Mar.17 (GMM) Bernie Ecclestone has downplayed the effect on his business of the global recession, but not all figures are as calm, according to a report in the Financial Times.
The sport's owners are heavily in debt, and facing dramatic declines in income, the business publication said.Corporate hospitality - with the glitzy $3000 per-person, per-day Paddock Club the centrepiece - reportedly faces a difficult year.One example is BMW, who has completely axed its regular corporate spend of nearly 500,000 euros for the forthcoming Australian grand prix.Moreover, while remaining in the sport with Williams this year and next, the embattled Royal Bank of Scotland has similarly slashed its hospitality and trackside advertising bill."Such cutbacks threaten the whole profitability of the Paddock Club business model, given the vast overheads of transporting catering equipment around the world," the Financial Times report said.An F1 debt-holder is quoted as saying: "Although this isn't the largest of F1's revenue streams, it is the most at risk."FIA president Max Mosley said in January: "I cannot envisage that Formula One Management's (FOM) forecast earnings still hold in the economic crisis."F1 chief executive Ecclestone is not talking openly about these issues, but he has undoubtedly shifted his attention from Europe in the quest for more lucrative markets."Asia is very important," he recently told Malaysia's Star newspaper. "I have been working for the last 20 years to get F1 into as many countries as possible. There should be no limit to where we can take and position F1."In a new interview with the Guardian newspaper, meanwhile, he added: "I said a long time ago that the stock market would crash and that Europe would become a third-world economy. And it will."
