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Formula One's money barrier looms large

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  • Formula One faces watershed moment as teams go on the selling block
  • Prospective F1 entrants face incredible financial demands to compete
  • Manufacturing teams look to protect their future earnings and position
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By Glen Scanlon
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LONDON, England (CNN) -- Wanted: someone with a minimum of several hundred million dollars and the stomach for a fight. No reward guaranteed.

Formula One's starting grid has shrunk with the demise of Japanese team Super Aguri.

Super Aguri finally succumbed to the disease that has plagued their two-year run in Formula One -- a lack of funding -- last week and are now up for sale.

However, finding a buyer for the team that has regularly punched above its estimated $90 million budget could prove a resurrection too far.

The process could also prove a watershed moment in the sport, which faces an immediate future with only 10 teams and the possibility that could shrink to nine.

Red Bull's second-string Formula One team, Toro Rosso, is also for sale.

Co-owner Dietrich Mateschitz, the billionaire founder of the Red Bull drinks empire, has put the team on the market after the introduction of new rules (starting 2010).

Toro Rosso has essentially been a feeder team for Red Bull, using a chassis based on its parent team's design but a Ferrari engine instead of the Renault-powered cars driven by David Coulthard and Mark Webber. This set-up will not be allowed under the new rules.

Super Aguri has been in a similar position, owing Honda up to a $100 million for engines and technical support, according to reports.

Aguri being sold as 'ready to race'

Based on previous sale prices -- Jordan was sold for $106 million in 2006 -- and the need for investment to be competitive, any prospective buyer will need a lot of spare change.

However, as Mateschitz has said: "The cheapest thing you can do in Formula One is buy a team... it only gets expensive when you try to run one seriously."

Indeed Philip Long, the joint administrator for the Super Aguri team, is marketing the team as being ready to race next year.

"This administration provides a unique opportunity to get into high-level motor sport without having to build an operation from scratch. In terms of capability a new team could easily be up and running for the 2009 season," Long said.

"Virtually everything is in place including the people, the technical expertise, the laboratories and testing facilities. A new team could walk in and take over a fully operation unit from day one."

It is not that clear cut though. The rule preventing the sharing of components between teams is a big stumbling block only bettered in size by the will of those already competing to protect their patch.

In 2005 F1 supremo Bernie Ecclestone was reported to have given his support to the idea of "customer teams," who would buy off-the-peg cars from manufacturers, to enter the sport (this would have allowed Toro Rosso and Red Bull to continue their arrangement).

FIA president Max Mosley has been an ardent supporter, hoping that the move would encourage new blood, spread the sport's appeal and create more competition.

Mosley has also been pushing hard for curbs on spending levels to even the playing field.

He began 2008 with a letter to the teams outlining the FIA's plans, which could see the budgets of the top spenders (estimated to be up to $550 million) nearly halved.

The FIA is proposing a cap on spending for all costs other than engines, drivers and expenditure for promotion and marketing.

Teams protect their patches

However, unsurprisingly the plans have been fiercely opposed by many of the manufacturing teams who do not want to see their value and standing diminished after investing heavily in high-tech facilities and spending a fortune on car development.

There is also the question of how the sale of television rights -- a big money earner for many teams -- would be split if newcomers were allowed.

Only last year David Richards, the owner of British motor sport company Prodrive, had to drop plans for a new team using McLaren cars and Mercedes engines after a legal challenge from Williams.

They argued teams that did not make or design their own cars should not be allowed to score championship points or benefit from television revenues earmarked for constructors.

"Obviously if a team comes into Formula One without any investment in the staffing and equipment that we've built up over the last 25 years and gains access to a [customer] car... then it's a serious commercial threat to us," Williams co-founder Patrick Head said last year.

A1GP chairman Tony Teixeira, who had been considering buying Toro Rosso last year under an off-the-peg arrangement, balked and has since said investing in F1 would be "madness."


So, even without including the $50 million entrance bond demanded to ensure a new team are not a fly-by-night operation, the costs of building a new team can be ruinous.

Super Aguri's sad demise is a case in point.

All About Red Bull RacingScuderia Toro RossoDietrich MateschitzBernie EcclestoneMax MosleyPatrick HeadFormula One Racing

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