The late noughties marked a torrid period for Formula 1. ‘Spygate’ in 2007 started with allegations of illegal data sharing between Ferrari and McLaren employees, and ended with a $100m fine and mysterious death of one of the protagonists. ‘Crashgate’, which occured in 2008 and was exposed the year after, saw Renault wilfully trigger a crash to benefit the strategy of its other car. The same year the president of the FIA, Max Mosley, was drawn into a lurid scandal by a tabloid newspaper which published details of his sex life.
Add in vociferous threats of breakaway series, teams’ refusal to sign a revised Concorde Agreement, demands that Mosley step down and the withdrawals of Honda, BMW, Toyota and eventually (though the latter remained as an engine supplier), and clearly these were truly turbulent times for the sport.
Underlying all this was Mosley’s efforts to implement one of the most contentious regulations in recent F1 history: A formula for an optional $40 million per year budget cap. Any teams operating under it would enjoy greater technical freedoms than their big-spending rivals.
Although open to all, the budget formula was aimed primarily at newcomers who, the FIA hoped, would be on their side during the increasingly acrimonious political disputes. Unwritten was that the newbies would use Cosworth engines.
In return they would benefit from Column 3 monies, a separate $30m annual ‘pot’ created for them as they would be hard-pressed to qualify for Column 1 and 2 income given that the revenue structure – still in place – required teams to place amongst the top ten to qualify for payment, and there could be up to 13 teams.
The concept sprang from a presentation made to the FIA World Motorsport Council in late 2008 by Kenny Anderson and Peter Windsor – the former an engineer who dabbled in F1 had various levels; the latter a journalist-turned-team/driver manager who had previously attempted to switch to team ownership.
They had designs on entering F1 with a US-based team, to be named USF1, which they planned to operate on an annual budget of $40m by running Cosworth/Hewland powertrains and cutting back on the extravagances flaunted by manufacturer teams. Thus they went about convincing the FIA of their concept.
Motorsport’s governing body, intent on neutralising the power of big-buck manufacturer teams – whose influence enabled them to wag the dog too often for comfort – latched on to USF1’s blueprint, turned it into a set of regulations and went forth preaching the gospel of low-cost F1. No fewer than 15 outfits express interest, including myf1dream.com, a crowd-funded operation that – not surprisingly – failed to fly.
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The ‘lucky’ chosen teams were USF1, Manor Racing, Campos Meta and 1MalaysiaF1, the latter under the adopted name Lotus. Cast-offs included re-imaginings of March, Lola and Brabham, plus Team Superfund, then operating a feeder series. Also rejected were respected names such as Prodrive and WSR team Epsilon Eskadi, while touring car operators N.Technology and Mallock withdrew once the level of F1 politicking became apparent.
As it turned out, the budget concept proved utterly myopic and was never introduced. The ‘losers’ could consider themselves fortunate, as the fates of those who made the cut demonstrated.
USF1 didn’t make it as far as pre-season testing. Campos ran out of cash before the first race and was half-rescued, only to die a slow death three years later.
Lotus, funded by Malaysian aviation entrepreneur Tony Fernandes – a colourful individual who seemed unable to recite the same story twice – eventually became Caterham following a long dispute with the former Renault works team over who had the right to use the name of Colin Chapman’s great team.
Manor designed a car with insufficient fuel capacity for its first season, requiring a change of chassis. Despite this inauspicious start it out-lasted the other three but underwent various changes of identity before going into administration after the 2016 season.
Meanwhile Stefan GP, a subsidiary of a Serbian arms company, attempted to acquire each team in sequence, then acquired Toyota’s cast-off F1 car. Zoran Stefanovic’s efforts even went as far as shipping a few tables and chairs to the 2010 season-opener in Bahrain, but got no further.
At the time surprise was expressed that Prodrive was sidelined. But it seemed David Richards’s company had committed the cardinal sin of spelling the name of its engine supplier as ‘Mercedes’ rather than ‘Cosworth’, having done a deal to acquire McLaren-Mercedes technology in a deal similar to that now enjoyed by Haas with Ferrari.
Despite having kicked off the entire budget concept, USF1 bombed due to a lack of time. When they made their pitch to the FIA they planned on a three-year ramp-up period to sweet-talk investors and sponsors, establish bases on both sides of the Atlantic and design and build the first all-new US F1 car since the efforts of Vels Parnelli in 1974-76. Then the FIA compressed the time frame from two years to nine months…
In December 2008, having gotten wind of USF1’s plans, I called Anderson, who begged me not to publish until they were ready to announce; in return, I would enjoy exclusive inside access. The following March I ‘scooped’ the story, then broke various news snippets before travelling to Charlotte in August for a feature.
I voiced my concern about the (relative) lack of progress, but was assured all was well. I was subsequently introduced to Chad Hurley, one of the founders of YouTube, who was allegedly bankrolling the team. Yes, Chad was an investor, but at minority level.
Come mid-February, with their race debut a month away, it was apparent the USF1 car, based on antiquated technology, was nowhere close to running. The team could not afford Cosworth’s engine bill. Meanwhile Campos, who commissioned Dallara to build its chassis, was also in dire straits over unpaid bills, so plans were hatched for two struggling efforts to support each other.
Both teams requested a three-race moratorium, in turn declined by the FIA – by then presided over by Jean Todt after Mosley stepped down at the end of his term. USF1’s game was over.
By chance I was on the telephone to Anderson when I received the FIA’s email, so read the contents to him. He promised to get back to me once he’d made enquiries. I’m still waiting for that call, but I can at least claim to be both the first and last journalist to talk to Anderson as team boss of USF1.
Campos mutated into Hispania Racing Team after team founder Adrian Campos transferred his interests to the Carabante family, early investors in the project. So late had it been left that the team’s second chassis, for Karun Chandhok, had its first run in Q1 in Bahrain. Had the 107% rule been in place neither he nor team mate Bruno Senna would have made the cut for the race. Having started from the pits they pootled around some eight seconds slower than Rubens Barrichello, driving a Williams with identical Cosworth power, then retired.
A week later I flew to Melbourne for the second round, and landed a lucky upgrade to seat 1A in an Airbus A380 for the 16-hour flight to Melbourne. The aircraft was the first to offer 1st Class privacy booths and full telephony access. Seated in 1B was Colin Kolles, the Munich-based sometime F1 team principal and sports car entrant who had been appointed boss of HRT.
Throughout the flight Kolles made lengthy calls to suppliers and the team. He was clearly unaware of the adjacent presence of a multi-lingual journalist who could not help but overhear his conversations. The look on Colin’s face when he realised it after landing was priceless. I was later commissioned to write a magazine feature on any of the new teams, and obviously chose HRT – for which he never forgave me…
Manor – now known as Virgin in a series of renaming exercises that took on serial proportions – fared better in Bahrain, but only marginally so given that both cars retired, but at least the quickest car was only four seconds off Williams.
Lotus beat the Virgin in the season opener, then held the upper hand for most of 2010, primarily due to Virgin’s fuel tank problem and the fact that chief designer Nick Wirth, tellingly once a close associate of Mosley’s, was unable to decide whether his design was the first to be created solely by CFD or not. That made upgrades difficult, and pointed to deeper issues. He eventually left to design robotic dogs.
Fernandes harboured lofty ambitions, and for 2011 cut deals with Renault for engines and Red Bull for transmissions, but hit legalities after the licence to use ‘Lotus’ was rescinded and awarded to the former Renault team.
Still, he attempted to race as ‘Team Lotus’, so for 2011 F1 laboured under the utterly ridiculous situation of two-each Team Lotus-Renault and Lotus-Renault GP Team cars on the grid – the former in traditional green-and-yellow and the latter in similarly retro black-and-gold. So desperate was Fernandes to be linked to Lotus that he acquired Caterham Car Company, manufacturer of Lotus 7-based sports cars, and took on their name in 2012.
Whatever, after HRT died at end-2012 the fight over last place was waged between two teams variously known as 1MaslaysiaF1/Lotus/Team Lotus/Caterham F1 and Manor/Virgin/Marussia/MRT/Manor again. These battles continued until the end of 2014, when Caterham made a last-gasp appearance in Abu Dhabi with an administrator running the show after Kolles, who had switched allegiances, left the bankrupt team.
There were, though, frivolous moments, such as a wager between Fernandes and Virgin boss Richard Branson over the outcome of the first season – the loser acting as air steward on the winner’s airline. It was Branson who donned an apron, though none of the newcomers posted a points-scoring finish in their first year. Or 2011 and 2012.
Far worse were the two tragedies which struck the Manor team during its brief time in F1. Maria de Villota suffered a serious head injury in which she lost an eye in a private test for the team at Duxford Aerodrome in 2012. She died the following year. Then in 2014 Jules Bianchi, who had scored the team’s first points in Monaco earlier that year, crashed in the rain at Suzuka, striking a recovering vehicle. He also sustained head injuries and was left comatose. Bianchi died the following year.
The renamed Manor team raced on for two more years after being acquired in administration by an energy entrepreneur with designs on the big time, but this was not too last. At the end of 2016, after failing to place tenth in the constructors championship and thus looking at a $35m hole the team finally collapsed.
Under various guises the trio of Budget Babes entered 282 grands prix, collectively making over 500 starts. Between them they spent an estimated billion dollars – the $40m budget cap having been scrapped after entries closed and a replacement Resource Restriction Agreement proving toothles. Only Manor scoring points: three in total, after the points table was restructured to pay to tenth place from 2010.
Where did the FIA go wrong with its much-vaunted $40m budget formula, designed (and said) to save F1 from itself? In retrospect it is clear that USF1’s was a blueprint but no business model, and to paraphrase Henry Ford: “Success is one per cent inspiration and 99 per cent perspiration.”
The major teams used every weapon in their formidable armouries to squash the budget cap formula, with Ferrari taking on the FIA in a Parisian court room – the Scuderia lost, but only on a technicality an appeal court is likely to have overruled. Ultimately the cap was dead and the alternative mechanism – the RRA – was laughably ineffective given that teams undertook to police themselves.
As a result, teams that had come in under the promise of $40m budgets suddenly discovered they needed double that simply to survive let alone score points.
The FIA was weakened by the team onslaught – orchestrated by the Formula One Teams Association, founded by Ferrari’s Luca Montezemolo – aimed primarily at Mosley, whom they wanted to step down at the end of his presidency. Was he pushed or shoved? Opposing sides see it differently, but who knows what was agreed behind closed doors?
His successor, Jean Todt, who had led Ferrari to great heights, took a more pragmatic view: Yes, caps on spending were crucial to the long-term survival of F1, but knee-jerk measures are no long-term solution. Under his aegis a more realistic budget cap of $175m is mandated from 2021, 10 years after that misguided $40m initiative. Yes, $175m is still too much, but at least consensus was reached on the need for a cap.
Worse, after committing to join F1, the 2010 entrants discovered through the media that plans for the $40m cap had been scrapped. By then it was too late to withdraw: millions had been sunk into car designs and facilities, staff had been recruited and contracts signed.
Then there are arguments that the wrong teams were selected by the FIA in the first place – USF1 in place of Prodrive, for example – rather than persuading manufacturers to remain in F1, but back then the soft option was to attract submissives.
Finally, during the selection process the FIA pushed for quantity and not quality. The Bahrain 2010 grid was the largest in F1 since 1995, but arguably the lowest in quality since the sixties. Tellingly, since the budget cap Haas F1 entered under stringent process and a business model not unlike that devised by Prodrive.
As F1 faces its new dawn and prepares to open a new team selection process there are lessons to be learned from the fate of 2010’s newcomers. Vet applicants carefully to ensure they have the wherewithal to survive beyond three seasons, and ensure that the revenue structure provides at least a realistic chance of survival.
In 2009 the newbies were granted around nine months to go from zero to grid, and clearly that was insufficient. By contrast, Haas had two years – the lesson is that the new team selection needs to get underway soonest if there are to be new teams on the grid in 2021. But, of course, the major teams are pushing back against newcomers – history may inform, but it seldom changes.
Equally prospective team owners – and there are said to be as many as five out there, including Adrian Campos – should prepare for revised regulations and circumstances that could wreck their plans at a stroke, so must ensure that their business models and contingency plans are sufficiently robust to cope with the ebb and flow of F1. As it transpired, the $40m dream quickly turned into a billion-dollar nightmare.
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