F1 rummages through Europe's economic crisis

© Ubaid Parkar, 23 June 2012
© Ferrari

Formula 1 is feeling the effects of the financial turmoil in Europe as teams are coping with its impact to the sport.

The F1 fraternity admitted that it has been affected by the crisis but are confident that they will pull through and see no reason why the sport can't bring about a few positives.

"We obviously feel sad and worried about the situation in Spain which is not ideal at the moment," Fernando Alonso said at the European GP at Valencia. "I think we are in a completely different matter which is sport and we are having a great event in one city which will be known worldwide on Sunday on millions and millions of televisions throughout the world, so it’s very good publicity.

"At the same time, I think the economic crisis is not only in Spain, not only in Europe but worldwide and if we question races and sporting events, we will never finish, because then we have to question why, in Poland, they hold the European Championship, maybe the Olympic Games and so on and so on, because there are macro-sporting events over which there is always a question whether they are necessary or not," the Ferrari driver explained.

Compatriot Pedro de la Rosa agreed with the two-time world champion.

"We have friends in Barcelona who have lost their jobs and it’s very bad," the HRT driver pointed out. "The only thing we can do is first of all concentrate on our job and try to make their lives better with a good entertainment show on Saturday and Sunday.

"And then also, as a team, I think HRT is an example of what you can do in Spain: invest at a difficult moment, give opportunities to young mechanics, engineers, people, drivers and this is what we are doing," he added referring to the Spanish outfit based in Madrid. "Crises come and go. It’s not the end of the world."

HRT team principal Luis Perez-Sala confessed that the struggling squad was having trouble finding partners.

"We have economic problems in my house - in my team!" Perez-Sala said. "It's touching us in some way. We are getting less money from sponsors; you have less money to spend on the cars, on the team."

Due to global economic climate, F1 is drifting slowly away from Europe, where circuits find it difficult to pay the hosting fees, to several new cash-rich venues in Asia.

"We are racing in areas where there is some money and no economic crisis: like India, like Australia, like Canada, like Brazil and like Saudi Arabia, with Bahrain and Abu Dhabi," Toro Rosso team principal Franz Tost observed. "We go to Russia, we are in China and I think that's very, very important for Formula 1, especially for the sponsors to be present all over the world."

But there was no denying that teams were feeling the crunch forcing them to devise strategies for sustainability in F1.

"As a team commercially you will be affected because the companies that want to be part of it will have to reduce their marketing budgets," Caterham CEO Riad Asmat noted. "That being said, we do need to look at what we're doing internally.

"It's a matter of the business that we're running at the end of the day: I have to make it as efficient as possible in the hope that we can sustain our being here," he added. "We just have to be smarter - and one of the areas is to manage our own resources, and hopefully with us working together maybe we'll find a solution."

F1 even held back its flotation plans, which was expected to go public in June, due to volatile market forces.

"It was just simply that the market is a bit turbulent. Why go into the market and battle against something? It wasn't necessary," F1 boss Bernie Ecclestone told Reuters. "Everything is being prepared. When markets look a bit more stable, they will push the button and go."

 

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