Prost's Financial Failure Concerns All F1 Teams

Formula One devours huge chunks of money and the financial problems that dealt a fatal blow to the Prost team on Monday concern even the biggest teams.

The threats by major carmakers to set up a rival series from 2007 if they do not get a bigger share of Formula One revenues are part of a worrying picture for a sport hit by an economic downturn which has badly hit advertising budgets.

"We need to get much more money from the FOA (Bernie Ecclestone's Formula One Administration) than we get now," Renault boss Patrick Faure said at the weekend after the launch of the team's 2002 car.

"First of all because it is normal, because we are making the show and must get more money from it. And secondly because with the cigarette manufacturers pulling out of Formula One in a few years, we need to find some more money.

"For the moment we don't see very clearly who is going to replace the cigarette manufacturers as sponsors. It is a major issue for Formula One."

Lucrative tobacco sponsorship helped to keep Alain Prost's team on the road and Gauloises' decision to pull out at the end of 2000 speeded up Prost's demise. They had no title sponsor last season, racing with their own name on the side of the cars, and had sought a far broader distribution of the sport's revenues to help smaller teams before folding with debts of around $28 million.

Tobacco Ban

The problem would merely have been deferred had Gauloises stayed since by the end of 2006, all tobacco sponsorship in motorracing will be banned by the ruling International Automobile Federation (FIA). The FIA has estimated current tobacco sponsorship in motorsport to exceed $350 million a year.

Renault have Japan Tobacco brand Mild Seven as their main sponsor while other teams are also heavily involved with cigarette companies. British American Tobacco own the BAR team, Philip Morris brand Marlboro back FIAT-owned Ferrari, Reemtsma's West sponsor McLaren and Gallaher's Benson and Hedges have had a long relationship with Jordan.

Other teams such as Williams and Ford-owned Jaguar are free of tobacco sponsorship, looking instead to the technology, banking and brewery sectors - some of which have been hit by the economic downturn. Faure said the sums involved in running a Formula One team were enough to concern any business.

"If more money is not coming into Formula One, I think some of the manufacturers are going to ask themselves questions. This is why it is essential for us to increase our revenues coming from FOA," he said.

Recession

Other issues undeniably hit Prost, such as French labour laws reducing the working week which made it hard to compete against rivals able to work around the clock. The return of Renault, likely to become a major force in years to come, stripped Prost of their position as France's team and will not have encouraged domestic sponsors to back them.

Recession was another blow and Prost's own fame as a four times World Champion meant his name was always likely to outshine any would-be partner.

"There is a real problem today, especially when you know that advertising budgets have been cut by 40 percent," Prost lamented last month. "Our situation is not very different from that of other teams, except that we are really in need of immediate funding and the timing is very unfavourable."

Grand Prix bosses agree that times are getting tougher.

"Unless there is a fairer redistribution of wealth in Formula One, Prost probably won't be the last one that goes down," Minardi's Paul Stoddart told Reuters this month.