Credit crunch hits Formula One

Two months ago, the blog noted that the credit crunch was starting to impact sport. Then the issue was high leverage, with the UK’s Football Association warning that the $5bn debts of the Premier League clubs were “high-risk”.
Now, its the turn of Formula One racing. Yesterday, Honda pulled out of the 2009 competition on cost grounds. And the head of its governing body, Max Mosley, said the sport was in a “desperate situation”.
With auto sales collapsing round the world, manufacturers can no longer afford the curent $220m a year cost of a F1 car. Maybe they could instead race versions of Nissan’s Pivo 2 car, recently highlighted by my blogging colleague Barbara? She says it even comes with a tax break in Japan.