A Dark Future Or Smoky Past

Honda’s departure from the F1 grid this year is a wake up call; with the economy in its current state F1 experts tell us that Honda may be just one of the many teams that says goodbye to its Formula 1 fans. 

This sad fact is a reminder of the current state of our economy, and it has apparently gotten the F1 minds thinking of how the business and sport can be saved.  The seriousness of the situation is reflected in the appearance of the 2009 spec F1 cars.

Beauty and the exotics have been abandoned to save costs, and further changes are on the way. 

The decision to follow through with the changes is being linked to the ever increasing costs of competing in the sport.  When combined, driver salaries, development costs, maintenance costs, etc., ballooned the budgets of a truly competitive team to over 300 million.  F1 costs would have continued to rise, and in the end we would have a Formula 1 comprised of two teams, Ferrari and Mclaren.  Williams and Toyota could have probably lasted for a bit; Williams does have a racing heritage yet in the end without a major sponsor even they would have faltered; Toyota does have a large budget but even after spending hundreds of millions each year without producing results even they would have questioned their involvement in the sport.  Then again retirements do happen even to McLaren and Ferrari so perhaps Toyota would squeeze in a race victory ever now and then.

The bottom line is that due to the nature of their main sponsors, or co-owners, only McLaren and Ferrari have the budgets that could make them competitive irregardless of the costs of the sport.  Vodafone McLaren Mercedes and Scuderia Ferrari Marlboro are both co-owned by corporations that compete in industries that will never have to ask for a bailout or declare bankruptcy.

TAG, with links to military technologies, Bombardier and other aviation companies are a private holding company based in Luxembourg City, in southern Luxembourg.  Although no longer owned by Techniques d'Avant Garde, TAG Heuer’s image and quality is the direct result of TAG’s reinvention of the Swiss chronograph maker in the mid eighties. 

Named after Great Marlborough Street, Marlboro is a brand of cigarette made by Philip Morris.  The company has sponsored Ferrari openly following the death of Enzo Ferrari, and as of 2005 the two have entered an agreement lasting until 2011 that will guarantee the Italian squad an income of 1 billion dollars.  Philip Morris has also recorded a profit of 2.08 billion in 2007.

In examining these two teams it is quite apparent that their future is guaranteed, and as new changes are being introduced into F1 on a yearly basis a question has to be asked, was abandoning tobacco sponsorship in F1 the right solution.

Tobacco sponsorship was introduced to F1 by Lotus; the Red, Gold and White colors of the Imperial Tobacco's Gold Leaf brand first appeared in 1968 and within a matter of a season, teams, drivers and circuits of Formula One had become heavily dependent on the financial backing of the tobacco industry.  While attempts were made to have F1 go cold turkey and part ways with tobacco sponsorship through the decades it would not be until the twenty first century that this came to a fruition, well almost. 

In 2000, WilliamsF1 became the first major team to run without tobacco sponsorship, and McLaren have now replaced the West brand and no longer have any tobacco sponsors. Renault ended the deal with Mild Seven after the 2006 season. Ferrari on the other hand renewed their arrangements with Philip Morris in 2005, at a cost of one billion over the six years. 

Smoking is a deadly habit; cigarette smoking accounts for at least 30% of all cancer deaths, and smoking is responsible for about 87% of lung cancer deaths.  These statistics merely begin to scratch the surface of the reality of how smoking affects us and those around us.  While F1’s decision to abandon tobacco sponsorship altogether was the result of F1 being under threat of losing their television privileges should tobacco advertisement present, F1 teams would have loved to have had the steady income that Ferrari enjoys because of its partnership.

Had tobacco advertising still been around Takuma Sato would still be strapping into his Super Aguri, and Honda would have not had to search for a motto to replace an absent sponsor.  Both Honda squads would still be preparing for the 2009 race, well perhaps; because there is an old saying, “if my aunt had balls she would be my uncle.”  Yes it is impossible to really predict where Honda would be today with a title sponsor present, however if we add up the facts the lack of a major influx of money has most likely led to the automakers decision to abandon the project.  

If Honda is not a good example then examine the Grand Prix themselves; the hosts of the German GP are indicating that they may have to reconsider their future in F1 due to shortage of funding. The venue may go the way that the Canadian Grand Prix did; the last of the North American venues was cancelled due to lack of funds and high debt issue.  The race had been held for three decades without facing this situation, a situation that may have arisen years ago following the cancellation of sponsorship by Players. 

Years back the Montreal Grand Prix had nearly been cancelled; the main sponsor, John Players and Sons, was banned from open advertising their product, and as a result withdrew as the main sponsor of the event.  At the time the government was willing to rescue an event that guaranteed a serious income for Montreal, but in 2008 the situation is quite different.  The impending recession has forced companies and governments to reassess their budgets and spending. 

Recession is not a new thing; in the last three decades we have had three recessions; governments have survived the recessions of 1974, 1980, and 1991, as has Formula 1.  While governments are dealing with the recession and seem to have a plan F1 is not in the same boat, because they have never had to deal with a recession. 

In 1974, 1980, and 1991, the number of cars surpassed places on the grid; three cars would compete for one spot for Sunday, and rules were pushed to a maximum and beyond to qualify for and win the race.  There were so many teams because for every car there were two cigarette companies wanting to advertise their product.

Cigarette companies through the decades have not been affected by economic downturns; the sales of cigarettes do not decrease with the fall of the market, if anything it rises.  Thus in 1974, 1980, 1991, an industry, a sport, dependent on a product that is highly profitable and sells well will not be affected by a recession. 

I am sure when F1 teams made the decision to abandon tobacco advertisement they were not prepared for the economic downturn experienced in the last year, thus for the first time they are being introduced to the truth and results of a recession.

Many races and many more teams may falter before the sport itself is stabilized, and it may be long after the economic situation is, however at the same time it may be quicker. 

Whatever the outcome of the economic situation in the world Formula 1 should consider the ban on tobacco advertisement.

Smoking is a dirty nasty habit that is expensive and deadly.  It is dependent on a product that is marketed as a cool thing to have, and marketed on an idea that enjoying this product might make you cool. 

Banning this product, this habit, has come a long way; in Ontario cigarettes can not be openly displayed on store shelves, and few magazines are permitted to advertise cigarettes.  Yet there are still people that smoke; individuals are aware of the risks of smoking and do not quit because suddenly Marlboro country is no longer advertised at St. Clair and Yonge, or at 5th and Madison, or because the surgeon general’s warning is displayed in block letters. 

F1 fans didn’t stop smoking West cigarettes because suddenly the ads were no longer present on the livery of the silver arrows.  Those that smoke will smoke because they want to smoke, because to them this is an escape, it is something they like. 

In the United States more than 100,000 U.S. deaths are caused by excessive alcohol consumption each year; youth who drink alcohol are 50 times more likely to use cocaine than those who never drink alcohol, yet nothing is done.

Alcohol is still advertised freely; TV, newspaper, internet, radio, and many other types of advertising media are visible to the every day person, and yet alcoholism is a medically recognized disease and cause of death.  While F1 has dumped the tobacco ads it now advertises alcoholic beverages, with a minor warning, “enjoy responsibly.” 

If F1 agrees to sponsoring one type of drug openly why does it frown upon the other?  Those that oppose smoking will argue that tobacco companies have knowingly marketed a product that is addictive and destructive at the same time, but the same could be argued against alcohol. 

Groups, the drinkers and the smokers tend to enjoy their product irregardless of the final results. 

Those opposing smoking will also argue that F1 advertisement is based on advertisement of association; if I like BMW-Sauber then I will drive a BMW, and buy Intel, however if I like Ferrari I will only drive FIAT cars, travel to Abu Dhabi, subscribe to Alice, and smoke Marlboro along with my Martini.  Such may be the case if you are someone in the higher echelons, because if you are in the middle class you dream of a BMW, you probably own a computer with Intel inside, drink whatever you like, and smoke whatever you like, if you smoke. 

Today’s society is all about choice; yes you may like the Scuderia but drive a Mercedes; you drink Johnny Walker because you like it, and you smoke not because the billboard told you, but because you like the taste of it.

Regardless if a smoker or not, the optimistic people predict that we will be out of this recession shortly, however it may stretch for a while. 

In the meantime the F1 fans keep checking the news hoping that their team will be on the grid in 2009 and 2010; hoping that their local race is not cancelled.  The reality of the situation is that as more and more companies declare bankruptcy more sponsors are falling by the wayside; if this pattern does continue then Bernie needs to start looking at the future or rather the question of how survival of the sport can be guaranteed. 

While moving the sport to new markets is part of a solution, the other part of the solution may be far simpler; if Philip Morris has been able to generate a profit of 2.08 billion amidst a year highlighted by a recession, then. 

F1 fans will not start smoking Wests just because Hamilton promotes them, they will either stick with their Marleys or not pick one up at all, and besides nobody has advertised Gitanes in a while, but they did look cool in Ronin.  Besides there have been worse decisions, like making a pact with Uncle Joseph back in the 40s.