How F1's cash crisis could help the sport
Here's a question for the petrolheads, procurement experts and financial controllers amongst you: how many dummy cameras do you think a needs? That's dummy cameras - the pretend ones they attach during testing - not the real ones they are given by TV for the races.
Three (one for each car, including the spare)? Four (a spare one just in case)? Or perhaps six (a spare one for each car in case they all fall off during the same bumpy testing session)?
Well, one team made 49 last year. But then they spent £300m in total so they probably didn't notice they were doing it.
Much of that money went on squeezing a few more horsepower out of the internal combustion engine, an invention that is now comfortably a century old, a challenge that many of this country's finest engineers put their collective brains to in an effort that would have gone completely unnoticed by motorsport's many fans.
But the revelation that F1 teams can run up eye-watering bills is right up there with the 's religious leanings and what bears do in the woods in terms of shock value.
Frankly it would be more of a surprise if wasn't a trailer-sized hole in somebody's pocket (three miles to the gallon, long weekends in Monaco, all that champagne). The key was who those pockets belonged to: sales-chasing car manufacturers, speed-freak billionaires and other assorted cash cows.
For many years, F1 was loud, proud and lumpy but it didn't matter because had a waiting list for the 6,000 or so cars it produces a year, and were hitting where it hurts and once every few years an idea like anti-locking brakes or traction control would trickle down to the saloon classes.
And then the police arrived, the party broke up and somebody was presented with a bill for those two wind tunnels they built to find a few hundredths of a second on a twisty track. The reckoning, when it finally came, was fittingly rapid.
If 's mid-season departure was a warning, few seemed to heed it because came as a shock despite the Japanese giant's slumping sales and paddock profligacy.
With rumours swirling of another manufacturer considering something similar, it was time for motorsport to cut up the credit cards and get a grip. . Or have at least started to do.
The cost-cutting measures revealed by motorsport's governing body, , and the F1 teams in Monte Carlo last week, represent a result for common sense and appear to have stopped the bleeding for now.
But what happens next is anybody's guess. The grid looks like being at least two cars light next season, sponsorship is going to be hard to come by for at least a year or two and the pressure on the is going to grow. After all, where is the when the classifieds tell you the value of a used 559 has just tanked?
And it's not just F1: rallying lost two manufacturers in two days, and , a huge blow for a sport that is struggling for exposure.
But all of that does not have to bring about the end of F1, or motor racing in general. It just needs to bring about the end of a particularly reckless era for the sport's finances.
The basic proposition of publicity, research and development and occasionally decent racing remains intact. Well, that's what ...but so, it seems, are BMW, Ferrari, Mercedes, Renault, Toyota and the myriad corporations that are to sell their products.
Some insiders even think : less really could be more if the sport's decision-makers hold their nerve and push for further cost reductions.
By doing that they may just inject a little more human interest into what can, at times, become an engineering competition, tempt in new entrants to shake up the grid, and reduce F1's dependence on the sales figures of its main sponsors' road car divisions.
It was just over a year ago that , the boss of Prodrive, was forced to admit defeat in his attempt to lower the sport's barriers of entry.
His idea was to turn the clock back to the 1960s and 70s, when independent teams drove rings around the better resourced "works" teams of Ferrari and other "grandes marques".
The bought their engines and gear boxes off the shelf and built a car around them. This low-cost approach annoyed the bigger teams, who made everything themselves, but took nothing away from the spectacle.
Richards, who wanted to buy in the whole package, would get a better hearing for his "customer car" approach now and if there is any truth to paddock gossip Prodrive may get its chance to emulate the likes of and soon.
It will be a longer wait for a more aspiring entrant such as - which runs a successful team in the tier below F1, - but if F1's elite can be further persuaded of the virtues of cheaper racing the Norwich-based company is confident an independent outfit could make commercial and competitive sense.
Could we be on the verge of a return to the days when "privateers" like could put together a fast car on the cheap and find a dashing talent to drive it to victory, as did at the 1975 Dutch Grand Prix?
Hesketh himself, isn't so sure. The life-long motorsport enthusiast and thinks that era has passed and the leading teams will emerge from their current cash-flow concerns even more powerful within F1.
Back when Hesketh Racing's teddy bear-badged cars were mixing it with the best they were doing it on an annual budget that equates to about £7m in today's money. Brabham, Lotus and Tyrell were on twice that, while Ferrari were on the equivalent of £50m, one sixth what they spend now. Hesketh Racing's staff was 25 - "we thought that was the Rolls Royce gold standard" he told me - and that included the truck drivers. Honda's headcount is more than 750.
For Hesketh, the only way to bring back the privateer era is to impose the "customer car" solution on F1, reducing costs and opening up competition at a stroke.
"We need original thoughts and big decisions, not these incremental changes. Engines must be made available to other teams at a sensible price," he said.
"There will be a lot of shouting about technology but if you want to look at technology go to the !"
The good news for Hesketh, and F1, is there is still something that counts for more than money, talent.
"I remember the first time I saw put two wheels on the dirt in Melbourne and it was the first time I'd seen an Englishman since James Hunt keep his foot on the accelerator," he said.
"I said to myself this guy can drive."
While there are still fans like Hesketh, watching talents like Hamilton, F1 should just about muddle through.
Hi, I'm Matt Slater and I try to shed light on what's happening behind the scenes in sport - so everything from football finance to Olympic squabbles. You can also follow me on . 
Comment number 1.
At 18th Dec 2008, jdrawmer wrote:Brilliant article.
It would be beautiful to see private teams on low budgets compete in F1, but I just can't see it happening. I don't think the 'credit crunch' will effect any aspect of life for more than a few years and after a year or so I think things will start to pick up again.
Cost reductions will probably happen a little bit, but not enough for competitiveness to switch much from what it is
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Comment number 2.
At 18th Dec 2008, auto98 wrote:Should also be noted that as soon as they left rallying subaru expressed an interest in going to F1
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Comment number 3.
At 18th Dec 2008, timzroom wrote:I don't think the FIA are going in the right direction by trying to make teams adapt standardised car components like chassis, engines etc... Althought the costs should be reduced, wouldnt an overall budget limit be more sensible? Then it would reduce costs whilst still allowing teams the creative freedom when designing their cars, just all on the same budget.
In terms of improving racing, the FIA are trying to go the right way by increasing mechanical grip and decreasing aerodynamical grip, but at the end of the day its still up to the drivers to make the show. Maybe the do or die drivers of the past are now just fewer in number?
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Comment number 4.
At 18th Dec 2008, gonnae_no_dae_that wrote:#2
It wasn't subaru that expressed an interest in F1, it was prodrive, the company that ran the subaru rally team.
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Comment number 5.
At 18th Dec 2008, ulrichtheknight wrote:In response to timzroom, there are do-or-die drivers out there, but they are not allowed to push the limits of a cars capability for fear of penalties.
This all leads back to the inconsistency issues, which we don't need to go over again, but it does have an impact on the spectacle of F1.
It would be good to see someone like Lewis or Fernando in a private team. To see just how much talent can influence the results, even against bigger teams.
It has been glimpsed during this last season with Vettell and Kubica winning, Sutil running in fourth in Monaco,showing that teams can still punch above their weight, if they nurture the talent available.
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Comment number 6.
At 18th Dec 2008, LondonMadHead wrote:less cash = slower development.
it should be up to the respective teams how much they spend. by all accounts the current financial climate will change within 5 years for the better and it would be shortsighted to limit progress in a sport that prides itself on being at the forefront of technical development.
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Comment number 7.
At 18th Dec 2008, NOSTAB92 wrote:Private teams on low budgets with standard equipment, that's A1 is it not ?
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Comment number 8.
At 18th Dec 2008, Canadiancharles wrote:I think one of the best starting points could be the salary thing. No driver, come to that, no person be it sportsman or business man is worth more than ten million a year and that's being generous.
This kind of salary, even in the exorbitant spending of the pre=financial collapse era, is more than enough for anyone to live in total luxury and comfort.
The whole money thing has gone totally crazy and that's why we have a global financial crisis today
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Comment number 9.
At 18th Dec 2008, Tunneller40 wrote:What's interesting is how this is all turning into a virtuous (!) circle. RBS go bust, get nationalised, but sponsor Williams. Tata announce the tie in with Ferrari, run out cash with Landrover and ask for a handout. Who's next? I can't think that any of the banks and automotive manufacturers are going to have an easy time explaining to their respective shareholders / taxpayers why a few million on F1 is a good idea.
Perhaps the TV license payers should miss out all the middlemen and have a ³ÉÈËÂÛ̳ Sport F1 team? It might make life a little simpler. I hear there are one or two teams going cheap....
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Comment number 10.
At 18th Dec 2008, GregClarke8 wrote:Why does F1 need saving, it seems to be doing fine to me.
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Comment number 11.
At 18th Dec 2008, Matt Slater wrote:Good evening, normal thanks to all for reading, special festive thanks to all who left comments.
jdrawmer (1) - you're too kind, but I think you're right about nothing much changing for F1 when people start buying Honda Civics again...that's what Lord Hesketh thought too. But as he pointed out, he was too old and had lost too much money to be a romantic about these things.
auto98 (2) - Rabbie Burns (4) got there before me but it's Subaru's partner Prodrive that is sniffing around...and I'm told they've got a good chance. They won the right to enter a team in 2006 but there was too much opposition from other teams to their idea to buy a car from somebody else and re-badge it. The entire ethos of F1 was at stake!
ulrichtheknight (5) - too true, sir, too true. Kubica was quality all year.
joshf33 (6) - I can see where you're coming from but it depends on how you define "development". I'm also not sure that your equation is as straightforward as that. There is no doubt that if you throw inordinate amounts of cash at an F1 engine you can probably get it to rev at 22K per minute, which would give you 30 extra horsepower....but what's the point? This is a classic case of diminishing returns.
The development curve for the internal combustion engine is almost flat now and while I know the argument about this kind of work filtering down to us in the shape of more fuel-efficient engines, I can't help thinking there is a more efficient way to do this R&D. I also can't help thinking the carmakers should be spending their time/money on replacing this 19th-century invention.
It will be interesting to see what comes out of the debate over a rescue package for Detroit - if the Americans are smart they would make it hinge on the Big 3 developing the cars of the (hopefully near) future. F1 could play a part here too.
NOSTAB92 (7) - yep, or GP2, or lots of other forms of motorsport. But does it necessarily matter? Many purists think of the "Silver Arrows" era as F1's finest: that was only one or two machines, wasn't it? And during the "privateer" era it was usually Ferrari v a Cosworth-powered independent. Great racing doesn't depend on lots of different cars....that Wacky Races.
canadiancharles (8) - agreed, although I'm hoping "the market" will pull its finger out and do what it is supposed to do...ie sort this out. Performance-related pay is the way to go, as long as it is really performance related.
Tunneller40 (9) - what an excellent idea. I can see it now. A car with no adverts on it due to the "unique way the adults fund the team". Jonathan Ross can drive one car, Russell Brand the other. Jeremy Clarkson is team principal, Grant Mitchell heads up the pit crew and I'll look after the paddock passes.
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Comment number 12.
At 18th Dec 2008, Matt Slater wrote:TheGodKing, you're probably right, but this is what Max Mosley had to say about last week's budget cuts.
"I think this is probably the first step towards Formula One saving itself."
Maybe he meant the first step towards saving himself? Hard to say.
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Comment number 13.
At 19th Dec 2008, aholt47 wrote:The cost cutting reductions are all well and good for the sport of formula 1 but the knock on effect is the more human side of it. Many people stand to lose their jobs, especially in this country. Their skills are in highly specialised, engineering jobs and as such they will find difficulty in finding work in this country, especially in the current economic climate.
So whilst you celebrate the cost cutting measures, remember that their are a lot of people that will lose out for the benefit of F1.
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Comment number 14.
At 19th Dec 2008, Matt Slater wrote:aholt47 - A fair point but not necessarily true. If new entrants can be tempted into the sport (by making it more affordable) most of those jobs will be saved, particularly if the grid can get back to 24 or 26 cars. It wasn't that long ago that there were so many teams you had to qualify to make the race.
We should also remember that we are short of engineers in this country, so I can't see them being out of work for that long, although they may have to get used to something less than the six-figure salaries so many of them are on at the big teams.
That said, nobody likes to see anybody out of a job so your overall point is well made. I guess a more viable sport, though, would lead to great job security for all involved.
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Comment number 15.
At 19th Dec 2008, Tim wrote:There's a very valid point being made here about the limited returns to be made on engine development.
Why not take a different tack, and encourage more useful developments? This would make it easier to justify the F1 budgets.
Two examples of this:
1) Fuel stops were introduced in the teeth of opposition from every team except Ferrari. Eliminating them might make engine development in F1 much more likely to transfer to road cars.
2) F1 introduced a rule that tyres had to last for a whole race, to the delight of tyre manufacturers - who wants to buy a tyre that lasts 100 miles? Only a racing team. So when this rule was reversed, Michelin promptly withdrew from the sport.
If you're going to spend on R&D, as every big company in F1 must do anyway, then you might as well showboat in a global showcase while you do it.
None of this would help Prodrive, but I think we all know those days are gone.
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Comment number 16.
At 19th Dec 2008, inoffapost wrote:I've followed F1 as a boy and got seriously into it 1974. I spent 1977 trekking around the globe seeing as many GP's as I could in what, for me, was a golden era of the sport. The sport had the greats and the also rans, the underdogs and frankly, just plain dogs. Sometimes the qualifying differences in time could be frighteningly big, especially at a places like the old 'Ring and Spa.
This year the back of the grid was within 1.5 seconds of the front at some races. Force India achieved that with probably a 10th of the budget. Can it honestly be justified to spend 200 million more, or whatever, to buy that level of differential. To be honest, I don't care for it, and I am not interested in it, especially if it can be wiped away with a shower of rain!
I would watch any of the current Grand Prix drivers race a dustbin because they are that good. They have other world driving skills. They don't need a mega million dollar projectile to prove it.
I love the variety of manufacturer and teams in F1 but this arms race for a 10th of a second bores me rigid. Currently I would rather see the drivers all in A1 cars and lets see some action. There was action in F1 in 2008, but at what cost. 35 million a year for Kimi. Enzo Ferrari would/has turned in his grave. Budget caps won't work as they (the teams) will never agree, and how would it be policed? I think it has to go with FIA in the short term of fixed engine and drivetrains with only chassis available to team development. Autosport also tabled ideas along the idea of zero testing, only 1 or 2 aero upgrades per year but an additional day at races for test drivers to develop the car. The 1970's afforded (relative) equality through the availability of the kit to everybody. Now equality must be enforced because of irresponsible manufacturer investment and a failure by the sport to manage itself properly. F1 is currently up its own exhaust pipe so a 'blow up' is long overdue. I hope it shakes out. Sorry for the rant, but it's 20 years overdue!
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Comment number 17.
At 20th Dec 2008, Vladimir Bayer wrote:Just like in any popular proffessionall sports, the salaries these people are making are ridiculous and way out of proportion to that what they do give back to the sport.
Why the miserable, incompetent overated KR who won the 2007 WCH only because Massa handled it to him on a silver platter, is making millions is beyond me. Same thing for LH. His qualities are way out overated - and to compare him to great drivers like Senna, Prost, Lauda or Mansell, is a joooooke.
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Comment number 18.
At 20th Dec 2008, Optomistic and English wrote:i think massive cash cuts would be great for F1, on all scales, make the sport more competetive, and cheaper to afford, so we could lure more small teams back into the sport, and even some car amanufactures back, and stop Bernie taking such a big cut so teams might be able to stay in as they dont end up loosing money!
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Comment number 19.
At 22nd Dec 2008, edmund wrote:If not for the interest generated by Lewis, F1 would have died by now.
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Comment number 20.
At 25th Dec 2008, Astra14Red wrote:I've said already on an other post somewhere, that F1 is Boring. It's strange that pit stops are now the most exciting part of it. If costs were cut and new Privateers came along that would be great news.
My idea of cuttings cost would be limiting the number of engineers and mechanics at the race.
More controversal would be a "previous seasons" car sale. That would entail selling a previous season's car (minus engine) to any private team if they apply for it.
What about rev limiting software - high rev engines cost a fortune, lowering the revs would reduce cost considerable. If you want high revs go for a turbine engine!
Also transport costs to GPs. Limit the lorrys to 1 per car - that'll sort them out!
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Comment number 21.
At 30th Dec 2009, xf1tech wrote:Yeah good article........The best teams will always find the resource no matter how much the FIA tries.
I agree with Lord Hesketh, a private entrant needs to be able to be competitive @ a stroke. It's what sobers the F1 wanabees when they look @ entering the sport (aside from the expense).
WTC or horse racing seem to have a good solution in giving weight awards with success. This would really level the playing field..Trouble is getting the big guns to agree (whom it will most likely hurt the most). Or why not allow more open technical regulations to the minow teams until they get, say, a top 3 finish @ which point there development must be curtailed.
It would give your "Torro Rosso" teams more opportunities to liven up a sunday afternoon drive, and allow some of the brilliant lateral thinkers to shine for the underdog which currently is prohibited.
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Comment number 22.
At 31st Dec 2009, Paddy Murphy wrote:I can save 1 team up to $/£(dunno whether it's £/$ the stats are in now!)60m, i will drive for them for a few quid per drive! I've done it a couple of times at Renault's track and I'm sure with a bit of training, I could drive at least well enough to come last!?
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Comment number 23.
At 1st Jan 2009, John Kelly wrote:Hi Mark, I like your comments about F1 please keep it up.Happy new year.John
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Comment number 24.
At 8th Jan 2009, cilurnum wrote:You're fooling yourself. Even Hesketh had to pull out in the 70s because it was too expensive. The fact is that teams make virtually no money from being in F1, and are expected to make ends meet from spin-offs. Only the top teams can make the money to do that.
More money needs to filter down to all the teams on the grid so it is actually worthwhile to be there and where a team has some resources to try and move forwards and improve the show. The solution is not to try and lower costs in an artificial way when the top teams will simply spend the cash they have on something else that makes the difference.
The future of F1 does not look rosy under current management.
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Comment number 25.
At 11th Jan 2009, kasbah wrote:Those complaining about the amount of money the drivers are making are mistakenly believing that their pay is directly linked to the task they carry out - it is not.
As with all sports stars they are actually paid in reflection of how much money they make their employers. F1 drivers are used by their employers to make them money and win them titles, their pay reflects this. Look at all the adverts that Lewis Hamilton appears in, why shouldn't he have a slice of the money that his employer/sponsors are making due to that advertising?? Otherwise the money simply goes into the directors pockets anyway.
It's the same in pretty much any career, not just sport, if you make your employer a lot of money then you might expect/demand a pay rise of some sort to reflect your value to your employer.
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