Financial challenges hit Formula 1

Until now, F1 has generally followed the trend that the teams with deeper pockets inevitably end up with the faster cars and the better drivers. Teams like Ferrari spend up to $250 million a year, according to Formula 1 business consultant Dieter Rencken, or four times as much as the smaller teams like Caterham. In return, they reap a higher proportion of the $1.2 billion in F1 revenue.

updated: August 08, 2013 23:35 IST
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Dubai: With the European economic crisis still rattling Formula One, it was not surprising that cash-strapped smaller teams were in trouble at the start of the season.

But when Swiss-based Sauber appeared on the brink of bankruptcy, the sport took notice. The team was eventually bailed out by investors closely linked to the Russian government and included an unusual expectation that an 18-year-old Russian driver might be on the grid for the team next year.

The financial woes Sauber described as "uncomfortable and embarrassing" highlights a long-standing concern that a majority of the 11 teams on the grid are weighed down with debt. Costs are skyrocketing and will continue to be a concern with new engines introduced in 2014.

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