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F1: Can Formula One survive without Ferrari?

Publication: 
Bryan Edwards
chiefofficersnet

It's a question that three years ago had a clear answer: yes; easily. Now, it's far more complicated. How far, then, should F1 go to appease the Italian team?

Three years ago, Ferrari was one of a number of teams in Formula One. Now it's a team plus two more or less half-teams.

First, there was the tie-up with HAAS which was widely regarded as the Ferrari B Team, in the style of Red Bull and Torro Rosso. This year there is a much closer relationship with Alfa Romeo. Ferrari provides not only the engines for both teams but also considerable technical expertise. While HAAS could swap to another engine manufacturer and, because of factors external to F1, probably gain technical help elsewhere, the otherwise independent and frequently cash-strapped Sauber (which one assumes is what it would revert to if Ferrari pulled out) would be in far more difficulty trying to continue.

In this way, Ferrari has put itself into the position where it can make forceful demands on F1 whereas, previously, losing Ferrari and its devoted fans would be a shame, F1 would continue.

F1 wants to change to secure its future. The grid is rapidly polarising into Ferrari and Mercedes powered cars at one end and everyone else in what some, unkindly, call the B class. Yes, Honda seems to have made a leap forward over the closed season but Renault are still some way off joining the fray. The only exception to the general rule is Williams which, despite Mercedes power, seem destined to prop up the field again this year as the team lurches from crisis to crisis with even the drivers saying that there are systemic problems that mean that the car cannot be driven even to its full, albeit horribly limited, capacity.

Formula One, under the ownership of Liberty Media and the FIA want to broaden the appeal so that the sport does not become, essentially, a contest between automotive giants the departure of any one of which could cause substantial damage. With a choice of only four engines (power units in FIA-speak), that is already a danger. The plan is to reduce both the technical and financial barriers to entry and to make it easier for lower ranking teams to afford to stay in the sport.

F1 has always seen teams come and go. Engine manufacturers, ditto. But in the modern era of F1, two car teams have meant the cost of building an F1 team and racing at every event has become outrageous. Unless you are Ferrari or Mercedes. Ford, Cosworth, Toyota have all entered engines and all have given up. The development cost of producing, under this year's regulations, a maximum of six engines per team (unless penalties are taken) makes the entry cost prohibitive, even though some parts are standardised and all teams use the same.

The teams all abide by what commercial agreements and they expire at the end of next year. Liberty Media wants to make significant changes, including removing some of the "privileges" enjoyed by Ferrari. The plans include a cap on how much teams can spend (which is easily manipulated by running multiple teams) and revising how revenues are divided. One of the Ferrari "privileges" falls in that camp: it receives an estimated USD90 million just for turning up. Other teams might get half that.

None of this is news: Liberty and the FIA floated discussion points more than a year ago. Ferrari's predictable response was that it would leave F1 rather than agree. But with sponsorship money becoming ever more difficult to find, even you happen to have a close relationship with a tobacco company, money flows to Ferrari more easily than to other teams. While Liberty and the FIA have no control over sponsorship, they do have a say in how the money that comes via Liberty is used.

A raft of proposals was put to the teams this week under a blanket of secrecy. Exactly what is proposed will no doubt leak out, given that F1 is basically a colander. For now, what is needed is to consider; is F1 going to stand up to Ferrari's threat and, if Ferrari leaves, can F1 survive as the pinnacle of motorsport?

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