The Weekly Grapevine

The news swept through the Fuji paddock quicker than a tidal wave, and was then accepted as fact, yet not a single official FIA document or bulletin actually reflected the governing body's intention to impose standardised (or, to use a term better suited to Formula One's sophisticated image, specification) engines upon motorsport's premier category.

That the Paris-based body, whose communication department released details of decisions taken at a World Motor Sport Council meeting on October 7, was thinking along those lines was leaked to a favoured news outlet the next day, then picked up and immediately telegraphed around the world.

Sources indicate that 'spec-eng' regulations were, indeed, one of the alternatives discussed during the WMSC meet, but that the FIA should resort to one-size-fits-all power units only if the governing body and the executive of the Formula One Teams' Association fail to reach agreement on cost-cutting regulations for the future.

Toyota RVX-08 © XPB

Those with five or more paddock years on their curriculum vitaes thought immediately of 2002, when FIA President Max Mosley hinted that in future drivers could be rotated or that weight penalties, masquerading as 'success ballast', could be introduced. At the time the popular press reacted as expected - as it did at Fuji - and, as expected back then, nothing came of what turned out to be just another of Mosley's negotiating ploys.

This time the FIA's justification for the stringent measures is believed to be based on the contents of two letters addressed to Max Mosley by two teams in response to his July 3 demands that the teams agree a set of cost-cutting regulations which simultaneously spice the show by facilitating closer racing and increased overtaking.

That some teams are desperately cash-strapped and could do with increased revenues is undeniable. But, it has always been so for independents, although many argue the situation has become increasingly acute over the last ten years (as it has for race promoters, as Silverstone, Hockenheim and, now, Canada, can attest), which coincides with the initial sale of the sport's commercial rights to Ecclestone, who, has, in turn, variously sold them on.

The present F1 grid is made of five categories of entrants: 1) pure motor manufacturer teams (alphabetically, Ferrari, Honda, Toyota, Renault) showcasing their expertise; 2) teams with motor manufacturer equity (BMW Sauber and McLaren-Mercedes), ditto; 3) entrepreneurial operations (Red Bull Racing and Force India), who have chosen team ownership as a marketing avenue for their products; 4) true independents, whose very raison d'etre is racing (Williams); and, finally, a single team falling into a mix of Categories 3 and 4 (Scuderia Toro Rosso, which is 50/50 owned by Red Bull billionaire Dietrich Mateschitz and former grand prix winner Gerhard Berger).

Over and above the fact that all these teams share the pit lane, they have one thing in common: to sell a product, whether it be primary (cars, energy drinks, beer, airline tickets), and/or secondary, as per Williams, which sells performance in order to attract sponsorship in order to provide the sponsor with a platform off which to sell its own product.

STR was set up to live off both Red Bull funding and outside sponsorship, and the team's superb victory in Monza has done its chances of acquiring outside funding no harm at all.

In this regard the general consensus of opinion at Fuji was that F1 offered exceedingly good value to global corporations, with one team principal suggesting that its return on (sponsorship) investment was such that F1 could be largely immune to the current financial upheaval, begging the question why the rate card not been increased.

Honda F1 CEO Nick Fry was even more bullish, stating that he could 'assure' this column that the team, a subsidiary of the world's largest engine manufacturer (15m units per annum and counting) 'would have at least one new blue-chip sponsor next year'.

Nelsinho Piquet © LAT

BMW's Mario Theissen was equally positive, asserting over the weekend that the company's F1 involvement represented excellent value. In fact, added Theissen, BMW was spending less as a team than as engine supplier to Williams simply as it was able to recover some of the costs through team sponsorship - adding further value

Ferrari, too, obviously believes F1 surpasses traditional advertising channels as a communications medium (explaining why the company does not engage in advertising), whilst Mercedes-Benz seem set to stay in the sport. You can bet your bottom dollar that, despite having last won a constructors' title exactly a decade ago, the company would leave F1 like a flash if its the involvement did not pay dividends.

Toyota, Honda and Renault, all of whom entered present-day F1 in the last eight years, have increased their commitments despite not enjoying their best seasons. All six manufacturers have had their best analytical accountants undertake cost : benefit studies, and the message is clear: as a communications medium F1 is extremely cost-effective.

Yet, despite this background, the latter two categories, comprising three teams plus Williams, are rumoured to be in danger of extinction simply as they have been unable to raise sufficient commercial sponsorship, and were increasingly relying on the patronage of billionaires. (This does not apply to Williams, which has been forced into the red of late despite a raft of blue-chip sponsors.)

The demise of Super Aguri is all too often cited as proof that F1's cost structures need to change, but this overlooks one very simple fact: the team proved utterly incapable of raising sponsorship despite having the ever-popular (in Japan) Takuma Sato as their star driver.

In Fuji, when asked to comment on spectator attendances 40 per cent lower than a year ago, a local journalist said two words - 'no Sato' - suggesting he alone was responsible for a fair number of bums on seats last year. In that case, why did SA fail? Certainly not through paying engine bills, for Honda was its largest creditor.

But, back to the present (and future). On the one hand there are six manufacturers who believe F1 to be exceedingly good value (despite the fact that 50 per cent of its revenues leave the sport, either as dividends or interest payments); on the other there are four non-manufacturer outfits, three of which are owned by individuals who gave as their reason for entry into the sport that F1 offers exceedingly good value.

Yes, the fourth, which came into the sport after striking a lucrative sponsorship deal with a Middle Eastern sovereign wealth fund (30 years ahead of the rest!) is under severe pressure at the moment, but given that its sponsor portfolio includes a large spread of Icelandic companies plus a high-flying bank now under British government control, the price of Williams' leased engines could hardly be blamed should this archetypal British operation (God forbid) fail.

Formula One is fueled not by hi-octane but wedge - massive wads of it. The car companies have no intention of leaving, certainly not for as long as the sport meets their marketing objectives more efficiently than do alternative avenues, whilst those billionaires exploiting the sport to move their products have obviously found it pays dividends despite their bleating, for no man ever became a billionaire by not striking the best deal going, or, worse, chucking good money after bad.

Spectators at the Japanese Grand Prix © XPB

Could a case be made, though, that Big Daddy provides enough of a safety net for the teams to not chase every possible deal? However, that the profitability of the teams needs to be improved, for at present their financial return on investment is far from blue chip. (Note: do not confuse Marketing ROI with Financial ROI.) This can be achieved through any four means, individually or in any combination of the four:

1) Meaningful cost saving through, for example, stable regulations which achieve sporting and technical objectives without need for constant clarifications or changes. Consider exactly how often have changes to engine or aero regulations been announced in the recent past, all of which cost the teams money; many of which were never implemented, or amended after a season or two.

Here the (manufacturer) teams are (reluctantly) prepared to accept certain standardised parts such as a basic engine block design even if it saves, according to one engine director, 'one percent of the overall cost of an engine'. The rider, though, is that the teams should be allowed to manufacture these parts to specification as opposed to buying them in, and be permitted to add their own cylinder heads and internals.

Already moves are afoot to reduce in-season testing to just four weeks total, with Fridays being given over to dedicated tests.

2) Prescribe those specification parts which do not, in the words of Toyota's John Howett and Fry, destroy the DNA or essence of F1. As Fry says, constructing your own engines and monocoques is unique to F1 and destroying that concept could well destroy F1, while prescription braking or clutch systems, standardised rear wings or wheel rims, for example, will not.

Gearbox internals could be sourced from a single manufacturer, with items such as fuel bladders being prescribed.

3) Increase the percentage paid out to the teams from the 50 per cent (in itself double the absolutely laughable 23 per cent the teams received between 1997 and 2005) to ensure that the revenues work to the benefit of the sport and its participants. Mosley suggested 75 per cent in June; why should the teams now accept any less?

Of course the rights holders will squeal, but they (and the teams) could be compensated through point 4 on my list.

Bernie Ecclestone watches the Friday press conference in Singapore © LAT

4) Increase the sport's revenues, not through exorbitant ticket prices, race hosting fees or TV broadcast rights, but through the exploitation of untapped areas, new technologies and additional licensing deals. Here, NASCAR has shown the way, and while F1 has traditionally been reluctant to be seen to be copying, pride should be stuffed firmly into pocket if it saves non-manufacturer teams from extinction.

A meeting between the full membership of FOTA and the FIA is scheduled for after this weekend's Chinese Grand Prix, and that should decide the direction of the sport for the appreciable future.

As Force India's Colin Kolles exclusively told this column, the needs of all players - for which read all five categories - need to be catered for. Too much imposition (such as spec-engines) could see all six manufacturers depart, something they can easily do, for no Concorde Agreement exists to bind them to F1; too little, and the four independents stand every chance of disappearing.

In the final analysis, F1 is faced with the vital matter of cost saving, but not at all costs.