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SBD Global/February 18, 2013/Leagues and Governing Bodies

Whitmarsh Says Seven Out Of 11 F1 Teams Struggle Financially; Ecclestone Denies Claim



F1 CEO Bernie Ecclestone has denied claims that F1 teams are financially stricken.
There "have been whispers" in recent years in F1 that "all was not well financially with some of the teams," according to Andrew Benson of the BBC. One of the most senior figures in the sport has finally "put a public voice to them." McLaren Team Principal Martin Whitmarsh said "of the 11 teams, seven of them are in survival strategy." Whitmarsh "is not just shooting from the hip." As F1 Teams' Association chairman, he "is well-placed to know what he is talking about." The evidence is out there, despite F1 CEO Bernie Ecclestone's claim last week that teams "all have more money than God." There "does not appear to be an immediate danger, but signs of trouble are plain to see." Marussia and Caterham, the two teams at the back now that HRT has gone, "have chosen to replace experienced drivers who command a salary with novice 'pay-drivers' who bring much-needed sponsorship income with them." It should also "have escaped no-one's attention that the airline business of part-owner Vijay Mallya is in serious trouble," although Mallya has long insisted that the Force India F1 team "is a separate business and therefore unaffected." Last year, "there were even problems at Lotus," which finished fourth in the constructors' championship. The fundamental causes of the problem "are both simple and complex." Firstly, the world "is still battling with the economic problems caused by the banking crisis" of '08. F1 "is not immune." That is "the simple part." Now "for the complicated bit." For many years now, the teams "have been battling to get a bigger share of F1's income," which in '11 was about £963M. Until recently, the teams "collectively received 47% of the total revenues, on a sliding scale from Ferrari down to the least successful team." But still there "is resentment at how much money F1's commercial rights holder, the venture capital group CVC, is taking out of the sport." Whitmarsh said: "Bernie has done a fantastic job for the owners. We can criticise him, but he's doing a better job than we are. He's keeping the money on behalf of his employers" (BBC, 2/15).

NO BELLS, NO WHISTLES: The LONDON TIMES' Kevin Eason writes that F1 was once "the sport that measured success by the size of the yachts and wingspan of the private aircraft,'' but now the circuit "is facing the end of the era of financial excess and looking forward to a more frugal future."  F1 has spent 30 years "on a global smash-and-grab raid, pulling in billions of pounds to fuel gas-guzzling cars and turning drivers and team owners into multimillionaires." That could all be a "thing of the past" after McLaren, one of the biggest and most successful teams of the modern era, disclosed that they were thinking of “downsizing” from their three-story mobile headquarters. Gone, too, are the glitzy launches. Red Bull was the only team to open up the champagne to kick off to the season, "a stark contrast to the days when the Spice Girls were hired to provide the entertainment. Whitmarsh: "There are some reality checks going around. We used to hire Alexandra Palace and launches were a competition. People don’t want to see £1 million extravaganzas anymore. Times have changed. We peaked"  (LONDON TIMES, 2/18).

SOLID FOUNDATION: AUTO WEEK's Christian Sylt reported Ecclestone said that "none of F1's 11 teams is at risk of collapsing despite the weak economic climate." Last week, it came to light that Ecclestone "had arranged a meeting" on Feb. 7 with F1's smaller teams -- and this "fuelled speculation that they face a funding crisis." However, Ecclestone said that the outlook "is not as bleak as predicted and, in fact, the point of the meeting was to go over the details of the Concorde Agreement, the contract which governs F1." Ecclestone said, "On Thursday I was bringing the teams up to speed with the new Concorde Agreement. They are all safe. We have got a deal with them all, including Marussia. We are continuing with Marussia. I thought they were going to go but they are not" (AUTO WEEK, 2/11).
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