Thank goodness the midterm elections are history. Back to what drives me…

I’m a follower of anything that rolls fast on anything, anywhere and powered by whatever. Cars, bikes, motorcycles, hell, I’ll even watch boats race if I’ve the time and outlet! As an F1 fan the last few months have been interesting to say the least. A major on-track incident that raises questions about safety procedures, teams being put into administration due to financial woes, and a change in points distribution have made for a season wrap-up that could leave as many questions as answers for the drivers, teams, fans, and administration.

The 2014 sporting season has been dominated by the Mercedes AMG F1 team. They secured the Constructors Championship in round sixteen in the inaugural Russian GP with three races remaining in the season. Teammates Lewis Hamilton and Nico Rosberg have won every race to date except three, which were won by Daniel Ricciardo of Red Bull Racing. At this writing, the Mercedes teammates are 1-2 on the grid for the 2014 penultimate race, the Brazil GP running 11/9/14.  leading up to the finale in Abu Dhabi Nov. 21-23. Hamilton holds a 24 point lead over Rosberg at 316-292, and with 25 points to the winner of the race, 18 to second, and so on. One would think that with the performance and pace the Mercedes FW 105 Hybrid has shown this season all Hamilton has to do is finish races to secure the drivers title. But wait – theres more!

The powers that be, FIA and FISA, have set double points to be awarded in the final race, so the distribution will be 50, 36, and so on. Hamilton has won ten races to Rosberg’s four with streaks of four and five consecutive race wins bookended around stretches of questionable reliability, bad luck, and on-ciruit run ins with his teammate. To be in the mix at this stage in the season is a little bit of a gift being handed to Rosberg. The title cannot be decided before the finale, and the double points award for Abu Dhabi makes for more hand-wringing in the Lewis camp moving forward. The reward for his consistency, patience, and dominance on track is to sweat out having to finish strong and fight to the end of every race. Right up to the end, this season will produce many stories to carry into the down time and on to next year.

The traveling show that is F1 generates over 1.5 billion USD a year in revenue. To put that in perspective, Sierra Leone’s GDP was 1.9 billion USD in 2011. So yes, the annual revenue F1 generates could run a small country for the year. How that revenue is divided is a source of contention amongst the competitors, with less successful teams receiving a smaller piece of the revenues than the more successful ones. The specifics of the allocations are a well kept secret, but it is known that Ferrari, McLaren, and Red Bull receive extra money annually from several special funds set up in the F1 budget to keep these monikers afloat at any expense. The reasons levied are that these teams are Formula 1; fans do not tune in to see Caterham or Marussia flail at the back of the field, or to see Force-India or Sauber struggle to win points. The prevailing thought is that these top-tier teams are the only reason asses are in the seats, and that without them the sport that is F1 would no longer exist. The depth and extent of the troubles some teams are in effaced itself with the absence of Caterham and Marussia at the USGP in Austin TX last week

In the last two weeks Caterham and Marussia were put into administration in the UK (administration being similar to bankruptcy court in the US) with the dominos falling down to the hundreds of affected employees. Marussia could not find any money or sponsors to help keep them afloat, so they have ceased operations, being locked out of their own facilities. Caterham is not throwing in the towel however, resorting to a crowd-funding effort to help keep them going long enough to make the last race in Abu Dhabi. A noble effort; I’ll throw a few bucks their way on principle alone. After much thought and many reads on the subject I’ve managed an opinion different from the one I formed upon initially hearing the news.

First, more power to Caterham for trying to right the ship any way they can. As a business owner that knows lean times I would welcome and applaud their success, if they can pull it off. But my initial thoughts were on the revenues available, and if the top-tier teams get a larger share, then why not offer up support to the lower tier teams to keep the fields intact? With a full field this year there were 22 cars at each GP, and at Austin the 18 car starting grid looked amazingly thin. And after a first lap bonsai move by the always erratic and overdriving Sergio Perez the remaining race field of 16 was overshadowed only by the debacle that was the 2005 USGP when 6 cars started the race. True, the smaller field was not a pretty sight, but is that what really matters?

If the Caterhams and Marussias of F1 cannot make their budgets work, then isn’t the problem landing clearly on their own stoop? And does that mean a bailout from the F1 management would be the right move? I understand that many lives are tangled into the fabric of the teams problems, but it feels like shoveling more money into the fire is wrong. If there is a lesson in this then it should be learned and shouldered by both sides of the debate, and changes obviously must be made moving forward. Teams should take their budget as it is laid out in front of them and make the team work. If engine development is allotted 10 million dollars, spend it, and then stop. If aerodynamic upgrades during the season is allotted 25 million, spend it, and then stop. Need more money for brake upgrades? Take that money from another appropriation and and give it to the brake appropriation. If midway though the season all that is left is to compete with what equipment development you have then compete. Run the teams as a business first. If more is needed to become more competitive and it cannot be found, then the team must endure with its capabilities or move on as Marussia has. These teams are not the first to close shop or tread precariously in deep water; many before them have fallen over many years. That being said, if the F1 management wants some level of parity and more teams entering the circus then they must come to terms with how money is allocated, and also, and more importantly, they must come to terms with capping costs in some fashion. The high-budget teams argue that they are capable and will spend what they must to remain on top, and that caps are unmanageable and arbitrary. The smaller teams will argue that they can never compete with the current structure. So what to do then….

The question actually is, what does Formula 1 want to be?

If they wish to insure the top tier teams continue to drive the revenue growth and the smaller teams be damned, then continue on the current path. Frankly, if no changes are made, I will keep watching. I will not turn the channel off, or stop DVR’ing quals and practices. Nope. I’ll be right there watching and enjoying no matter what. The circus has to get much less enjoyable to put up with for that to happen.

Then again, if they want more competitors or more parity, then they could cap spending, somehow, someway. Big data knows everything, and a 1.5 billion dollar operating budget can cap costs and track spending if they so desire. The sporting regulations already cap off season track testing. It could be done. And there could always be other methods to create parity. Think pop-off valves in Indy cars. Granted there are other higher-tech methods that could be used, but just take that as an example. But what does that buy the F1 powers that be? Is that in their best interests? Parity and competitiveness, quite frankly, have never been the calling card of Formula 1.

No, the best interests of Formula 1 are being served, 1.5 billion of them at a time it seems. And that is not necessarily wrong. Take the money out of the equation and what do you have? You would still have a handful of  top level teams trying to settle things on track, and establish their dominance as a manufacturer. For all of the names bandied about it is still the likes of Ferrari, McLaren, Lotus, Renault, and Mercedes that will be racing somewhere, somehow to out-duel so they can outsell the others. These teams sell to other independent teams, giving them a competitive chance. So Formula 1 is what it is today, a global force that will run as the money wants it to run. I’m all for the little guy, and pull for the underdog, because that is what I am and identify with. But the current structure of F1 is what it wants to be, and it works quite well. F1 can be whatever it wants to be; the interesting thing over the next few years will be to see what it becomes.  In the same vein that final race points were doubled, and track testing capped, and safety regulations changed, so will the future of Formula 1 evolve. Where that evolution takes it will be one hell of a ride to take. And I’ll be riding along.

Cheers:)

Riley C.