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Rediff News  All News  » Sports » Force India boss Mallya on how F1 can solve revenue crisis

Force India boss Mallya on how F1 can solve revenue crisis

November 07, 2014 19:18 IST

Formula One supremo Bernie Ecclestone (left) with Force India chairman Vijay Mallya. Photograph: Clive Mason/Getty Images

The deepening of the Formula One financial crisis prompted Force India boss Vijay Mallya to say that the sport's owners must fix the revenue sharing model among teams for the survival of smaller outfits like his.

All eyes are on the future of midfield teams like Force India after the two smallest teams -- Caterham and Marussia -- failed to make the grid at the United States Grand Prix last week owing to ownership and financial issues.

It is unlikely they will take part in the last two races of the season, leaving all stakeholders to ponder over the road ahead for F1, which has not been able to keep a check on the rising costs for more than a decade.

Mallya is sad that teams barring the top ones are struggling to survive in a sport that generates revenue worth US$ 1.7 billion every year.

"We are very disappointed that Caterham and Marussia are no longer competing. The fact of the matter is that all these new teams (HRT, Marussia and Caterham) that were brought into F1 (in 2010) have sadly disappeared and there is a reason behind that," Mallya said.

"It is very clear that this distribution is skewed heavily in favour of the big teams and the smaller teams are at a disadvantage. For a sport that generates $1.7 billion in revenue, which is more than Rs 10,000 crore, it is sad that small teams (Marussia and Caterham) are being no longer able to compete," said the Indian businessman, who bought Spyker F1 in 2007 and renamed it to Force India.

The 11 teams shares a prize fund over $900 million, out of which a major chunk goes to the bigger teams.

"You could run 30 cars with that kind of money. $900 million is more than sufficient to cover all teams. So the revenue generation is very generous, the way it is being distributed is something that needs to be fixed," says Mallya.

Nico Hulkenberg of Force India. Photograph: Paul Gilham/Getty Images

F1 supremo Bernie Ecclestone too has finally admitted the the sport is in crisis. Last week in Austin he was quoted as saying, "The problem is there is too much money probably being distributed badly – probably my fault. Frankly, I know what's wrong but don't know how to fix it. No one is prepared to do anything about it because they can't."

There have been number of attempts over the years to introduce a cost cap but the idea is yet to find enough takers.

Mallya has his own take on the contentious matter.

"The top teams are against a cost cap because they all want to win the World Championship. You have Mercedes, Ferrari, you have Red Bull and you have the likes of McLaren, so at the end of the day those teams benefit a lot strategically in their core business by performing well and winning the World Championship.

"That (approach) is fine but that doesn't mean other teams don't have a chance. You know money cannot buy performance. This is very evident from the performance of Williams this season. They spent one third of probably any other top team and are still fighting at the top. They are ahead of Ferrari," he says of Williams who are only behind Mercedes and Red Bull with 238 points.

"Our budget is also way smaller than McLaren, still we were ahead of them (for major part of the year) and with the remaining races who knows what happens. Therefore money can't buy performance," he says referring his team, which has slipped to sixth in the F1 constructors' standings.

Talks between Ecclestone and Force India, Sauber and Lotus are expected to continue at this week's Brazilian Grand Prix.

Mallya, who will be in Sau Paulo for the race, is hopeful of a solution, especially after Ecclestone's admission.

"I think the good news is Bernie has acknowledged (that there is a problem) it publicly and has promised he is going to do whatever it takes to correct the situation, so the sport becomes financially stable and sustainable for all teams participating in this world championship."

He rubbished rumours of his and some other teams were planning to boycott the United States Grand Prix in protest.

"This is all media speculation. Nobody discussed any boycott of this sort," he claims.

Talking about the Indian Grand Prix, Mallya feels it will be tough for the race to return on the calendar until the government approach towards the sport changes.

"I am personally very very disappointed that there is no Grand Prix in India. I know all the teams very much enjoyed being in India and racing there. The driver loved the track but unfortunately the government is not supporting the promoters Jaypee Group, that is what I am told.

"The bottom line is there are many countries who are going to Bernie and offering to host races. In India if the arrangements are not satisfactory to Bernie (financial or whatever), one can not have any confidence on the race returning to India, which would be a tremendous pity," he concludes.