Mark Hughes
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Face to face with Todt, small teams at risk, advantage Rosberg
I believe that there is a conspiracy in Formula 1 that is trying – and at the moment looks like succeeding – to keep costs high enough that they can induce a few small teams to expire and thereby trigger three-car entries from bigger rivals. At least two of the major four teams are supportive of the plan, which would allow them to retain huge factories built up during the boom years and their attendant cost bases. In reducing the number of teams, it would also create larger slices of the thin cake not devoured by the sport’s owners. Essentially, all of F1 is being skewed around two teams – McLaren and Ferrari – having facilities that are too big and too expensive for the current climate. They can afford them, but only because the others are making sacrifices. F1 collectively cannot afford them because it cannot afford the iniquitous income share among the teams that is necessary to feed the giants. Yet that is the direction these teams – and also to a lesser extent Red Bull and Mercedes – are taking.
At the time of my interview with FIA president Jean Todt (p36), he still held out hope that he was going to be able to mandate some serious cost-cutting measures suggested by the F1 Strategy Group. Almost inevitably however, most of these were blocked – blocked by the very teams that were part of the strategy group that formed them. Given that Todt is effectively handcuffed by the processes, it means that those big teams have effectively and cynically stalled what was a genuine attempt at introducing some financial sanity and sustainability into its structure.
As soon as Ron Dennis returned to the helm of McLaren, and Martin Whitmarsh was banished, the team’s whole attitude to cost control U-turned. While Whitmarsh had been proactive in trying to find a way through the nightmare of imposing and policing a cost cap, Dennis came out immediately and said he was against the idea and had no interest in being part of it. It was his job to look after McLaren and that’s what he was going to do. Ironically, the costs associated with running McLaren’s fantastic MTC facility are why teams such as this have such a voracious appetite for income. That income is squeezed from a total available pot that is smaller than it should be, because the sport’s ownership is greedily structured. And even within that pot the distribution between teams is iniquitous. Instead of spreading the pot so that even the smallest teams can have a viable business, the big teams would prefer to be rid of the smaller fry, thereby taking their meagre income and directing it at propping up facilities that are just too big, too costly.
If instead of trying to introduce a cost cap teams were told they could not have a head count of more than 400 people (excluding engine departments in the case of Mercedes and Ferrari), then Lotus, Sauber, Force India, Toro Rosso, Marussia and Caterham would automatically comply. Williams would need to trim some jobs. Red Bull and Mercedes could probably achieve it with much less pain than McLaren. Their facilities are much smaller and they use sub-contractors more extensively. Ferrari could surely disguise it easily enough by re-assigning official roles into the production car company. McLaren?
So F1 heads on with a few more restrictions on wind tunnel and simulation time, but essentially on a path that spells extinction for some of the smaller teams. That’s why for all its surface fairness, it’s unhealthy having teams – particularly the big ones that largely comprise the F1 strategy group – coming up with the rules. They need to be imposed by an enlightened dictator (like we had), albeit one who doesn’t sell the sport out or become personally vindictive against those standing in his way (like we also had).
At the moment we have a very fair governance structure being subverted by self-interest among the big teams. The egalitarianism of the structure, outlined by Todt in the interview, makes it vulnerable to this subversion. The subversion in turn is being driven by too much of the income leaving the sport through the owners.