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Formula 1 needs to learn from Caterham’s story

Jun 28, 2014, 1:00 PM EDT

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When Tony Fernandes closed his Twitter account earlier this week with the message “F1 hasn’t worked”, he managed to sum up the sorry state of the sport’s cost crusade in less than 140 characters.

Caterham’s demise has been hard to watch. The team has fought tooth and nail to stay ahead of Marussia, and has been the leading backmarker team for most of its five years in the sport. Last year, it was behind the Anglo-Russian team for just four races – sadly for Caterham, it was enough time for Jules Bianchi to rack up a 13th place finish that would secure Marussia P10 in the constructors’.

For 2014 though, there was renewed hope. In Kamui Kobayashi, the team had secured a very popular and talented driver; you can expect the Suzuka grandstands to be a sea of green in October. The stars seemed to be aligning for the minnows to make the step forwards and perhaps even score some points.

So when one of the new teams did score points, it was something of a surprise that Marussia had that honor. The teams had been largely neck and neck, but some more brilliance from Bianchi meant that he finished ninth. On the same day, Marcus Ericsson matched Caterham’s best ever result in 11th, but few smiles were raised.

The future for the team is not clear, but buyers are lining up to take over from Fernandes, meaning that it should at least run to the end of the season before perhaps being rebranded.

“F1 hasn’t worked” – for Fernandes, no, it has not. Formula 1 on a budget is always difficult, if not impossible.

But Fernandes did not come into the same sport that we have now. Following the withdrawals of Honda (2008), BMW and Toyota (both 2009), new teams were needed to take the grid back up to a healthy number. After receiving a number of entries, berths were given to Lotus Racing (now Caterham), Virgin (now Marussia) and Campos Meta (then HRT, now defunct).

For all three entrants, the big condition for them joining the party was that a cost cap would come into force, allowing them to run on a budget of around $50m per season. Toyota was spending close to nine times that figure during its time in F1.

At the time, it seemed to be the only way to save F1 from itself. Red Bull’s Christian Horner was enthusiastic, saying: “I think Formula 1 has reacted responsibly. It’s positive to see new teams entered for next year which would have been impossible, I think, without the resource restrictions that will be introduced.”

So when the cost cutting measures were not enforced as strictly as planned, it hit the new teams hard. The fact that they managed to keep gradually cutting the gap to the leading teams despite running on far smaller budgets is highly commendable.

F1’s outlook has changed. At the time of Caterham’s entry, it had the feeling of an “all for one, one for all” club. FOTA, the teams’ association, was doing some great work. However, it sadly became impotent as a political body, and eventually folded earlier this year. The voice for the teams now is the F1 Strategy Group, which only includes the bigger players in the sport. Caterham and company have little to no say in the future of F1 at the moment. The big boys have formed their own club now.

The sport needs to learn from Caterham’s story, but it is unlikely that it will. Teams have come and gone in the past (Super Aguri, Prost, Arrows etc), but that was in a different time when it was a case of spending what you want to be successful. Caterham came in on the provision that things would change, but it has not.

We’re back to 2010. Cost cutting talks continue, but little is actually done. The sport plays host to some of the finest minds in the world, yet they continue to squabble like children and come to few actual solutions. Tony Fernandes’ views and approach was refreshing, just as Monisha Kaltenborn and Bob Fernley are at Sauber and Force India. They are voices of reason.

F1 has managed to reduce five years of struggling and fighting the good fight to less than 140 characters. It is likely that the stories and fall-out from the impending sale of the team will be a bit more drawn out.

  1. spa67 - Jun 28, 2014 at 1:35 PM

    With enough accountants spending caps are enforceable. The fact that teams will not agree to even a cost cap in the range of $200M shows how much they are actually spending. It is unsustainable.

  2. techmeister1 - Jun 28, 2014 at 2:54 PM

    It’s naïve and absurd to believe that a cost cap is viable in F1. As with other forms of pro racing, those with the gold make the rules. There is no rule that states we need 9-10-11 or any specific number of F1 teams on the grid. Most spectators want to see good racing not moving road blocks that often skew the race results. F1 is the pinnacle of motorsport and the advancement of technology. It’s not a spec racer form of motorsport.

    None of the three backmarkers had a snowball chance in Hell of being anything but backmarkers. The way they operated their teams illustrate a lack of understanding and ability. Asking the top teams to compromise their race efforts so undeserving teams can compete in F1 is just foolishness. You should do a serious reality check before signing up for F1. You will be competing against the best teams and engineers in the world. If you don’t have an F1 level organization with all the resources required, you should not expect to be anything but a backmarker.

    The teams that deserve credit for delivering excellent results on a shoe string budget are the Williams and Sauber teams. They have had good times and rough times but they are class acts that have done well on occasion unlike the backmarkers who did not even belong on the F1 grid if they planned to try and compete with $50-$100 million per season.

    As I have suggested for Gene Haas’ F1 team – if you’re not 100% committed and you can’t afford to spend $400 million per season for the first five years to “learn the ropes” then you don’t belong in F1. The backmarkers wanted the prestige of being involved with F1 without having the resources to do so. It doesn’t work that way in the real world.

    I unfortunately don’t expect Haas to enjoy much success unless he gets better advisers and starts hiring a few hundred experience F1 professionals soon – but where will he find them??? It’s not like you can just go hire hundreds of experienced F1 engineers, designers and aerodynamicists so Haas has their work cut out for them. That is why buying Lotus would be the smart move, IMO.

    • johnjensen2719 - Jun 28, 2014 at 11:35 PM

      I hope you enjoy 10-car fields, because that’s exactly what you are heading for.

      It is possible to advance technology and have a world-class racing series without spending half a billion dollars per year … which is incredibly outrageous. As recently as 20 years ago, top teams were spending in the neighborhood of $100 million (U.S.). Using the U.S. inflation index, that translates to slightly less than $161 million per year now.

      So while the $50 million budget that Caterham was supposed to run with is unrealistic, so is the $500 million that teams like Ferrari and McLaren seem to think they need to spend.

      For F1 to survive, it must come up with a cost formula that allows teams to be creative, yet makes it realistic for new teams to come into the sport. It seems to me like a $200-$250 million cap that ALL TEAMS agree to follow would be realistic for the sport. This would allow the major teams to be cutting edge, yet still allow a team like Caterham to compete. Along with the cap, however, must be a requirement that teams spend at least a certain amount (say … $100 million). This would prevent groups without the budget to be competitive from entering the sport.

      As an American, I am extremely hopeful that the Haas F1 entry flies. Realistically, however, I seriously doubt this will be competitive. After all, Mr. Haas’ NASCAR team was uncompetitive until he found a partner (Tony Stewart) who knew how to attract sponsors and get the right people in place to run a race team.

      • chaparral2f - Jun 29, 2014 at 3:15 PM

        I would rather have a 10 car field of super competitive cars than to have the current state where almost half the field is backmarkers. Mercedes, Red Bull, Ferrari, McLaren will be there for the very long haul. Force India looks stable too. That leaves Lotus and Toro Rosso, but given their performance this year, if they were not on the grid, it would not be a big deal. Marussia and Caterham have been an embarrassment. I absolutely disagree with the points that you made. Cost cutting has never been a part of F1. It is the pinnacle of motor racing. If you look at what top teams are spending in LMP1 at LeMans, then you can clearly see that a cost cap is going nowhere. Racing has always been a rich man’s sport. Why dumb down F1 and make it into a spec series?

      • indycar02 - Jun 29, 2014 at 3:49 PM

        johnjenson2719. said it best, 10-car fields, that’s what you are heading for. f1 should be AT LEAST 22, just like the indy 500 should be 33. their should be a rule that the field needs to be a set number (not just the 500).

  3. f1kat - Jun 28, 2014 at 6:17 PM

    I actually have no problem with to teams spending what they want. The fact that they are willing to spend the enormous amounts of money that they do, shows commitment to the sport. I’m not against smaller teams, I like the underdog like anyone else, but I just think they need to be realistic. F1 is an elite sport and this comes with a price tag. I think the real area that F1 is failing financially is the price fans have to pay to watch.

  4. indycar02 - Jun 29, 2014 at 3:58 PM

    how about this idea, have the top teams enter 3 cars. everybody happy (?), and we get a full field of 22.

    • Luke Smith - Jun 29, 2014 at 7:15 PM

      That’s the plan if the grid ever gets too small. Ferrari, Mercedes, Red Bull and McLaren would only be too happy to have a third car.

  5. Jeff - Jun 30, 2014 at 9:36 AM

    I doubt F1 or any racing series will learn. IndyCar, which lost two teams last year if I’m not mistaken, seems content to have fewer teams as well.
    Fewer teams = more boring.

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