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Back to reality

There are few genuine surprises in modern sport, but Honda’s sudden and immediate withdrawal from Formula 1 late last week certainly counts as one.

It’s a blow to the several hundred people directly employed by the Honda F1 team, who face imminent unemployment unless a buyer can be found quickly, not to mention the thousands of others who work for specialist suppliers or other associated companies, whose livelihoods will be impacted by the decision.

From a business and moral perspective, the company’s decision is completely understandable. A record of one win in three years since the team became a wholly-owned Honda operation – and one with the largest budget in Formula 1, reportedly £330m – is difficult to justify at a time when the parent company, like all car manufacturers, is seeing global sales plummet, halting factory production and cutting back its workforce.

And Honda may just be the tip of the iceberg.

There will now be question marks hanging over Honda’s nearest rival, Toyota, another team with an annual budget in the £300m region, and whose F1 record – no wins in seven years – is even poorer than Honda’s. BMW is seeing plummeting sales in all its key markets, and should they pull out you would have to question Mercedes’ continued involvement in the sport too. Wealthy though he is, Dietrich Mateschitz will undoubtedly be questioning the value of running not one but two F1 teams, Red Bull and Toro Rosso. In fact, with the possible exception of Ferrari, one can easily picture a scenario where every F1 team could fold or at least dramatically scale back.

It’s easy to look at F1 through jealous eyes and feel that what goes around comes around. After all, steered by the canny Bernie Ecclestone, the sport has become a commercial gold mine, generating money, glamour and playboy lifestyles in a way that even Premier League clubs and players envy. And there has always been an attitude that, as a sport with truly global marketing reach, F1 would be somehow recession-proof.

Uh uh.

Say what you like about FIA president Max Mosley – and many have indeed said what they liked about him during what has been an, ahem, difficult year for him personally – but his has been the one voice in step with the times. Almost single-handedly, he has campaigned for reduced costs in the sport – standard components, engines built to last for multiple races rather than 200 miles, restrictions on expensive testing – and tasked the teams with developing their own solution to this challenge, or face having one enforced upon them.

The teams, as is their wont, have ignored, obstructed and undermined Mosley’s words, or attempted to bend them to their own advantage. Instead, they have poured all their energy into boosting the sponsorship coffers, allowing them to invest millions into developing new, better components which will shave a tenth of a second off their cars’ lap times. (For instance, one team reportedly spends £800,000 a year on tailored, lightweight wheel nuts which make about as much difference to their cars’ performance as a walk to the stationery cupboard makes to my waistline.)

Mosley wants to drive down the cost of competing in F1, to bring an end to what Simon Barnes describes in his Times column yesterday as “the end of fantasy car-building based on fantasy economics”. Currently, all the major manufacturer-backed teams spend upwards of £200m a year – by comparison, Chelsea FC’s wage bill for 2006/7 was a trifling £133m – a level of spending which is becoming increasingly unsustainable.

For the sport as a whole, should the grid shrink from 20 cars to 18 (minus Honda) to, say, 14, it becomes unsustainable as a spectacle too. Even if the hardcore petrolheads continue to come through the gates – and given the cost of attending a grand prix even that is by no means certain – the TV audiences on which the sport is so dependent will leave in droves.

And if that happens F1 will wither and die, at least in its current form as the unrivalled pinnacle of technology and motor racing excellence.

Of course, it’s too early to tell how bad things will get, and any such conjecture is, at this point, only speculation – and alarmist speculation at that – but there can be no doubt that Honda has set the shockwaves rippling through a sport which, until now, had considered itself to operate in an alternate reality all its own. No more. Like any other sport – like any other business – Formula 1 is now waking up to the fact that it is just as vulnerable as anyone else. How the sport reacts to this potential crisis may well shape its future. First of all, however, it will need to ensure it has a future at all.

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About Tim
Father of three. Bit of a geek. That's all, folks.

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