Is F1 not seriously worried?

[skyblue]

I know it's too early in the season to judge how it's going to turn out, but unfortunately millions of people did just that for the aussie race.

Recently I had a tour of Jordan and i was utterly amazed at the level of spending on the car build and development. It just doesn't seem to equate to anything on the track.

On another factory tour last year I was in a room filled with computer programmers, about 50 of them, and a huge factory full of machinery spitting out precision components.

then in the marketing dapartment there was one guy and two secretaries, and a PR woman who was out. the person giving the tour mentioned that getting sponsorship to pay for everything was difficult!! With 4 people I'm not surprised, i expected about 100 raising money.

Seriously how long can the madness go on, the show is not reflecting the effort and the cost.

[Super Tourer]

Welcome to 10 tenths skyblue!

This is a question we have often mulled over on the forum, indeed I posted some 2003 budget comparisons:

http://tentenths.com/forum/showthrea...t=budgets+2003

Also an angle on team sponsorship - which you may find interesting.

http://tentenths.com/forum/showthrea...t=budgets+2003

F1 is notoriously bad at putting it's head in the sand, then reacting with great surprise when an issue that has been heading to the fore for years, suddenly becomes a problem.

The overall view is that whilst the car makers can justify the cost to their shareholders, etc and can generate the profits to sustain it, they will continue to spend whatever it takes - indeed budgets this year have risen by 15% or more at many teams, putting four into the $300M plus bracket.

When they don't have the money, or can't justify it, they have the ultimate cost saver - they pull out.

The new GPWC/SLEC agreement is the first step to distributing funds more evenly to the teams, the first step is a one off $10M payment to all teams, followed by a larger slice of TV reveneue. The next step is to encompass the revenue from trackside advertising, etc - so the teams see some of this revenue too.

Ulitmately this will ensure the survival in the short term of teams like Minardi and Jordan, and provide the car makers with a bit more of a financial benefit from being in F1.

As for cost cutting, unfortunately most of the voices on that are coming from teams who are lacking in budget - you don't hear much on the subject from Toyota or Ferrari, for example.

Everyone know's the costs are too high, but no one knows how to implement a cost cutting scheme - virtually all the FIA attempts to increase costs have led the team to spend more money insteat. Moves like the single engine rule have been dismissed as equally expensive by the car makers due to the development costs.

Richard Parry-Jones from Ford and negotiator for the GPWC has raised the subject of capping costs, but it needs a concerted agreement from all parties to move forward.IMO

http://www.grandprix.com/ns/ns12588.html

[Armco Bender]

Meanwhile Ol'Bernie keeps pocketing the us$10 million per race license fee,which at the end of the season should leave a healthy $180 million in his bank,should keep him in beer & milk for another year.

[Gt_R]

The only reason why you hear enthusiastic efforts to cap cost is because every team in F1 is freaking selfish. They work ONLY to their own benefits..and if they can't have the budget to match others..they complain to have it capped to their level.

Pitiful really Jaguar.

I believe that there is almost no way that money spendings can be reduced significantly. Maybe a few million here and there, but if they expect big cuts...it's very hard.

[Super Tourer]

This is the nub of the issue, the top budget's have grown to such an extent that even savings of $10M are neither here or there out of a $350M budget, whereas to Jordan or Minardi they would be make or break - but ironically there are very few savings that Minardi or Jordan could make.

They don't test outside a race weekend or operate a seperate race team.

They don't have every bell and whistle that the top teams have.

They have already shed staff and effectively operate a skeleton team compared to the top four.

The base line figure is that it cost's $40M-$50M or so as a bare minumum to put two cars on the grid at 18 races, with an engine and tyres ready to go - and give or take a few - that is the sort of money Jordan and Minardi generally have to play with.

Sadly, all we will see is a bit of tinkering here and there, it will take a wake up call of say two manufacturers to pull out for people to come to their senses IMO. F1 management style is reactive not preventative.

It's worth mentioning that the soaring budgets are now an effective barrier to entry, as any CEO eyeing the figure's will see they need to commit $1Bn over 3 or 4 years to be in the ball park for a few point finishes, which is enough to get most shareholder's choking on their canapes.

It's too expensive, it's unsustainable, it will all fall over one day, with 99% of the people who could do something to avoid it sat on their hands waiting to become spectators to the event.....

All IMO, as ever!

[skyblue]

what makes me really mad is that there appears to be no drain down of the income generated from F1 towards drivers on their way up. In the way for example that the Tennis works.

While Bernie et al literally soak up millions and Flavio and Eddie are on their 100ft Sunseekers there are extremely good drivers who have no support whatsoever!

All the drivers PAY for the privilege of providing entertainment for the paying public at Brands and Silverstone but more and more of the cream are falling by the wayside. It's too difficult for a gifted young driver to also be gifted at marketing. So F1 loses the best drivers by not supporting them and allows the commercially gifted to drive instead. AAAArgh!

[joe rossi]

I have been thinking about this issue recently, and surely the pot is big enough to guarantee each team a budget of say £30 million, regardless of TV rights, etc. This should ensure that Minardi and Jordan make it onto the grid each year, and maybe don't need to take pay drivers every year, there by raising the standard all around (ie Justin Wilson or Davidson, not Zolt etc in the car). Various parties seem to be taking a massive slug of cash out of the sport with very little going back in. I think the teams deserve a better deal, regardless of the GWPC issue.

[Mr V]

Originally posted by joe rossi
I have been thinking about this issue recently, and surely the pot is big enough to guarantee each team a budget of say £30 million, regardless of TV rights, etc. This should ensure that Minardi and Jordan make it onto the grid each year,

Sounds good in an ideal world, however, it just means that the top teams have an extra £30 million to spend, aswell, leaving the tail end charlies..... tail end charlies!

[Woolley]

I really have never understood why teams have to be manufacturers as well. If someone can make a chassis, why shouldn't they all buy it if they want? They've still got to run it and find someone who can drive it. Does anyone care if half of the grid are last year's Ferraris with different paintwork? They all look much the same anyway.

[skyblue]

Let's face it, although it's not very purist, if the team were running a single chassis we would have so much better racing, not to mention the cost savings.

Yes it's great to have the team building unique cars, but the performance disparity frankly is killing it. It's definitely broke, so someone better fix it.

[joe rossi]

Originally posted by Mr V
Sounds good in an ideal world, however, it just means that the top teams have an extra £30 million to spend, aswell, leaving the tail end charlies..... tail end charlies!

I agree that it would give the top teams even more cash, but that wasn't the point of my post. The point was that it would ensure the survival of the lower teams. They would still need to get sponsorship to improve, but they would not need it to survive. The top teams will just use it to pay for the hospitality suites!

[Liz]

Dare I say that if you can't afford to be there, you ought to go elsewhere? Welfare only works for so long before the wallet is empty and the gravy train has to halt; giving people "money for nothing" encourages them to live beyond their means in the fond expectation that the jackpot will never end.

There are a lot of racing series in which the "tail end charlies" could afford to compete and compete well; if everyone were really interested in competition, and not in the glitz, glamour and opportunities to show off that F1 affords them, they'd be making other plans.

As for welfare for drivers, sorry, I'm against that too. If you can't convince anyone to believe in you enough to help you realize your dream, you won't be able to make it when you get there. What doesn't kill you will make you strong. And handing people things on a platter makes them not only dependent, but convinced that everything else ought to be handed to them as well ... equal opportunity becomes a demand for equal results.

Formula One has become a place for overpaid, overpriced showoffs who are happy to pay to be there, and apparently there are plenty of people who still want to watch them just the way they are. Until they become unhappy enough to do something about it, and you become unhappy enough not to watch it anymore or buy their stuff, why shoul they change a thing?

[Aysedasi]

I agree entirely. Yes, I watch GPs still (although I slept through 2/3rds of the race last weekend, it was that enthralling), but, having lived through at least one other F1 "era", where as far as I'm concerned, at least there was some racing going on, it continues to amaze me that so many millions of people still do tune in and then get incredibly excited when, during the course of an entire GP, one driver actually manages to pass another one - maybe once. The reality that despite the huge amounts of dosh being invested (at one end of the pitlane, anyway), F1 has become stale, sterile, banal, whatever expression you choose. B*******g around with the qualifying procedures does not guarantee any kind of decent racing. Why the minnow teams bother to try and just exist from year to year in F1 defies belief, when, as Liz says, they could move into other forms of motorsport and probably be quite successful reasonably quickly.

[Adam43]

I don't like a lot about modern F1, agreeing with a lot that has be said here. I'm not a great fan of the car spec (although the power is lovely!). I also think it is needlessly expensive, although agree with what Liz says about charity and F1.

However these calls come after Melbourne. Which I didn't think was that bad. It strikes me that just maybe most of the backlash comes not from that race, but more because of the team/driver that won it. There was no overtaking at the front because Ferrari did such a good job - this happens in every sport and every branch of motorsport and always has done. If F1 has to be worried then I suggest that a lot of other series need to be too.

Having said that though, there is a lot that can be done to F1. Not least a reduction in costs. Which I guess was more the point of the thread It is a problem, although you can see why the team bosses maybe don't realise - I hear most team's budget has increased this year!

[Liz]

But why should they reduce costs or change anything else when you're still watching it the way it is now?

Hockey teams go through "dynasties" in which loud calls are made for the team to be broken up so there will be competition again. Eventually the players got old and retired, and then things changed. Some day TGF will retire. Then racing will get good again for those of us that care. But til then, everyone else can enjoy whatever it is they like about the series just the way it is.

Then you have the Toronto Blue Jays, who won two World Series and sold off all their winning players and have never had another good year.

[Gt_R]

Quote:"Some day TGF will retire. Then racing will get good again for those of us that care."

Hmm..i care.. but i believe F1 will get good again if they bother to kick out all the 19 drivers who simply aren't good enough to provide MS with competition But i guess, replacing the best to bring down the standard of competition is far easier...

[skyblue]

I agree with AdamAsh but it's just a bit tedious waiting expectantly for a GP, and then for it to be particularly bad because 'it's not a Michelin circuit' or some other genuine but tedious reason.

My interest in this is working out how the teams are going to afford the level of competition if the show is not up to much and the sponsors are really genuinely not there? Seriously how long with it be before a leading manufacturer pulls out?

[Adam43]

Thanks skyblue for an interesting thread.

And on that point:

Originally posted by skyblue
My interest in this is working out how the teams are going to afford the level of competition if the show is not up to much and the sponsors are really genuinely not there? Seriously how long with it be before a leading manufacturer pulls out?

May I just remind people that this is the topic of the thread. It is not another chance to bash a driver. It'll (obviously) only bait people into responding.

[Super Tourer]

Trouble is that probably 99.9% of the people who watch it are unaware of the finances behind F1 and the sustainablity thereof.

How many UK football fans who followed Leeds Utd FC (for example) as casual spectators knew they faced financial ruin?

Any series you can name that has seen a manufacturer spendathon in the pursuit of success - be it Touring Cars, World Sports Cars or WRC, etc, the big loser every time has been the series itself.

F1 at the moment faces three vital problems at the same time, which I would suggest is the first time these three have come together.

1. The budget's are unsustainable
2. The performance gap is huge and growing
3. The price of entering f1 and the lead time to achieve any meaningful results is preventing new entrants.

Over the years, F1 has had each of the above issue's, but I'm not sure they have all come together.

[Adam43]

Looking at those 3 points. All these are problems, but I think there are reasons why they are being ignored.
1. A lot of teams haven't reached the point where they are unsustainable. Especially when budgets keep increasing.
2. The performance gap is perhaps not conceived to be that big. I think there are several (majority?) past years when it was much worse. Also looking at other series is it much different? Unless it is single make, very restrictive or has equivalency there are no better than F1.
3. This is the one of the three that is most obvious and everyone knows. The problem here is that the people who could change this are already in F1, so it doesn't effect them! The top teams are ambivalent to it and the lower teams are worried that their 'worth' will drop.

These are all problems, but I'm not sure they are all immediate, to more importantly seen to be immediate.

[jj2728]

Originally posted by Liz
But why should they reduce costs or change anything else when you're still watching it the way it is now?
Then racing will get good again for those of us that care. But til then, everyone else can enjoy whatever it is they like about the series just the way it is.

i don't agree. i care about f1 and am very concerned about the costs and what it has done...not so much to the top teams, but to those that minnow at the back.....the field that we are seeing now is the smallest since the late 60s....1969 i believe when grids of 15/19 cars were not uncommon....i long for the day when the 'powers that be' get ahold of their senses and do something/anything to drive down the costs and broaden the playing field, let the privateers come back...
"Formula One has become a place for overpaid, overpriced showoffs who are happy to pay to be there".....it has always been this way in f1 both pre-war and post-war, that is nothing new at all.....

[skyblue]

I agree that it's always been this way but never before have the teams been so dependent on Joe Public for their money to run. While wealthy individuals may have paid for the sport for decades, those days are over.

When Joe Public turns off, the TV station knows about it and next year they simple tell Bernie that perhaps they're not interested in paying for F1 this time.

The Concorde agreement means nothing unless fans are tuning in their millions....genuinely. When the trend to switch off starts, nothing can stop the media denigration and broadcast media slide into obscurity, or lower prices.

Only Bernie and Frank Williams seems to understand that the future of F1 is in the hands of peeps like us and the great unwashed, the flyovers, the un-named millions and not Ron Dennis, Jean Todt or Eddie Jordan.

[Schummy]

I think an eventual F1 collapse, if it happens, I can happen very quickly. F1 dooesn't have a wide base to hold it.

It is not like football(soccer) what own a huge base of fans who knows everything about the sport and inherited it from their parents, there are a lot of journalist feeding it and there are a lot of facilities along villages and cities. The same about other massive sports, i.e. NBA or even NASCAR in different degrees.

It is difficult to meet someone who has aknowledge comparable about F1, There are just a handful of facilities, and frankly speaking, sport journalists are pathetic about their awareness of F1.

When the huge TV business begins to fail it will simply be just a switch off for a TV broadcaster. Without the huge sum of money&publicity the blood of F1 will not be there and... The whole card-castle will fall.

Well, it is a bit too dramatic, but I think the message is there