Formula One faces its biggest crisis in the history of the sport.
Former American Idol winner Kelly Clarkson and Formula One racing have nothing in common. But one can’t help but wonder if the words of her hit single “Breakaway” are playing on the minds of Formula One teams. The words go like this: “Trying hard to reach out / But when I tried to speak out / Felt like no one could hear me / Wanted to belong here / But something felt so wrong here / So I’d pray / I could break away.”
Well, the dramatic events of last week have rocked the world of motorsport and the teams are acting on their threat to break away. Till recently, not many would have heard the term FOTA, let alone known what it stood for. But now the Formula One Teams’ Association has gone ahead and done the unthinkable. They have announced the formation of a breakaway league. So far, eight of the 10 teams have confirmed their participation. We give you the lowdown on what led to the crisis, how it will affect the sport, who are likely to be the biggest losers and gainers, and what the future holds in store.
IT’S ALL ABOUT MONEY
Formula One has always been a money-driven sport. The costs of running a team ($500 million a year) and organising a race (over $20 million) have escalated with each passing year. The problem arose when FIA supremo Bernie Ecclestone proposed a budget cap on the spending of teams at £40 million in 2010, reducing it further to £35 million in 2011. The idea didn’t go down well with most of the teams, and the seeds of the rift were sown. The other problem is with the revenue coming into the sport.
FIA makes close to $1 billion a year from television rights, advertising, and the large fees it charges racetracks for the right to host the races. The bone of contention is that half of this money comes back into the sport as payments to the teams, and the rest goes to the body. The teams are unhappy that, despite the coffers of the body being filled, the FIA is asking them to reduce costs.
WIN SOME, LOSE SOME
The biggest loser if F1 turns into a “financial arms race” will be the sport itself. Fans have already complained about the numerous changes FIA has made to the rules and, as Renault driver Fernando Alonso rightly said, “People at home don’t understand why Ferrari is not winning, why Renault is not winning. They don’t care about diffusers, about KERS, they care only about the show.” The show, in this case, obviously lies with FOTA. And FIA, with no big names, no star drivers, stands to lose a lot. Advertisers will flock where the audiences are — and audiences will follow their favourite teams.
It’s not clear whether or not FOTA will manage to come up with a breakaway series in a short time. FOTA, in its statement, has already said that “This series will have transparent governance, one set of regulations, encourage more entrants and listen to the wishes of the fans, including offering lower prices for spectators worldwide, partners and other important stakeholders.”
FORMULA FOR DISASTER?
The idea of a breakaway league will definitely polarise the sport to extreme levels. While established names like Ferrari and Mclaren will continue to be a big draw for the spectators, the issue of where the races will be held, and how the advertisers will react, makes the scenario of a separate series a bit dicey.
The two teams still with the FIA — Force India and Williams — and three new teams, USF1, Manor and Campos, are not big names. Money will play a pivotal role here as well.
THE ROAD AHEAD
Negotiations are on, and it’s unlikely that FOTA will step back now. The ball is in the FIA’s court, and if they bow to the teams’ demands, a compromise may yet be reached. However, the discussions about the budget cap have been going on for the last few months now, without having reached any consensus. The FIA’s proposals make the sport more affordable for new teams. Setting up a rival series will not be easy. A compromise is unlikely. With so much money at stake, it’s a case of who blinks first.
A FEW QUESTIONS FOR THE REBELS
- Where will they race?
- Who will govern the rules?
- What happens to the contracts of the teams with the FIA?
- Will there be new entrants?
- Will there be any budget cap?
