Archive for November, 2014

The ‘truth’ behind #refuelcaterhamf1 crowdfunding

Well it appears at least to be true. (UPDATE: And I’ve given it a go! though I doubt the team will reach its target)

Caterham Sports Limited’s administrator seems, on the face of things at least, to be running a crowdfunding effort on UK based crowdfunding platfrom Crowdcube.

Details on the front page are scarce, but Crowdcube does appear to be regulated by the Financial Conduct Authority.

The full terms and conditions only appear when pledging, and are as follows: Caveat Crowdfunder!

Abu Dhabi Don’t

According to Daniel Johnson of The Telegraph, the Marussia F1 team has ceased trading and staff are being made redundant. He reports that the team will not make it to the final race in Abu Dhabi.

This then appears to constitute the liquidation of the team, making it hard for any buyer to do much more than restart from scratch.

Alternatively, it is possible (though less likely) that an incoming buyer does not wish to inherit the existing team’s payroll, and is waiting until liquidation before jumping in to buy the entry and IP, before re-hiring staff.

Given that the current crop of F1 team owners aren’t exactly building a reputation for integrity, this wouldn’t be a complete supprise.

Time will tell…

Why is F1 broken? – a simple analysis

Why is F1 in a mess?

Well it is a simple equation – cost can improve performance but the rewards of performance are not sufficiently high to justify the costs.

Required Costs: 

  • increasing massively (engines, tyres, logistics)

Discretionary Costs: 

  • stable if you don’t care about performance – increasing if you do care about performance

Guaranteed Income from FOM:

  • unbalanced favouring bigger teams

Performance based income from FOM:  

  • low if discretionary costs are kept low, but not high enough to warrant increasing discretionary costs

Sponsor income: 

  • declining and linked to performance, but not high enough to warrant increasing discretionary costs

 

What is the solution?

Required Costs:

  • don’t cap engine development, but do things like capping charges for engines to customer teams.

Discretionary Costs:

  • mandate lower numbers of pit crew, restrict passes, abolish back to base comms (close factory on race days)

Guaranteed income:

  • rebalance

Performance based income:

  • rebalance – award points all the way down to last place

Sponsor income:

  • ensure transparency and governance to lessen ‘dodgy’ image of the sport and attract more sponsors, enable them to advertise trackside

 

And we haven’t even talked about the economics for the race promoters, which are also comprehensively broken!