Formula One agrees to cut costs

It seems that nothing, including motor sport, is immune to the problems caused by the global economic crisis.

Max Mosley, president of the sport's governing body the FIA, has been concerned about the cost of competing for some time, but the Formula One Teams Association (FOTA) has been slow to react. Things came to a head however earlier in December when Honda confirmed they were pulling out of F1.

Watching motor racing has played an important part in the development of the events calendar for Monaco. The first Monaco Grand Prix took place in 1929, staged by the Automobile Club of Monaco (ACM), which has been responsible for the F1 race in the Principality ever since. Additionally, the club organises the Historic Grand Prix and the Monaco Kart Cup, not forgetting the Monte Carlo Rally (historic and modern), which was first staged in 1911. With an eye on the evolution of both motor sport and motor industry, the ACM has introduced rallies for electric vehicles, fuel cell and hybrid vehicles, and most recently for alternative energy vehicles. If it became financially inviable for motor sport, and especially F1 to continue, there's no doubt that there'd be an impact on the Principality. The Grand Prix is estimated to cost over 30 million euros to stage, but the 100,000 visitors that it attracts each year bring in sales of approximately 100 million euros. And that's not counting the incalculable benefits of media coverage for Monaco's image throughout the world.

So it's perhaps with some relief that the FIA and the FOTA agreed on cost cutting measures a couple of weeks before Christmas, when the World Motor Sport Council met in Monaco. New engine regulations amongst other things are expected to cut manufacturing team costs by 30%, without altering the glamour of the spectacle itself. A win-win situation for teams and fans.