Motorsport Blog
Topic

Motorsport Blog

What's the next "win-win" for Formula 1?

shares
comments
What's the next "win-win" for Formula 1?
Nov 30, 2009, 7:42 PM

This has been the season of the "win-win" - deals which leave both sides feeling really good about themselves.

This has been the season of the "win-win" - deals which leave both sides feeling really good about themselves.

The F1 grid will have 13 teams next year (Darren Heath)

There is a lot of restructuring going on at the moment; the inevitable result of a season which has seen savage recession hit the sport, manufacturer withdrawals and the arrival of new teams.

We have had a spate of deals the principals have described as "win-win" lately; first Ron Dennis described the deal whereby Mercedes bought Brawn as a "win-win", then Toto Wolff used the same term to describe his acquisition of a shareholding in Williams and at the weekend the mayor of Montreal said the deal which brought the Grand Prix back to his city was a "win-win".

There are quite a few situations waiting to be resolved in F1 at the moment and a big deadline looming in the shape of the F1 commission meeting and the ensuing World Motor Sport Council meeting on December 11th. There will be some interesting announcements after that meeting, Jean Todt's first as FIA president.

It is not obvious how the 13th entry situation will be resolved with a win for everyone. Toyota is facing a penalty charge of $150 million if it walks away from the sport, according to sources and its bill for laying off staff in Germany would be equally painful. So it is highly motivated to find a way of continuing its entry and leasing its facilities and its cars and engines to a race team. None of the FIA's approved new teams have gone for the deal, but Serbian Stefan GP is looking closely at it. Although there appears to be some doubt about whether this is a genuine programme or a bit of mischief making behind the scenes.

If Toyota does find someone it can get a "win-win" together with, it will have to go through an approval process. Stefan GP had some uncomplimentary things to say about the FIA's selection process, in particular the thorny issue of using Cosworth engines. Any partner will be looking for a deal with plenty of sweeteners, knowing that it is a cheaper option for Toyota than shutting the doors. But time is tight. Honda took almost three months to look at all options and do a deal with Ross Brawn. Toyota will have had just over a month from announcement of withdrawal to the World Council Meeting.

It is not true to say that the issue needs to be resolved by then, but the FIA is understood to be keen to get it resolved in that time frame. It is a delicate situation which needs to be resolved skilfully and it is the first major test of the Todt/Ecclestone regime. Nobody wants this to end up with legal actions, but the priority is to find a 13th team which is sustainable for the long term.

Giving Sauber the entry may well be the "win-win" for the team and the sport. Toyota may not see it that way, but they are leaving anyway.

Sauber's acquisition of his old team from BMW last week means the end of Mario Thiessen as a figure in Formula 1. He is staying with BMW to oversee its motorsport programme. It is a career that ends therefore in disappointment, something which will not have escaped the attention of Frank Williams and Patrick Head, Theissen's former partners in the BMW Williams team.

Another issue needing resolution next week is the British Grand Prix. Silverstone and Bernie Ecclestone have not looked like they have been heading for a "win-win", but you never know.

Montreal's new deal with Ecclestone points to an interesting route for promoters struggling to make the numbers. It is based on a revenue sharing agreement. The contribution from the local and state government is $15 million (£8.6 million) per year, with a promise of a 30 % share of the profits. This model has worked in Singapore, where the government shares some of the risk and benefits if the event is a success. It is also being tried in Germany. In Montreal there is every reason to expect a return on investment because the race is one of the best attended of the year, the stands are packed, even on a Friday. The way this deal breaks down is that the government pays Ecclestone's race fee and the promoter, Octane, pays the cost of staging the race.

Revenue sharing is in vogue as a very post-credit crunch way of doing a deal when no-one is feeling too keen on taking risks. I was told recently that Silverstone is looking at all the options and I know that some government figures have got involved, but it's still a hard deal to sell to the British taxpayer, who is already wondering how he is going to pay off the multi billion pound budget deficit caused by the credit crunch. But revenue sharing is an answer.

The BRDC changed its rules recently to allow it to work with backers willing to share the risk.

Next article
FIA publishes 2010 Formula 1 entry list

Previous article

FIA publishes 2010 Formula 1 entry list

Next article

Toyota, not Sauber, to appear on FIA entry list

Toyota, not Sauber, to appear on FIA entry list
Load comments

About this article

Series Formula 1
Be first to get
breaking news