It’s that time again…

 

I will be back after August 19 – not quite sure when…

A thought

I see Charles Leclerc is doing a Pirelli test for Ferrari this afternoon. Interesting…

Notebook from an Argentine steak house

Nagyvásárcsarnok is a bit of a mouthful, but for some of the eastern European countries additional syllables are deemed essential to give a word the splendour it deserves – and Nagyvásárcsarnok is a splendid thing. I thought it might have been an old station from the Austro-Hungarian imperial days, but it seems that this imposing edifice has always been the central market hall in Budapest. It is a neogothic heavyweight, with a steel roof of which Gustav Eiffel or Isambard Kingdom Brunel would have approved. And below, in the hustle and bustle, one can find all the delights of Hungarian living: duck liver, paprika, Túró Rudi pastries, spices and candies and the local wines and spirits, plus, of course, the most colourful fruit and vegetables, including vast peppers and monster pickles that would scare small children. These days it is a big tourist attraction and, as I was being a tourist for a few hours, I dropped in to take a look.

One eats in odd places when one travels. I cannot imagine going from city to city and always being on the lookout for the best British restaurant (not that Britain ever won gold in the epicurean Olympics), but many of the different nationalities in F1 like to eat their own food.  I guess it gives you some comfort in a foreign field. I went to some fancy Italian place on Friday and found a table filled with happy eaters from the Italian media/PR world, merrily nibbling on truffle-encrusted ravioli and sipping pink Prosecco. There wasn't really enough food to feed a supermodel but the bill would, no doubt, have been eye-poppingly impressive. Usually I like to eat local food, although I have had some fairly unpleasant experiences in China and Korea as a result. Hungarian food is great, if you like fruit soups, goose liver and goulash (which I do). There is also fogas, a fish that comes only from Lake Balaton, although it bears a passing resemblance to the perch you get if you dip your fishing rod into Lake Geneva.

Nonetheless on Monday night I didn't have the energy to walk very far from the hotel and my body was telling me that steak and spinach was required, which means that I am lacking protein and need a boost of iron. I had spotted the Argentine steak house while returning from Nagyvásárcsarnok and gave it a try.

The horseradish and tomato sauce that came with a few anaemic prawns wouldn't have frighten St Elmo's Steakhouse in Indianapolis, but it had some zing and I guess that this would have pleased the clientele, who included a lot of Americans. I could hear their voices around me. And let's face it, not many nations wear teeshirts that proclaim "Sometimes I drink water" or "Drinking helps". The tables were largely peopled by men, but there were one or two beefy women as well. Miss Hungary was not spotted. The steak was terrific and properly cooked and it reminded me of the old days when F1 used to go to Buenos Aires (before the corruption payments outweighed the budgets available). In those days we used to visit places called La Estancia and La Mosca Blanca – and they were exceptional. The good thing about Argentine restaurants in Budapest is that one can escape from the inevitable gipsy bands, who tend to plague the local eateries.

Monday had been a quiet day after a weekend of never-ending deadlines and pizza in the hotel room on Saturday night, as I put the magazine together. By Monday afternoon, however, I had cleared the decks, in preparation for the summer break. I should have flown home on Monday, but when they say that a day can make a big difference, they were not kidding, at least not in relation to airline ticket prices from Budapest to Paris.

So I stayed and I was glad I did. The recent weeks have been quite a slog, but Hungary is the one and only race in Europe to which I fly (I guess I should include Sochi as Europe, but I don't) and it confirmed my belief that life is too short to fly around Europe in the summer months.

At the circuit the weariness that we all feel was highlighted by the fact that people are also starting to get ill. Paul di Resta went to Budapest to commentate, standing in for the unwell Martin Brundle, but then he found himself propelled into one of the Williamses when Felipe Massa also went down with a lurgy. This meant that Anthony Davidson got to be the big cheese commentator on SkyTV, although I am told that not a lot of people actually watch the show, at least not compared to what used to be the case.

The folk at Liberty Media have already made it clear that they are not overly keen on pay-TV, unless it is in markets which are used to the idea and accept it. Most of Europe does not – and F1's viewing figures have suffered because of the decision to go to pay-TV in recent years. F1 is a sport that needs the profile to draw in new fans and to keep sponsors happy. Pay-TV does a terrible job at that. Over in Germany, so they say, the negotiations are continuing over the next big contract. RTL is bidding and Sky is in the mix as well, but there is also the free-to-air ARD, a public channel, which is hoping to get a deal. ARD is hoping to come up with some clever deal which will cover not only F1 but also the Olympic Games for 2018 and 2024. Those rights are held by the Discovery Channel and ARD wants a sublicence. Discovery bought the European rights for the Olympics from 2018 to 2024, a deal which includes the two summer Games In Tokyo in 2020 and Paris in 2024 and the Winter Games in Pyeongchang (South Korea) and Beijing (China) in 2018 and 2022. Discovery is owned by one of the branches of the Liberty empire and so a deal could happen in Germany. The Olympic Games may also play a role in deciding future F1 races in the United States.

Los Angeles has just accepted a deal to stage the 2028 Olympic Games, which means that there is 10 years to wait. The city is keen to build up its international image under youthful and ambitious mayor Eric Garcetti, who was recently re-elected and will be in power until at least 2023. Garcetti's Events people are believed to be looking at the idea of a Grand Prix in LA and with a 10 year gap before the Games, there might be impetus for a deal. What is now clear is that Long Beach City Council is going to decide to stay with Indycars and so if F1 wants to be in California, it will need to be elsewhere. The folk in the F1 group refuse to say much on the subject, but it seems that the West Coast is really not a great priority for them at the moment because of the problems created by the nine hour time difference between California and Europe. This means that races would be aired live rather late in the evening and would be screened in the middle of the night in Asia. This is what McLaren might call sub-optimal and I believe that the focus for new F1 races is firmly on the East Coast, where the time zone problem is less intense. I am not a gambler by nature, but I reckon that Chase Carey must be looking at something in New York City, and perhaps even down Miami way. Liberty does like the idea of using stadiums, as happens in Mexico, but in New York the key point is to get a view of the city skyline and/or the Statue of Liberty.

It is worth noting, by the way, that Formula E spent a lot of time talking to LA about hosting a race at one of three venues: around the Staples Center, close to the downtown area, or at the nearby Dodgers Stadium to the north, or the  LA Coliseum to the south. In the end Formula E went to Long Beach but has since dropped off that calendar, as Formula E found a place to race in Brooklyn. This is not suitable for F1, but there are quite a few potential sites that could work, particularly if Liberty does its own promotion, which seems the likely way forward.

Some people think that F1 cannot get into big cities these days but they obviously forgot to tell the people in Singapore. The word from there is that the Singapore Grand Prix will continue in the future, with a deal having been struck for the race to continue. It is logical to suggest that the deal will be announced when F1 is in town in September and the word is that the Singapore government will be taking a bigger role.

There is a fair bit of rumouring in F1 circles at the moment, although the chuntering of discord around the halo has drowned out the silly season a little. I am hearing that a deal has basically been agreed for the shape of the engines from 2012 onwards and that these will be modified versions of the current hybrids, with a number of key modifications to bring down the costs, in order to attract new players. Cost is the key factor in getting more manufacturers into F1 and it makes sense to bring in as many reductions as possible. The word is that the 2021 engines will feature twin turbos and a less stringent fuel-flow rate. The expensive and complicated MGU-Hs will disappear but the sport will retain some of its technology credibility by increasing the amount of KERS, although the MGU-K systems are likely to be standardised to keep costs down. Work is going on to ensure that the engines are also noisier and thus sexier. One can only hope that by then the halos will have turned into something nicer-looking.

There is a big push going on to have independent engine manufacturers as well, so that the likes of Cosworth and Ilmor can be involved. However, I am hearing that this may come about by different means with joint ventures involving teams, manufacturers and engine companies. Joint R&D is quite normal in the automobile world, so watch out for something similar. I can see McLaren, Red Bull, Aston Martin and Cosworth all getting together to create engines that will then appear with different badging. McLaren, for example, could use McLaren V6s, Red Bull could use Aston Martin V6s and Cosworth V6s could be supplied to customer teams. The FIA and Liberty is keen on this idea as it will undermine the power of the big F1 engine manufacturers. Still, there is nothing to stop Ferrari doing the same sort of thing with Alfa Romeo, or someone else coming in with Ilmor. The key element is cost.

Elsewhere Sauber and Ferrari have agreed to stay together for another three years, although the Swiss team will get a 2018 version of the engine next year. Is that better than a Honda? Well, time will tell. Honda and McLaren looked half-decent in Hungary but the word continues to be that the divorce is coming and that Honda will move to become the engine supplier of Toro Rosso. This is a win-win-win situation for all concerned. Honda gets to stay in F1 with a lower profile than with McLaren, Toro Rosso gets a free engine deal for three years, which means that the team will save $60 million, and if the engines start getting to be very good Red Bull can simply flip the engines on to Red Bull Racing and so there will be a factory supplier for Milton Keynes again. All of this means that McLaren and Renault bosses have been canoodling behind the F1 bike sheds and will soon announce that they are going to be together for three years… Renault will get to have three top teams using their power units (even if one is badged as TAG Heuer – a purely financial deal because the name of the engine appears on screen whenever the car is seen).

On the driver front, it all still depends on Ferrari but we expect Vettel to sign and Kimi will probably stay too. There has been some talk of dropping Charles Leclerc into the second seat, but that is way too wild for anyone with a clue about what it takes to drive F1 these days. Ferrari would like to have Max Verstappen, but they cannot get him just yet, while I hear that Renault is upping the ante in its efforts to secure Esteban Ocon for its factory team. Force India would be happy to get the money to sell the contract and might even be convinced to take the other Mercedes youngster Pascal Wehrlein (if money comes with him as well). Pascal probably needs to move on from where he is because the chances are that Leclerc will end up at Sauber, with some Ferrari cash to help balance the books. Marcus Ericsson will remain because he is Swedish – and the team has a Swedish owner, who is hiding behind a Swiss private equity façade. And Fernando Alonso will almost certainly stay at McLaren, because there is no other gig in town and Fernando is not about to walk away from a McLaren with a Renault engine. That might even be a winning car… Elsewhere Michael Andretti is considering switching his Indycar team from Honda to Chevrolet engines and so if Fernando wants to go to Indy again, that might still be possible.

[Joe was eating at the Pampas Argentin Steakhouse, Vámház krt. 6]

Six hours after the race…

Ferrari dominated the Hungarian Grand Prix, despite the best efforts of Lewis Hamilton to take the fight to Sebastian Vettel. The German struggled throughout the race with a steering problem but Kimi Raikkonen duly sat behind him, carefully not doing anything to threaten the situation. This will have done the Finn no harm at all with his 2018 ambitions to stay at Maranello. Kimi played the roll of tail-gunner for Vettel all afternoon, while Valtteri Bottas allowed Lewis Hamilton to pass him to see if Lewis could mount a challenge. He pushed hard but there was no way, and so on the last lap Lewis handed third place back to Valtteri. Max Verstappen was right behind them at the finish despite having got himself into trouble early in the race for bumping Daniel Ricciardo off the track. It was a good day for McLaren, which scored points with both cars, which lifts the Woking team off the bottom in the Constructors’ World Championship, pushing Sauber to the back. Also scoring well were the two Force India duo with Sergio Perez bundling his way ahead of Esteban Ocon on the first lap (the two did make contact…) They finished eighth and ninth, behind Carlos Sainz in his Toro Rosso. It was a bad day for Williams, for Renault and for Haas. Williams was without Felipe Massa, who went home before the race, feeling unwell and the team drafted in Paul di Resta, who had been planning to commentate for Sky, standing in for Martin Brundle…

– We analyse at the controversial halo rules

– We examine the future of Formula 1

– We detail who is testing this week in Budapest

– We look at single seater racing in Australia

– We chart the rise of social media in the sport

– We look back at Nigel Mansell’s victory in the Hungarian Grand Prix of 1989

– JS mulls over pizza dinners, Cinderallas and baked beans

– DT is depressed about the way the world is going

– The Hack writes of the halo, the Honda Jazz and

– Plus we have the fabulous photography of the Nygaard Clan

GP+ is the fastest F1 magazine. It comes out before some of the F1 teams have even managed to get a press release out. It is an e-magazine that you can download and keep on your own devices and it works on computers, tablets and even smartphones. And it’s a magazine written by real F1 journalists not virtual wannabes… Our team has attended more than 2,000 Grands Prix between them. We’ve been around the block a few times and we know the history of the sport and we love to share it all with out readers at a price that is a real bargain. We believe that by attracting more people at a sensible price we can achieve so much more than all those who exploit the fans. In 2017 you’ll get 22 fabulous issues for £32.99, plus the 2016 season review completely free of charge.

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If you are interested…

Before I head off to beautiful Buda and Pest tomorrow, at a time when planes should not really be allowed to fly, when even the larks are not ready to lark about, I thought I would do a quick podcast to catch up with F1 in recent weeks. Since the last podcast, the F1 circus has rushed from Austria to Silverstone, by way of London, and is now in Hungary, and on its final approach to the summer break, when F1’s travellers are supposed to get a chance to down suitcases and spend a few days with their families.

In F1 we often say that we only catch cold when we have time to do so, this being something to do with subconscious relaxation that mean that our battle-hardened battalions of antibodies are outflanked by crashes of rhinoviruses. I think I must have been suffering from this because a few days off last week (to fit in with small people holidays) means that I now have a good old-fashioned summer cold. Despite this, I battled through the podcast last night and, if you are interested, you can listen to it, by clicking here. With the audio version one can edit out coughing, but if you get the video feed you get all the nasty sounds for free. Just click here.

A shock for DTM

Mercedes-Benz has announced that it will enter Formula E for the 2019/20 season and will withdraw from DTM at the end 2018. The company said that it wants to be “the benchmark in the premium segment and also explore innovative new projects and with Formula 1 and Formula E we have achieved exactly this balance”.

The deal to extend the option for an entry in 2019 was requested to allow the company to properly understand the series and make suitable preparations.

The withdrawal from DTM is a major blow for the series, which will be left with only 12 cars, six from BMW and six from Audi, unless other manufacturers can be convinced to take part in the series.  Mercedes has played a central role in the championship since it was set up in 1984. This became the FIA International Touring Car Series in 1996 but this was a total failure and the DTM was revised in 2000. Three years later Hans-Werner Aufrecht, the then boss of AMG, was the founder of Internationale Tourenwagen Rennen eV, the organisation that sanctions DTM races. When AMG was acquired by Mercedes, Aufrecht set up HWA to run the Mercedes entries in DTM. He remained chairman until earlier this year when he stood down and was replaced by Gerhard Berger.

The current DTM championship started with Mercedes, Audi and Opel between 2000 and 2005 but then the last-named withdrew and the series had to survive with two manufacturers until BMW came into the series in 2012.  Mercedes has won nine DTM constructor titles, but the last was in 2010, since when BMW and Audi have won three apiece. In terms of driver championships, Mercedes has won seven, the most recent being in 2015 with Pascal Wehrlein.

Strategic thinking…

The other day Chase Carey was talking to Germany’s Sport Bild about how Liberty Media plans to change the rules and economics of Formula 1, in order to attract more big players. He was talking to the Germans and so was saying that the sport wanted more German companies involved, with more manufacturers, teams and a solid German Grand Prix. This was interpreted in a fairly narrow way, the suggestion being that he wants more German influence in the sport.

In reality, it was a rather different message that he was delivering. If he had been talking to the Japanese media he would probably have said the same about Japanese manufacturers and likewise with the Americans. The bottom line is that he wants more automobile manufacturers – and it does not matter from where they come.

This is a logical strategic statement because F1 currently has only had four manufacturers (Mercedes, Ferrari, Renault and Honda). Back in 2008 there were six (Mercedes, Ferrari, Renault, Honda, BMW and Toyota) and that was pretty much a normal sort of number going right back into the 1980s. Some made little impression, such as Yamaha and Peugeot, and there were always odd suppliers looking for customers, such as Judd, Hart and others. Cosworth was there too, to pick up the stragglers as required, but the last Ford win was 14 years ago.

Everyone understands the power and global market penetration of F1, but not many manufacturers want to pay the kind of money that is required to join the F1 club today – and they are quite open about it. F1 is too expensive. Thus it is safe to conclude that if one can bring down the costs to a sensible level, other manufacturers will join the fight. There is no real logic these days in building teams from scratch, as there are 10 perfectly good ones in action, at least three of which are for sale at any given moment. It would probably be wise to change the system a little and have all of these entrants being given what the Americans call “franchises”. These are basically contractual rights to own and operate a team – within an established framework. In the US these are often linked to the team’s location, but in F1 it would simply be 10 teams, contracted to work together and sharing out money in an equitable manner.

The current system is secret, complex and not really very fair. Franchises in the US are bought and sold, although the franchise-holders can vote to admit new members if they see fit to do so. European sports leagues tend to work with promotion and relegation being used to determine membership, but this is impractical in F1 because of the huge leap in budgets from Formula 2 to Formula 1. If rising teams want to move into F1, they need to find backers to fund such a move.

The current prizemoney structure is heavily weighted towards Ferrari and other big teams, but if the money was redistributed in a more equitable fashion there would be more for almost everyone – and less reason for anyone to argue. Teams would get what they deserve, based on results. History and loyalty to F1 is all well and good, but the big brands make additional money from merchandising as a result of their heritage and so to reward them just for being there is deemed by many as being unfair. If all these bonuses and benefits were removed, the teams would get around $60 million apiece for appearing at races (what is known as Column 1 money) and the prize money (known as Column 2 money) would range from $110 million for the World Champion Constructor, to $23 million for the 10th placed team. That means that every team would get at least $83 million, without requiring any sponsorship or pay-drivers. Given that a couple of teams are operating on around $100 million with decent success, the need to cap budgets would only apply to the biggest teams.

A car manufacturer might baulk at paying $200 million for an F1 programme, but if a moderately successful programme generated $120 million in guaranteed prize money, one can imagine the decision being rather easier for the auto industry executives involved. And one must add that these numbers are percentages based on the money the sport generates and with everyone working together and new revenues being generated, the numbers will definitely rise. So too will sponsorship if the sport moves away from pay-TV in markets that will not support it.

At the moment, the manufacturers who do not want to pay for F1 go elsewhere in the sport. This generally costs less – but achieves less as well. At the moment the fashionable place to be is Formula E, which costs very little, has environmental credibility and goes into urban areas. The fact that it gives little back in terms of publicity and prize money does not matter at the moment, but it will do when the costs start to rise, which they inevitably will do as manufacturers are given more freedom to design their own powertrains and chassis.

Other championships have the classic boom-bust cycle with manufacturers seeing an opportunity and entering a series. This means that either one manufacturer dominates or a number battle and raise the spending levels. Usually only one can be the winner, so the others withdraw and the championship sinks back. This is seen in series like the World Touring Car Championship and the World Rally Championship. The World Endurance Championship allows for more exotic machinery and more spending, but the only race with any real promotional value is Le Mans and even this requires advertising spending to tell the world that a company has won the event.

DTM and NASCAR have the manufacturers working together to keep the regulations tight and thus spread the winning around a little bit more. By working together they all benefit, while remaining rivals on the race tracks.

In a perfect world, the spending in F1 would be limited to make the sport attractive to car companies. Manufacturers would then enter their own teams, rather than being only engine suppliers, thus guaranteeing that they have full control over their investments and making it more interesting for the fans. If the sport generates sufficient money to make the involvement entirely positive, then everyone will gain from the experience.

There was a time 15 or so years ago when it was reckoned that it was worth an automobile manufacturer being in F1 because of the halo effect that the sport had on the image of any company involved. Some believe that it is essential for there to be independent engine suppliers to provide competitive engines for any team not backed by a manufacturer, but without cost controls they cannot be competitive. At the moment F1 engines are still wildly expensive with research into the complicated hybrid technology being useful for the industry. Industry relevance is important, but not when it creates an automobile industry arms race in the sport. Car companies will be doing this research whether they are in racing or not, so the trick is to find a formula with rules that allows them to showcase their technology, without it becoming a question of who can spend the most.

At the moment the industry is still looking to hybrids and electric cars but it must be noted that of the 94 million vehicles manufactured in 2016 only four percent of them were using hybrid or electric powertrains. This is expected to rise to about 15 percent by 2023, but it will still only be a small part of the overall market. Having said that, up to now the big manufacturers have not been investing in the new technology nor marketing such cars aggressively, so the estimates may change. It makes little sense for F1 to switch away from hybrids, but it makes a great deal of sense to restrict these in order to cut costs. If that can be done, and chassis costs can also be cut back, F1 may become more attractive. It is clear that nothing is going to happen before the rules change in 2021, although discussions about the direction that this will take are now ongoing. Liberty Media is hoping that the new package will convince more manufacturers to join the fray. In order for that to happen, the rules need to change in such a way as to give everyone an equal chance to be successful.

At the moment Renault is the biggest of the manufacturer in F1. It is now the third largest car firm in the world, following its acquisition of Mitsubishi Motors last year and the fact that GM has sold its European operations to PSA Peugeot Citroen. This means that GM will likely slip to fourth in the pecking order, behind Volkswagen (10.3 million), Toyota (10.2 million) and Renault (9.9 million). Behind these four are Hyundai (7.8 million), Ford (6.3 million), Honda (4.9 million), Fiat Chrysler (4.8 million), PSA Peugeot Citroen (which should rise to around 4.3 million with its GM sales) and Suzuki (2.8 million). Of the luxury brands Mercedes sells 2.2 million, and is in a fight with BMW (2.3 million) and VW brand Audi (1.87 million), while another VW brand that might be interested is Porsche (238,000). As a comparison, super car companies Ferrari and Lamborghini currently only make 8,000 and 3,500 cars respectively, although they have far bigger margins.

There is a pretty solid case for GM and Ford to get involved in F1 to boost their global sales, while Fiat Chrysler has talked about an entry for Alfa Romeo. BMW, Audi and Porsche are obvious candidates as well.