Trouble in Pit Lane
The recent auto industry bailout may help keep manufacturers afloat, but it won't stop significant changes to how Formula One and NASCAR do business.
Most people in North America have heard all about the woes of the automotive industry. Governments handing over billions of taxpayer dollars will do that. Those bucks may help the auto manufacturers, but they will do nothing to halt significant changes in both Formula One and NASCAR.
The old adage was always "win on Sunday, sell on Monday." In fact, the earliest racing events were created by manufacturers as the best way to prove that their cars were better than the rest. But the recent departures of Honda from F1, Subaru from the World Rally Championships, and Audi and Porsche from the American LeMans Series are surely a sign that the role manufacturers will play in professional racing will change, probably forever.
F1 president Max Mosley has already imposed cost-cutting measures that will save teams at least 30 per cent on their 2008 budgets. The measures include less testing and less time in aerodynamic research, as well as asking teams to increase their engine life so that each engine is used for three races instead of two.
F1 czar Bernie Eccelstone has said, "It's clear that the world financial crisis affects everyone, including the car industry. But it won't affect Formula One seriously."
But it is around the 78-year-old billionaire that most winds of change are blowing.
The manufacturers are tired of the financial hierarchy in F1 — simply put, they want a bigger cut of the profits. Currently, F1 teams share 50 per cent of the organization's annual profit, with the rest going to Formula One Management, the company responsible for promoting the sport.
F1 czar on the ropes?
Eccelstone, the former used motorcycle salesman, was the man who helped make F1 the money-making machine it is today and is the president of Formula One Management. He's strongly resisting any change in his company's take.
If the teams get their way, they will get much more and Formula One Management will get much less. The teams want to share 100 per cent of the profits equally, which would mean a difference of easily $25 million US per team.
With the departure of Honda and the rumoured departure of manufacturers, teams know they have Eccelestone on the ropes. Their goal is to force Bernie to hand over his wallet. With the money goes the power, so you know it will be a brutal fight.
In spite of all of this, Formula One appears to be healthy heading into 2009. It has signed rich sponsorship deals with LG and DHL for the 2009 series.
Eccelstone has said the success is easy to understand.
"It's simple, the big guns who want their ad across the whole world understand that Formula One is the cheapest way to achieve it," he told reporters earlier this month.
Car of Tomorrow helping NASCAR today
While auto manufacturers may increase their role in F1, the economic downturn in the U.S. may have the opposite effect on NASCAR.
No manufacturers have left, no teams have folded in the U.S.-based stock car circuit. Considering the current financial state of GM, Ford and Chrysler, it seems curious that NASCAR is virtually unaffected. With the Daytona 500 less than a month away it appears to be business as usual for the Good Ol' Boys.
Is it a matter of the manufacturers having their heads in the sand? Are they waiting to see who blinks first?
Neither. NASCAR is a different beast. While manufacturers are an integral part of what the series is about, they are not the sole source of money for the teams.
NASCAR has protected itself from the fluctuations of a fickle auto marketplace by creating the Car of Tomorrow (COT). All the cars are the same shape, weight and size . Each of the 43 cars that will start this year's Daytona 500 have the identical COT chassis. What makes a Toyota a Toyota? Decals.
The manufacturers are still involved with NASCAR, but their roles are more straightforward, more defined. They develop the engines to power the COT. They spend money, but it's mainly to market their brand.
In Formula One a Ferrari is a Ferrari. In NASCAR a Toyota is the Joe Gibbs Racing Snickers Camry.
NASCAR manufacturers are important, but not critical to its success. The series is driven by sponsors and teams more than by GM, Ford, Dodge and Toyota. When Pontiac left NASCAR, there was hardly a ripple. The teams continued as Chevys, or Fords.
So while the involvement of the manufacturers may decrease, NASCAR itself is optimistic heading into 2009.
"We tend to fare much better than other industries, thankfully," NASCAR chairman Brian France told reporters this month. "That's because sports are so culturally ingrained to fans.
"It's one of the last things that they want to not participate in."