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F1's financial woes

  • Published on 08 Nov 2013 21:51
  • comments 0
  • By: Tom Spithaler
F1 itself is in the back-stage spotlight. As we all know, the gap between what is required to field an excellent Formula One team, and the funding that is actually coming in for the average team is growing. F1 knows it needs to shrink this gap, or the fans will be relegated to watching the over-rewarded first place team (in this current case Team Red Bull) against whoever the second place team is, while all the other teams who remain look more lake dirt track carting teams in comparison. F1 Grand Prix’s will begin to look more like GP Sports Car races with several different classes on the track at the same time.

Brought to the forefront by the recent pay debacle between Lotus and Kimi Raikkonen, funding is a real concern for most teams. Compounded by the bright idea of going back to the Turbo V6 in an effort to “shave costs”, the effect has been the opposite with the funding gap is widening for 2014. The ‘Professor’, 4 Times Champion and now Renault Ambassador Alain Prost has weighed in on the topic, and people should be listening.

The Professor takes it deeper than most thinkers. Prost accepts that at least part of this funding gap needs to be lain in the lap of FIA, and not all on the teams themselves. Like any business, FIA needs to make a profit. But like most governments, FIA itself, and its principal players (read: Bernie Ecclestone and clan) are lining their pockets with millions while teams struggle to pay their drivers. Hardly seems like a positive long-term business model.

"I think it is already late - but never too late, for sure," Prost said. "I think budgets are too high considering the revenue, considering the sponsors.”

He’s not the only one who sees a disparity. Team Principal of the aforementioned Lotus also spoke up.

"We have the highlight on us, but it is not only about us," he said. "I think most of the teams on the grid… Everybody knows and everybody agrees that the cost is too high in F1.”

Boullier continued, “But unfortunately to be competitive you need to spend at least a minimum - even if the minimum today is at least 50 per cent less than the top teams.” Himself pointing out that everyone is struggling. "It is still a lot of money and it is still not sustainable. So you need to bring the costs down or bring the revenue up - but we need to do something."

So what do we do about it? What can we change? I’ll be the elephant in the room that is speaking out.

Like in a lot of pro-sports, it is often forgotten that it is the team owners that decide what to pay their athletes. No driver is worth a six-figure per race salary. None. Sorry Sebastian, you’re just not. Sorry Kimi, Alonso, Hamilton, Massa and the rest. We love you guys, but you’re just not worth that much money! This is a great place to start.

While we all like to see the latest tech performing on the F1 circuits, how about a team spending cap. Limit the amount of money each team can spend and see how tech savvy they can be for the money permitted. Faced with this, teams will have to decide whether spending an extra couple of million in the wind-tunnel can be offset by an extra couple of million spent developing horsepower, etc. It brings a chess match mentality back into it from the get go.

At the end of the season, award teams with some provisions for allowing bonus spending for their finishing position rather than paying the teams with cash from FIA. That cash in turn can be used to be evenly distributed among the teams or some similar system to help allow for better team parody.

There are a lot of ways to look at reducing the cost of fielding an F1 Team. We need to be open to all of them. If we are not, the level of competition parody will continue to decline, and we as fans will be left with a completely unsatisfying class of F1.

Tom Spithaler
F1 Editor: USA

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