As the Ferrari president, Luca di Montezemolo, called on behalf of the Formula One manufacturers for a larger share of the sport's profits, the McLaren chief, Ron Dennis, has admitted that his team expect their revenues to fall by more than a third as a result of the global economic crisis.
"Our budgets come from the advertising budgets of the companies that support us, and inevitably advertising budgets get slashed or, at least are significantly trimmed in times of economic strife," Dennis said. "We know we have to reduce our costs to cater for the inevitable downturn in income that is coming in 2010 and 2011." Dennis expects annual turnover to drop from £280m to as low as £175m.
This is despite McLaren scooping 2008's big prize as Lewis Hamilton won the world drivers' championship and is clearly the sport's hottest property. They are backed principally by the telecoms company Vodafone and Santander (though the Spanish bank is due to switch to Ferrari in 2010).
The remaining nine operational Formula One teams aim to cut their costs by 50 per cent over the next two seasons, with a series of measures being discussed by the sport's governing body, the FIA, and FOTA, the teams' association.
"If you look back in history, you see clear examples of teams that have stayed unique to Formula One that have just failed," Dennis said last month in Brazil. "You cannot sustain a Formula One team indefinitely, you need to diversify." Mercedes' motorsport chief, Norbert Haug, sounded positive when he added: "Mercedes-Benz's contribution is cost-efficient – the resonance in the media and in the public, which last season and Lewis Hamilton's win generated, was worth many times our financial investment."
As FOTA and the FIA president, Max Mosley, prepare to meet for further discussions this week, their chairman, Di Montezemolo, added: "We'll meet with Max to present him the details of our proposals and to discuss with him how to improve the show our sport offers. Furthermore we also agreed that it's necessary to meet with Bernie to talk about the distribution as far as the earnings are concerned."
Mosley supports the teams' argument for more income from Ecclestone and CVC Capital Partners, who own the commercial rights. In a recent letter to all of them, Mosley said: "The FIA would join with FOTA in seeking to persuade FOM [Formula One Management]to divide the prize-money so that up to 12 teams are guaranteed at least £33m each."Reuse content