News and views on motorsports

Friday, January 07, 2005


PlanetF1 has this interesting editorial here discussing among other things, the plans for the GPWC rival series in 2008. Underlying this of course is the share of revenues allocated to the competing teams. The article goes further and discusses the structure of those F1 revenues. Revenues from Formula 1 come mainly from the payment from the circuits themselves, TV products and from that corporate fat cat crony pampering Paddock Club, which as you may guess provides corporate entertainment.

As is widely known, the teams receive some 45% of the revenues from the main source of revenues that is the TV revenues. The market for this of course runs into the billions but then the teams collectively spend billions as well to compete (successfully or not). The teams quite understandably want more of these revenues. After all, in the spectacle that is Formula 1, the cost of providing that spectacle is borne mainly by the teams.

As an example take that brand spanking new hideous Hermann Tilke creation, the Shanghai circuit. Granted it costs something like USD 300 million or so. But if one considers that Ferrari's budget for the year exceeds this amount then one will have an understanding of the team's grievances. Essentially the Greedy One gets a free ride. I would estimate that 90% of the cost of Formula 1 is borne by the teams but they get only 45% of the revenues.

One might argue that actually its the sponsors that bears these costs but then one would forget that the sponsors are there as part of their marketing efforts and gain back tons more from the worldwide exposure. Sponsors like PC Suria (Oh My God!!!) being the exception of course.

Despite his greed, people like Luca di Montezemolo agrees that Bernie has done much good to raise the corporate marketability and awareness of the sport. However, there are limits to what the teams will consider acceptable. Despite getting preferential treatment from the FIA, in the end the bottom line counts. For all you bimbo Ferrari fans out there, the cost of the Ferrari team are actually paid for by parent company FIAT, incidentally now under the control of Senor Montezemolo. Essentially the Ferrari team ARE the FIAT team. The Planet F1 editorial article paints a good picture of the dire straits FIAT are in at the moment. Put simply they can't afford to bankroll the Ferrari budget in perpetuity. If the editorial is correct, very soon their bondholders will have a controlling stake in the company.

Well, there are two ways of getting out of this. First would be to cut cost. This then would be easier on the FIAT coffers. This is something that Ferrari with its wealth of testing and development facilities are loathe to do. So Luca opts for the next approach. That is, to gain more revenues to cover the costs instead. Despite The Greedy One's USD 500 million dollar enticement to the teams, I somehow do not think that will be enough and he is not going to relinquish more monies to the teams any time soon. So, the manufacturers of course band together to create the GPWC, essentially their way to ensuring that more of the profits from the sport reaches their pockets.

If a GPWC breakaway series does kick off, my main interest is in the circuits the series will race on. It is certain that the Greedy One will do everything in his considerable power to prevent the GPWC from racing on so called "Formula 1" circuits. With the exception of Imola, Monza, Suzuka, Spa and Silverstone, I really couldn't give two raised fingers about the rest. Well, maybe I'd still care about Montreal. However, I'd be overjoyed (and many would be too) if I don't see another Tilke designed dog ever again.

Let's speculate. What other circuits could they race on? Well, how about those who don't host Formula 1 races anymore. Circuits like Estoril, Jerez, Paul Ricard, Brands Hatch (yummy...) Brands is particularly apt since most drivers love the back section on the Grand Prix track and why not? It's full of fast flowing corners. Paul Ricard has been refurbished but I hope it still has the ultra quick Signe curve. If not Paul Ricard, the how about a race on the Circuit de La Sarthe? Grand Prix cars at Le Mans? Why the hell not?

Zandvoort in Holland hasn't seen F1 action in a while. Neither has Kyalami in South Africa. We could also bring back the Argentinian Grand Prix and perhaps the Rio circuit in Brazil. Japan could take on another Grand Prix in the Toyota owned Fuji raceway. Australia? No problem. There's always Surfer's Paradise (much more viable then London for instance) or even better yet, the much loved and sorely missed Adelaide street circuit. If Tony George of Indianapolis doesn't agree then the GPWC could go to places like Road America or Laguna Seca instead. Road America especially.

I know this must sound crazy but why don't we simply dispense with the new Nurburgring and go on the Nordschleife instead? Yeah, I know that's mad but I just had to put that in. If all else fails there are still some wonderful circuits in the UK such as Donington Park for instance. Zeltweg in Austria is another fast circuit unspoilt by the hand of the moronic Tilke (I think!). Of course Ferraris' Mugello circuit is another good option.

Hmmm.... it would seem that if they could rope in classics like Spa and Suzuka in their series, I would imagine that from a circuit driving and RACING standpoint the GPWC could prove more interesting than watching Michael Schumacher doing spins on some silly circuit modelled after a Chinese character.

Well, we shall wait and see. Whatever the pinnacle of motorsport turns out to be, F1 or GPWC, that pinnacle will still be faced with a ton of corporate and money politics. As I have often said, it is sad to see the "sport" in motorsport degenerating into a sea of greed and money. But there has to be a pinnacle to decide the true world champion. Hmmm... which brings me to another question. Could a driver compete in both series if the calendar permitted? Another thing to look out for.

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