Motorsports To Suffer From Global Financial Meltdown
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Oct 10, 2008
ToyotaF1
Motorsport could also be hit hard with carmakers around the world suffering falling profits. Already Formula One teams—whose annual budgets currently run to hundreds of millions of dollars—have agreed to urgent cost-cutting measures which FIA President Max Mosley says are essential to the sport’s survival.
“Some of the manufacturers may be in difficulty now as well, because if you look at their share prices, their profitability, their sales, the days when they could just toss out 100, 200, 300 million euros a year, which is what Formula One costs those big companies, I think they’re finished,” Mosley said.
“I am sure we will be affected, I am sure our fans will be affected and some of our teams will be affected, no question,” Tony Cochrane said. “You can’t avoid that in this massive financial clout, but I think overall if we keep doing everything diligently we will be OK.
Honda F1 chief executive Nick Fry said the sport needed to eliminate “wasted expenditure”, with some sort of immediate action required.
“Whilst we shouldn’t panic, we need to do things for the short term and that means next year,” he said. “It’s difficult to say otherwise when you have five thousand people laid off recently at a car factory in France.
“How can that manufacturer turn to its employees and say it’s not going to do anything?
“There’s a requirement for some of the Formula One teams to have instant action,” he added.
“You’ve only got to look at the accounts of some of the Formula One teams to see losses over the last couple of years and that needs to be addressed. The bank manager is not going to lend any more money.”
Williams chief executive Adam Parr has warned one of the bigger Formula One teams run by a major road-car manufacturer could quit the sport due to the global financial meltdown.
Parr said it wasn’t just the small independent teams—like Force India and Red Bull—who could be hit by the current uncertainty that has seen stockmarkets crash.
“There is a serious possibility that one or two teams may pull out and they could be manufacturer teams,” he told.
“The assumption is that it would be an independent team but I don’t think this is necessarily the case.”
