Over at Grand Prix.com they have a story regarding the current financial times and the impact it will have on F1.It’s a decent read and highlights the issues faced by the world markets and F1’s ties to consumer company involvement in a tightening economy.
A few additional thoughts I would have on the issue is that Grandprix.com speaks of banks struggling and buyouts of Lehman Brothers and AIG. All very true. In America we call these investment banks NDIF’s. These are banks trading in securities to raise capital for mergers, acquisitions and companies. While they play a critical role in the world economy, perhaps this economic crisis is more likened to over-extended credit, sub-prime loans, greed and bad regulation. Will this have an effect on Vodafone? Santander? RBS? Time will tell but I suspect that companies in F1 still have core markets and baseline strategies to implement and products to sell. With Auto sales down 11% in the US alone, can Toyota afford their F1 efforts? Can they afford not to be forefront in brand development through the proving ground of F1? A decision that the Japanese auto maker will have to decide but like the Savings & Loan debacle of 1987, I suspect this credit crisis will have far reaching impact on all walks of life but it may be a little early to be talking of Soylent green or circling the wagons.
F1 is seriously leveraged and CVC will need to keep a keen eye on sponsor involvement. Cost reduction should be paramount to F1’s future and things like Max Mosley’s rants, scandals and recent PR nightmare are not helping matters. Sure, any PR is good PR in a normal economy but if reticent, financially tight companies are looking to cut expenditures, the circus F1 is becoming under Max’s leadership is the first place many may look. F1 has to make the most sense for the investors involved. F1 is looked upon as the pinnacle of motorsport not the tawdry, continually-changing-the-rules kind of build/design operation it has become with current regulations and a lack of tangible cost-cutting solutions.
Let’s hope, for F1’s sake, that companies continue their support even though ego’s seem more important to F1 leadership than retaining good sponsors. Exonerating ones actions has become paramount to good regulation and real cost-cutting measures that insure a sponsors investment is not frivolous but applied to a series that is the pinnacle of motorsport and a model of good financial stewardship. perhaps the struggles Wall Street is facing will help all us focus on what truly needs to be done to protect CVC’s investment, FOM’s investment, Teams sponsors and the fans sport. I suggest starting with some drastic cuts at the Place de la Concorde and then move outward.
