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Mixed views and uncertainty over Brexit's F1 impact

Britain's decision to sever ties with the European Union has politicians and experts upset, angry and confused but what does it mean for F1?
As Britain and the European Union continue to get to grips with what might happen now that they are heading for divorce, leading F1 figures also hold differing views on how the people's decision will impact their sport.

The drawn-out 'Brexit' referendum, where the UK population was given the power to determine whether the country should remain a part of the 28-nation EU, saw the opposing 'leave' and 'remain' sides bombard voters with the positive and negative aspects of their respective positions, with the 'Eurosceptics' arguing that withdrawal would reverse immigration, free Britain from the economic burden of EU membership and, potentially, save the billions of pounds for the common man, while the 'Europhiles' insisted that exiting after 43 years would lead to economic uncertainty at the cost of thousands of jobs thanks to weaker trade and investment.

Would access to a market of 500 million consumers disappear overnight? Would Britain's exit dissuade foreign firms from locating there, keen to be part of that market? Would freedom from EU restrictions and red tape allow Britain to establish itself as a stronger, more independent trading nation or would it end up isolating itself from both the European marker and others around the world that hold trade agreements with the EU? Would free movement between Britain and the EU become harder? Would Britons need visas to work abroad, or face the need to integrate with their new host nations? Would that deter nationals making the trip, in either direction, to take up jobs?

All that remains a big unknown, and will do so for some time yet as the disenfranchised couple untie the knot that binds them, but, on a smaller scale, what impact will the separation have on F1?

In the short term, the plunging pound will almost certainly make grands prix weekends a more expensive prospect for the eight UK-based teams, with hotels, catering and other costs suddenly higher than they might have been a week ago but, beyond that, the questions surrounding the movement of personnel and products will almost certainly exert an impact, with Britons finding it harder to work abroad and Europeans perhaps put off coming to F1's British heartland. Will it become as difficult to move cars and equipment around Europe as it currently is to freight them long-distance for F1's flyaway rounds? Would that, in time, persuade teams, suppliers and manufacturers to up sticks and move from their established British bases and head for the continent? While the first question could lead to more opportunities for Britons in the UK, will the second mean that there are fewer teams - and, hence, fewer opportunities in the long run?

On a wider scale, any impact on F1 is likely to have echoes for UK industry - motorsport or otherwise - as a whole. With more than 40,000 people employed in the sector and an estimated annual contribution of £9bn to the UK economy, the impact on of F1 cannot be taken lightly. Despite that, two leading F1 individuals - the sport's commercial supremo Bernie Ecclestone and McLaren boss Ron Dennis - see the outcome of the referendum through very different eyes.

"McLaren is based in the UK; more than 3000 families are affected by our fortunes, as are our British suppliers and their employees," Dennis, whose company enjoyed an estimated turnover of $1.9bn last year, wrote in a communique to the Times newspaper before the public cast its vote, "Remaining in Europe is fundamental to the prosperity of the McLaren business."

Meanwhile, Ecclestone, whose F1 deals are largely conducted in US dollars to 'negate foreign currency risk', welcomed the narrow vote to leave the EU, saying that he agreed with the decision and that Brexit would have little or no impact on the sport.

"I have been a supporter of this all the way through," the 85-year old, who predicted the fall of Europe into a 'third world economy' in 2014, told Reuters, "I think it's the best thing. We should be ruling ourselves. If we've got something to sell, and it's a good product at the right price, people will buy whether they are Chinese, Italian or German... People will just get over this and get on with their lives."

Ecclestone's operation looks set to benefit in the immediate aftermath of the exit, with Autoweek noting that 'most payments [F1] receives' come in the form of US currency, while its costs are paid in sterling, which hit a 30-year low on the announcement of the referendum result. The sport's last published accounts, for 2014, show it revenue to be a staggering $1.8bn.

Currently, only Ferrari and Toro Rosso, both based in Italy, and struggling Sauber, in Switzerland, exist as F1 teams outside of the UK, but the British motorsport industry serves much more than the top flight, and Chris Aylett, chief executive of the Motorsport Industry Association, reckons that the vote to leave brings as many opportunities for the future as it may have impacts on current agreements.

"Europe is a major market, but so is the United States," he said, mindful of the industry's £10bn contribution to the UK economy, "There's hardly a race anywhere in the world that doesn't have products that are made in the UK. Over time, will we lose things? We would anyway, even in the EU. We get the business here because these companies, over the years, have provided winning solutions. If you don't win, you're out of business and that doesn't really rely on whether you are in the EU or outside."


Tagged as: Britain , european union , brexit

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