ATLAS F1   Volume 7, Issue 5
		The Minardi Dilemma
		by Roger Horton, England

Has the Formula One asset bubble burst? That's the question that many involved in the business of Grand Prix racing must have had on their minds recently, as they observed the Minardi team's long drawn out struggle, which ended this week with the official announcement of Australian Paul Stoddart's takeover of the team. Minardi always found F1 a battle for survival. They had, at various times, most bits of the package required to make them a decent midfield team. The trouble is, they never had all the bits in place long enough to make a serious impact, thus unable to land the sort of mega sponsorship deals that are now so important to even stay afloat in these competitive times. Last year, the Italian outfit managed to get through the year on a budget of a little over US$55 million - actually finishing ahead of the Prost team in the Constructors' standings, whereby Prost were funded to the tune of some US$130 million. That, unfortunately, has always been the way for Minardi: they have always been able to deliver a pretty big Bang for the Bucks they had at their disposal, but with such a miniscule budget available to them, they couldn't ever hope to trouble any of the serious teams. Minardi's latest troubles started when the Spanish communications giant Telefonica - who had backed the team with some US$20 million last year and had plans to take control of the team - decided to pull out of F1 altogether. Then, the Pan-American Sports Network, a South American cable company, who had agreed to buy a 70 percent stake in Minardi, backed away from the deal, effectively leaving the Faenza-based team without a major sponsor, or partner. In came Stoddart, at the eleventh hour, and bought the majority stake in the team for reportedly US$30 million. The Australian now begins the race against time to keep the team together, and crucially, get two cars onto the grid in Melbourne for the opening race of the season, now just over four weeks away. As the team currently has no competitive engines, and no confirmed drivers, this will be no easy task. Stoddart, though, is not the type of new team owner one has come to associate with modern Formula One. Some ten years ago he set up an aircraft leasing and spare parts company, European Aviation, which has grown rapidly and made him rich. Last year he ran his own F3000 outfit, European Racing, winning one race with the Australian hot shoe Mark Webber at the wheel, and all the time building up the team's facilities with an eye on the possibility of taking the huge leap into Formula One. He also has an interest in historic F1 racing, and has accumulated a collection of some forty old Formula One cars, and his company built the two-seater F1 demonstrators for the Arrows F1 team. So, if Minardi is going to be saved, it will not be by the likes of Ford or Renault, but by a racing enthusiast whose entrepreneurial skills have allowed him to accumulate the wherewithal to pursue his dreams. This was common in the sixties and seventies, but not since Eddie Jordan moved his F3000 operation up to F1 over ten years ago has anyone attempted anything like Stoddart is now trying. The question remains, though, just why did Minardi struggle for so long to find a buyer? Was it just bad luck, bad timing, or a bit of both? In recent years, most newcomers entering Grand Prix racing have always bought out an existing team. Ford bought Stewart, BAR bought Tyrrell, and Renault bought Benetton. All these deals happened for different reasons, but the overriding opinion was that trying to do it alone and from scratch was just too hard, even for a major motor company with previous F1 experience like Renault. The number of teams allowed to compete in Formula One is governed by the Concord agreement, and currently that number is set at a maximum of twelve. Two years ago, there were already eleven teams on the grid, and with both Honda and Toyota making serious noises about joining in, it always looked as if the last to actually enter would be forced to buy out an existing 'franchise'. When Honda decided to settle for supplying engines to BAR and then Jordan, and Toyota made the brave decision to do it alone, suddenly supply equalled demand, and then just who needs to buy Minardi, or any other struggling team? Add into the equation that the world economy is not in the robust shape it was just six months or so ago, and the outlook for new entrants gets bleaker still. Therefore, although there are always rumours concerning just who will be the next automobile company to join the recent stampede into F1, it would appear that currently there are no new players waiting in the wings. If that proves to be the case, it would appear that Stoddart is going to have to make his investment in Minardi pay off in the old fashioned way - by building the value of the team up season by season. That will not be easy, and it is unlikely that the team will be allowed to continue to operate as it has in the past. Engines are likely to be the biggest problem, both immediately and in the mid-term. For a long time now F1 boss Bernie Ecclestone has been mulling over how to get engine suppliers to provide more than one team, but with mixed success. In some ways this is surprising, because it can - if properly managed - help defray the high cost of research and development. It also has the advantage of ensuring support in the endless politicking that is part and parcel of the F1 game - paying teams don't bite the hand that powers them. So Minardi's future is now in the hands of an F1 novice, a wealthy enthusiast with a passion for the sport - a breed many had thought no longer existed in Formula One. There can be no guarantee that Minardi will survive its present troubles and become a real force in the future, but one things is certain: there will be many fans and colleagues cheering them on from the sidelines. Question is, will it be enough?

Roger Horton	© 2007 autosport.com
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