Analysing the process for new F1 entries

It was on 17 March last year that the FIA's World Motor Sport Council announced its intention of introducing a budget cap of £30m (then approx $40m) in conjunction with liberalised technical regulations in order to make independent teams more competitive, and attract new teams to the sport, beginning 2010.

Precisely 12 months later, give or take two days, the governing body issued a media release advising of a revised team selection process due to a team slot vacancy caused by the failure of the original $40m outfit - US F1 - to make the 2010 grid despite having had its entry confirmed in writing at end-July last year.

A lot of water flowed under the F1 bridge over the last 12 months - an acrimonious war broke out between the Formula One Teams' Association and the FIA, with commercial rights' holder at times backing whichever side held the aces at any point in time; the departure of Max Mosley as FIA president and the election of his anointed successor, Jean Todt; the departure of two manufacturer teams (BMW and Toyota); and the arrival of three start-ups in F1. Most, if not all these activities, can be traced directly back to that WMSC meeting in Paris last March.

As is a matter of record, three new teams - Campos Meta 1, Manor Grand Prix and said American outfit - were granted entry slots to bring the grid up to the FIA's desired level of 13 teams, with a resurrected Lotus operation obtaining an entry after BMW announced its withdrawal effective end-2009.

When Toyota followed suit retrospectively, the FIA granted, some suggest in extra-procedural fashion, the re-formed BMW Sauber F1 Team - which, somewhat perversely, has no continued connection to the Bavarian motor manufacturer - the Japanese team's entry. Having signed the 2010-2012 Concorde Agreement and the (secretive) Resource Restriction Agreement, then decided to withdraw, Toyota 'gave back' to the FIA its right to the entry.

However, as is equally a matter of record, none of the three teams originally granted entries made the Bahraini grid under their original names, with one (US F1) collapsing completely, Campos undergoing a last-minute change of ownership (and name) in the run-up to the 2010 season opener and Manor making it without undue dramas, but under the Virgin name - which included an interim change of team principal mandated by the Virgin Group as part of its commercial involvement.

Lotus' entry, too, had changed from that originally submitted by Litespeed before an amalgamation with Air Asia founder Tony Fernandes's operation culminated in the operation acquiring the rights to the iconic name, and a bond is said to have facilitated the entry.

Given that the 2010 entry list published a week before the season's first race does not include those teams as originally granted entries, it can be argued with conviction that the entry procedure, which included due diligence vetting by international auditors Deloitte Touche and at least two visits by senior FIA personnel to US F1, was flawed and in dire need of revamping despite (as a result of?) having been introduced 12 months ago to cater for a specific set of circumstances.

Colin Kolles, who stabilised Jordan, then ran the team for five years under Midland/Spyker/Force India guises before working wonders in getting the former Campos team to the Bahrain start as Hispania Racing Team - not, as some believe a patriotic sop to Spain as per US F1 and its country of origin, but named after investor Jose Ramon Carabante's Hispania Group conglomerate - believes firmly the principals of all four start-ups seriously underestimated the task of going F1 from scratch.

"In my opinion they were naive and underestimated what is required and what it costs," he said. "Formula 1 is like nothing else, and regardless of your background in motorsport it is a completely different world," added the former F3 team owner who entered the big league in 2004 and recently contested Le Mans with a brace of Audis R10s.

HRT garage © Sutton

Thus the announcement last week of a revised selection process, opening immediately and with a decision likely to be handed down in July. The purpose of the process is given as 'to identify a candidate team to fill any vacancy that may exist in the FIA Formula One World Championship'.

So far, so good; then the sentence continues: "at start of the 2011 season". The release, dated 19 March, continued: "The FIA may also identify one or more possible 'reserve' entrants to fill such vacancies."

And, in those two phrases lies the rub, for the bottom line is that the successful operation (and any reserve teams) will again have just six months to design and develop a competitive car ready for testing, put in place the necessary infrastructure, and assemble a budget of minimum $80m (£60m) to pay for the entire shooting match, including substantial start-up costs.

A daunting task to be sure, one made all the more complicated by the 'chicken and egg' nature of the entry - no sponsor/partner/investor is likely to commit until an entry is confirmed, making it unlikely that prospects would commit under such circumstances given the sanctions threatened against US F1 for failing to make the grade.

Consider, then, that not one of the three newcomers to race in Bahrain produced their own car, with Campos sub-contracting the task to Dallara, Virgin drawing on the design expertise of Wirth Research and Lotus the skills of Mike Gascoyne's MGI operation. That only the two last-named attended any of the official test sessions (with Campos/HRT treating the entire Bahrain weekend as such), and the collapse of the only team aiming to build its own car (US F1) even before the two halves of it one and only monocoque had been laminated perfectly illustrates the daunting task any newcomers face.

Given that building an own car in-house, then racing it across the world while constantly honing its performance is the very essence of F1, surely the fact that the three latest teams to join the sport failed at the first hurdle, to do proves that a time-frame of six months is too limited. History is, after all, a good teacher, and recent history the best of all...

Ditto a reserve team - although no selection criteria were made public (despite the FIA's recent promises of transparency), with the release staying only the 'precise terms of this selection process, together with the applicable selection criteria, deadlines, legal requirements and other conditions, will be communicated to candidates who have registered a formal expression of interest' - on wonders exactly what would be required of such a reserve team, and for how long such status would exist.

Would the operation be required to, for example, to immediately step into any breach, or would a reasonable notice period be granted? If so, how long? Six months or less? The former equals the period currently allowed, begging the logical question why one would require a reserve team if, as the governing body obviously believes, a start-up can be on the grid within that period. If the latter, would it be required of the team to continually develop its designs and infrastructure on the off-chance it gets to race within six months?

Jean Todt © Sutton

Consider the costs of such an exercise, particularly given constant regulations changes. And, which sponsor would be prepared to cover such a budget given the no-guarantee poultry-like scenario described above? Above all, who would be prepared to put all other projects on ice and not even be permitted to test until an entry is granted due to the terms of the tyre supply agreement struck between the FIA and Bridgestone?

Then there is the possibility of manufacturers applying to enter the sport under the revised procedure - by their nature corporations undertake lengthy feasibility studies, then take board decisions at snail's pace, all of which are not possible under the new process which provides for a maximum of nine months between submission of a formal expression of interest (accompanied by a statutory €1000 deposit) and appearing on the grid for the 2011 opener in some far-flung place.

To place that in perspective, consider that Toyota required three years to get from boardroom approval to the 2002 Australian Grand Prix grid, having paid an FIA-imposed fine of £8m ($12m) in May 2000 after it became clear the team would not be ready in time for the 2001 season as originally planned. Thus the new entry procedure is likely to shut out the very entities F1 currently needs most - big spending manufacturers prepared to commit to the sport.

Another potential stumbling block is the $30m per annum committed by Ecclestone for disbursement amongst newcomers as catered for by the new Concorde Agreement. Originally the amount due to be disbursed amongst the three newcomers was $10m each. When, though, Lotus was accepted into the fray, Ecclestone refused to increase the amount, so it was split four ways, with each team scheduled to receive $7,5m. The demise of US F1 has restored the status quo, but a 13th team will, of course, reverse that - placing the three newcomers under even greater financial pressure.

Finally, entering F1 in 2011 would leave the selected team just two years under the existing Concorde. Who knows what the new one will bring - already rumours abound of a total revamp of the sport in 2013, the final year of Todt's current term, and thus possibly a watershed season regardless of whether the Frenchman stands for re-election or not. Given the frenzied war over the current agreement, reflect on the potential for conflict when the next agreement is thrashed out, then consider the likelihood of a sponsor signing up on that basis.

Given the forgoing, should not Formula 1 concentrate on consolidating the current grid and ensuring the survival of the present newcomers before going all out to select a 13th team? While there are likely to be at least five expressions of interest for entries - the word on the street has Stefan GP applying in some or other guise, with N-Technology, Lola and Prodrive believed to be considering the matter, while Epsilon Euskadi had already announced its intention of entering - would the sport not be better served by delaying the matter by a year, then working towards attracting a 13th team for 2013.

In January, during his visit to Madonna di Campiglio, Bernie Ecclestone stated that F1 needed only ten teams. The sport currently has 12, so would surely be better off by concentrating on quality, not quantity.