Formula One: Money takes the centre stage in the race

Where’s the money honey? If you had any doubts on that, Formula One clears them all. It not only remains one of the most expensive sports to compete in, but also sees a huge amount being spent by Formula One teams and the race organizers.

While the top teams continue to expand their budget expenditures without much sweat, it’s the teams from the lower end of the grid(the backmarkers and to some extent the mid-field runners) who often face the heat of rising costs.

Formula One was witness to a three big teams namely BMW, Toyota and Honda moving out within a span of one year thanks to the exorbitant costs and a world-wide recession in 2008-09.

Here’s a look at what are the impact of rising costs and lack of unity among the teams to bring down the escalating expenses.

Money Power

F1 boss Bernie Ecclestone finds it difficult to bring down the escalating costs

With the exit of three big manufacturers in Formula One, there was a growing need for a step to check the exorbitant costs. Max Mosley, the ex-FIA President suggested a Resource Restriction Agreement(RRA) that could help keep a check on the costs.

It helped in bringing down the costs to an extent, but the top teams continued to spend way in excess as compared to the minnows. The RRA was opposed by a few teams with Red-Bull Racing Renault and their sister team Toro Rosso the front runners.

The much talked about and the thorny subject of budget caps supported by Formula One supremo Bernie Ecclestone, is yet to be implemented with the top teams standing ground (as they did for RRA) and dead against the capping which might have an impact on their development and testing procedures.

And the reason for such a stand is no rocket science. They have invested heavily to stay ahead of the bunch, and that’s what gives them the competitive advantage. The top-teams, if subjected to a budget cap, will definitely impact their performance on the track.

The costs are expected to rise further for the 2014 season due to a sea change in the technical regulations and rules. The top-teams would definitely be able to afford it, but the backmarkers would be barely able to manage to get the funds required.

The yearly budget for a top-team such as Ferrari has almost doubled since 2007. While the Italy based was spending somewhere close to US$200mn in 2007, it is now believed to be spending around US$400mn compared to a back-marker like Marussia which spends just over US$100mn.

The disparity opens up the debate. While the mid-field and backmarkers argue that Formula One needs them, and the sport would be practically boring if it had just four cars competing and there has to be a level playing field, the front runners opine that they spend a huge chunk on Research and Development and that’s what helps them gain that point 0.1 or 0.01 second over their competition.

The situation remains critical as the pack remains divided on the matter. And this might lead to a fall-out of teams much like 2009. But that would hardly have an impact on the bigger teams. They have been able to survive long enough thanks to their deep pockets. Even though they might agree on cutting down the expenses, a budget-cap would be a far-fetched affair for them no matter how eagerly the mid-fielders and the backmarkers want it.