Teams going bankrupt in F1 is nothing new but a solution is needed

http://www.theguardian.com/sport/2014/nov/02/formula-one-bankrupt-marussia-caterham

Version 0 of 1.

Graeme Lowdon looked an almost spectral figure as he passed through the paddock of the Circuit of the Americas before the United States Grand Prix.

The sight of the president and sporting director of the Marussia team, now in administration, was an uncomfortable reminder to Sauber, Force India and Lotus, who now constitute the sport’s back-markers along with Toro Rosso, of the fragility of survival in this most glamorous and expensive of worlds.

The future of Formula One was no clearer after chief executive Bernie Ecclestone’s protracted expression of mea culpa in the paddock on Saturday afternoon. Everyone – just like Ecclestone – knows the problem but doesn’t know what to do about it.

Just 90 minutes before the race in Texas got under way the three teams who were ready to boycott the race, Force India, Sauber and Lotus, announced that they would take part.

But the crisis, it seems, has only been eased for now and will return before the next race in Brazil unless there are significant developments.

Bob Fernley, the deputy team principal of Force India, said: “It’s been acknowledged that there is an issue. The question is can that issue be resolved. But the fact that it’s been acknowledged is enough for the moment to be able to progress.” We have now lost 153 teams since the Formula One world championship started in 1950; that’s a casualty rate of a little over two teams per year. So what’s happened to Caterham and Marussia, we should remember, has always happened and always will.

The collapse of two teams inside the same week is something that did concentrate the minds, particularly those who are now at the back of the grid. But it should also be remembered, when we are talking about the survival of the fittest, that it is sometimes the strong teams who fall away. In recent years we have seen BMW, Toyota and Honda walk away from F1. Their main business is making road cars and that, ultimately, is what they decided to return to. Honda, of course, will make a return in 2015 as McLaren’s engine supplier.

Lowdon, speaking just before Marussia went into administration, told me: “We have a strategy group but there isn’t a strategy articulated to the teams. The people in that forum have an incredibly difficult job because they are being asked to do something which is very counter-intuitive and difficult, because they have to put the sport above their team. And if they can’t do that they shouldn’t be there. People have placed faith in them to put the big picture above their objectives. The fans don’t seem to be terribly impressed by the short-term tactical things like double points or not doing any running on Friday. The fans are not stupid.

“And the fans are the ultimate deliverers of the value of the sport. They’re the ones why buy the produce, whether it’s from the sponsors or the teams. They are the ones who drive value into the business, so we have to listen to them. And they want diversity and a degree of uncertainty to keep them tuning in. They get the entertainment value, because these cars we have are fantastic.”

In view of what has happened in the past few weeks, what Lowdon then said sounds extraordinarily sad. “Ultimately it would be good to see a growth strategy that’s articulated that everybody buys into and which provides a route map for the way forward,” he said. “Because the current recipe, in terms of sporting and technical regulations, has produced a sport that nobody can afford.”

The awful thing is that this crisis has been talked about ever since the start of the most recent recession, in 2008. And it was in Monaco in May last year that Martin Whitmarsh, then in charge at McLaren, said: “Formula One works best in a crisis, but it is a shame that we have to create a crisis to deal with.

“This sport needs 10 or 11 teams and we should fight to keep the 11 teams we have now. But we are not good at doing these things. We seem to drop the ball. I fear that we will have a crisis and then we will have to get real and sort it out. I cannot see in their shoes [the seven smaller teams] how you can construct a sustainable business model.”

Earlier this year the smaller teams screamed that F1 was heading for a rocky ride unless something was done quickly. But their words were not heeded – or if they were they were ignored. A plan to cap costs was replaced by money-saving moves which were never going to make any difference. Ecclestone has not done anything, as if distracted by his two court cases, in London a year ago and then in Munich. And there has been a disappointing – though hardly surprising – lack of leadership from the FIA, the sport’s governing body.

Now CVC, the private equity company which has a majority shareholding in F1 and has taken billions from the sport, must play a full part in ensuring the show stays on the road.