DECEMBER 11, 2003
Why new teams are unlikely in F1
There is talk at the moment that there will be new teams in Formula 1 in 2005 and 2006. This is hard to believe because the system has been designed to make it very difficult for that to happen. At the moment there is a $48m deposit, which must be paid to the FIA for a new team to gain entry. After that a new team has to go through three years without any Concorde Agreement benefits. Only after that is it allowed to join the club of 12 teams. The team bosses are keen to reduce that number to 10 teams so that they can take more money from F1's income. The more teams that exist, the more chance there is that the existing operations will be threatened.
This will not stop people trying to join the sport but even if a team is stripped down to the bare minimum the costs involved are in the region of $30m and that is just to survive. This will not greatly change even if the car manufacturers can be convinced to offer cheap engines to small teams. They are going to want at least $11m for an engine deal,, which is about what the small teams are now paying.
Anyone with a decent budget for F1 would not therefore start a new team and have the fight through the initial three-year period but rather use the money to buy an existing team and then modify it.
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