Financial crisis did affect Formula One Bernie Ecclestone said in May 2008 that the global financial crisis would have no effect on Formula One. In a letter addressed to all FIA presidents published on the official F1 website he stated: "There...
Financial crisis did affect Formula One
Bernie Ecclestone said in May 2008 that the global financial crisis would have no effect on Formula One. In a letter addressed to all FIA presidents published on the official F1 website he stated: "There is no financial crisis in Formula One. On the contrary, Formula One is in robust health, it enjoys the support of most of the world's leading automotive manufacturers and is sponsored by many of the world's other most prestigious brands." He couldn't have been more wrong.
Formula 1 has also been struck by the worldwide financial and economic crisis, and had to pay the price. At the end of 2008 Honda, Japan's No. 2 carmaker, announced it was pulling out of F1. Japanese carmakers have had a disastrous last 2008 quarter, car sales worldwide dropped like a stone. Japanese companies Subaru and Suzuki have also quit the FIA World Rally Championship, not only Formula 1 is affected by the current crisis.
Soon after the Honda announcement, Renault sponsor Dutch ING bank and Williams sponsor the Royal Bank of Scotland (RBS) also announced their withdrawal from the sport. Carmakers Mercedes and Renault made it clear that they wanted to cut cost with 50% in the next 2 years. Renault are restructuring their Enstone facility, it will result in the loss of 100 jobs.
Toyota announced that they are still fully committed to Formula 1, but the mother company, the Toyota Motor Corporation, is facing serious financial problems, and when the Toyota F1 team doesn't deliver positive results this year, the whole Toyota Formula 1 project could be axed.
Not only F1 teams are in trouble
It is a fact that circuits need government help to organise a Grand Prix, and in the future, with the economic crisis in mind, it is more likely that governments will be even more reluctant to spend many millions on a Formula 1 race. Austria, Canada, France, Imola, Indianapolis and the Nurburgring plus Silverstone [in 2010] are no longer on the F1 calendar, all due to financial problems. Belgium and Australia are in trouble as well, Spa recently reported a loss of 4,7 million Euros.
The Canadian GP was axed because the Gilles Villeneuve circuit could not pay the $175 million Formula One Management (FOM) wanted for the next five years. The city of Montreal and the federal government would only guarantee $110 million plus a percentage of the profits. These figures show us that it costs $35 million per year to organize a Grand Prix nowadays, and that is almost the annual budget of a small F1 team.
It is obvious that Mr. Ecclestone has turned his back on the more traditional European and North-American circuits, in favour of the Middle Eastern and Asian circuits. In plain English: he is going for the money. Unfortunetaly Mr. Ecclestone and his FOM are not prepared to share more then 50% of the revenues with the teams, it might be a wise idea if he would be willing to invest a part of the remaining 50% in the future of F1, it will be well-spent.
FOTA, the new kid on the block
All teams, now united in the Formula One Teams Association (FOTA), quickly realized something had to be done about the huge costs of running a Formula 1 team. Last week at a press conference in Geneva they revealed a package of proposals to safeguard the future of Formula 1.
Luca di Montezemolo, chairman of FOTA stated: "This is an unprecedented moment in Formula 1 history. Above all else, for the first time the teams are unified and steadfast - with a clear, collective vision. Thanks to this unity, all the teams have already managed to make a significant reduction to their costs for 2009."
The proposals FOTA made are changes to the technical regulations to decrease the costs, ranging from 2010 engines should be available for E5 million, gearbox for E1,5 million and a standardized KERS unit for E1-2 million per team per season.
And the best news at that press conference? The fact that FOTA now also realizes that they have to do something for, as Luca di Montezemolo put it "the benefit of our most important stakeholder, namely the consumer (the fans)." FOTA conducted a survey in 17 countries to find out what the fans really wanted, and they have based their proposals on the outcome of that survey.
At last! That is great news. With their proposals FOTA is also aiming to please the fans, they want to improve TV and Internet coverage, and they also want to make F1 more accessible for the fans. And much to my relief, the FOTA also agrees with my plea "not to fix what isn't broken", so F1 will stay as it is, no huge changes, the sport just needs some "fine- tuning" and cost-cutting measures to survive the financial crisis.
Also as a result of this survey, FOTA proposed a new points system, (12-9-7- 5-4-3-2-1), increasing the gap between first and second place, hoping it will encourage drivers to win a race instead of just going for the points. I think this is the best alternative for the much criticised "Ecclestone medal system", but it is yet not clear if it will get the green light before the start of the 2009 season.
But let's not count our chickens yet, all these proposals have to be approved by the FIA and the World Motor Sport Council. I can tell them one thing, if they don't agree with the majority of the FOTA proposals, it is not very likely they will get a lot of sympathy from the fans...
More good news
Good news from the United States as well, in February Peter Windsor and former F1 designer Ken Anderson announced the birth of a new Formula One team, USF1. It seems the cost cutting plans of FIA and FOTA have paid off. The "all American" team plans to run two American drivers in 2010. Already there is a lot of speculation about the possible drivers, the names Marco Andretti, Danica Patrick, Scott Speed and Kyle Busch have been mentioned. A driver line-up with Marco Andretti and Danica Patrick would without a doubt guarantee a huge media exposure for the new team.
Although the new team has the full support of the FIA and FOM, Mr. Ecclestone felt it was neccescary to force the USF1 team to take on another name, it seems he was worried about the use or possible abuse of "his" trademark "F1", but the team wisely decided not to get into a fight with FOM and changed their name in "United States Grand Prix Engineering", or USGPE. There is no problem with the names ING Renault F1 Team, BMW-Sauber F1 team, Force India F1 Team, those names are all on the official FIA entry list for 2009. We, and certainly the Americans, are not amused Mr. Ecclestone, not at all.
Brawn Grand Prix
After months of speculations, the ex-Honda team was reborn, Honda favored the Ross Brawn buy-out option, and Brawn is now the proud owner of Brawn Grand Prix. Ex-Brabham owner Bernie Ecclestone tried to help to save the team, but said he was "gutted" when his proposed management buy-out of GBP100 million was politely turned down by Honda. It seems his ticket to the FOTA meetings has been cancelled.
I think we also should praise the Honda Motor Company, they kept the team alive until February, they didn't stop the development of the 2009 car and they paid the bills until the Ross Brawn buy-out was a fact.
Ross Brawn is a very talented man, I'm convinced he has the strength and the determination to lead his team to success. He is a great engineer, leader and strategist. He is smart, has a lot of experience and his colleagues speak very highly of him. He was the man behind the Schumacher and Ferrari success story and I can't think of a man more suitable for the job then Ross Brawn.
The team has worked hard during the winter, the new car is already on the circuit, it is powered by a Mercedes-Benz engine and will be driven by Jenson Button and much to our surprise, by the most experienced driver in F1 ever, Rubens Barrichello. The car already showed some real potential with impressive lap times during tests at Barcelona this week. On Wednesday Jenson Button was the fastest man on the circuit, the team has done a superb job. I wish them a successful 2009 season, scoring some points at the Australian GP would be a dream start.
New regulations - A fresh start for everyone
The new 2009 regulations have been a real challenge for all Formula 1 designers. All teams had to design a brand-new car. It's the biggest overhaul of regulations ever seen in F1. The result of all these changes became apparent when teams unveiled their new cars for this season. The changes have had a huge impact on the front and rear wings, the side pods and the rear diffusers.
We already saw ingenious solutions some designers came up with, Williams and Toyota have stretched the boundaries of the regulations with their clever interpretation of the rear diffuser design specifications. Other teams have asked for clarification by the FIA, but the FIA say the diffusers are perfectly legal. It won't take long before other teams come up with the same design. In that respect nothing has changed in Formula 1, exploring loop-holes in the regulations is just part of the game. McLaren came up with a new floor design for their MP4-24 last week, if it works, other teams will copy it, c'est la vie.
Most of the aerodynamic changes are made to make it easier for drivers to overtake, something we didn't see too often last year. But will it work? Will there be more overtaking and more excitement during races? BMW driver Nick Heidfeld and Williams technical director Sam Michael both think the new rules will create more overtaking opportunities. The smaller rear wings make it easier to follow close behind another car, and the use of the moveable wing flaps will give some extra speed.
One thing is sure, the changes in regulations give all teams an equal and fresh opportunity to be competitive, and the cost-cutting measures will ensure that money doesn't buy speed anymore in Formula 1. In the past, big teams could spend an almost unlimited amount of money on the development of their car, those days are now over and the smaller independent teams will get a fair chance to be equally competitive.
We have already seen McLaren struggling to find the right pace during testing, while Brawn GP ended up on top of the time tables with their untested car. And they don't even have a sponsor... It also means that the skills of the driver will become more important, and that is exactly what we want.
All in all, last year I was very pessimistic, but now I'm very optimistic about the future of Formula 1, hopefully FOTA and FIA will work together to get things done, and hopefully they won't forget the promises they made to F1 fans all over the world.