by Danilo Schöneberg
Please note that this feature expresses a personal opinion that doesn’t neccessarily match the opinion of other TJ13 writers or anyone else for that matter.
In yesterday’s Hippo’s Rant I proposed that those teams, who cannot afford F1’s huge costs, leave a contrail and if too few remain, to let F1 as we know it, die in peace. Predictably that was met with criticism from the readers and most of them still cling to the hope that F1 as they have gotten used to can still be salvaged, but it can it?
Why is F1 in such a sorry state?
The kneejerk reaction is to shout ‘credit crunch’ or ‘global economic crisis’, but that’s just hogwash. The economic crisis was mainly about the banks, who got punished for their corrupted methods of systematically defrauding their customers. F1 is a big company business, but the blast wave of the imploding banking sector mainly hit small and medium businesses and people, who were poor in the first place. All the big corporations, who shed crocodile tears about having to lay off people, were either using the economic climate as a welcome excuse to maximise their profits or they were so badly run that they would have hit problems, even without a disintegrating banking sector.
The F1 teams do not produce consumer goods. F1 is the world’s most expensive “mine is bigger than your’s” competition. They build highly advanced prototype cars for the sole purpose of determining, which one is the fastest. Since they don’t produce anything they can sell, an F1 team’s major or only source of income is to seek sponsors, who pay them money to have their name or logo painted on them. Another source of income is the share of money they get from the earnings of showing F1 to the world.
Saying that sponsors went away because of the current climate is not logical. A gloomy economic atmosphere is making people shy of buying things that are not a strict necessity. So if anything, to fight falling sales, companies have to increase their efforts on advertising, not reduce them. The real problem is that no industry really took over the big spending trousers of the tobacco industry, which was chased away by bigoted governments, who forbid tobacco advertising, but subsidize tobacco farmers. I’m looking at you, European Union. It is legal to sell cigarettes, it is legal to own them and the state gladly collects the massive tobacco tax, yet advertising them is illegal. Why? To quote the late George Carlin: “Kids don’t start to smoke, because a camel in sunglasses tells them to.”
So not only were the biggest sponsors F1 had since the 60s chased away, the incentive for others to take over is greatly reduced by F1 literally being all over the place. Back in the day most races were run in Europe with a few overseas stops in Americaland, Japan and Australia. Consequently sponsors with a strong interest in the European market were lining up. But unless you are a company that wants to sell its wares literally everywhere, you don’t get much exposure for your money even with more races than in the olden days. Russian gas multi Gazprom is a big spender in terms of sports sponsoring, so they would be a natural match for the rear wing of the Marussia cars, wouldn’t they? No, they aren’t because they operate mainly in Europe, which is why they sponsor big European football clubs instead of a Russian motorsports team that is forced to toil about on god-forsaken Tilkedromes at the wrong end of the world.
The second big problem is that Ecclestone and his shady bunch of business partners, all proud alumni of the Cosa Nostra School of Applied Fraudulent Methods presumably, are siphoning money out of F1 by the bucket load. F1 generates such a gigantic amount of money from TV rights, hosting fees and whatnot, even Marussia could operate on a 100 million budget before they even slap on the first sponsor sticker. Problem is that Bernard E. and his kleptomaniac posse pocket half of the revenue for no reason other than to become filthy rich. In 2012 that left about 700 Million to be distributed among the teams. That’s how big the pie was after the toad from Suffolk had wolfed down half of it already.
The terminally naive will now think that we divide those 700 million by twelve and everyone gets 58,3 million, thats massively more than Marussia’s entire budget. But no, first a slice of 17.5 million is taken off the top and given to Ferrari for being Ferrari. That others like McLaren and Williams have also been in F1 since the Romans left and even privateer squad Sauber is soon having its 20th F1 anniversary is just a pesky little detail. The remaining 682.5 million are divided into two pots of 341.24M each. The first pot is distributed in equal shares among the 10 or 9 teams, who have been in the top 10 twice in the last three years. That’d be 34.2M each. Mind you, that’s still a Marussia budget’s worth of money. The second pot is divided by a tricky formula, otherwise known as witchcraft, based on final championship position in the constructors championship.
These numbers are somewhat simplified, since there are also ‘special treats’ involved for teams, who willingly bend over the nearest piece of furniture. when Bernard wants to ‘service the account’, like for instance letting go Adam Parr, because the dwarf doesn’t really like him. But in essence that means, those who could spend the most will automatically get more money back, unless you are Toyota or Honda and have no idea what you’re doing in the first place.
Call me stupid, but I cannot see how such a system can achieve anything but to deliberately starve thos to death, who have to operate on a smaller budget to begin with. Germany has something called the Länderfinanzausgleich, which in essence means, those states like Bavaria and Baden-Würtemberg, who are finacially and economically stronger than others, like Hamburg or Mecklenburg-Vorpommern have to pay some of their earnings into a fund, from which the weaker states get some money to help them along and avoid a ‘poverty line’ across Germany, like the stark difference between northern and southern Italy for instance. What might sound like Communism or Waldorff school, makes sense on a second look. After the war Bavaria was a piss poor agrarian state, who was firmly on the receiving side of this financial construct. They invested that money, industrialized their state and are now the biggest constributor to the fund, which in turn strenghens other states and Germany as a whole economic power. Why not indroducing something like that in F1? Take part of the revenue, put it into a pot and pay it out proportionally in reverse order. As Marussia gets financially stronger, they might rise in ranks, but the higher they climb, the less ‘extra money’ they get and they either keep going by their own strength or will drop down the order again. May sound prepostrous, but it makes more sense to me than handing out money, just because your cars are red.
Can F1 be fixed?
Theoretically yes. We could wait until the German prosecutors have locked up Ecclestone and then reverse the fraudulent deals that enable him to milk money out of F1 in biblical proportions. Then give the money back to those, who worked for it – the teams. But that would make a trifle too much sense for the world we live in. In a world in which career criminals don’t get locked up, but become Italian Prime Minister instead or rule F1, you can’t really expect any sort of sanity.
The first and foremost thing to do is getting rid of Ecclestone. As long as he and his crooked background posse are about, F1 is terminally doomed. He may be the reason for making F1 the global sport it is now, but he’s also the one, who didn’t notice when the cow’s udder was empty, he kept on squeezing and squeezing. Now the cow’s about to die.
The next thing – the kneejerk reactions have to stop. Back in 2009 – as ‘means to reduce cost’ – the testing ban was introduced. First of all that cost a lot of jobs as most teams basically had to sack their dedicated test teams and in return teams invested even more money to build obscenely expensive simulators. Back in the day Ferrari was pounding around Fiorano day and night and that got them a development advantage over smaller teams like Minardi, but even Minardi could afford a few test days every year and more importantly, it allowed them to sell test drives to rich gits for added revenue. The smaller teams of today cannot afford a simulator, thus they have nothing at all. Minardi’s (perhaps) 10 testing days to Ferrari’s 200 was still a better quota than Marussia’s grand total of Zilch to Red Bull’s 200 simulator days. It achieved the exact opposite.
Is the cost cap the way to go?
If you read yesterday’s rant, you already know what I think about this hogwash. First of all, you cannot enforce it. If you control how much Mercedes’ Brackley factory is spending, how do you make sure that Merc doesn’t have a few engineers and a supercomputer back in a Stuttgart basement doing additional development work. How do you make sure that some of Ferrari’s development team isn’t securely obfuscated and buried within Alfa-Romeo? How can you ensure that a Red Bull technology intern, who officially is the dedicated paper delivery boy for the stratosphere jump team, wasn’t in fact secretly Adrian Newey’s personal pencil sharpening assistant? The moment that the teams agree to a cost cap, is the moment they have worked out how to cheat it.
And why should the costs be capped? How about not letting them occur in the first place? Track testing is cheaper than an obscenely expensive simulator. Yes, the bigger teams will be able to afford more testing, but the smaller teams will at least be able to afford SOME testing as opposed to none at the moment. And get rid of the idea that the playing field has to be levelled. That doesn’t happen in any sport. Nobody proposes to put Usain Bolt in lead shoes, so that someone else can win for a change. The Austrian Ski jumping team puts a lot of money into youth development and material research. That’s why the majority of ski jumping events in recent years were won by Austrians. Nobody proposes a training ban to hobble them.
The whole point of F1 is to build a car that is massively faster than all others. If you invent gimmicks, like double points for a fake showdown, you destroy the very essence of what F1 is all about.
And finally, get F1 back to were it belongs, Europe. Back in the day for most races you put your cars and stuff in the back of a few lorries and went to the track. These days for most races you have to book expensive flights, because the race is held on a brand new Tilkedrome in North-Dictatorstan, because they paid more money than, let’s say, Estoril.
If you really want to get the costs down, stop introducing expensive malarkey like masses of overseas races, simulators and rubbish tyres that need extra testing just to make sure they don’t kill the drivers. Oh, and before I forget: Get rid of Ecclestone. It’ll help much more effectively than any cost cap.