Note: This article was written on March 1, 2009
Like most American F1 fans, I was pleased and excited to hear the news that Peter Windsor and Ken Anderson were planning an F1 team based in the US. The loss of both Indy and Montreal from the race calendar removed any direct involvement F1 had on the North American continent. The dismissal of Scott Speed from Scuderia Toro Rosso was the other bit of bad news that US fans had to digest in the last couple of years.
Like many others, I questioned whether a project like USF1 had the wherewithal to join the top ranks of racing’s elite. I found that my initial skepticism waned as I looked further into the possibilities. Those of you who are familiar with my points of view know that I am no dreamer. Be that as it may, I think their business plan may have a chance, but many things must come together in the next 12 months for these guys to pull this rabbit out of their hat.
Finance – The first question everyone has is, “how will they pay for this?” I had the same thoughts. The economy is in deep trouble worldwide, and sponsors are dropping out of series in both Europe and the US. But, the FIA and FOTA have committed themselves to lowering the costs. There have been many suggestions of how to do this, and some ideas like testing restrictions, wind tunnel usage, and the engine freeze have become realized. The future costs of F1 will be contained if these efforts continue. This will make the arrival of new teams more financially viable, but a team still needs about $100 million USD to fund a one year campaign.
USF1 currently has one financial partner: Goodby, Silverstein, and Partners. GS&P are a California based advertising company who has won multiple awards in recent years for their work. They are considered one of the best and most creative ad companies in the world. They have a “who’s who” of international clients. Goodby’s experience with F1 came as the advert manager/designer for Hewlett Packard’s Williams/BMW collaboration 2001-2005. The company is owned by Omnicon, the 4th largest advertising company in the world with annual sales around $16 billion USD.
Their plan is to use their experience with their existing clients to come up with a program that would include many sponsors. The F1 affiliation would be used to market their customer products all over the world.
In comparison, Frank Williams and Adam Pharr said that RBS’s contract with Williams was around $15 million USD per year. They also said it represented about 10% of their gross revenue. USF1 intends to spread sponsor costs amongst a diversified crowd of investors, many of them America’s blue ribbon companies, rather than depending of the deep pockets of a few big players.
Another interesting aspect of their marketing plan is their agreement with Perpetual Motion Films, Inc. The plans include an in-house studio to produce promotional films. The entire process of building an F1 team is to be filmed and released in order to promote interest from sponsors and fans. SpeedTV, the US network that presents F1, is said to be planning a “reality show” to follow the team through their preparations. Speed TV is headquarterd in Charlotte, so we should see some very interesting backstage footage for the very first time.
Engine – I have read many criticisms of the team because they have released very few details of their operational plans, but the pair did comment that they do not yet have an engine partner. While many have considered this an indication of a lack of preparation, I consider this to be a minor problem.
USF1 will tender bids for an engine and award the contract to whoever makes the best proposal. The FIA have concluded a deal with Cosworth to supply customer engines. The deal requires a minimum number of buyers, and we do not know if the minimum has been reached. But, the FIA has the intent to have a supply of spec engines available one way or another.
I would like to point out that Cosworth is owned by former Champ Car owners Gerry Forsythe and Kevin Kalkhoven and service North American customers through their facilities in Torrance California. It is possible the team may have an engine produced by a company owned by men who have spent their careers racing in the US.
Logistics – Charlotte North Carolina has been named the base of operations for USF1. North Carolina is a coastal state situated on the Atlantic Ocean about halfway between Jacksonville, Florida and Philadelphia, Pennsylvania. The metro Charlotte area has a population of 2.27 million. It has been listed many time in the top 10 most desirable US cities based on affordability, education, safety, and quality of life. The area has the largest concentration of racing engineers, facilities, and suppliers in the United States. It is true that most of these activities center around Nascar, but the expertise in specific crafts and technologies apply to many other endeavors. Fabrication and machining can be done to any specification supplied by the designers without regard to its final usage.
The Charlotte airport serves as an international hub for US Airways, Lufthansia, and Air Canada. It also serves DHL as an international cargo hub. US Airways has direct flights to Gatwick every day. Lufthansia flies to Frankfort every day and Air Canada flies to Heathrow. So, it’s quite easy to get from Charlotte to Europe with either passengers or cargo.
Charlotte is UTC -5 hours, so the time differences are significant, but hardly insurmountable. Let’s look at the 2009 season in terms of travel requirements. The first block of races consists of 4 flyaway events. They are as follows:
March 29 Australia
April 5 Malaysia
April 19 China
April 26 Bahrain
For the most part, there is no disadvantage being in the United States when travelling to these events. There will be some additional costs: The cars will be flown to England via DHL at the team’s expense, and will then be flown with all the other teams’ equipment to the venues via the FOM contract with DHL.
The next blocks of races are all European. For these events the team has tentative plans to operate out of Epsilon Euskadi’s facilities about 30 miles from Bilbao in the Basque region of northern Spain. The Epsilon team has excellent modern facilities and is currently expanding their operation. Epsilon is run by former F1 stalwarts Joan Villadelprat and Sergio Rinland.
May 10 Spain
May 24 Monaco
June 7 Turkey
June 21 Great Britain
3 Week Break
July 12 Germany
July 26 Hungary
4 Week Break
Aug 23 Europe (Valencia)
Aug 30 Belgium
Sept 13 Italy
The final races on the schedule are all flyaway events as well.
Sept 27 Singapore
Oct 4 Japan
Oct 18 Brazil
Nov 1 Abu Dhabi
The logistical need to be in Europe is much less important now than it once was. The logistics are somewhat problematic, but this will not be the straw that breaks the camel’s back. The schedule has really never been any more suited for a US based team.
Design – The real problem is not the finances, logistics, or engine partner. The real problem is designing a competitive F1 car. This is where the “big unknowns” can be found. Anderson knows a lot of people, and he says he has his “brain trust” chosen and agreed, but there is no evidence of any individuals being under contract. I think it will be impossible to design a car without some of the engineers currently involved in F1. As such, the team will definitely be composed of many non-Americans. This is how it should be.
Drivers – The marketing plan assumes that there will be an American driver or two involved in the effort. However, Windsor said that an experienced driver may be needed initially. Rumors that a South American driver would satisfy the “American” requirement have been heard, but it makes sense to me because the South Americans have had a profound presence in North American racing.
So, I am hopeful that the team does have their act together and can bring a new energy to F1. Drivers and teams from the US have never had any real impact on the sport, but as a lifelong American F1 fan, I have always looked forward to the day that America would fully participate in the sport, i.e. teams, drivers, sponsors, and technology.
Great post John. I have a feeling USF1 will be the strongest of the new teams, and could be challenging the established teams in a few years
Posted by: Paul Murtagh | August 29, 2009 at 11:45 AM
Great article.
I am very excited by their entry.I am quite sure, that they will provide, a fresh approach to the F1 business model.
And also raise a great many eyebrows in their perfomance
Posted by: Stuart Chapman | September 02, 2009 at 12:29 AM