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The Co$t of Winning – F1 must Reform to Save “the Show”

The Formula One season has just wrapped up with Lewis Hamilton taking the title ahead of team mate Nico Rosberg after winning in Abu Dhabi. However as the trucks pack up and the teams head off for their winter break a shadow remains over the sport. How many of the teams will be back on the grid in 2015? Will the top manufacturers have to run three cars? Will Formula One be able to see off a complete financial meltdown?

Formula One is in crisis. Both Marussia and Caterham were placed in administration before the end of the 2014 season, and despite Caterham making it to the grid in Abu Dhabi on the back of crowd funding, doubts surround both teams for 2015. It is not just the back markers that are feeling the pinch.  Midfield teams Force India, Sauber and Lotus all raised concerns about the distribution of revenue with the three teams rumoured to have considered boycotting the USA GP.

The Co$t of Winning – F1 must Reform to Save “the Show”

The disparity in the way that the sports revenues can be traced back to the argument between Bernie Ecclestone and the Formula One Teams Association (FOTA). Unhappy with the way the sport was being run by Ecclestone and the FIA FOTA, which at the time was an association representing all 12 teams on the grid, were threatening to break away and form their own championship. To advert this challenge to his authority Ecclestone went into divide and conquer mode. Securing his power-base Ecclestone lured Ferrari, the most historic team in F1 and one of the most powerful members of FOTA, with a guaranteed yearly payment of $90 million. Red Bull also arranged their own deal, albeit less lucrative than Ferrari’s, leaving FOTA and taking sister team Torro Rosso with them. Sauber, a long-time customer of Ferrari engines, also left severely denting FOTA’s collective bargaining ability.

Now we arrive at the fallout from those negotiations with teams struggling to put cars on the grid let alone be competitive. Marussia and Caterham have been put in administration and are unlikely to be in Australia come 2015, Lotus, Sauber and Force India are struggling to keep up with the cost and unless changes are made could also be under threat this winter. If that is the case it is not inconceivable, however unlikely at this point, that F1 could see a 6 team grid in 2015 made up of Ferrari, Williams, Mercedes, McLaren, Red Bull and Torro Rosso. Now even if the teams go to three cars as has been mooted to make up for lack of numbers someone has to come last, and it won’t always be Torro Rosso. At the Abu Dhabi GP of those that finished the race, if only the aforementioned teams had participated, Nico Rosberg would have finished in last place. Now once in a while, due in part to mechanical difficulties a team could write off one of their cars coming last, but would one of the world’s top sports car makers like Ferrari accepting running around in last place if they struggled with the design of their car for a year? Even a corporation like Red Bull would look unfavourably on being at the back especially if both of its teams were the field’s backmarkers.

Formula One is at a critical stage in its history.  Unless it changes the way it distributes its revenue it will lose all but the richest of teams, creating a bland grid with few teams and less excitement. The smaller teams bring a depth of diversity and challenge to Formula 1. Former minnows such as Minardi have given race winners such as Webber, Fisichella and Trulli their start in F1 and even world champions as Fernando Alonso is also counted as an alumni of the small Italian team before they were sold to Red Bull to become Torro Rosso. Seeing a small independent rise up and challenge teams for wins and even have a shot at the driver’s championship, like Jordan did in the late 1990’s, gives Formula 1 part of its rich history.

Formula One needs its smaller teams.  Corporations will not like the idea of coming last and that will lead to further instability. Fans like the excitement of teams fighting all the way down the grid and an underdog fighting a world champion is always a welcome sight. Formula One must work through this current crisis or face becoming a hollow shell of what it once was.  Without a change of course “the show” will have less and less interest for fans, thus less appeal for sponsors, and then the show cannot go on.


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