How F1's foundation has responded to the coronavirus threat

No matter how strong you make a building, if it's built on weak foundations there is a danger that the whole structure can come crashing down.

Formula 1 is not immune to that, and its position as the battleground for the very best drivers in the world is helped by a solid base of categories below it that are feeding it future stars.

If Formula 2 and Formula 3 do not continue to deliver as a proving ground for bringing on the best young talent around, then that is as much a headache for F1 as it is for those individual categories.

As Renault F1 team boss Cyril Abiteboul said recently when there was uncertainty about which racing categories would return this year: "Formula 1 could be facing a problem if there is no F2 championship. We need to make sure that we have enough drivers who are fit and ready with superlicence points to get into F1."

Thankfully the racing is getting going again, and F2 and F3 will be heading to Austria next month alongside F1 to get their seasons underway.

But as the storm of the coronavirus pandemic continues to batter the world, it's clear that how these main feeder categories react and adapt for the long term is as important to F1's own health as was its own 'New Deal' package of rule changes that were recently pushed through.

In the short term, that's why F2 and F3 chiefs reacted swiftly once the lockdown began to ensure its teams could survive weeks of no racing activity.

Reflecting on what it did, F2/F3 series boss Bruno Michel explains: "We immediately took some measures with the teams to tell them that we were freezing all the debts and outstanding invoices, and things like this. We wouldn't want to put any additional pressure on the teams.

"And we had exactly the same discussions with our suppliers to say 'give us some time at the moment because we need to freeze the whole chain'. Our technical partners such as Dallara, such as Mecachrome, such as Magneti Marelli, they all played very, very well the game I would say.

"The whole idea, whether it was the teams or the suppliers, was to keep everybody afloat for these two or three months, and to make sure that everybody was ready to go back to work" Bruno Michel, F2 CEO

"Everybody was in the same boat. We were particularly careful on suppliers that didn't have a stronger financial situation because they were too small and we wanted to make sure that [they survive too].

"The whole idea, whether it was the teams or the suppliers, was to keep everybody afloat for these two or three months, and to make sure that everybody was ready to go back to work."

That action, in trying to free teams from extra financial burden as they faced the trouble of having to continue to pay staff, should at least help ensure the grids are complete when the F2 and F3 campaigns begin in Austria.

But Austria will not mark an end of the difficulties, and the long-term financial hit of the coronavirus lockdown will be felt for months to come. Bigger problems could be over the horizon.

Former grand prix winner Jean Alesi, who plays an active role in the career of his son Giuliano as he races with HWA in F2 this year, is particularly concerned about the sponsorship situation in the category.

He is worried that sponsors, which are a lifeblood to drivers at this level, are being turned off by the consequences of the coronavirus pandemic and how the rest of the year is panning out.

As well as promotional budgets getting stripped back, there is the added aspect that part of the attraction for sponsors in F2, of being involved in the buzz of a grand prix weekend, has been taken away now that races are behind closed doors with no guests allowed in.

"It's going to be terrible," says Alesi about the campaign ahead. "Terrible. Why? Because of course, you know in our category we pay for driving. You need to pay the teams and the price in F2 is very, very high. So most of us, most of the fathers, we still have to pay for it.

"In my case I am at the race track, I bring some sponsors, some partners to the F1 paddock, and they enjoy the weekend with Giuliano. In the meantime they watch the F1.

"But that is going to be over because this season everything [at the track] is going to be just drivers and the technical crew. So I'm facing some troubles already. The sponsors are not very happy to follow it, because they they have no advantage to be on an F2 car and that is going to be very difficult.

"This season, the drivers who already have some sponsorship, the sponsors pull out, they already sent the letters and said: 'OK bye bye, because you will have everything [the whole season] in two months'.

"In these two months' time, all the sports around the world, they start at the same time. So, what will be the space for F2 when there is Champions League, the Italian football Serie A and then F1 and then sportscars, and then GT all together? It is going to be difficult."

Michel is aware there is potential for sponsor problems, and says it is something that needs "careful" attention and will be monitored. But he is equally mindful that teams, drivers and the championship organisers all are coming at the same issue from different perspectives.

"You know, there always are problems with sponsors and drivers every season," he says. "I never had a season where everything is hunky dory and everybody has paid and everything is perfect.

"It's going to be terrible. Why? Because of course, you know in our category we pay for driving. You need to pay the teams and the price in F2 is very, very high. So most of us, most of the fathers, we have still to pay for it" Jean Alesi

"Probably this year is going to be a little bit more tricky. But as long as we have not really started racing, it's difficult [to predict]. From what I hear from the teams at the moment, there are no drivers that are not planning to come back, which is the most important thing.

"After that, how it is going to happen in terms of payments of budgets? We of course, will be extremely careful about the way we're dealing with the teams. We will try to understand exactly what the situations are.

"The other thing is, I don't want some people to take that as an excuse to try to re-discuss their budgets with the teams, because that will not be fair either.

"We need to find something that is fair for everybody: for the teams, for the drivers and for ourselves. We need to be careful this season, but I don't foresee a bigger problem than we've had in the past when we had some difficult seasons as well."

How a potential drying-up of sponsorship as the financial impact of the coronavirus pandemic plays out is something that is perhaps of heightened concern in the junior categories than it is in F1.

While F1 teams receive a great deal of income from commercial rights (mostly TV and race hosting fees), that is not true of categories like F2 and F3. The business model there is based mostly on drivers bringing sponsorship themselves. So if the sponsors aren't there, there is little else for teams and drivers to fall back on.

In the short term, the best way to offset any disparity between the incomes that are available from the drivers, and the outgoings of teams, is to cut costs.

For F2 and F3 team boss Rene Rosin, whose Prema Racing squad has won titles at both levels, the financial situation is certainly a challenging one right now, but one where he thinks attention is being rightly given.

"We need to look forward for a better future," he says. "We need to try to cut down costs because the budgets are starting to become pretty expensive.

"That's what we're working together with the promoter on, in trying to make everything possible to become a business that is sustainable in the long term.

"We cannot just rely [on driver sponsorship] because not all the years can we get 22 drivers in F2, or 30 drivers in F3, with the right budget like we did now. We need to think."

Cost cutting for any category is a tricky subject though; especially when series have a core DNA that needs preserving. For F2, it cannot abandon its essential component of being the final preparation ground for F1.

As Michel explains: "We've always been quite careful [on costs]. You know, there's a lot of aspects that you can work on for limiting the costs, but we can always go further. The trick is always to make sure that we take the right decision to cut the costs.

"We are actually at the moment working on that for the future. But on the other end, we need to make sure that, number one, we keep the same excitement in our race. That's the DNA of F2 and F3 at the moment, and we don't want to diminish it, because otherwise nobody would be interested in more.

"Second, we need to make sure that we prepare the drivers correctly for F1. And that's what we've been proving every time a driver is arriving in F1. We need to continue to do that.

"And third, we need to make sure that we have a car, and I'm talking about F2, that has a performance that is not massively far away from F1. Otherwise, it's not a good preparation.

"So it's a balance: it's always a balance and it will always be. F1 has exactly the same problem, which is how it cuts the costs without losing its DNA. On our small scale, we have the same issue. So we know on what parameters we can play. And we will. We started already to think about it, starting from 2021. But, as usual, we have to be careful in it."

Longer term though, there perhaps needs to be a shift beyond cost cutting - and one that even revamps the entire business model of junior categories. Relying on sponsors that are happy to back drivers is all good when companies are flush with cash. But it becomes a problem when belts get tightened, as they are likely to be over the next few years.

Rosin suggests that the coronavirus crisis may be the catalyst for some consolidation of motor racing categories: where only the strongest survive, but they are able emerge better than they were before.

"I think this pandemic situation could help in a way to reorganise motorsport a bit, because I'm not sure all the championships will be able to start," he says.

"This time, for the first time, the teams were at the end of last year full with drivers that were all bringing in budgets. I even added another team, so that was a sign of good health. Then the pandemic arrived..."Bruno Michel

"Maybe there will be a natural selection of categories, so the stronger ones emerge: like happened in the past between F3 and GP3.

"And although not for the short term, but we need to get back to attracting sponsors and maybe changing the leverage of the driver's budgets versus the team budget, and maybe sharing some more TV rights in the future.

"I think in the long term, maybe we should change the model a bit to be less dependent on drivers' budget and more dependent from sponsors and other source of finance for us."

Michel agrees that some thought needs to be given longer term to shifting the balance, so F2 teams' revenue is not reliant so much on drivers.

"Of course, we always, always look at that," he explains. "We've always been doing that. I think at the end of the day, there's been a lot of junior categories over the last 15 years that arrived and that disappeared. And, obviously, if we're still there, it is because we have looked at things and we've been more flexible maybe than other categories.

"So we absolutely need to look at that and you're right: finding drivers bringing this kind of budget might not be easy in the future. It means that number one, we need to try to diminish the budget that is required. And number two, we need to try to generate more revenues ourselves that we could put back into the system. That's something we're working on as well on both sides.

"At the end, we need to find the right balance to make sure that the teams are sustainable. This time, for the first time, the teams were at the end of last year full with drivers that were all bringing in budgets. I even added another team, an 11th team. So that was a sign of good health. Then the pandemic arrived..."

While closed door events and 2020's compressed calendar may still then pose its challenges and difficulties ahead, the prospect of no racing happening at all was a far worse possibility.

Rosin concurs that it was essential for F3 and F2 to get back on the road again with F1, rather than being left alone and ignored.

"The time we are facing now is difficult for everybody," he says. "But even if it's behind closed doors, it is important to run.

"It is better to start from my point of view, because if there are no junior formulae, there will not be in the future drivers for Formula 1. We are in categories who will create drivers for F1, so if there is no F4, if there is no Formula Regional, if there is no Formula 3 and Formula 2, in the longer term there is no F1 either.

"It's been a huge challenge the last few months but of course for me, it's better to start than not start. We have a company that we need to run, and I don't want to think what would have happened if we were not able to run."

For Michel, the dangers of not racing were clear. Asked if there would have been risk of teams not making it, he says: "Yeah, absolutely. Definitely 100%.

"It was very, very important to go back racing. And it's very important to have a season that is going to count as a real season, because the drivers signed for a certain number of races.

"If we had not gone back to racing, some teams would not have survived, for sure."

F1 can at least take heart that its foundations have been protected for now. And hopefully, while there will be some stresses and strains on them in the coming months, they can be made perhaps even stronger in the long term.