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JANUARY 19, 2002

Dennis says that next two seasons will be tough

MCLAREN Chairman Ron Dennis has predicted that the next two seasons will be tough commercially for the F1 business and there could be a painful squeeze which will make it hard for some teams to survive. His comments came over a weekend when the F1 community was waiting to hear whether the Prost Grand Prix operation will be saved or finally be wound up by the French court which has been administering it in receivership since last November.

"Grand Prix teams are normally last in and last out of a recession," he said. "If you are a team which is well structured your finances are arranged two or three years ahead, and in our cases, up to seven years ahead with some investors. From our standpoint we are pretty stable, but outside F1 a whole series of things have occurred in sequence which have pulled the world economy down.

"We had ridiculous amounts of money being paid for stocks which were not yielding acceptable commercial returns, particularly in the area. The value of some of these shares were totally out of sync from any logical multiple which could be placed on their profit. Then after the tragedy of September 11, I think many companies felt they had an opportunity to put every piece of commercial bad news into the wider world.

"I think now we're going to have a very strong recovery which will initially be very slow. In that period - this year and the beginning of next - I think some F1 teams will really suffer because they are tied up with short term, two year sponsorship deals. Are we going to see some attrition? Yes, I think we will, but F1 breeds survivors, but there will be a few walking wounded, I feel for sure. It's a very severe period in which we are operating at the moment."