drivers, sponsors and fans.
The decisions made by the FIA with FOTA and then the World Motor Sport Council in Monaco on 12th December were an enormous step in the right direction, but even more can be done, and this includes in the area of so-called customer cars. A lot of people get worked up when talking about Manufacturer Teams and Independent Teams, and equally so when the subject of Customer Cars is debated. Frankly, I don't know what the issue is; Teams are Teams irrespective of their name or identity of their shareholders, and all should be able to make money from participating in Formula One. Similarly cars are cars, and one only has to pop into the local showroom to see what the car industry thinks of sharing parts; witness the Toyota Aygo aka Peugeot 107 aka Citroen C1. You don't see anyone suing them for daring to share a design.
So what's the big issue in Formula One, especially when we haven't seen anyone have a heart attack yet as a result of Red Bull Technologies supplying RBR and Toro Rosso? The so-called 'purists', who also maintain that F1 is all about the technical challenge and to hell with the cost of it, say that each team really has to design and construct its own cars, otherwise we are all going to die because they'd be a bit similar and that just wouldn't do at all.
A similar argument erupts when 'standardised engines' gets mentioned. Yet the sport didn't fall over when everyone ran Cosworth DFV's apart from the eccentrics at Ferrari and Renault who insisted on developing weird things like flat-12's or turbos, so I don't think the future of Formula One with teams and the FIA working hard to generate efficiencies of scale and common innovations would be such a bad one.
Quite honestly I'd quite like to see David Richards running a likely modified Renault with a Mercedes drive train, Ferrari suspension, a driver from Mumbai and a sponsor we'd never heard of.
This sport needs new teams, teams to take advantage of the economy when it begins to recover, spawning a new age of Formula One in which the colour, drama, excitement and competition of the sport is enjoyed by more people, not less, and the old brigade accept that times have changed. It would be so much better to concentrate on growth rather than survival.
Mark Gallagher
mark@pitpass.com
 |
To check out previous features from Mark, click here