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Mosley: Current spending isn't sustainable

5/9/2004

BARCELONA, Spain -- Formula One seems to have finally woken up to the fact
that there is not an endless supply of money out there. Normally the teams
can't agree on anything, but if there was one theme that came out of the
Monaco summit on May 4, it was that it's time to slash the ludicrous amounts of
cash the teams are spending.

How ludicrous?

FIA president Max Mosley revealed that the engine manufacturers are
spending a total of $1.2 billion a year on their F1 engine programs. Yes,
that's $1.2 billion! The top teams all spend over $250 million a year to,
when you come right down to it, field two cars in 18 races.

"It is not sustainable by any calculation," Mosley said.

Even the teams say it can't go on like this.

"The simple fact is that the money is running out," said Sir Frank
Williams, owner of one of the best-funded teams in F1.

The sweeping technical and sporting changes introduced by Mosley, and set
to begin in 2008, go a long way toward cutting costs. Mosley, Bernie
Ecclestone (who holds the commercial rights to F1) and the teams met in
Monaco on May 4 to discuss the new rules. Contrary to the bickering
sessions some of these types of meetings degenerate into, there was an
overall attempt to work together to find solutions to creating a better
show, cutting costs and ensuring the survival of the present teams while at
the same time opening the door to let new teams in.

Why such harmony?

"There was a common will," Williams said. "Everybody wants to save money."

There was also the stark reality that the teams really have no choice in
accepting the new rules package. F1 is currently bound together by the
Concorde Agreement, which is a document that sets out the relationship
between the teams, the FIA and the commercial rights holder. The current
contract runs out at the end of 2008. After that, the FIA can make up any
set of rules it wants, and then tell the teams: Here is our F1
championship, you are welcome to participate under our rules.

Among the many proposals are: long life engines; banning electronic driver
aids; mandating a common Electronic Control Unit; standard braking
packages; no spare car; severe limitation on number of tires used; a single
tire manufacturer; restriction on testing; ban on electronically controlled
differentials and power steering systems; and allowing teams to sell their
cars to new teams.

Of course, it's a commandment of racing that if a team is forced to save
money in one area it will just find another area to spend it on. And that
will be the case with the new rules. But what the new rules should do is
at least make it possible for teams to survive and compete without having
to spend ridiculous amounts of money.

"We shouldn't try to masquerade things up in cost-saving exercises," said
Lucky Strike BAR Honda director David Richards. "The reality is that I
will get a budget for next year; it will be the largest budget I can
acquire by whatever means I can, and we will allocate a proportion of that
to spend on our racing activities. Our job then is to spend that as
effectively as possible."

But teams with lighter budgets generally can't compete with the well-funded teams no matter how effectively they spend their money.

"What we've got to look at more and more is the enormous disparity we have
from one end of the sport to the other end of the sport," Richards said,
"and we've got to find ways of closing that gap. While you have one or two
teams able to spend vast fortunes to win a world title, at the other end of
the spectrum are teams who don't have the funds available to them, nor the
engines available to them. What we hopefully will address is that we
should minimize the cost to build a competitive car. But it doesn't get
away from the fact that ... motor sports tends to favor those with the
deepest pockets."

The engine manufacturers have agreed that they need to cut their costs by
50 percent.

"The clear aim of all the manufacturers is to cut costs," said BMW
motorsport director Dr. Mario Theissen. "That is the number one priority.
The most urgent objective. And to achieve this before 2008."

If the engine manufacturers and the FIA can agree on a new rules package,
it could come into effect in 2006. What they are arguing over is whether
to go with a 2.4-liter V8 or stick with the current 3-liter V10s but
make those engines last three, four, five or even six races.

"Our position is to go with a long life V10," Theissen said, "because if
you want to save money, the most significant issue is to save engines per
year, and that can be achieved by extending engine mileage and reducing
testing at the same time. The third approach to cut costs is to make the
engine itself cheaper, which means banning expensive materials and
technologies. We are making progress on those issues."

Renault team boss Flavio Briatore is a businessman and an entertainer, not
a diehard F1 fanatic and purist. He has always maintained that F1 could put
on a good show for half the cost. He's been saying that for more than 10
years.

"Our product is so expensive," he said, "and we never take into
consideration our customer. It is an engineering exercise, our business,
and we forget there are millions and millions of people watching us.

"The (May 4 Monaco) meeting was very good. It is one of the few good
meetings in F1 in the last 14 years. Together we need to do something
because we need to take care of our public, our customers, and the people
watching on television.

"We need to give them a better race. I don't think that people care if in
Fernando Alonso's car there is a 2.4-liter engine or a three-liter. What
they are interested in is if Fernando (Alonso) and Michael (Schumacher) are
fighting together. They want to watch a race."

McLaren director Ron Dennis said that everybody that went to the Monaco
meeting knew that they would have to give a bit.

"Everybody had a common objective of stabilizing the sport," Dennis said.
"We need to improve the show and address the long-term future of F1."

While everybody was saying that they agreed on the objectives put forth by
the FIA and discussed at the Monaco meeting, when it comes to them actually
agreeing on the exact specifics of those changes, things won't be quite so
harmonious.

There's a lot more to the rule proposals and the future of F1 than just
cutting costs on engines, of course, but the bottom line is that F1 had
finally realized that it can't go on spending such vast amounts of money.

And, thank to the firm guidance of the FIA, something is going to be done
about it.

Dan Knutson covers Formula One for National Speed Sport News and ESPN.com.