Sauber team thinking on balancing growth and expenses in F1
It might not be immediately apparent but there are two battles going on in Formula One at present.
On the track there is 11 teams competing for victory, which Mercedes-GP have had an iron grip on thus far in the 2014 season.
Then there is the off-track issue of the high cost of participating in the sport, which has been the core theme in the paddock.
The issue is to try to make it less expensive for the teams, but how this will happen and to what extent is proving a sticking point.
Jean Todt, the president of FIA, motorsport’s ruling body, estimated this month that budgets of a team in F1 ranged from US$100 million (Dh367m) to $400m and said he wanted to see cuts to that of between 30 to 40 per cent.
A budget cap was high on the list of suggestions for reducing the cost of competition and as a way of potentially levelling the playing field.
That was rejected last month by the teams represented in F1’s strategy group.
They reported this to the FIA and instead suggested cutting costs by refining some of the technical regulations. The teams in the strategy group were Red Bull, Ferrari, McLaren, Mercedes, Lotus and Williams.
The first four are the biggest teams on the grid in terms of personnel and speculated budgets. The other five teams, Sauber, Toro Rosso, Force India, Caterham and Marussia, reacted with disappointment at the Spanish Grand Prix this month.
They are formulating their own suggestions to the FIA on how to alleviate the high costs in time for regulations to be changed, possibly as soon as next year.
A solution is unlikely soon, but it has again highlighted the financial pressures on the teams in F1 at a time when the sport is anxious about losing more cars after the Hispania Racing Team left the grid at the start of last year, which reduced the number of cars from 24 to 22.
Monisha Kaltenborn, the team principal of Sauber, said it is essential for F1 to remain with as many different teams as possible.
“Our target here is that all teams which are here today need to survive,” she said. “F1 needs this kind of diversity.
“This is what makes the show exciting and this is what allows sometimes a smaller team – as they call it – to even touch the front and get maybe a podium or two and that’s exciting for the whole show.”
With a solution to cutting costs still to be found, the Swiss team requires some creative thinking when it comes to sponsorship and boosting revenue to be able to compete with the teams further up the grid.
“You basically have two sources of income,” she said. “One is your prize money and then one is sponsorship and it has been very difficult in the last few years to attract big sponsors, but I think there is a change in the market now as people want to be associated with the sport again.”
Kaltenborn is hopeful that a new three-year sponsorship deal with Pacific Ventures, a Dubai-based real estate developer, will help Sauber to move up the field, with the team’s driver pairing of Adrian Sutil and Esteban Gutierrez yet to score a point in the season’s first five races.
Linking with a UAE business partner had been high on the agenda for Kaltenborn, who believes the country and the region can play an important role in F1. “Motorsport is growing so much there,” she said. “There is so much interest and there is so much potential in the commercial market there.
“They have always had strong links with the sport, and I think the involvement in Formula One is only going to increase.”
Parvez Khan, the chairman of Pacific Ventures, revealed he had spoken to several F1 teams about financial involvement, with his branding appearing on the rear sidepods of the C33 chassis, but he had been impressed particularly by Sauber.
“When I went to London I visited a lot of teams, but the way Sauber responded to us and the way they understand the Middle East concept, which very few of the teams understand, really impressed me,” Khan said. “The way they greeted us, they welcomed us and the company, this is a team with who we could work as I feel we as a company and they as a team can generate mileage from working together.”
Sauber have a history for being proactive when it comes to generating funds with Chelsea Football Club already a sponsor in a rare sporting crossover, while the team has also been linked with Russian companies.
Kaltenborn said that looking beyond the usual revenue streams, rather than trying to compete with higher-profile teams for sponsors, was something that midfield teams have to do.
“We have to be proactive when it comes to finding new sources of income.
“If it means that we can link up and create fruitful partnerships in new areas along the way, even better,” she said.
The relationship with Pacific Ventures has already seen advertising hoardings of the Sauber car go up in the UAE and the relationship with the company means Kaltenborn is especially excited about this year’s Etihad Airways Abu Dhabi Grand Prix on November 23.
“It is always a great atmosphere there and now we are already seeing the work Pacific Ventures are doing with the team it is going to feel like a home race for us, and I am already looking forward to it,” she said.
* With agencies
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Published: May 22, 2014 04:00 AM