Features - Comment
FEBRUARY 9, 2006
Why tomorrow's kids need today's F1 profits
It has been an interesting couple of days in the Formula 1 world with a variety of interlinked bits of news. Honda has taken on a PR guru to convince the kids of today that they want to be the Formula 1 stars of tomorrow.
"The competition now for an audience is not just within motor racing but comes from Desperate Housewives and Chelsea Football Club," Honda's Nick Fry says. "We want kids to grow up saying they want to be a racing driver when, at the moment, they want to be pop stars or footballers."
There is a very down-to-earth reason why the kids of today want to be soccer stars or pop singers.
Everyone can kick a soccer balls around or sing a song.
Not everyone does it well.
But there are very few kids who have the money that is needed to even go kart racing. In America big prize money is paid to winners but in European racing prize money in the junior formulae is minimal if it exists at all. Almost all the kids that do get into circuit racing in Europe start out in a wealthy family or come from a background where their families have rich or influential friends.
There is a sound reason why there are so many sons of famous fathers in the sport, because they are the ones who can get to the money. Evidence of this comes from the fact that this week Nigel Mansell's two sons Leo and Greg are entering Formula BMW with backing from Unipart, which sponsored their father a long time ago. How many times, you might ask, has Unipart received a sponsor proposal from a young driver without a famous father? Most big companies receive hundreds if not thousands of sponsorship proposals each year from young hopefuls. They are ignored or if the company can be bothered, rejected.
In short, for most kids the aim of going racing - the dream of being a racing driver - is completely unattainable because of the money needed and many a young career has ended because a kart driver could not find the cash to switch to cars.
If you want evidence of that you need only to look at the success of the Gloria car company in recent years. The Italian company was started in 2002 by Enrico Glorioso after he sold his business for $63m. His aim was to spend some of his money to build affordable racing cars to help karters move into car racing. The Gloria company builds lightweight spaceframe chassis with composite noses, powered by 1000cc Yamaha motorcycle engines and they so impressed the Italian national sporting authority that it adopted the machinery for its Formula Azzurra class. Now Gloria is heading to the United States to help out there. It is the story of a rich man investing to help a new generation.
The one place in the sport where money is not in short supply is in Formula 1, at least not according to the latest financial figures from Formula One Administration. This reported a turnover in 2004 of $705m and a profit of $468m. Even allowing for a $93m one-off payment these are impressive figures with more than 50% of the income being pure profit and even then the company was able to reduce its debt by $347m in the course of the year. All of this money is leaving the sport, going to offshore trusts funds or investment companies.
Bernie Ecclestone, the man who has made the sport such a success, praises Nick Fry for trying to draw in the kids of tomorrow but does not seem to make the connection between dwindling interest in the youth of today and the impossibility for them to find funding.
Would it not be a better idea for Ecclestone to either provide money to the FIA to give to the automobile clubs of the world to fund scholarship schemes so that talented kids, even in poor countries, can make the jump? Money is the key. Back in the 1980s France had a dozen top F1 drivers because the Elf oil company recognised the sport as a good promotional tool and funded the best of the best in France. That is how Alain Prost arrived in F1. It would not have happened without Elf money. Developing new markets for Formula 1 is a direct result of helping new drivers on their way up. Before Michael Schumacher German interest in F1 was limited. Spanish interest before Fernando Alonso was next to nothing. And what has happened to French interest now that France has no drivers?
Ecclestone may not like the idea of giving more money every year to the FIA but that does not stop him doing something else such as putting a year of profits into a foundation which would then have sufficient money to provide scholarships for youngsters from all over the world for ever. This could be administered by people who know how to recognise talent in young racers.
Many wealthy men have tried to put something back into society when they achieved riches beyond their wildest dreams: John D Rockefeller, the Rothschild Family and Bill Gates all put millions into medicine, Andrew Carnegie started libraries around the world, Paul Getty, the Guggenheim Family and Sir Henry Tate (the inventor of the sugar lump) believed that their art would enrich the world, James Smithson wanted a museum called the Smithsonian, Henry Ford's Ford Foundation exists to promote democracy and Alfred Nobel, who made a fortune from explosives, created annual prizes for research, literature and peace.
Motor racing is not a world where there have been many legacies but that does not mean they cannot exist. And if nothing else it would stop people like this website banging on about the Formula One group taking too much money out of the sport.