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GP Week : Issue 201
17 GPWEEK.com // 17 GPWEEK.com // PARTNERS: While Formula 1 has been putting on a commendably brave face this year about spiralling costs and the ludicrously disproportionate sharing-out of the sport's income, you don't have to walk very far from the Media Centre before you bump into someone who's actually feeling the financial pain. One industry person whom I found in the Barcelona paddock mournfully reeled off a list of various unpaid debts from last year, owed by teams both big and small. The unusual aspect of this is that in years past, when everyone was living high off the hog, such bills would have been paid off months ago. The amounts involved were piffling by comparison with the costs, say, of leasing engines. A couple of days earlier, as it happens, Renault F1 boss Jean-Michel Jalinier had ratted, without actually identifying them, on a couple of teams which he said were behind in their payments for the very expensive ($50 million-plus per year) power units which his company supplies. The finger of suspicion pointed at Lotus and Caterham, which have admitted difficulties in raising the sponsorship required to sustain their racing campaigns. And although both teams have since muttered not entirely convincing denials that they were in default, I'm cynical enough to point out that in half a century as a reporter, I have yet to encounter any reputable businessman who saw an advantage in advertising to the world that he had not been paid by folks whose money was already sitting in his bank account. Sooner or later, the chickens of impending bankruptcy will come home to roost, because Formula 1 is costing at least half the teams a lot more than they can afford to spend. Things would be better if the bankers who stand behind Bernie Ecclestone were less short- sighted and a whole lot less greedy. They've already paid themselves gigantic slices of capital out of the business, which means (to take another aphorism from the world of poultry) that the goose which has been laying the sport's golden eggs for the last 30 years will soon die of exhaustion. A couple of weeks back, FIA President Jean Todt chaired a meeting in England of concerned team bosses (plus Ecclestone) at which the smaller squads were hoping to hammer out a solution to the dilemma. They are particularly peeved that while Ferrari and Red Bull snaffled about $100 million each last year as their share of the commercial rights, Caterham (below) got just $6 million after a season-long struggle for the penultimate (10th) place in the Constructors' Championship. Marussia received exactly nothing for finishing 11th. That meeting ended inconclusively, with nothing to report except that another meeting will be held next month. Todt, it would seem, has just been pretending everything is fine and dandy in the F1 hothouse. But then he showed up unexpectedly in the Media Centre at Barcelona and mumbled some supposedly off-the-record observations. First he spoke of the huge cost of building and developing a car capable of running within reach of the three or four megabucks teams at the front: "We know the budgets are between 100 and 400 million (US dollars) -- and they (the big teams) seem to be very happy to reduce that by two or three millions, which is ridiculous," he said. "When we speak about reducing [costs], we must consider 30 or 40 percent cuts. I would feel comfortable about that." Even if a cost cap is agreed by all (an unlikely outcome), nobody knows how it is to be enforced. Cost restrictions and a limit on the number of employees are suggestions which have foundered, largely because of the difficulties in enforcing them. "So what can we do?" asked Todt in Spain. "I want to see what comes out of all the teams. Hopefully they are sensible people and will provide some sensible solutions." Meanwhile, Claire Williams has been telling journalists of her own frustrations over the cost of going racing, even for a team which was once a giant on the grid: "We are at a really critical junction now where if we don't do something about it and take responsibility, then we are going to be causing ourselves some serious damage," she told the press in Spain. "W illiams is working really hard to make sure that we keep pushing and driving the conversation, coming up with proposals that will save costs in F1. But they have to be significant." Meanwhile, four of the smallest teams are working on a scheme to report the megabuck outfits to the EU Commission for inequitably dividing the cash that finds its way back into the sport after the bankers have taken their slice (about 45 percent of all income). Trouble is, decisions like that take the EU bureaucrats years, decades even, to make up their minds, so good luck with that. Meanwhile, if you're interested in seeing the sad and exceedingly messy process of an F1 team becoming insolvent, just wait around a bit. There's likely to be more than one. SPENDING lIKE A SAIlOR OPINION OPINION MIKE DOODSON