GLOBETROTTER

Shut up and do a deal!

Sports are competitions but in order to survive a sport must always remain interesting, exciting and if possible unpredictable. If a sport does not provide these things then those watching will go and do something else as the choice of leisure activities continues to grow all the time. Follow the logic of this and one must conclude that teams need be at least somewhere close to being competitive with one another. A team with more money has, by definition, an unfair advantage and there comes a point in any sport at which money needs to be considered when one is making the rules of the game if there is clear advantage gained from financial investment. There is nothing wrong therefore with rules that restrict how much money can be spent, although policing them is a difficult, if not impossible, business. It is particularly difficult in motor racing where one cannot easily trace the money spent on technological development of different parts of cars.

I am not averse to budget-capping as long as the parties involved freely agree to it and are not coerced into accepting it and as long as they agree to play by the rules. Max Mosley would have you believe that the car manufacturers are responsible for the increasing costs in Formula 1, which neatly forgets that Red Bull is actually pouring in more money than anyone else at the moment. For many years cigarette giant Marlboro was pouring in more cash than anyone else. So why should car manufacturers be restricted in their spending in motorsport when drinks companies are not? And how does one categorise a car company? Ferrari says that it is not a manufacturer team despite the fact it manufactures cars and makes a lot of money doing it. It may sell cuddly toys and ties as merchandising but the primary reason for Ferrari's existence is to make cars. If one allows Ferrari to get benefits but excludes bigger car manufacturers, there will be all kinds of trouble. One can imagine Toyota arguing that it is not a car company because it makes more money from its financial operations than it does from making cars (which is true). And one cannot use direct income as any form of guide as it is easy for a big company to channel funds to a racing team via a third party which can appear to be a sponsor.

Ownership is not a safe guide either because FIAT-related companies own more of Ferrari than Mercedes-Benz owns of McLaren.

A cap on the budgets is only workable if the parties involved can be trusted. And, yes, that is not going to happen because before you can say mesothelioma, someone will be cheating. Back in the 1960s the members of the American Automobile Manufacturer Association agreed not to participate in racing but Chevrolet secretly used the Chaparral company in out-of-the-way Midland, Texas, to develop extraordinary technology in racing. Working with Chevrolet engineers, Chaparral's "Skunk Works" developed aluminium engine blocks, automatic transmissions, early composite chassis and ground-effect aerodynamics.

Strike that idea!

So what can one do?

Baseball has tried to address the problem of fairness. Major League Baseball was dominated by the New York Yankees and in 2003 the team had a payroll of $180m. This was $64m more than the nearest challenger. In the 10 years before that the Yankees had appeared in six World Series and had won four of them. This was considered to be unfair and because the team was not willing to accept salary-capping, the baseball authorities introduced a "luxury tax" on payrolls over a certain figure. This has created a situation in which the Yankees now have a payroll of $213m, pay $75m in a revenue sharing scheme and $34m in a luxury tax so financially the company is not performing as well as it was but the owner George Steinbrenner is willing to make smaller profits in order to stay competitive. He is hugely wealthy and making money is not the most important thing.

And therein lies the answer. Formula 1 is based too much on people making money.

Mosley might be able to use his talents to convince teams to accept a tax on success. By his arguments, winning is now only possible if you are a manufacturer. If one was penalised financially for winning then the penalty (ie lack of income) would have to be factored into the budget and so fewer car manufacturers might be attracted to the sport. However if the sport continues to grow around the world the value of the publicity from winning would still outweigh financial penalties. The second half of the grid would have to get the same money because otherwise one can imagine a situation in which the smaller teams would be racing to finish last which might be entertaining to watch but is hardly sport. This situation would create cycles of success which in turn would keep up interest.

My own view is that the sport can impose financial penalties on the richest players if they can all agree on it and one team is not favoured over another. Parties should not be coerced into anything. In order to do that, however, people need to feel that they are getting something in return and that everyone is getting a fairer deal and I think should be applied across the board. This means that Formula One Management should be encouraged to take less out of the sport.

That is an idea which will go down like a shipload of depleted uranium but one which makes a great deal of sense for all concerned when one stops to think about it. Even under the new deal being discussed at the moment the Formula One company is going to take 40% of all the revenues generated. It puts very little back.

In most sports the international federations have profit-sharing schemes that help to fund the growth of the sport at lower levels. If 40% of the income is disappearing from the sport then why should those who compete for the other 60% feel the need to take a cut in their revenues? It would be in everyone's interest for a deal to be struck which would see perhaps 10% of the revenues going to the automobile clubs around the world to allow them, under careful supervision, to make the sport stronger. This would create new heroes and new markets and inevitably new revenues as well.

The sport would gain a much better image which might encourage more governments to help fund racing projects. The owners of FOM would still be getting rich for the next 104 years but would also be seen as putting something back. They may not care now about cash but as they grow older they may start to worry about how the world will remember them and this course of action will guarantee some nicer obituaries and a better place in history. It might even lead to honours.

The car manufacturers would help to keep the smaller teams going and could trumpet their important contribution to the health of the sport as a whole and the sport itself would cease to feel as if it was being deprived of its birthright.

But the thing that is most important is that getting to a solution to these problems is something that must be done behind closed doors and not in the media. Such disputes engender little sympathy from the media and the fans. Millionaire team owners fighting with billionaire rights holders does not make a fascinating contest particularly if it spills over into strikes and other such messes. This was highlighted in 1999-2000 when there was a lockout of players in the National Basketball Association in the United States of America.

"I may have to sell a couple of my cars to make ends meet," commented star player Kenny Anderson in a graphic illustration of how people in such positions are out of touch with the general public when it comes to financial matters.

Or to put it another way. Shut up and do a deal!

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