05-09-2018, 11:35 AM
(05-09-2018, 11:27 AM)Jody Barton Wrote: I have to say the hybrid engines being the "big cost" barrier is actually a bit of a red herring. I just don't buy it. One of the biggest costs for the top teams is wind tunnels, every season it's the same, running wind tunnels and CFD models. Next, and the differentiator I think that really matters in suspension. I think it was 2015 when I read that Mercedes had spent over £100m developing their FRIC suspension. RBR and Ferrari were spending similar sums developing their suspensions, and at the time Eddie Jordan commented that was probably close to the entire budget the likes of Sauber and Manor had to spend on their entire cars. So yeah, costs are certainly part of it, but how do you police it?
This gets partly to the crux of F1's problem. When F1 has introduced standard components it has closed up the competition, be it ABS, power steering or the tyres. I mean it stands to reason right? If the teams have standard components that are the same for everyone there is less scope to 'gap' other teams with development in these areas. But, F1 is supposed to be the pinnacle of motor racing, so it's supposed to be bespoke and an engineering formula as well. Right now though by banning things like active suspension, which are super cheap now, just ask the privateer WEC teams, encourages excessive spend from teams who can spend it in these areas. FRIC as good as it was, was nowhere near as good as an average active suspension system could achieve and cost significantly more to produce. So yes there's cost problems, but these are often a direct result of regulations within the sport.
So I think there's a few things around cost of the sport being too high, almost see saw relationships where the balance is current wrong. The regulations need shifting away from some bespoke solutions towards some more generic solutions. That's one thing. The other is then budgets. Do you impose budget caps? They're always fiercely resisted in F1, and when the caps were introduced into WEC the number of competitors dropped. Do again the sport has to be careful about caps. There's distribution of revenue, I think that's certainly part of it. The likes of Ferrari, Mercedes and RBR start with a massive budget before they get their slice of the pie, and their slice of the pie is way bigger than other teams. Again, this wouldn't be so much of a problem IF the sport was attractive to sponsors and the teams were better able to generate their own revenue, but they aren't for a number of reasons:
1) The sports viewing figures have plummeted after Bernie negotiated pay-per-view TV deals around the world. In Sweden before it went pay-per-view F1 used to regularly hit viewing figures of 1m to 2m that's huge in a nation of 9.5m people. It rarely tops 100,000 now. The rights holders might generate more money from these deals, but it limits the value of advertising space for teams. Again it's a seesaw relationship that's gone too far in the wrong direction.
2) It's not a competitive field, so if you sponsor Williams you aren't ever likely, right now, to see your name on the podium. In previous eras if the big teams screwed the pooch the little guys got some exposure, which made taking a punt sponsoring a Jordan or Arrows or Tyrell worth it to Marketing Departments because there was a chance of some exposure for your brand. That's not there now, and coupled with point one, well, it makes sponsoring F1 teams a dumb business decision.
So we're back to either needing regulations to close the gap up again, and or better distribution of funds to do so, so that the sport actually becomes closure and more appealing for investors.
This so brings us to the lack of teams. I removed hearing people at the time saying losing Caterham and Manor was no big kiss the sport because they were cack. This was partly true, but I always felt the reason they were cack was because F1 was utterly cack at the time s d being run to the detriment of the sporting side of things, which again is detrimental to its commercial appeal. New teams aren't going to jump into the sport right now because:
1) the economics don't make sense
2) the regulations mean you'll be onto a hiding for nothing
3) the sport doesn't have the exposure it once did
4) Even if the first 3 issues didn't exist all engine manufacturers are claiming to be at capacity.
There is a reason the like of me have said the only way we'll see new teams is if they're manufacturers. Only the likes of the Volkswagen Audi Group with Audi or Porsche, or Toyota have the wherewithal to actually give F1 a shot, partly because the technical challenges are so stupidly high (when they needn't be with solutions like active suspension waiting in the wings) and because it only makes sense to manufacturers right now given the financial situation and not privateers. Gene Haas originally thought he'd have a build it and they will come attitude, that American manufacturers and sponsors would flood to him if he just did it. Right now I worry that Haas are close to pulling out because that's just not happening...
God that's all depressing, and I've not even started. There are a series of very complex interlinked issues with F1 as it stands now, and I think there is no silver bullet to the issues. And I actually think the commercial concerns of the rights holders are actually detrimental not only to privateers, but also the manufacturers. There needs to be a realignment of not only the sports priorities, but also the relationships before they can even think about fundamentally tackling the issues F1 currently faces.
Insightful post Jody and can’t fault the information, it does sound depressing