On the face of it, Formula 1 is in rude health. Eighteen Grands Prix will be run this year—a record high. The world championship kicked off in March, as usual, with races in Melbourne and Kuala Lumpur, after which, on April 4th, the third round was held in Bahrain—Formula 1's first ever visit to the Arab world. The event was hailed a huge success. The first Chinese Grand Prix will be staged in Shanghai on September 26th—an even bigger “first” and of which Formula 1's autocratic ringmaster, Bernie Ecclestone, is understandably proud. Moreover, seven major car manufacturers now run or part-run Formula 1 teams—BMW, DaimlerChrysler (using its most prestigious brand, Mercedes-Benz), Fiat (Ferrari), Ford (Jaguar), Honda, Renault and Toyota—which is another record.

On the other hand, Formula 1 has never been more expensive than it is today. The ten teams spent around $2.5 billion in 2003, and the 2004 figure will be no lower. Despite the fact that tobacco sponsorship could be outlawed as early as 2005, in line with the European Union ban (or, failing that, 2006, which was the original date of the ban), five teams (B.A.R Honda, Ferrari, Jordan Ford, McLaren Mercedes-Benz and Renault) still rely on cigarette companies for the bulk of their financing.

Formula 1 has lost two established teams over the past three years (Prost Grand Prix in 2001 and Arrows Racing in 2002), and can ill afford further casualties. Yet a significant number of teams—notably Jordan Ford and Minardi Cosworth—are finding it difficult to attract sufficient sponsorship. While Mr Ecclestone insists that both teams will survive the season, he has admitted that they may be “vulnerable” thereafter. In March 2004, F1 Racing magazine estimated Jordan Ford's 2003 operational budget at just $79m, and Minardi Cosworth's at only $46m (by comparison, F1 Racing claimed Ferrari had $418m to spend). In order to thrive, teams such as Minardi Cosworth and Jordan Ford must maintain, or even increase, their current sponsorship levels.

Clearly, finding a way to reduce the bigger teams'—and especially Ferrari's—stratospheric operational budgets is the key to preventing any smaller teams going the way of Arrows and Prost. “Things have got out of control,” Mr Ecclestone told a group of journalists in January 2004. “The amount of testing the big teams do is mad, utterly mad…The ballast situation is utterly mad, too.”

World gone insane

The minimum weight limit for a 2004 Formula 1 car is 600kg—not including its fuel but including its driver, who will usually tip the scales at around 70kg. However, rather than aiming for 530kg, teams design their cars to be as light as possible— typically as little as 440kg—so they can bring their cars up to the 600kg limit via the judicious positioning of 90kg or so of ballast to optimise the car's centre of gravity. “It costs each team millions of dollars to make their cars as light as possible,” Mr Ecclestone went on, “and then they use the densest, most expensive materials in the world to bring them up to the minimum weight limit again. When you try to explain it to normal people—which Formula 1 people aren't, of course—they think it's mad. And they're right.”

Unbearable lightness of Grand Prix racing

The worst-case scenario, noted Peter Sauber, chief executive of Sauber Petronas, after the Bahrain Grand Prix, is that a couple of small privately run teams will go to the wall at the same time as a couple of big manufacturer-owned teams decide to pull out. “If that happens, then we'll be down to half a dozen teams, and that would be a disaster,” grumbled Mr Sauber. “Something must be done.”

The Max and Bernie show

On May 4th 2004, finally something was done. After secret consultations with Mr Ecclestone, Max Mosley, the president of Fédération Internationale de l'Automobile (FIA), invited representatives of all ten teams to attend a meeting in Monte Carlo to discuss a radical programme of proposed changes for 2008. The proposals—which include back-to-basics measures such as reducing engine capacity from 3 litres to 2.4, outlawing “exotic materials”, banning traction control and power-steering, eliminating the use of ballast and enforcing “a drastic reduction” in testing mileage—were received badly by the manufacturers, for whom Formula 1 has always been a high-profile marketing platform on which to strut their highest-tech stuff.

However, the indications are that the manufacturers—five of which (BMW, DaimlerChrysler, Fiat, Ford and Renault) banded together in 2002 to form a company called GPWC Holdings, which aimed to exert pressure on Mr Ecclestone to bring about “a more equitable distribution of revenues in Formula 1”—will now be forced to put up or shut up.

Why so? First, from a regulatory point of view, Formula 1 is governed by the FIA. Although Mr Ecclestone is merely one of 16 FIA vice-presidents, his relationship with Mr Mosley is extremely close and his influence considerable. They first met in the late 1960s, when Mr Mosley was driving in Formula 2. (Ron Dennis, chairman of McLaren, refers to the two men as being “joined at the hip”.) As a result, the FIA rarely acts counter to Mr Ecclestone's commercial advantage.

Ecclestone: Formula 1's iron fist

Second, Formula 1's constitution is enshrined in a private and confidential document known as the Concorde Agreement, which is renewed every ten years. The current document—which, after much wrangling, was signed by the FIA and all the teams in 1998—stipulates that “major changes” may only be made “unanimously”. But since Mr Mosley's 2008 proposals are due to come into force after the expiry of the current agreement, the teams have been left with no bargaining power with which to combat them. They have so little leverage, in fact, that Mr Mosley could insist on accelerating the pace of change (he has hinted that 2006 is his target) in return for dropping some of the more revolutionary proposed measures.

Third, the changes will be ratified on June 30th 2004 by the World Motorsport Council, on which a representative from only one Formula 1 team (Ferrari's general manager, Jean Todt) has a seat. Thus the balance of power is expected to be restored to the two men who, for a generation, have ruled Formula 1 with an iron fist (Mr Ecclestone) in a velvet glove (Mr Mosley).

Mr Ecclestone turns 74 this year. Even so, his grip on the sport remains vice-like, thanks in part to the savvy yet statesman-like support of the 64-year-old Mr Mosley. Mr Ecclestone finds it hard to conceal his delight at having strangled GPWC so soon after its birth.

However, building on the success of the ﬁrst ever Bahrain Grand Prix, the Arabs are coming. The world of horse racing, which in the 1970s was dominated along Ecclestonian lines by Robert Sangster, was gradually taken over by Sheik Mohammed al Maktoum and a few (Middle Eastern) others in the 1980s. So perhaps Formula 1's grandees should read more into the recent announcement of the A1 Grand Prix Series than they have until now.

The brainchild of 27-year-old Sheik Maktoum Hasher Maktoum al-Maktoum of Dubai, the A1 Grand Prix Series promises to be “a completely new concept in motor racing, running between September and March [the Formula 1 closed season],” says the sheik. “I hope to bring a new flavour to an industry that has been stale for too long.” The idea is to have one car per country. People or companies will bid for their national franchise and will then concentrate on running a profitable business with income generated by sponsorship, merchandising, prize money and local media rights. “We will provide the infrastructure and the cars, and will handle the logistics and ensure maximum television coverage.”

Why is he doing it? “Because it bothers me that the Arab is typically portrayed as a rich businessman pissing money away. The nouveau riche Arab is dead. The Arab world needs its Bill Gateses.” And, perhaps, its Bernie Ecclestones, too…





Matt Bishop is editor-in-chief of F1 Racing.