Cost Cutting - I Told You So

thegoth

To anyone who disagreed with cost cutting.

What I said would happen has happened. Toyota has joined Honda and BMW pulling out of F1. If costs had not been addressed this year, then next years grid would have been

McLaren
Ferrari
Renault
RedBull
Torro Rossa
Williams
Force India
Brawn

Trust me, Renault would have gone too.

EvilMonkey

Most people didn't disagree with cost cutting, they disagreed with budget caps.
No one forced Toyota, BMW etc... to spend so much. In my opinion they aren't pulling out because of the costs they are pulling out because they couldn't buy the championship. Costs at this time is just a handy excuse rather than say they are pulling out because they cant compeet for the championships.

And the real reason new teams can come in is because the fia dropped the 50 million bond for entering not cost cutting.

thegoth

For the record I agree that costs isnt the main reason, its more to do with optics. They really cant be seen to be spending hundreds of millions on F1 while all their factories are on reduced working weeks.

The reason doesnt matter, but that point that F1 can never allow itself to become so reliant of manufacturers again can not be made strong enough. Like I said here at the start of this year. All F1 is to manufacturers is an expensive bill board marketing drive. The second they think its not working or it doesnt suit them anymore, bang, its gone.

Compare that to Williams whos only business is F1. I wish all teams had a business model like them ( and Jordan, Sauber.......)

EvilMonkey

Private teems are only in F1 when it suits them too.
There only there while their money lasts or they can attract sponsors or the backer is still interested in F1.

F1 can not allow itself to become relent on the playthings of rich men either, which is what most private teems are.

It needs to have a balance and and not rely on anyone type of team.

It needs to be seen as a fair and stable competition to attract new teams when spaces are available because as history has shown, very few stick around. Manufacture backed or private.

thegoth

I disagree.

Private teems are only in F1 as long as they are making a profit or they get a great offer from someone to buy the team. Its the same as any business such as your local shop.

I cant name any private F1 team thats a play thing. VJ Malliga ( however you spell it) has been VERY clear, that either Force India makes a profit or it goes bust. Thats why he himself took a very hands on approach this year.

I think that the only play teams have been Honda (BAR) for Craig Pollock and BMW for Mario Theiesen

Manufacturuer teams never need and very rarely do make a profit.

EvilMonkey

Anyone coming in to F1 expecting to make a profit wont last long.
What's that saying how to make a small fortune in F1, start with a big one.
Vj is board with Force India, he's talking about floating it on the stock market and needs to make it look like it could be profitable. It will be a disaster.

thegoth

I suppose Williams, Jordan, Sauber.........all these teams never maid a profit ? Maybe you could say that to Eddie Jordan when you see him on the dole line, oh no, he'll be on his yacht. Its amazing how Willams can survive for all these years without turning a profit. I think Peter Sauber is just about getting by with the few shillings BMW threw him for his team

EvilMonkey

Williams are in debt, and looking at getting into other green/KERS related business.
I would say teams like Williams would be happy to cover their costs.

Jordan and Sauber are hardly shining examples of private teams sticking in F1.

Iron Hide

McLaren and Williams are probably the two most succesful private teams imo...

thegoth

Williams are breaking even for the last few years and have very little money,but thats as a result of the manufacturers creating huge costs. Since Williams joined F1 they have made alot of money

Same for Saube and Jordan. They made alot of money and got out when they saw the way costs were going. This is normal business practice, and F1 private teams are just that.

Might I suggest the Jordan and Saube would still be F1 is the costs were at that of the mid 90's.

EvilMonkey

thegoth wrote: »

Williams are breaking even for the last few years and have very little money,but thats as a result of the manufacturers creating huge costs. Since Williams joined F1 they have made alot of money

Same for Saube and Jordan. They made alot of money and got out when they saw the way costs were going. This is normal business practice, and F1 private teams are just that.

And the manufactures come in and raise their brand awareness and when the parent companies think its no longer worth it, they leave its a cycle and a balance of both is needed.

Might I suggest the Jordan and Saube would still be F1 is the costs were at that of the mid 90's.

So would Honda and Toyota.

I would suggest if F1 teams were so profitable their wouldn't be so many based in the uk due to the high tax rates they are after all businesses.

thegoth

EvilMonkey wrote: »

So would Honda and Toyota.

I would suggest if F1 teams were so profitable their wouldn't be so many based in the uk due to the high tax rates they are after all businesses.

Thats rich, since Honda and Toyota probaly the two teams the most contributed to the current high cost of F1 the most by throws 100's of millions of dollars a year an F1 thinking they would win.

I'm not saying that there is bucket loads of cash to be made for F1 teams, but unless a model is made that insures that each team has the chance of turning around a profit, even a 5% of turnover, then F1 can only be filled with teams whos main business isn't F1, which is not a good thing. Imagine if the premiership had 70% of its teams made up of teams whos main business isnt soccer. Imagine, Team Coke, Team Pepsi, Team Microsoft, Team Sony ....... It would never happen.

This is not a guarentee of suceess. Private F1 teams will still fail, but some will survive. If F1 kept going the way it ways then no private team could survice as the cost of engineering a half decent car would be way too high. Then we are left at the mercy of manufacturers, and see what they so when they dont need expensive bill boards !!!

EvilMonkey

The sad thing is F1 makes enough money to help fund every team on the grid but its creamed off by FOM/CVC every year to service a massive debt and pay the shareholders.

I really don't see a major difference between private and manufacture teams, both are welcome and both are needed and both have something to offer F1 in my opinion.

Measures do need to be in place to stop the massive spending and help fund private teams But most important the sport needs stability to attract teams, fans and sponsors. Something that's been missing for a while.

Iron Hide

EvilMonkey wrote: »

The sad thing is F1 makes enough money to help fund every team on the grid but its creamed off by FOM/CVC every year to service a massive debt and pay the shareholders.

I really don't see a major difference between private and manufacture teams, both are welcome and both are needed and both have something to offer F1 in my opinion.

Measures do need to be in place to stop the massive spending and help fund private teams But most important the sport needs stability to attract teams, fans and sponsors. Something that's been missing for a while.

Bang on.. RBS gone from Williams, ING gone from Renault(probably would have happened come seasons end anyway), and Brawn signing one-race sponsorship deals for half the season...

vincenzolorenzo

EvilMonkey wrote: »

Jordan and Sauber are hardly shining examples of private teams sticking in F1.

That's not a fair statement really. Jordan were in F1 for 14 years and started off from being very small and built up to be race winners, more than Toyota ever managed. Granted they declined and eventually left the sport but 14 years is a long time, way longer than the likes of Honda, BMW or Toyota have been in it. And the reason why Jordan left was that he couldn't afford to stay any longer, mainly because manufacturer teams had come into the sport and pushed costs up massively.

Pretty much the same argument for Sauber.

Ghost Train

Slightly strange news on the Ferrari website

We want a different ending

Maranello, 4 November 2009 – It could be seen as a parody of “Ten Little Indians,” the detective novel by Agatha Christie, first published in England back in 1939, but the reality is much more serious. Formula 1 continues to lose major players: in the past twelve months, Honda, BMW, Bridgestone and, only this morning, Toyota, have announced they are leaving the sport. In exchange, so to speak, we will now have, Manor, Lotus (at least in name only, as this incarnation has little to do with the team that gave us Colin Chapman, Jim Clark and Ayrton Senna to name but a few,) USF1 and Campos Meta. Can we claim that it’s a case of like for like, just because the numbers sitting around the table are the same? Hardly and we must also wait and see just how many of them will really be there on the grid for the first race of next season in Bahrain and how many will still be there at the end of 2010.

The reality is that this gradual defection from the F1 fold has more to do with a war waged against the major car manufacturers by those who managed Formula 1 over the past few years, than the result of any economic crisis.

In Christie’s work of fiction, the guilty party was only uncovered when all the other characters died, one after the other. Do we want to wait for this to happen or do we want to pen a different ending to the book on Formula 1?

http://www.ferrari.com/English/News/Pages/091104_F1_We_want_a_different.aspx

Do think there has to be a balance between private teams and manufacturers, while cost cutting is good for the smaller teams and protects them I think you do have to allow teams that have the resources to use those resources. It shouldn't be a case of handicapping one set of teams at the expense of the other, but those teams with the resources should have to offer something back to help the less resourced teams

thegoth

vincenzolorenzo wrote: »

That's not a fair statement really. Jordan were in F1 for 14 years and started off from being very small and built up to be race winners, more than Toyota ever managed. Granted they declined and eventually left the sport but 14 years is a long time, way longer than the likes of Honda, BMW or Toyota have been in it. And the reason why Jordan left was that he couldn't afford to stay any longer, mainly because manufacturer teams had come into the sport and pushed costs up massively.

Pretty much the same argument for Sauber.

Bang on. 100% agree

EvilMonkey

vincenzolorenzo wrote: »

That's not a fair statement really. Jordan were in F1 for 14 years and started off from being very small and built up to be race winners, more than Toyota ever managed. Granted they declined and eventually left the sport but 14 years is a long time, way longer than the likes of Honda, BMW or Toyota have been in it. And the reason why Jordan left was that he couldn't afford to stay any longer, mainly because manufacturer teams had come into the sport and pushed costs up massively.

Pretty much the same argument for Sauber.

That's exactly what i said Private teams stay until they run out of money or cant get sponsors or the backer is board with their F1 project.

The fact remains both manufacture and private teams eventually leave, very few teams last more than 15 to 20 years.

thegoth

EvilMonkey wrote: »

The fact remains both manufacture and private teams eventually leave, very few teams last more than 15 to 20 years.

True, but why do manufacturers leave? Its because they dont want F1 anymore. Its that simple

Why do private teams leave

1) They produce a crap car and therefore cant get sponsors
2) They are a new team and cant get sponsors, therefore produce a crap car, and can get even fewer sponsors and leave
3) Costs go beyond what a sponsorship can ever bring in, because of manufacturer teams throwing money at F1. This is what happened to Sauber, Jordan, Minardi, and almost Williams
4) A team owner gets a great offer for his team and sells it.

They are the main reasons a private team would leave. You would NEVER see a private team say. Ok, dont feel like F1 anymore. Using the above points as reasons why private teams leave, then you are very unlikely to loose more than one team in a given year, not like the moment where 4 manufacturer teams would withdraw in a 12 month period . See here http://www.planetf1.com/story/0,18954,3213_5676012,00.html Renault still are not committing to anyting

Slutmonkey57b

The problems is not costs, it's results. You can make an F1 operation that profits - if you're at the Mclaren or Jordan scale of things - ie Mega successful or small, careful and midfield. The manufacturers to go all shared one thing in common - they were backmarkers, or losers. BMW had the odd shade of a good result but not much really. Honda had nothing but at least had one season of good sense in bringing Brawn on board and junking a bad car. Toyota were the worst of the worst. Biggest budget, smallest results, least idea what to do. No clue at all, and won't be missed. Renault if they leave will do so for lack of money. But Max, clever man that he is, has them by the short hairs - if they leave, he'll find a way to crucify them, you can be sure. Mercedes are running a big F1 operation, and expanding it - despite Daimler's massive losses in their american experiement. Why? They've got good results at the ideal moment (when they were blowing up and failing, it was a cash free time).

The debate between privateer teams and manufacturer teams being better or worse is a red herring. The whole situation is caused by return on investment.
During Ferrari's rehab, they and McLaren were the ones causing big budget rises. Everyone else had to compete. The FIA made sure that small operations couldn't come in by putting up a massive bond requirement Bernie ensured no return on investment by keeping all the cash for himself. Eventually, everyone got sick of it and formed Fota to get more money out of Bernie (and succeeded). The loss of the manufacturer teams isn't a big deal from a "sporting" perspective, since they were all crap at the sport anyway. But it is a big loss of power for Fota.

thegoth

I agree. More or less what I said on the last page

"I'm not saying that there is bucket loads of cash to be made for F1 teams, but unless a model is made that insures that each team has the chance of turning around a profit, even a 5% of turnover, then F1 can only be filled with teams whos main business isn't F1, which is not a good thing."