Stoddart Warns Recession May Halve F1 Grid

Minardi owner Paul Stoddart has warned up to half the teams in Formula One could be endangered by the effects of the worldwide recession following the attacks in the U.S. last month.

Australian Stoddart, who also owns the European Aviation airline that sponsors his team, said on Saturday only those teams backed by major car manufacturers could be confident of escaping the threat unless they joined their poorer rivals in a collective effort to keep the sport strong.

"I don't think anybody has digested the full impact of what happened on September 11 yet," he said. "The economic impact is going to be grave and not only for me in particular, with an airline, because we are the first ones to get hit, but for everyone. Where do you want to start?

"Allianz, Siemens, Credit Suisse -- with 2,000 redundancies. Are they going to want to sponsor Peter Sauber next year? I don't know. Maybe they will. But I know if I was one of those 2,000 people made redundant, I wouldn't be very happy.

"And we haven't seen the end of the trading losses yet or the end of the companies going down. We haven't seen the end of airlines going down, or the end of hotels going down. Tourism is taking a big hit.

"So, if the teams don't take a long hard look at the costs of Formula One, then they will find themselves with deficits. Maybe they will be happy to do that and to fund it. But I won't be surprised at all to see all the teams that are not manufacturer-based are not around any more."

Dire Straits

Stoddart confirmed the widespread paddock belief that the French-owned Prost team is in gravest danger, but added that they are not the only team in dire straits as sponsors pull out and cancel their commitments. In his worst case scenario, only such teams as Ferrari (backed by Fiat), McLaren (Mercedes-Benz), Williams (BMW), Benetton (Renault), Jaguar (Ford) and Toyota, who enter the fray next season, are certain survivors.

His strong views followed those expressed on Friday by fellow team owners Eddie Jordan, Craig Pollock and Ron Dennis, all of whom agreed that the recession would hit Formula One severely in the coming weeks and months.

Stoddart said: "I reckon there will be up to six teams fielding only four cars each and that wouldn't be Formula One as I want to have anything to do with it.

"I've spent 50 million (dollars) this year, save a few pennies, all my own money, but I don't see it as all lost. There is another way of looking at it. I am, perhaps, a bit of a believer that there may be people going to the wall -- and there may be people who take preventative action.

"But there is a third scenario here that few people have discussed and that is that the 'haves' keep having and putting a bigger gap between us and them and the 'have-nots' run their businesses prudently on whatever budget they have got -- and I think we probably fall into that category. And we are still here.

"But there is a much bigger gap between those at the front and those at the back. And again you have to ask yourself the question -- is this good for the sport? I don't know where the top teams are going if what I hear, and it is only hearsay, about Ferrari and Toyota's budgets being in the region of $650 million is true.

Unbelievable

"I find it frankly unbelievable. I think it is more like a quarter of a billion dollars. But if that is the way it is going to go on a rate per dollar basis then Minardi would have won the world Championship this year. If we had that kind of budget!"

On a more optimistic note, Stoddart said he agreed with Jordan that the teams would succeed in reaching a collective agreement to cut costs drastically by reducing testing, banning highly-expensive specialist parts and restricting the number of chassis built each season.

"If people are not sensible it could be very bad," said Stoddart. "But I don't think it will be. I think a bit of sanity will prevail here. We've discussed three possible scenarios here including one where we all get sensible on the costs and peg a few things back. But would people agree to that? I don't know.

"Not likely. Scenario two is that you have six super teams all fielding four cars each -- and how boring would that be? And scenario three is that the smaller teams go out of business or are very prudent and sensible on budgets and spend only what they've got.

"So then you'd have a first and a second division -- as you have now really -- with the manufacturer teams and the non-manufacturer teams and a couple on the fringes."

He added: "This is the F1 side but the global economy side is far more serious. The airlines, the tourism and the hotels and then if you think who feeds off that from airlines, you've got insurance companies who are taking a hell of a hit off this and then you've got banks that own aircraft.

"You know, 747 400s. At $140 million each -- and they've been traded like currency in years gone by. Those days are over. Gone. That's what September 11 did forever and a day. We've been hurt by it. Look hard at all the sponsors in Formula One and I guess that 40 per cent have been seriously hit by this.

"It is a big problem and it is not going to go away."