Assets come in many shapes and forms. Pamela Anderson, for example, had a couple of them that made her a great deal of money, but that does not mean that crafty financiers could have floated Pamela on the Singapore Stock Exchange. Formula 1′s assets consist of a pile of contracts, which the pro-Bernie Ecclestone parrots say are worth $4.4 billion. Perhaps, but they are still pieces of paper and investors tend to be a little wary of companies that talk about foundations made of paper… Valuing a couple of filing cabinets at $10 billion is an interesting concept. Contracts run out and there are no guarantees that similar deals can be struck again. Yes, in principle it should be possible but as we are seeing at the moment most race promoters are looking for cheaper deals because of the downturn in the world economy. New bidders may be willing to go high, but those with experience are trying to find more reasonable deals. It was ever thus.
Today is May 1 and the F1 teams (with the exception of HRT) are in action at a soggy Mugello. In France and a number of other countries it is a holiday and I intend to treat it as such.
I think – with investors especially – value is in the eye of the purchaser… Witness the vast sums paid for social media and apps that have no revenue stream…
If they value F1 that highly, that’s their lookout – caveat emptor.
The 800lb gorilla in the room, as far as F1′s value goes, would seem to be that Bernie holds it all together and without him – and we will eventually get to that point – the whole house of cards is close to worthless in the long-term…
As you say, those lucrative contracts will run out and F1 may well return to its hap-hazard pre-BCE status…
The state of F1 after Bernie moves on (ignoring how he moves on and where he moves on to), is so completely unknown that caveat emptor doesn’t do it justice.
Assuming for the moment that Bernie’s parrots (Polly want a contract) are correct in their valuation, the follow up contracts are completely dependent on whomever takes over. Plus, if Bernie goes, how many of his friends in high places will remain?
Enjoy the holiday and don’t think about Pamela Anderson literally floating above the Singapore Stock Exchange too long, I did and needed a nice red wine to calm down.
One thing though is for sure: Pamela Anderson would *definitley* float…
Ah yes, but those same assets were regularly seen floating in the waters off California
G
With regard the “contracts”, and the sometimes dupicitous goings on behind closed doors of F1 and big business, am I the only one who sees conspiritus possibilities between Murdochs paper being the downfall of Max Mosely, and the move away from FTA to PayTV?
Would Max, had he still been in office at the FIA, had any influence on the situation?
G
Yes, if Max had still been in charge FTA would still be F1′s main platform of choice.
Average viewers per race for Sky so far is 735,750, and that includes time shifted viewers … And that’s about half what they promised.
They floated Pamela in the ocean on Baywatch and those couple of assets helped there……
Hope the weather in France is better than the UK, Joe, have a nice break.
“Valuing a couple of filing cabinets at $10 billion is an interesting concept.” – A brilliant line made me chuckle.
Main reason I read this site is not only the insightful commentary on F1 but the writing style which I for one like.
Keep it up Joe.
Of course the contracts are worth something, especially if they’re underwritten by the host nations government, as most of them are these days.
Can you imagine a parallel universe where FOM have to pay the circuit owner the right to stage a race?
The Formula One brand has other areas for the F1 entertainment experience that are ripe for commercial exploitation to future proof the offer.
A well deserved day off, if I may say so
Joe: TIme will certainly tell just what the “assets” will truely be worth, especially in this time of economic uncertainty…and enjoy your holiday! You deserve it!!
Enjoy your day off! Just a comment on the Pamela thing – you could float her breasts on a stockexchange if you wanted. Actually, David Bowie did it with his “assets”! Check: http://en.wikipedia.org/wiki/Bowie_Bonds
Happy camping!
Frederik
All work and no play make Jack a dull boy, as the saying goes. Enjoy your holiday Joe!
FIA owns F1, CVC funds control rights. Rights can be rescinded. Investors buy assets.
The rights owned by the CVC funds exist as a result of actions taken by the EC. The EC could take further action that remove/restrict these rights, and a certain large German industrial concern is quite capable of having members of the EU see to it that this comes to fruition.
I had the opportunity to make a short study aforementioned assets (in the garage of the Charlotte Motor Speedway) and maybe because I was talking at that time with a state trooper the merits of his vehicle (a Harley Davidson) but I was seriously unimpressed by [the size] of those assets.
A couple of years before I had the chance (at the same venue and the same [Coca Cola 600] to observe Carmen Electra’s assets. Here too I noticed a distinct lack of maintenance.
I ‘met’ both ladies and their assets when walking; this reminded me of what once upon a time a female bank manager replied when we asked for an overdraft based on assets ( of a racing team). She said “assets can walk”. My response was “so can people”. Next I got up and left the building.
Moral of this story: none. Have a nice day.
Hope you had a nice day off Joe.
The filing cabinet generates a lot of income, but apparently it is not distributed according to the ratio of shares held by the filing cabinet shareholders as one would normally expect. (After preferences, debentures, PIBs bonds etc). Thus a share in the filing cabinet may not provide any earnings for it’s owner unless they also bought shares in the distribution controlling company. So it will be interesting to see how this is portrayed in the prospectus. (or not)
Meanwhile I must apologise for the weather, it is due to me ordering a summer house for the garden. (it remains in pieces in the garage)
Hard to put a price on contracts which are forever being broken isn’t it?
I don’t see F1 ever being floated on Wall Street. Without a Concorde Agreement it’s not really worth any investors $$.
Not true, CVC paid £1,038,818,380 for the ability to exploit the rights to F1, and at a time when there wasn’t a Concorde agreement in place.
The figures I used came from their published numbers, but I presume you are including Allsport and companies relating to GP2, (for which they overpaid astonishingly). Psychologically it may look more if you write it out in full, but it is still a small percentage of the asking price planned in Singapore…
I was really making the point that the Concorde isn’t that necessary.
The bulk of it relates to race promoters and what their responsibilities and guarantees are.
And even with the Concorde Agreement signed that only lasts for a few years till the next one.. Nothing long term is locked in.
We also recall $4 billion was the sum paid by Yahoo! for the GeoCities.com website.
At the time $4 billion was the valuation put on the real company Volvo.
We were staggered that Yahoo could be so stupid as to buy a domain name and a stack of servers with and ever changing database, for the sum they could have bought a brix-n-mortar company with a history and a future.
GeoCities soon went off the map, (like Myspace.com), and its parent Yahoo! is as good as dead. SWallowed up by Microsft’s Bing.com.
Whereas dear Old Volvo is still motoring along.
Ford bought it in 1999 for $6.5 billion, who sold it in 2010 to a Chinese holding company, for a lot more than Geocities.com is worth.
How much is Volvo worth today?
QED.
Bernie’s Circus is just as vulnerable as those flash in the pan internet start-ups.
It’s good of you to remind us.
Hang onto your day-job Joe.
PS. Your feed is still rogered.
I just read the Pitpass piece, and I am having trouble understanding the math.
“… over each of the next 15 years the F1 Group will receive on average £291m of annual revenue … [which] makes even more of a mockery of the ill-informed initial reports which suggested the business is not worth £6.1bn”
My understanding is that 5- to 7-times earnings is a good benchmark for the purchase of a firm. Even at 10-times earnings, F1G would only be worth £2.9bn, so I’m curious as to how the valuation is over double that (and quadruple, at 5x earnings).
Pitpass always knows all the answers. Bernie tells them.
Ah, good old Pitpass. The website that banned me from its forum because the editor didn’t like the fact I refused to give the site’s application page my occupation or annual income – I forget which.
Utterly humourless site. I do enjoy their massaging of Bernie’s ego, though possibly not for the reason they would want. Desperation is so appealing. to some people.
£291 seems way too low to me, the track fees alone must be more than that, then add the tv fees, the trackside ads, the paddock club etc.
Hell of a drop from £950m in 2011 to £291m thereafter! Still we need to watch what he is doing with the other hand, he might have bought Harrods in the morning tea break and sold it during lunch.
I find myself unusually disagreeing with you Joe. The stock exchange has plently of organisations who have a business based not on fixed assets but on the contracts they hold today, and historic performance. Every consulting company in the world would fit into this category and there are some very big names there; McKinsey, Accenture, ATKearney et al.
I’ve worked in the consulting and IP space all my working life and investors have always been plentiful. Certainly I support your argument about the value of F1 being inflated but I’d say the historic performance would illustrate stability and security to investors and the latest round of contracts will shore that up substantially. On top of that you have a globally recognised brand that seems to be growing annually.
Have a great day’s holiday.
Q/
On top of that you have a globally recognised brand that seems to be growing annually.
/Q
Surely you recall an American chap called Rupert Murdoch enthusing like a teenage Oscar winner over his latest purchase called Myspace.com.
He was confident he’d made a sound purchase because, “…it has ten times the visitors that Google has.”…
Ask him today about the hole in his pocket.
Oh, and Google is just as doomed as MySpace, for the exact same reasons.
Joe’s right to sober people up.
PS. Joe your feed is +still+ broken, simply knock out the Brabeck post from the feed itself and it will be ok.
I thought you Swiss blokes were on the ball? (Where did I get the idea he’s got Swiss roots?)
No, I don’t think I agree with you. Past performance is not indicative of future performance. This is true of a consulting company, an aerospace company, an IP organisation, a property development group etc etc including F1
All investment is a risk and it doesn’t matter if your assets are in bricks and mortar or pen and paper. You assess the risk and take your gamble.
MySpace was not doomed. Absolutely not. MySpace got soundly beaten by the competitions vision and ability to apply that vision and innovate at a pace that MySpace couldn’t. Quite possibly this is as a result of being acquired by the big corporation and getting bogged down by their process and governance (I don’t know this to be true, but I’ve seen it so often elsewhere).
Google isn’t doomed either. It’s incumbent on them to make the right moves going forward so the competition doesn’t overtake them. Their past success certainly doesn’t guarantee they can do this. Think of Nokia.
Blue sky asset buyers and sellers:
Google is surely doomed, and will go the way of all corrupt flesh.
The wise learn from the mistakes of others, but fools continue in their folly.
Joe: The corrupted post has at last dropped from your feed, and I can now report it is working on RSSOwl once again.
This has been the first time in 3 years your feed has been broken. It still has several validation warning because of empty Titles, but at least is valid again.
As my broker always says its not the asset class which matters its how you spread it that counts. Google only has chips and wires as assets but it is solid as a rock. For the same reason dont expect the Facebook float to fail. Any of the car manufacturers involved with F1 have probably got more assets than Google but I know where I would rather put my money and I know which is more likely to go under first.
Building on sand.
Hi Joe…the opening line is a killer. I sat back and visualised the how finance mavens hedging on Pam And’s assets. Hahahaha…
Much as I dislike Ecclestone, I have to admit he’s commercially smart in a similar way to Branson.
It would probably be a very sound general principle not to buy when either is selling.
Philosophical thoughts on a blog day afternoon, or my response to every negative thought I have encountered because I am trying to suss why the good side of this blog so often gets usurped, and why I can see I have to change my actions too. This is my long but thorough take and response to when things have been fraught here, upset Joe, come across sometimes plain wrong, and how to do better. I hope I spent my holiday afternoon well, and I have no need to revisit this subject later:
= =
In the spirit that May Day is an idealist holiday of many dimensions, and of ancient meaning from spiritual to political, but also a moment to reflect on the coming fertile summer, of love and simple pleasures, I spent today to think how I could reflect that.
So I have decided to cull my long diversions into complex moralities, and technicalia and philosophical treatise, and simplify what I write here. Basically, to try to stop my scribbling becoming lost in deeper exploration of the worst side of human life, and find more to enjoy. In less words. [ultimately less words!]
Last year I had so much more time unsullied by silliness, that I could think before approaching the keyboard, and usually had a fully formed comment in mind days before I wrote it down. I was actually then affected less by random tensions in the comments which always seem to me to be far too personal. That personal side,having a go or whatever, is so obviously not why this blog should exist. I have often lately been upset that some visitors here seem to have no idea how to disagree politely.
So this year, staring now, a nice Pagan date, I guess I simply have to organize my time. Protect more carefully what is positive and enjoyable.
I hope to go back to writing comments how movies might reflect the characters. Allowing I find time to keep watching movies! I’ll try to add some hard takes on the marketing side, at my most acute, which observations I have not let out here before, but may be of interest, because it’s easy to misstep in tricky times, and a least some have expressed an interest in that side of things.
I think the marketing side screaming out for better discourse, and though it may not look dire today, there’s more than one creaking fracture between what is being sold and how things really are.
I shall shut up on my political drifts, because they are too personally intertwined with my own contemplation why I never did diddly squat in that direction. I think i was actually willfully naive when younger. That’s too much me explaining me, instead of explaining what I mean. There must be enough trail of my thinking left here before now, should anyone want to explore my navel gazing.
GP+ is what to read if you want the races, straight up, full on, and in depth. We have gotten a bit too distracted by the other goings on, here. Joe set this up to promote GP+ and at a guess, I imagine he may feel his efforts at including us who read here, as being unfairly diverted. I also think there has been too much general swerve. If this promoted Joe’s business newsletter, it would maybe make more sense. What happens however, is that Joe is cannibalizing for sure some of his sales there. So somehow, I think the twists and turns of this blog do not fairly support what it was intended for, and which intent we should respect. When matters of politics are discussed, I am afraid I feel that there is too little respect shown in general, towards all.
So, I am going to change how I comment, and what I comment on, and the attitude underlying that, and this is my explanation as to why, an explanation I hope will give some better ideas to all. At least I shall explain what I might do to make things better, and if you have appreciated what I wrote before, well I reckon I dropped the ball lately, and so I hope to bring some happy renewal.
Lately i’ve scribbled far too little appreciation of the driving I watch, and I usually watch intently, several times over. Still, if you want to read about racing, you can subscribe, and read the pros, not my casual thoughts. That said, I intend to comment much more about the racing, because that’s in line better with what we are supposed to be on about.
Surely the serious business talk ought to be in the other newsletter. But if I can add to the research, I’ll do that for benefit here. Just understand it’s amateur effort!
This holiday is about vitality and regeneration, love and growth. Consider the winter over, and press on for what is of value and virtue. May day is embedded in our cultural lore, so maybe on this day I can contemplate the lore surrounding here, my passion for it, and also, just as this holiday is meant to do, move right on, having celebrated.
I have a take on life which can be misconstrued as pessimist. But I am quite the opposite. It’s sad to me when friends claim I am knocking “everything” because they suss not that I am paying attention to avert cockups, of which I have witnessed possibly a disproportionate share. (Just mileage, I reckon, not ill luck or some jinx)
Today, I mean to start to undo that impression, falsely imagined though it may be. Starting with some better comment writing. I’m doing this for me, but it’s worthless as an exercise unless others enjoy it too. I do write purely for fun, but it’s become too involved lately. I spotted just one or two comments that I had come across as more than difficult to read, but it only took one to start me to reevaluate and redress the problem, and take that seriously. In doing so, however, I started to notice we might all pitch in better, and I’ll touch on that, but my declaration is to try to lead by example, not fall upon chastising others.
I owe it to all of you here, for being so patient with me. I’m an emotional bloke anyhow. But whilst I have been scribbling comments on Joe’s blog, I have not been doing that as a diversion from my work. I have been piecing together a diaspora of thoughts, and by focusing to write here, regained the positive angles on many things which both personally and professionally have upset me or disappointed me in life.
I think I lately have pushed my limits beyond sensibilities. Growing a beard does not suit me! But the discussion here made approaching subjects which worry me, would have kept me awake at night regardless, more than bearable, a positive pleasure. I simply need to compartment better, focus now, to repay you guys, make my part of the exchange less impenetrable or farther from the brink of personal anxiety, or forfend, diatribe.
My promises are just this: shorter, more fun ditties reference the movies, all new some marketing thoughts, and some hard research. Far far less or no politics, far less general financial discussion. Almost nothing personal unless i can recall something funny at my own expense. No more politics at all, unless absolutely directly relevant. I made the mistake to pat attention to, or include too much of what upset me, and it changed my tone and voice. I can only guess at this, but I sense people who read my comments appreciated or enjoyed my earlier style more, and so I shall U-turn but with a bit more care.
That said, there has been an atmosphere shift around here lately, I want to talk about. Or just comment I had enough of it. Summary: anything or anything negative, let’s get rid of that.
. . .
Maybe someone might be reading now, who thinks I am some kind of shill for Joe or GP+, or connected commercially or something like that. Once again, for the record, I simply was drawn inexorably to what I think is a positive place and a genuine and human journal, and though I see many things I’d love to change in F1 commercially, my bread is buttered on another side, really very removed. It so happens that a great buddy of mine has recently made friends in the sport, socially, and so I might enjoy that one day, but I shall keep my commercial remove intact.
I allow myself to be attracted to whoever I think talks straight, plays straight, and by choice I would rather praise more often what is good, than waste time criticizing who is negative or fails. Sell the good thing. Maybe this is too personal a thing, but I asked my then girlfriend why she loved me, she said because I never talked down about anyone. My mom says I am a softie, and naive, but i moan she is glass half empty, and I just prefer not to waste time with such thoughts.
I’m ashamed nonetheless I been very critical about some characters lately. There was a change in me, which I am just about correcting, whereby somehow i let negative criticism of others become a part of my conscious thought. It took a very awful blow, or series of blows, to take away what was a far happier state of mind. I do not mean the simple ways people think to take advantage of someone who prefers not to argue the bad side of life. That’s a daily unpleasantness, which I am saddened to say I perceive not constantly, maybe dint all the economic ruin we have all conspired to allow happen.
It is simply far harder to criticize why something is good, than it is to tear into why something is bad. So, I want to get involved in understanding the positive again, not bemoaning the awful. Here, on this blog, about F1. I see myself moaning about things which probably fly above most people’s heads, because I was deep into obscure finance, the kind that has caused too much problem, when I was in my 20s. I was doing that on my own bat, by the way, not involved in the general malaise, but trying to use those tools for the better on my own account, in another industry. I failed, save as gaining some insight that is unusual. Only a few emails between who I worked with might exonerate me and prove I had a clue and cared. I never got to use my appreciations more widely, because well at that time, had you heard of RiskMetrics, the JPM spinoff? Not just that, but who I read at that time, really were changing the world, but through academic journals and similar. Tip of iceberg stuff. Sorry to point out to you, but the instruments os our possible demise, I did not create, but I certainly studied in the mid 1990s. No, you would not have likely seen this, mafe any sense of what was going on, so there was no way for me to more widely to speak. Only very very recently, has there been any scrutiny of any kind of the banking industry, and that’s why I mention one website too often. Too often because it seems to have reached a depth and stuck there, running out of oxygen to sustain life. To complete the irony, had I taken the obvious route, in mainstream banking, you’d not be listening to me now, so great would the prejudices be! But one thing I touched upon several times before, was how junk bonds got vilified because one man dominated them, was very positive in life, none of the mainstream could get any action so piled in ruining it all, then soon as they could, fired it up all again. I freely admit I never had the balls to get involved, and by choosing to be independent, ensured I could never big up my business to any notable scale. These are other reasons why I kept private fat too much, just seeing the cynicism of it all. I also clearly recognized I was too young, and too molly coddled to handle anything more than the theory. So, as and when I cease to be anonymous, I expect a deafening chorus of silence, interrupted by “who they hell are you?” from the suddenly disrupted and confused back of class.
But, sat as a guest at friend’s trading desks, thought the meltdown of 07 – 08, I realized there ought to be a way to sort this positively. I was asking traders about so many things i, outside the industry, had imagined worked to protect us all, and got blank faces. The very people who were trading couldn’t answer my questions. This was at a very serious house. So I decided I’d get right stuck in again, and find out what could be understood in a beneficial manner. No, I have not gained any silver bullet insight. It’s messed up in too many more complex and cultural ways. But when i was in my teens, to learn, I blagged shelves of books from publishers, to ostensibly review for magazines I worked on. I simply ate them up. I have a A4 “black and red” notebook, absolutely full of titles and ISBN’s i devoured in one summer break. (summer is doldrums in advertising) and only recently do I see all that I read fitting together, and see there are tools from all that which I read which could change what I want to do.
I discovered rather late in life how dumb I was not to see how this was developing (only thing to save my intellectual pride is those few emails, but that doesn’t mean they were top calls) and because I started to notice that almost no business sets out to teach the real nitty gritty basics to anyone. Next time you meet a banker, ask them to explain you the “cash and carry” trade. It is one of the first things you are taught. But just as students now learn more how to model in some CAD-Cam or CAE computer programme, and have no time at the lathe, so useful basics are forgotten. Every single theory seems to put us past the practickum of life, and this I believe is the explanation why the vast trading in finance has gone wrong. I have spent these last years, almost holding my head in shock, in these realizations, and a kind of shame I never could get a grip on even just one aspect of why it got to be a mess, before it did. (including of course, I’d then have traded for myself more practically).
Guys’ all I have on my CV is I started my own business when I was improbably young. I have had some very cool customers, but you don’t speak about that, or at least that was how I was taught. So disbelieve me entirely. I am a nearly middle aged man with no CV. Oh, and my good references are passed away. My really good references do not want to have that publicized, because they are in on my silly plans to change how the advertising workd.
One single disclaimer to this: I hope before too long to have developed some software tools which might commercially benefit Joe’s company, or one like it, which have been informed in detail by my observations here. If that ever happens, that is me selling a product, not me selling me. I hope the difference between thinking I could build something of proper use to publishers like Joe, and me being personally impressed and enamored by what he does, is clear. In the ad game, you really should always try to separate the personal from the commercial. That’s good in any game. But being too personal backfires more frequently in advertising.
Anything else I do, including a few observations and suggestions in comments, are – just as to anyone – offered freely. For laughs, I took a look back at a bunch of comments of mine over the year or two, and I could not tell if I was explaining the basics or relearning them myself! Both. I have definitely been re-learning it all. Let’s just say my work become extremely theoretical and abstract, very indirect in the way it is conducted, and though I never forgot what I learned, permit that finance math for ad trading takes you a long long way from the basics, and how I formed my unadulterated opinions at a impressionable age.
Advertising does affect almost everyone, but instead of indulging the debate, I should get cracking as to making some actual movement in the better directions I always envisaged. My work has always been at least half way to banking. I think I describe myself by default as adman, yet that was really only my formative and then youthful tuition. Neither that nor finance comes naturally to me, but I am more honestly described as involved in finance.
Corollary to that, orthogonal, I am sure I said it before, but I do often wish I had been 17 again, or even 20 (any later and i was after shooting at the big game in earnest and too disillusioned about any individual publisher to be enticed) when Joe started this publication, because then I could have devoted myself to selling it, and would have been able to give my heart freely. I know I would not have become so disillusioned that in anger I set about trying to change the whole system.
That’s enough disclaimers. No more of that, because I’ll not have time to get plans done if I diary them here, and it’s no good until I have a product to show. In a way, being allowed to participate, quite a few aspects of what I am doing feel “co-developed” by this party here. So if they can help, I’ll send them to Joe long before the public. If they are any good, c.p. etc!
I intend this to be my last “essay”, and in future knit tighter the subjects which matter. All you regulars have heard it (almost) all from me, by now, anyhow. (Okay, if I remember something funny, I’ll keep those in) I suppose the thing is as a anonymous correspondent, I simply wished to persuade you direct, without ever any claim upon my real life or career, or status or anything. I mock that in me in real life just as I do here. My real friends are so often angry with me for cutting no profile in real life. Ironically, I cut might just have more profile here. So that has to stop, and change about. Somehow I reckon I did that too well. Because in my scribblings, you have seen my ideals and hopes, and best thoughts, and suddenly i think that my real life does not live up to what I write, and so I better go work on that again! I hope to use my real name, also. That will come, eventually. I have not taken the path of least resistance in life. When I admire something or someone it is because they are tough too, at being involved, and challenging the status quo. Yet another reason I like to stick around here. No, these are not backhanded compliments, they are as serious as the morning sun is beautiful, they are what matters in life, to me, and what is wort showing.
. . .
May Day is a celebration, and my part of London is this day blessed by clean air washed by nighttime storms, and a gentle warmth.
What I shall do is observe the traditional fount of happiness and play that today’s celebrations mark, and direct that positivity into making what I write here more enjoyable, more fun, and when i can, be more factually informative.
It would be great if we could all think that way, truly optimistic and yet realistic. Strange things are afoot in F1, and this is the singular place bothering to try to understand them, at least in public. That is of notable value for us all. But some of the themes of comment have drifted far into being dark, and gloomy, and personally negative. It’s a bit too easy to think that way, when we are all hit by economic woes, and politics which seem increasingly anathema to fair living. But I think of the people here who have commented positively, and many have influenced me very much for the better, and so reckon we can get this place on a upward track, just so easily. Put some faith in. If there is bad to discuss, also explain the opposite possibility. Don’t let casual observers think we are somehow dragging it all down, because that’s not the plan, and if i sensed it were, well I’d have signed off. I love it here because of the humor, and the sensibilities, and also the cutting observations. But, since surely not one of us wants to see F1 done down, please keep in mind how those who don’t or won’t pay attention, might unfairly, but inadvertently, give this place a bad name for no good reason. Keep vigilant, but keep heads up!
. . .
TL;DR:
(sort of, hmm, only just learned what that abbr. stands for. . )
Thanks to all of you for everything. You lot renewed a lot of my faith in life, as well as this sport. (not sure which way round, technically!) I reckon I will be better to write on themes again now, some of which I managed before. Try to be lighter, concise, and fun.
It is true that the slanging matches over Bahrein and Lotus made me fed up. Have a thought for how Joe must take it, all that tirade we never see aimed personally. Let’s steer clear of that kind of thing, collectively. People who want to hate, always want a way in, a crack to open up. Let’s not give any chance. Even these very serious things of politics can be discussed in ways that cause not a cascade of denigration of the good values in life. But see my pleas above, if there’s another looming controversy. If you love or even just enjoy this blog, please put aside all the friction that has gone on, worn down our host’s natural patience, and come across as ungenerous of our own humanity. It takes more effort to explain the bright side, always easier to slap things down, but who comments here, are all capable. Maybe just a little bit extra effort.
So my wish on this ancient holiday is to transform my involvement here, find some good angles to scribble about, and make them entertaining. Sure, let’s not stop on quest for truth in F1. But we owe ourselves a more pleasant life, a higher value of discussion, and I promise you lot I shall try to use the best angles to pursue that. I have to write this down, like some declaration, because i have felt ill winds, and stupidity messing around here too much, and it got me on a downer. I should just have made the change naturally, but I wanted to be able to be called up on this. So, here’s the line in the sand. ” – - – - – -” or something like that. Just a challenge to make us all happier!
My love to all. Off now to get my sense of perspective and humor back! – john
Fascinating stuff here. Any chance you could go into a little more detail, please?
LOL you want more detail???!!!
But if you ever want to ask something, go ahead. I had forgotten a while how to crack a laugh at myself, also why you saw the above, so quite up for it.
The above is true, but also I keep on at these things, in case one day, someone really has a question they want answered, about what I go on about. Personal or otherwise, no problems, here if relevant, offline if not. My writing may suck, but having that’s because I have teeth, upshot I don’t bite . .
Why do I get the feeling that Bernie has turned F1 into a grand Ponzi scheme?
He keeps moving venues and churning fees to increase the “asset” value, and now when asset value has peaked he wants to float the entire schmegeggie? And walk away with an IPO killing while others eat the swill of a failed asset once governments stop filling the trough with their cash.
Don’t get me wrong, he’s not a thief like Madoff, in the mold of classic Ponzi schemer, but this flotation idea doesn’t pass the smell test.
Then again, that’s why he’s a billionaire and I’m broke.
Off topic, just finished “The man who caught Crippen”, excellent, recommended!
Now the world is smaller and those adventures are no longer possible because mankind has moved on explored, invented and discovered. A bit like F1 engineering having gone so far, but maybe it might be better if it had not, but the proces of invention was a major part of it all.
However it left me thinking, hang on, what about Michael, so I had to look that up.
Great book Joe, what’s next?
I have three books on the go at the moment, but am making little real progress because of the lack of available time.
Putting a value on a few filing cabinets, yes nice line, but right now some very serious money is exchanging hands in the Mobile phone market on peices of paper, that say I own or have a patent – trademark on a system, that would you believe it, was developed 15 to 20 years ago.
In fact right now Facebook, only a few years old is in court fighting an IBM patent from back in the 1970’s on what a social network is. I don’t think Mark was even born back when the patent was granted. So peices of paper.
Value wise, the contracts are the key. Some run for a few more years, some much longer. That is where the value is. What no one really knows at this point, how much each contract is worth, over its life time. As Bernie has done deals with most of the key tracks, no one can really come in and put on a race at another track. Yes I know there are a few better tracks than what we currently have. Also he controls the name, and has the deals with the TV – Cable companies. So there would have to be a massive breakdown in relationships between Bernie, the tracks, and the TV companies, for this sort of valuation to be questionable.
The value I think is high, but then you pitch it high, as it gives you room to drop it to secure the deal. It is done on the value of the contracts for the races at key tracks which makes up the overall feel of F1 as we know it today. Cash is king, and the F1 circus does throw of a heck of a lot of it, each year.
In the old days – before I had grey hair, it was based on bricks & mortar. Things you could touch and feel. Patents and IP were not really thought of as a good asset. Nor was the so called “goodwill” or brand name of a company, business, but today all has changed.
Yes, but it is not my money…
Correct Joe,
But like say the valuation given to a mobile phone operator. Most of them don’t actually own the towers that transmit the signal from, but rent space. They don’t own the handsets, but sell them to you. As for the back office software – billing system a few very big ones actually lease that software. They rent retail space and the same with office space. So what real world assets do they own? Not much. A few Servers, some Laptops, tills, PC, and office equipment. They are a pure cash cow. These companies have valuation in the same range as the proposed F1 deal is aimed at.
In this case I would say the Brand Name is the only real value in these mobile phone companies.
All Bernie has is a bunch of contracts, where the track has agreed to pay him a sum of cash each year for a number of years. The same with a TV company. The whole CVC – F1 package are like the mobile phone business, they don’t really own anything.
The big question for the investor is, will the cash flow stay solid and increase or dry up. Will the company pay out a dividend? And if so how much? How will Bernie grow the business and bring on line new revenue streams. The internet I think is one area he needs to have a second look at.
Keith, worth noting how much shareholder equity got wiped out, by mobile phone companies, over the years. Voda never kept Chris Ghent’s trajectory, and frankly couldn’t. The 3G auctions were nuts but not the worst of the waste. Just now, I can get a rolling package unlimited from O2 for less than half my current contract (up on renewal any moment now) and they are increasingly commodities.
It’s fun, though, that you can buy shares in a company sold by other investors who just got fleeced, and do well, every now and then. Like a perpetual motion machine, for abusive companies . .
Except for the new reliance on data, and apps, as mentioned which is an extraordinary revenues stream. Do people realize their iphones release private data to apps all the time? Apparently, when I browse here, if Joe does not receive my phone number in the packet header info, he could pay O2 for that data. Quite amazing, what we give up. There’s even companies trying to assess credit information from our browsing habits and online presences and chat.
Yes, I’ll be a sucker for that. The proposed sub to Adobe touch apps on ipad is pretty aggressively priced, and includes the desktop suite, which you need to upgrade so often might as well take the sub. I can see my data bill getting steep on occasion. (i’m holding off, but this new ipad sure seems the way to display adverts when you need to, so, well, another tax deduct.)
. . .
Joe,
problem is it’s not the money of who’s buying, either. End of day, that’s the trick.
Actually the real reason Bernie can float is because there’s been hardly any new companies coming to market lately. Simply so much demand pent up, he can get away with it. All the new web companies. e.g. are too scared to get valued by the market, live in VC land for a long long time, or hope to swap out for shares in the couple who will float, like FB.
Not saying anything not obvious. Just i dislike this market in which there are never any smaller companies. That’s bad, I want to punt on someone who can grow, not a company exiting at the highest they can tick a valuation.
– j
Is it not only a matter of time before some clever people write equivalent applets to NoScript, Adblock, Ghostery etc for the new phones? There are very few sites that I view with no protection. It s now the equivalent of having your own stalker following you and writing down where go what you do where you shop and what you buy. Stalking is illegal.
John,
It is the way of the markets these days. In the “good” old days you actually made something, which people could touch and feel. Now money is made on nothing. A filing cabinet full of papers, in other words. We have been here before with the dot.com mess.
My downstairs loo is papered with share certificates and option notes, which if I could have cashed them in, or excised them would make this very small room, having the most expensive wallpaper in the world.
We didn’t learn from the dot.com period, we didn’t learn from the subprime mortgage market (Property) and I doubt we will learn about the new internet companies – Google – Facebook ect. I wonder where Google will be in say 5 years. Big Tec names companies have come and gone over the last 20 years, and the same with mobile phone providers.
We like our motor sport and F1 throws off massive amounts of cash. So in theory teams and shareholders could make some money. But we have also seen CART in America go bust, so who is to say that F1 will run true for the next 10 years or more. We do have more history in F1 then the CART people did, and we have Bernie, but for how long?
Also as you pointed out, governments made a killing on the 3G licenses for the mobile market, and the companies badly overpaid. You can flip that and say that tracks – countries have over paid to host a F1 race, as tickets for the local races are extremely expensive. You can see parallel views to the selling of 3G licenses and countries over paying for the rights to host a race.
Temporarily, Keith, then sanity will return after they’ve learned the lesson.
Ask anyone in Iceland, and Ireland.
But those are the only two countries taking it on the chin!
Sadly, not much facing up to reality anywhere else.
Maybe that explains The Mole’s refuge in Iceland?!
Martin Haven:
Apps and social media that have no revenue stream ? You are kidding ? How do you think Facebook makes it money ? Their revenue stream is in advertising. They have data on all of their 800 million members (facebook has 1/7th the worlds population on it’s ‘books’, quite astonishing). They know how old I am, roughly where I live, they know I love F1 and motor sports, and music, they know who I work for and roughly what I do there, advertisers will pay handsomely for that kinda data.
They bought Instagram for 1billion as they know damn well it has a huge base of active users (most of whom are probably facebook members) who’s data they can mine for advertising purposes. ‘Apps’ are the same, you may not pay for them (I rarely do, certianly not £20 for the F1 timing app – who are you kidding Bernie ?!), their value lies in the metadata of their users and the advertising that can be targeted at specific groups of users.
Totally sucks the timing app. Last year was free (Nokia paid up I think, they do this a lot, keep people interested) and sorta worked good enough, this year, no choice for a N8. I agree, £20 is just a bit much. Might have done a tenner, but seriously . . Forget that, though, they are silly to loose the outreach they had. I was able to hand my phone to my pal’s daughter so she could learn about why sector times mattered into pitstops. Yes, of course, I am corrupting her. Catch’em young! More seriously, the constant information kept her far more engaged, and upshot she read out the sectors, so I didn’t have to take my eyes off what i was viewing. I keep working on my evilness …
I haven’t dared into facebook. Looked to me like their TOCs gave them perpetual rights to any electronic data held on me anywhere.
I actually have friends who ignore important emails, oh, no I have to be on FB. Err, Big NOPE to that, thanks. Some relatives, also, like that. Who are old enough to maybe appreciate a actual letter. Whenever people do finally suss it out, might have to wait for a generation to grow up a bit more, find out they been slimed, i can quite imagine the whole thing imploding. But not now, not soon.
I went to see The Social Network – came out of it actually sympathetic to Zuckerberg, though boy did they trash him. Interesting movie, I’d watch it again.
End of day, those kids sure know how to monetise every move we make. (Thinking The Police song, about stalking, really).
For fun, search “Onion FBI facebook” for a Would Be More Amusing If Not So Obvious, but enjoyable and very well done.