Columns - Big Al

Tightening belts and feeling the draught


Formula 1 teams were tugging at their commercial seat belts yesterday as the turbulent after-shocks of the Prost $35m bankruptcy rippled out through the sport. Desperately, they were trying to read the tea leaves to understand the long-term implications for the sport.

No surprise, really. As the CVs of more than two hundred redundant Prost employees thudded onto the mats at rival teams senior formula one figures moved to calm fears that other teams could follow the four-time world champion's company to the wall.

Of course, Prost's liquidation also came at a particularly poignant moment as the F1 constructors yesterday convened at a Heathrow hotel for one of their regular meetings. Crucially, one item on the varied agenda was the question of what else could be done to rein in the spiralling costs of this multi-million pound sport.

"This is certainly a wake-up call for the sport," said Minardi principal Paul Stoddart who twelve months ago rescued the small Italian team from bankruptcy just weeks before the first race.

Rivals were interpreting Stoddart's remarks as a coded signal to Bernie Ecclestone, the F1 commercial rights holder, to make a bigger share of the financial cake available to the competing teams. As things stand just 47 per cent of the television revenues are shared between the top ten most successful teams while Ecclestone and his partners, the German media group Kirch, take the other 53 per cent.

Nobody doubts that money is tight. The Jordan-Honda team faces a reduction in funding from its former title sponsor Benson & Hedges and carry reduced identification from the tobacco company this season.

However, it is also believed that Deutsche Post, a secondary sponsor last season, will be seen to have increased its investment in the team when the new Jordan EJ-12 is officially launched next month.

Arrows is also looking for additional sponsorship to help fund the $24m cost of leasing Cosworth V10 engines this year and Stoddart's Minardis still also has plenty of space on its cars for new investors.

Yet even the most optimistic insiders believe that formula one is in for a tough time before things get better. "The nature of the business ensures that formula one is always last into a recession and last out of it," said one senior team principal.

Others agree that the Prost failure is a one-off. "I don't think their bankruptcy is symptomatic of a bigger problem in formula one," said McLaren MD Martin Whitmarsh.

"This has always been an extremely difficult sport, particularly so if you don't deliver results and therefore can't find the necessary funding. I don't believe that it is the start of a trend and I don't believe other teams will fail this year."

Another well-placed insider took a different view. "When one listens to some of these team owners at their meetings they sometimes give the impression they think nothing can stop the goose that lays the golden egg from continuing with no problems."

Therein could lie a worrying long-term problem.