Formula One's chickens come home to roost

Mon Oct 27, 2014 12:22pm EDT
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By Alan Baldwin

LONDON (Reuters) - Talk of financial crisis in Formula One is nothing new but the absence of back-markers Caterham and Marussia from this week's U.S. Grand Prix after they went into administration has concentrated minds.

For the first time since 2005, there will be only nine teams in the paddock and some of them are competing in straitened circumstances.

It is a long-standing joke that the best way to make a small fortune in Formula One is to start with a large one, but securing even a basic budget is proving increasingly difficult in a sport that burns through cash at eye-watering speed.

Sauber have made no secret of their problems while Force India owner Vijay Mallya continues to make headlines after being declared a "wilful defaulter" last month by state-run lender United Bank of India.

Speculation has also swirled around Lotus, who have had serious financial problems.

The signs of trouble have been there for years, with regular warnings and calls for cost caps along the way. The plight of Caterham and Marussia, who are both hoping to find a buyer, comes as no surprise.

"It seems that the chickens have come home to roost," Max Mosley, the former president of the governing International Automobile Federation, told the Times newspaper on Monday.

Mosley helped three new teams into the sport at the start of the 2010 season, after a manufacturer exodus, with a promise of budget caps and regulation tweaks to ensure they could compete on a level playing field.   Continued...

Marussia Formula One driver Jules Bianchi of France drives in front of Caterham Formula One driver Kamui Kobayashi of Japan during the Japanese F1 Grand Prix at the Suzuka Circuit October 5, 2014.  REUTERS/Yuya Shino