There is little in the way of interesting chatter at Hockenheim, although there have been rumblings about several teams having financial troubles. The latest whispers suggest that Renault F1 has a bit of a cash-flow crisis, as sponsorship money is due to arrive in the autumn, but more cash is needed right now. The team would like to get its hands on its TV rights money but, as some of the other teams are pointing out, the operation counts a bank amongst its sponsors: a bank that is owned by Renault. A look at the cars reveals a company called DIAC. This was founded by Louis Renault himself back in 1924 and stands for Diffusion Industrielle et Automobile par le Crédit, in order to provide credit for Renault car buyers. It has been a part of the another company called RCI Banque since 2002. RCI, incidentally, stands for Renault Crédit International. This organization finances sales of all the Renault and Nissan brands in 39 countries, so it has a few quid. This presumably means that it could loan the team some money…
There is also a fair bit of chat about Monaco and how the race really should pay F1 more money than it does. This is not surprising given that the people in charge of the sport these days do not care about anything other than cash and have no respect at all for the traditions of the sport. There are some who say that F1 will be fine without Monaco and others who are aghast at the thought of removing one of the pillars of the sport, the one race that gives F1 glamour. There is, of course, a negotiation going on and both F1 and Monaco understand that it would be detrimental to both if there was not a Monaco Grand Prix. In all probability a compromise will be found and all the sabre-rattling will stop. This would be good. F1 loves to do its dirty washing in public and the people in charge seem to be quite happy to bet the farm to win a few extra nickels. That is fine if the only reason for existence is to squeeze every single penny from the sport, but one would hope that there are some folk out there who understand that this is not what it is all about. The only reason that more money is needed is to pay off a bunch of bankers who care nothing for the sport. One can only hope that in the fullness of time the teams and the FIA can find a way to get rid of those who have no passion for the sport. Banks exist to loan money and there is no reason that a commercial bank cannot provide a funding package to buy out the financiers who are currently involved in order to create a structure which will better serve the sport in the years ahead.
Elsewhere it is being reported that the HRT team has a deal with Toyota Motorsport for a supply of chassis for the future. This is a sensible move. However, there are a number of points which should be mentioned. Firstly, in order for such a deal to go ahead, the owners of HRT need to make the necessary payments stipulated in any agreement; and secondly Toyota needs to have the people on staff capable of not only building chassis, but also developing them in the future. With HRT drivers trading places (quite literally) and the Spanish owners apparently unable to come up with cash by other means the existence of any such arrangement must be regarded with caution.
Joe,
Have Renault’s money issues come about because they did not correctly anticipate their budget for the season or has their expenditure been accelerated by finding themselves in a championship battle for 4th (with Mercedes, Force India, etc..) and therefore constantly pushing for updates?
If I was Toyota I’d be nervous about building anything for HRT without cash up front. Have they considered using the coincidence of the name of the team to get some pharmaceutical advertising on the car? Lots of menopausal female F1 fans surely….
“This is not surprising given that the people in charge of the sport these days do not care about anything other than cash and have no respect at all for the traditions of the sport.”
Great point you made there, Joe. Money seems to the only thing behind the sport’s promoters.
I understand the importance of Monaco, but paying more to Bernie is not likely to be an issue for wealthy Monaco. This is more of a problem in countries like Turkey, China and India. The majority of the folk in these nations earn less than their European counterparts. But circuit organizers are forced to keep a high price for tickets in order to meet the excess fees Mr. Ecclestone demands.
Let’s face it – in third world countries where many people still go starving and prostitution and other evils snuff out the lives of children in slums, paying huge amounts of money to bring a sport (something like motor racing) is outrageous. Not that I don’t want it. I want more and more F1 and other motorsport events in India and motor racing is the only thing I care to follow. But we’ve got to step into the real world and put things in perspective.
Sepang, Istanbul Park and the Shanghai International Circuit all faced empty grandstands. I wouldn’t be surprised if the same happened to the Indian Grand Prix in a few years’ time. People can’t afford to part with a substantial amount of their monthly earnings to watch a race however breathtaking it may be.
I believe motor racing is the ultimate sport and F1 the ultimate in motor racing, but if F1 has to reach more shores it needs to get down from its pedestal – I mean the race hosting fees and technical mysteries behind its current car designs .
This need (or greed?) for money is also the reason why F1 will never visit the great tracks of America such as Laguna Seca, Road America and Watkins Glen, while Mr. Ecclestone looks for new facilities in the middle of nowhere. MotoGP doesn’t face such a prospect – it now has two races in America and is looking to expand to Hungary and Singapore.
I’m sorry if I bored people. I may sound too idealistic, but I just wanted to say these things. This was an opportunity to do it.
I understand why CVC are so often painted as the villains of the piece but they are only the final link in the chain. The really villain is Bernie who placed his boy Max at the FIA while telling Balestre he was backing him. Once Max was safely ensconsed and had a coterie of people prepared to back whatever he said he did what Bernie placed him there to do. He sold 100 years of commercial rights to F1 for $3 million a season and Bernie did what he had always planned and found a mug who was prepared to pay a lot more than that and would then hire him and keep paying him.
No other sport has done such an insane deal. No other sport would consider only inviting one bidder to bid for the whole thing. Football sells its TV rights not its commercial rights in blocks of a few seasons and to the highest bidder. It then separately sells radio and all the other rights individually. As a result the English Premier league makes vastly more than F1.
The deal Max did (or he had no involvement in if you believe his version) could be considered criminally negligent had it not been the reason Bernie put him there. I am surprised Jean Todt has not re-negotiated the deal as there exists a mandate from the FIA electorate to do so. When Max had his little problem his pitch to get past the vote of confidence was that the deal needed to be re-negotiated and he was the one man who could do it. Of course once the vote went his way he seemed to forget about re-negotiating the deal or was given a reason to forget that required him to immediately move to Monaco.
Bernie is the reason that circuits can’t make a profit from running an event that sells 300,000 tickets over three days in the case of Silverstone. Bernie is the reason so much of the money F1 generates is being spent financing a deal where he pocketed a fortune.
This spat over Monaco will end just as the previous Balestre/FIA suit with ACM ended: a settlement which requires the ACM to relinquish some form of income. Last time it was tv revenue, this time it will be the trackside adverts that’ll be transferred to FOM.BE is angry at all the “free” SBM billboards he see on tv during the coverage.
And the proceeds of the Toyota chassis will help towards a return to WRC.
[...] Gossip from the Hockenheim paddock There is little in the way of interesting chatter at Hockenheim, although there have been rumblings about several teams [...] [...]
Quote: “The only reason that more money is needed is to pay off a bunch of bankers who care nothing for the sport.”
Edited for correctness: “The only reason that more money is needed is to pay off a bunch of wankers who care nothing for the sport.”
Nicely worded Joe- if only we could get rid of him! Wisgful thinking I guess
I’m sure the banks will loan Renault some money against their property/directors’ homes; loaning money to help develop a business? Forget it.