Leaving before the party starts

To make it in sport, as in business, you need huge reserves of courage. Or to put it more prosaically, guts. Pity Honda then. When the time came for showing the world just how brave they were, for throwing caution to the wind and shouting ‘deal me in,’ Honda instead said it didn’t want to play anymore and beat a hasty retreat.

It was probably the most costly decision in the history of sport.

Honda spent a year shy of a decade trying to mix it in F1. Short of setting fire to money, there are few more expensive things to do than run an F1 team, particularly an unsuccessful one. Since 2000, Honda spent in the region of $1.7bn, first by providing engines to British American Racing (BAR), and then by buying BAR out wholesale. $1.7bn makes Abu Dhabi’s purchase of Manchester City sound like a snip.

After the 2008 season, in which Honda Racing finished ninth in the World Constructors’ Championships (the ranking of the various F1 teams), the men in suits decided to pull the plug. A massive attraction of taking part in the F1 jamboree is global brand exposure (Ferrari, for example, pays for no other advertising), but being an F1 make-weight at the start of the worst financial downturn in the history of the world suddenly didn’t look like such a good idea.

That’s an understandable reckoning, especially if you are about to make several thousand people redundant. All that spraying of champagne which F1 so seems to go in for could look a little tasteless set against a sea of termination of employment letters.

And yet… At the start of the 2009 season, the man widely regarded as the sport’s pre-eminent genius, Ross Brawn, then Honda’s technical director, told anyone who would listen the car he had designed for 2009 was an absolute flier. Driver Jenson Button, too, said he couldn’t believe the speed of the thing. Honda walked away regardless, leaving the team to Brawn, and giving him $170m to tide him over until he found a sponsor.

Marketing firms who specialise in putting monetary value on brand exposure reckon that in the first 15 races of the 2009 season, as Button blew all comers away and captured the imagination of the sporting public, Honda missed out on publicity worth about $400m.

That figure will have increased exponentially now Button has the F1 crown, and Team Brawn the Constructors’ Championship.

And who did manage to get the name of his corporation associated with Team Brawn’s success? Why, Sir Richard Branson, of course, the master of publicity opportunities. He took a calculated risk by putting the Virgin brand on the front of Brawn’s cars at the start of the season, for a relatively small fee, and reaped massive rewards.

While millions celebrated Button and Brawn’s triumph, the Honda headquarters must have been a sad place to be. Walking away from a decade of investment when all the rewards of that investment were there for the taking is an experience that would leave scars.

A honda is the name for the eye made in a piece of rope through which the end of that rope is threaded to make a noose. As we all celebrate F1’s debut in Abu Dhabi next week, let’s hope it didn’t come to that for the money men at Honda.

Damian Reilly is the editor of Arabian Business English.

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