Just 18 cars will line-up for this weekend’s USA Formula One Grand Prix, the smallest grid in close to a decade.
It comes in a week when both Caterham and Marussia, Formula One’s perennial backmarkers, went into administration under crippling debts, caused by the exorbitant cost of competing in the series and the inequitable revenue model.
Incredibly, a global series that generates somewhere between $1.5 to 1.8 billion per year can’t sustain its own teams because so much of those profits leave the sport.
The television rights for the series were sold from the governing body, the FIA, to Bernie Ecclestone for a 100-year term at a pittance (£360 million) given the length of the deal; then on-sold to a company called CVC, who has reportedly taken around $4 billion from the sport.
Meanwhile, the arms race in Formula One has driven most teams to great financial strain, the idea of a budget cap to contain costs keeps getting shot down by the big teams, and attendances and sponsorships have plummeted.
In order to counter the diminishing grid, there’s a push for either the bigger teams to field third cars or sell off their machines as customer cars to the privateers.
Both, though, bring with them serious problems, mainly in terms of the impact it would have on the competitive side of the series and the increased centralisation of power it would give to the bigger teams.
Either way, it’s a band-aid solution to a broken series. With so much of the revenues leaving and so little being done to market the sport properly, Formula One needs to rebuild from its very foundations.
Whether the collapse of Caterham and Marussia is enough for the rest of the competing teams to fight more aggressively against a system that desperately needs changing remains to be seen.
Sadly, though, they sold out long ago and appear powerless as long as they are contracted to the series. And self-interest has ruled for too long for teams to suddenly work together for a greater good.
Perhaps the only hope is for a complete collapse or breakaway series to escape the current flawed model. After all, if immediate action isn’t taken, Caterham and Marussia won’t be the only teams to go under.
Sauber, Lotus, Force India and even Williams are under significant financial stress. Red Bull props up two teams, McLaren is without a major sponsor this season and Ferrari and Mercedes are bankrolled by their road car divisions.
Formula One is in a perilous state and lacks the leadership to get itself out of the rut. With such an incredible global reach and so much more that could be done to promote itself, potentially opening up new revenue streams, it’s madness that the sport can’t fund itself.
A budget cap on team spending is the most immediate fix that needs to come in to ensure there are enough cars to justify a 2015 season. But the deeper fix is to somehow start again from the ground up.
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