Is Formula One running out of track?
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Senior Writer
Jody Clarke Jun 26, 2009
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A row about money had threatened to split Formula One in two. That threat has been averted – for now. What does the future hold for the sport? Jody Clarke reports.
What triggered the latest dispute?
Honda. The Japanese car maker pulled out of Formula One in December. Due to the global downturn it could no longer justify spending £300m a year on the sport.
Honda's move prompted fears that other car makers would follow. So the sport's governing body, the International Automobile Federation (FIA), responded with a set of proposals for F1 teams that included the imposition of a voluntary $60m (£36.6m) budget cap on each.
The aim, according to FIA president Max Mosley, was to curtail a "financial arms race" and keep the sport viable.
What's wrong with that?
The top teams regularly spend $500m a year and "feel that they are very able to sustain what they have at the moment", says former F1 boss Eddie Jordan on Voice of America.
They were also infuriated by the way Mosley tried to force feed them the recommendations without consultation. So eight of them, including Ferrari, threatened to form their own championship.
"These people have had enough," Sir Jackie Stewart, the three-time world champion, said at this year's recent British Grand Prix. "They don't want to be told how to spend their money," he told Autosport magazine.
But that's not the only reason they are upset. F1 teams also want a greater share of the revenue from the sport's broadcasting and merchandising rights.
The friction between the "Breakaway Eight" and the FIA reached such a peak that many of the 128,000 fans who packed into Silverstone to watch the British Grand Prix assumed they might be watching the last race of its type at the famous Northamptonshire circuit.
Why are those rights so contentious?
Unlike, say, football, where the majority of the annual £900m of TV money goes to the clubs, F1's commercial rights are controlled by F1's self-appointed commercial impressario Bernie Ecclestone and private equity group CVC Capital Partners, which is now his employer.
As a result, Ecclestone has consistently refused to give F1's teams (who design the cars, invest the cash and put the drivers on the circuit) more than 50% of the sport's estimated £1bn annual income.
Teams complain that the cash being drained out of F1 to pay CVC's debts and feather Ecclestone's nest leaves nothing for grassroots investment. Thus Mosley's latest move was the last straw.
Could the teams set up on their own?
On paper, yes. After all, "what's more important? The Super Bowl or the teams playing in it?" asks Chris Aylett, chief executive of Britain's Motorsport Industry Association in Time.
The breakaway threat was backed by all but two of the teams, with the rebels including Ferrari and McLaren Mercedes – names that would not find it difficult to attract advertising for a new series.
And some established circuits have already refused to meet Ecclestone's financial demands, including Silverstone in Britain and Imola in Italy. They would be more than happy to host a new series. But Ecclestone has always been dismissive, claiming that the only winners would be both sides' lawyers.
Is there a precedent for this?
There is – and it tends to back up Ecclestone's point. In 1996 a similar situation arose in American Indycar racing, which broke into two rival series. But instead of choosing between the two, fans deserted to follow other sports.
"You only have to look over the pond to see what happens when you split a championship," former world champion Damon Hill tells Autosport. "It's difficult enough to draw people into one particular sport, so what will they make of two separate championships? It would just dilute it."
Is Mosley's departure the answer?
In the short term, yes. On Wednesday, the FIA President agreed not to stand for re-election as president in October, when his term ends.
The move is likely to ease tensions between the FIA and teams who were infuriated at his insistence on "putting his own ego and ambitions ahead of the sport he governs", says Ed Gorman in The Times. Having labelled rebel F1 bosses as "loonies", and accused Renault team boss Flavio Briatore of wanting to be "the Bernie" of a breakaway series, many in F1 will be happy to see him go.
However, despite the teams agreeing to reduce spending to early 1990s levels, in return for the cap being dropped, the vexed issue of who should take what money from the sport has still not been solved. Having taken down Max Mosley, F1 team bosses may now start focusing their sights on another big fish: Bernie Ecclestone.
Will big bucks kill F1?
Max Mosley and the FIA may not be flavour of the month with many F1 teams, but a spending cap would be welcomed by those who fear the sport will go the way of football and be dominated by a handful of elite teams with vast budgets.
For several years debate has raged about whether drivers make much difference. Would Jenson Button be a success this season without the backing of Ross Braun, for example? Could Michael Schumacher have dominated the early 2000s driving something other than a Ferrari? An F1 break-out, which releases teams from any spending cap, would merely exacerbate this problem.
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