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Making the good better - A vision for Formula One: Step Two

FEATURE BY TONY PURNELL
11/04/2013

Step Two: Fair competition, do we want it?

There's always an elephant in the room with Formula One when it comes to a fair competition: Money. It pervades every aspect of the game, yet until relatively recently it was never queried as whether finances should form part of the regulations. The unwritten rule it seems is simple; if you want to win you better have the cash to spend and lots of it. Getting the money is part of the competition. It's all out total war. If the billionaire spends more than he ever dreamt possible, too bad, there will be another to overstretch himself and for a while that big spender will be someone: A Big Potato Charlie, in the land of really Big Potatoes. Well good luck to them, who am I to tell people how they should spend their money? Hold the thought, however, that this isn't a particularly aspirational or noble state of affairs. Nor does the money always come from sources that are whiter than white, a problem if you are a potential sponsor with a family brand image to protect.

Spending a lot of money on each car is essential for Formula One as high technology costs money, and leading edge technology is part of Formula One's brand, an essential part of its DNA. Shabby old tech 'spec' cars, such as one seen in IndyCar until 2012, will be a big turn off to the F1 fan. It's more than that. The cars need to be awesome, and awesome costs money. The thing that is less clear is just how much one needs to spend to maintain this brand image.

In 2003/4/5/6 teams were spending truly biblical sums on their entries, the top half of the grid in the order of £350m each year. Today there is a dramatic change to somewhere around £250m all-in for the same teams. Do the public view 2013 Formula One as shabby and old technology? Of course they don't, indeed I'd be a little surprised if the average viewer has really noticed the reduction, because the cars are still awesome. Blimey, even the back runner cars are fantastic to the average fan when they see them close up. Moreover has public interest appreciably diminished during this period? No, the TV figures are still grand. So one has to say that this huge reduction has not harmed Formula One a jot.

Noteworthy is that the disparity of spending from top team to, say, the ninth or tenth team has remained constant (to the nearest ten percent) during this time i.e. Ferrari or Red Bull/Renault spend about five times more than, say, Marussia or Caterham. One might think, well perhaps it is not the amount per se, it is the disparity in spend that is important to Formula One. I can't see any compelling argument or evidence to support this, can you?

So it appears that the present spend at the top of circa £250m is not a problem for Formula One's popularity. At what level of spend would the public think what appears on the grid isn't 'proper' Formula One? £70m? £50m? £30m? It's hard to be sure, but my feeling is that teams like Sauber or Force India do a good job that people view favorably. This would put the figure around the £50m to £80m mark. Back in 2008 when such a figure was suggested as a suitable amount for a budget cap we at the FIA met with a high degree of ridicule from all but the lower ranking teams. Flavio Briatore even suggested that we were trying to 'kill' F1 with such a reduction. Max Mosley opted for an even lower figure of £35m, but Max always knew what the end game was and I suspect had £50m in mind as the compromise number. Bang on.

Now before I jump into a diatribe on the virtues of a budget cap (next article), I should say that the amount of spend is not the root issue. Instead it is whether or not Formula One should be a sport based on a level playing field? To date this has never happened. All the teams being equal as far as finance resource would be a dramatic change, but the result would likely be very similar in terms of race entertainment. Indeed one can compellingly argue that the entertainment would be better rather than worse. Today's also-run teams might make a better fist of it than the established winners, so we might see Williams and Sauber fight it out at the front while Ferrari and McLaren struggle in mid-field. It might be that the status quo remains and Red Bull and Ferrari still lead the charge, who knows? This is very much the point, unpredictability is good. We do pretty much know right now for 2014 that it won't be Williams, Toro Rosso, Sauber, Force India or any of the bottom seven teams. Next year it will be Mercedes, Ferrari, Red Bull, for sure as they have the money. Lotus may keep their miracle of technical management efficiency going another year (or is it that the Genii Capital folks are finding the money - if they are, why? Are they not an investment Company? Well good luck on getting the money back.) Would it not be better if there were real hope for the rest of the grid? Would it not be better if owning Lotus F1 were a truly great investment that actually pays?

A look at the history books shows that different teams have dominated the front from time to time, and when someone new appears (like Red Bull in 2010) no one watching on the telly seems to lose interest. So I don't buy the thought that having new players at the front would be a turn off for viewers. Actually folks went wild last year when we really had some big surprises winning races.

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