The 2017 calendar revealed

The FIA World Council meets today and there are whispers before the official announcement of the 2017 calendar. It looks like there will again be 21 races, although I hear that Brazil may be listed as a provisional race because of ongoing financial troubles in Sao Paulo.

The word is that there will be a late start in Australia, to give the team’s maximum time to prepare the new cars. The race is slated for March 26 in Melbourne and will be followed a fortnight later by China (April 9). This will be followed by Bahrain on April 16 – Easter Day. This is a sensible back-to-back. There will be a two-week break before Russia (April 30) and then the European season will begin on May 14 in Spain, followed by Monaco on its traditional last weekend in May. There will be the same Canada-Azerbaijan back-to-back on June 11 and 18 and then the super-tough (and expensive) Austria-Britain will follow on July 2 and 9. Hungary will be on July 23 and Germany (at Hockenheim by all accounts) will take place on July 30. The usual summer break will follow.

Belgium and Italy will be back-to-back on August 27-September 3 and then there will be a two-week break before Malaysia on September 17. There will then be the same daft two week break (presumably forced upon the date-makers) before Singapore on October 1. Japan will follow a week later on October 8, with the U.S. GP on October 22 and then a Mexico-Brazil back-to-back on November 5-12. The season will finish off in Abu Dhabi on November 26.

It’s certainly not perfect, being very little different to the current calendar, but we can hope for changes in 2018 when perhaps we will see some new thinking.

Thoughts as we go back to Asia…

Ten days ago, F1 was racing in Singapore. Next weekend we will be in Malaysia and while those without ties, have stayed out in sunny places, most have trekked home to spend time with their families and will now trek out to Asia again. Staying away means a month on the road and most people just don’t want to do that. F1 is tough on families. And it doesn’t need to be, if the calendar was better planned. I accept it is not easy to fit the dates around all the variables, but to have as many stand-alone long-haul races is incomprehensible. They are expensive, draining for those who do the travel – and utterly illogical.

One hopes that the purchase of F1 will lead to a little more logic in the future.

The news that Zak Brown is to step down from his role at Chime Communications is no great surprise. Zak was clearly uncomfortable talking about a possible role in the Formula One group when I talked to him in Singapore, and I take that as a good sign because lesser men would simply have told a lie and claimed later that they had no choice. Zak didn’t tell me a lie, but nor did he answer the question – which answered the question. I think that he’ll be great in a commercial role in the Formula One group and I suspect we will see a string of new faces coming in to join him and new sponsorship deals coming through once he gets his feet under the desk. He has an amazing contact book and has an easy and convincing way with people. This is what helped him build such an impressive company  and will be of great value to the sport in the long term. We know that there are some ambitious targets that Liberty has set the group and, with the share price dependent on good performance, there is much to be done. Liberty’s Greg Maffei made the point recently that the Formula One group has 17 sponsors in an official capacity and said that Major League Baseball, by comparison, has 75. It also had dozens of marketing people, while F1 has only three. The sport also derives less than one percent of its revenues from digital activities, while having the potential with available data to do a great deal more, particularly in gaming, virtual reality and augmented reality. There is also money to be made from gambling, particularly in Asia. Liberty is planning to increase the number of races and has no apparent plans to reduce the hosting fees, but it’s different approach and style may make it easier to attract government money, which really should be happening for every race, while also being willing and able to take in its own race promotion in key markets which will not support such fees, notably the United States.

One challenge will be to get more manufacturers. The technology in F1 is attractive, but the costs are huge and we see Formula E taking advantage of this fact by pulling in a string of car companies. The most recent in BMW which has just announced plans to go Formula E and WEC GT racing in 2018. Formula E is cheap as chips at the moment, while WEC is not huge but is growing and provides useful technology and the right image. F1’s lack of self-promotion of its hybrid technology has always been daft – as has the fact that it will not deliver a budget cap. F1 will have to change in the years ahead. With up to 25 races teams will need to accept more sensible calendars and less freight if it is to be flexible enough to move more quickly from race to race. There are two options: increasing the staffing levels and the spending; or making the whole thing more efficient and lugging less stuff and fewer people around the world, using more sensible ways to do things. There are lots of avenues worth exploring, such as the increased use of charters or indeed bespoke aircraft to speed things up and ultimately reduce costs. That would requires some rethinking of how the sport operates.

Nonetheless, these are exciting times for Formula 1, with the potential that the previous owners willfully squandered (or never even thought about) ready to be developed. Of course, it won’t all be plain sailing, but there are a lot of brilliant people in Formula 1 and having them work together for the common good (in a capitalist way) can only produce better results.

Times of change

Over the weekend I went to visit a former F1 journalist colleague, who retired from the scene more than a decade ago. It is always agreeable to see old friends, although the F1 timetable does not make this an easy thing to do. Nonetheless, we spent the weekend in a world of bucolic splendour, disturbed only by cocks crowing and the occasional passing of vast yellow machines, build by Ropa, which tear innocent little potatoes from the ground before they shipped off to pommes frites factories.

There was time to discuss all manner of things, from the price of fish to the future of journalism. When he was still in the F1 business, my pal decided to collect all manner of computer machinery when it came along and he now has a veritable museum of “modern” technology including, I discovered, my Tandy 200 that I first used back in the 1980s, complete with stickers from the era.This was the Model T Ford of the lap top computer, with its stunning memory of 12,000 bytes (as I recall). One could write an entire race report on it and despatch it to the office (in theory), using crocodile clips, acoustic-couplers or local telephone plug converters if you could find one. We would transmit at 300 bits per second (yes, you did read that correctly). I had forgotten that I had given him this venerable machine and it was a bizarre flashback for me. Little did we realise in that innocent age how these machines would revolutionise the industry in which we worked, make our lives far busier, and ultimately begin to kill the business.
Today, anyone and everyone can pretend be a journalist, once they have mastered the cut and paste procedures, and that means that demand for material from real F1 correspondents who are out in the field has died out and it is more and more difficult to sustain the job. This year, the Fleet Street pack of F1 reporters is being decimated because their papers can cobble something together from the Internet. One scribbler has gone already and at least three more will go at the end of the year. One, a bright youngster, is quitting to join the Foreign Office because he sees little future in being a sports reporter. If they are replaced, it will be with folk who know nothing of the sport. Specialist magazines are fading gradually away and publishers are trying to lure fans behind pay-walls, but as there are so many amateurs flooding the market with stories, there is little original content left. Everyone claims to be an expert and how does the reader know? How do newspapers know? This means that smart operators in the F1 world can play games and use the media to further their own goals, using unscrupulous wanabes who do not trouble themselves with journalistic integrity.

There is, you may have noticed, an apparently concerted attempt going on to make people think that the EU should investigate the takeover of Formula One by Liberty Media. This is a daft story because it will happen anyway, whether people want it or not. And, yes, one can argue that there are things that need fixing in the eyes of the EU because some of the goings-on in recent times, and the resulting structures of decision-making and revenue splits, are right out over the cliff edge, like Wile E. Coyote running in mid-air. But what these stories fail to understand is that, rather than being a pain that the EU wishes to avoid, F1 has now become an easy victory for the bureaucrats in Brussels. All they now need to do is to tell Liberty Media to fix the problems and the clearances will come.

It is in the interest of all concerned – even the teams – to find solutions to allow the new owners to take over the business and start working to expand its revenues. There may be a need for some slugging matches in respect of some of the bigger teams, but when all is said and done they need to be in F1 and while they might rattle their spaghetti sabres and twiddle their moustaches, they will inevitably also have to accept that there is no real alternative global method of promotion in motorsports, as the IndyCar Series and the World Endurance Championship do not get the same level of coverage as Formula 1. So, they will find deals that allow them to continue.

There was a Citi analyst report a few days ago that recommended that investors buy Liberty Media shares. This was based on analysis of the figures and investigations into the potential of the business. The conclusion was that Liberty has managed to acquire “passive stakes” in an undervalued company which it will turn into an operating businesses under its controls which will generate cash. There was a slight worry about the volatility of the team line-up, but the conclusion was that if teams disappear there will always be others to replace them. Of course, if you want to reduce the volatile nature of this side of the business, you can create budget caps that will turn each team into a profit centre rather than being a money pit. The other thing that was really interesting is that Citi believes that Chase Carey is right man to lead the company because of his understanding of the value of franchises and brands; his attention-to-detail and his aggressive approach to driving revenue growth forward. Citi admitted that it was surprised by the appointment because Carey brings “extraordinary managerial firepower to a relatively small asset”.

People in F1 always tend to think that the world ends with Formula 1 and that there is nothing beyond it, but the truth is that it isn’t that big a deal when one looks at some of the business being done today. Last year John Malone and his troops did a $78.7 billion deal to acquire Time Warner Cable, so a measly $8 billion deal is not that impressive.

It is an exciting time for the F1 world and one wonders where the sport will go in the years ahead, as new technologies and new ideas are applied.

My favourite promotional activity in motorsport at the moment is the involvement of IndyCar driver James Hinchcliffe on ABC’s ‘Dancing with the Stars’, a reality competition featuring contestants, celebrities and other people from all the walks of life with professional dance partners. This show pulls in 13 million viewers per episode, which is many times larger than the audience that IndyCar is able to draw. It will be interesting to see whether the viewing figures go up as a result…

It got me thinking, however, if Formula 1 did such things, who would be the best dancer on the F1 grid and who would wear a lurid green suit as Hinchcliffe (right) did? Have a think about it, you’ll find yourself giggling…

While I think about it, there is also a new Sidepodcast show, for those who like to listen to discussions about the F1 world. Click here to go to the broadcast, or you can read the transcript here if you so desire.

On Apple and McLaren

So, Apple apparently wants to buy McLaren, in order to get its hands on automotive technology?

Now, here is a story that sounds possible. McLaren has some spectacular automotive technology and a company like Apple might be interested to get hold of this – if the company was seriously considering going into high-end automobile manufacturing. The problem is that Apple doesn’t appear to be going in that direction any longer. For several months now, Apple has been backing away from its earlier automobile project and people who had been employed on the secret project have now begun to be laid off. The intention now is to be a technology supplier rather than a manufacturer, with software going into the cars that will transform them into connected devices. Thus automotive technology is not what is required. It is more logical to do this and wait to see how the market develops and then perhaps use the Apple cash pile to buy the best option when the products are more developed. Apple can afford to buy any small car company without even blinking, but developing its own project makes no great sense as the automobile industry is not an easy market for any newcomer.

What gives this story some credibility is that it appeared in the Financial Times in London, one of the few sources that generally operates using old-style journalistic methods, making sure that the stories are correct and not speculative. The money markets like speculation, but they don’t like it in the financial media.

“McLaren is not in discussion with Apple about any potential investment,” was McLaren’s response to the story. This seems to be fairly clear. It looks like a denial, but it does not say “is not, and never has been” in discussion, which would have been a total denial. There have been rumours of Apple around F1 for several months and it could be that McLaren and Apple were talking at some point in the past. It is no secret that for the last two and a half years Ron Dennis has been looking for someone to buy out his partners in McLaren and thus regain control of the business. But then Apple would not be the perfect partner for him because Apple doesn’t do joint ventures. They don’t need to. They are the brand and they swallow up companies and use the acquired technologies. A deal to buy McLaren would kill the McLaren brand. And it is hard to imagine Dennis letting that happen. Such a deal might see the staff staying on, but Dennis would then have only influence, rather than control. So maybe McLaren and Apple were talking but, obviously, they no longer are. And no deal is happening. The Financial Times report seems to have come from Silicon Valley sources rather than from Woking, which might make sense if there are disgruntled ex-Apple folk wandering around with nothing much to do.

The story was, in any case, somewhat confused. McLaren Technology Group does not own the McLaren Automotive car company, or at least it owns only a very small percentage. The owners of the McLaren Technology Group do control McLaren Automotive, but the ownership structure is very different – and this is significant because overall control is not always the same. Having said that, if the money is good, the partners might sell both companies to a big player like Apple.

The story says that McLaren has expertise “that ranges from automotive engineering and on-board computer systems to novel chassis materials such as carbon fibre and aluminium”. This is true, but not in the single company, although the two firms do share the very flash Apple-esque headquarters in Woking.

The McLaren Technology Group, is a racing car manufacturer and a third party technical supplier. It is involved in marketing, it applies its technologies to other industries, it has a catering business and is involved in “corporate services”. It changed its name in January 2015 in order to draw attention to its diversified interests in high-technology company, involved in industries such as oil and gas, healthcare, pharmaceuticals, aviation and financial services.

McLaren Automotive is a stand-alone company and operates as a separate operation.

According to the last available filings 50 percent of the shares in McLaren Technology Group are owned by Bahrain Mumtalakat Holding, 25 percent by TAG Group (Mansour Ojjeh) and 25 percent by Ron Dennis. There used to be an agreement that Dennis and Ojjeh always voted together, which meant that the company was 50-50 between the original partners and the Bahrainis. The role of chairman rotated between the three parties and the chairman could vote as he wanted to vote. In other words, Ojjeh could vote against Dennis if he was chairman of the meeting and the vote was 50-50. This is believed to have been what happened some years ago and the two partners fell out. Whether this affected the voting agreements is unclear. However, an alliance between Ojjeh and the Bahrainis would create a 75-25 vote against Dennis.

The car company is very different. The last official filings reveal that McLaren Technology Group owns only 3.6 percent of McLaren Automotive. Bahrain owns 57 percent, Dennis and Ojjeh 11 percent each, with the remaining 21 percent owned by others, notably Singapore’s Peter Lim. Thus is order to get all the assets a purchase would need to be two purchases.

These kind of stories rarely appear without a good reason and the word is that there is an important McLaren board meeting coming that could change the face of the company once again. Rewind a couple of years to 2014 and you will recall that Martin Whitmarsh was ousted from his role as the boss of various parts of McLaren and Ron Dennis returned in an active executive role, after several years on the sidelines. As part of that agreement, Dennis was to find a way to buy control of the firm, by acquiring the shareholdings of his partners, or at least enough to get a controlling interest. Two and a half years later, that has still not happened and the word is that the shareholders have been getting impatient. They can change that structure and may be willing to do so. The problem, of course, is that McLaren without Ron Dennis is an odd concept, although to be fair there have been many car companies in history which carried the name of someone who had been removed from the ownership.

Time will tell what it all really means, but do not expect Apple to buy McLaren any time soon – if ever.

Notebook from a lounge in Dubai

On my flight back from Singapore, there was a six-hour stopover in Dubai. This is fine. The Emirates lounges in Dubai are exceptional, although they do not compare to the Turkish Airlines lounge in Istanbul, which is amazing. The only problem in Istanbul is that you might end up with someone blowing the place up when you are sipping your Chardonnay…

The Singapore GP seemed to have a huge amount more security this year. This can be irritating, although one understands the reasons that it is a good idea. What is not a good idea is if there is bag search when you LEAVE the circuit – even if it is four in the morning.

In Singapore, of course, working at four o’clock in the morning is pretty normal. We finished GP+ magazine at about four on Monday morning. We were just about to pack our bags and head home (to the hotel) when there was a colossal tropical rain storm. We were ill-prepared to venture out and so spent the best part of an hour waiting for the rain to stop. While I was doing this, I watched out of the window and was surprised to see some of the F1 riggers who were so wet that they had given up trying to shelter. One was lying on the track, pretending to swim down the main straight. His crawl was quite good, but the butterfly was exceptional. The night before, at the same sort of time, I found myself arguing with a Singapore policeman about why he should want to search my bags as I was leaving the circuit and trying to go home. Did he think I was stealing? What was it he was trying to find in my bag? He had no answers and, like a policeman who has no answers, he simply kept repeating that it was for “security”. Outside, the F1 perimeter, in the real world, there seemed little need for security.

The F1 paddock during the weekend was a dangerous place because of the stampedes of TV crews from one place to another as they, um, chased Chase Carey about. F1’s new chairman, or Chevy Chase, as he is already nicknamed, was being squired around the paddock to meet all the big bananas of the F1 jungle, but clearly was not going to talk to the media. Still, if you don’t have anything much to say, there is some logic in not saying anything at all. There are only so many questions that one can ask and you know that, at this stage, the answers are going to be waffle because the buyers have not had the chance to work out the details of what they will be doing…

Instead of running around in pursuit of Mr Carey, I decided to give chase on the Internet and discover about the gentleman in question. To start with, his name is not Chase, but rather Charles. His father, also Charles, was the head of various associations representing food producers. I guess that would be described as a lobbyist today. Carey Jr was born in November 1953 and so will soon be 63. He studied mathematics and economics at Colgate University in upstate New York and then went on to get an MBA at Harvard Business School. Somewhere along the way, he had a car crash and suffered a nasty scar on his lip, which is why he started to sport the extravagant moustache which has become his signature. He then joined Columbia Pictures, which led to his career in the media world. He first joined Fox in 1988 but then departed the empire between 2003 and 2009 to work with John Malone, after the latter had acquired DirecTV from Murdoch. He then returned to the Murdoch fold as President of Twenty-First Century Fox, a job he held until 2015.

Liberty is clearly a clever company and this was proved in the days after the Formula One purchase. On the day of the transaction (September 7) the market
capitalization of Liberty Media was $1.817 billion. Nine days later that had shot up to $2.320 billion, which means that the business is now valued (theoretically) at $500 million more than it was 10 days ago. Given that Liberty spent $1 billion for the deal and the theoretical value of the company has increased by half of that, one can argue that the F1 purchase has actually only cost the company half of what was announced.

The best deal in F1 at the moment was highlighted by the Williams Grand Prix Holdings financial returns for the first six months of 2016. These look quite rosy with F1 producing a profit of $5.5 million, which the team explained was due to a “non-recurring sponsorship payment” which, so they say, is a $20 million deal made by the Stroll Family, in order to prepare Lance Stroll for F1 next year. He now has the points required for a super licence and his 18th birthday is coming up shortly. Between now and the end of the year he will do around 8,000 miles of testing at a string of circuits around the world, driving an unbranded 2014 Williams-Mercedes. The car, which is being set up for Stroll at each circuit by Gary Paffett, was spotted at the Hungaroring last week and this week will be in Austria. The schedule includes tracks all over the world and so one can speculate that he will be seen in action in Austin, Interlagos, Abu Dhabi, Bahrain, Malaysia and Suzuka.

With such a programme and the possibility of even more funding next year, if he races, one can imagine that Williams will name him as one of its drivers for next year, probably alongside Valtteri Bottas. While this sort of thing is not necessarily the best image for Williams, it does guarantee that the team will have money to get to through to the next financial discussions in F1 and is a better option that struggling for money with ace drivers but no budget for development.

The arrival of Liberty Media seems to have spurred a number of people to look at team ownership, as the new F1 commercial rights owners (until 2110) are expected to change the structure of their company with the possibility of franchise arrangements, share ownership for teams and a fairer share of the revenues. The signs are that Liberty will adopt a much more collaborative style to drive the sport forward commercially, rather than using the confrontational approach that we have been used to with Bernie Ecclestone.

It is clear that the management style of Carey and Ecclestone is rather different and it remains to be seen whether it is utterly incompatible. If it is, and the transaction is completed, which is likely, then it is hard to see why Ecclestone will stay on. The key point in all of this is that what is effectively a reverse takeover of Liberty Media by the Formla One group will require transparency of the kind that F1 has not seen before. With such things, it is hard to see the Strategy Group surviving, and it is hard to imagine that Ferrari and others will get their historic payments. They may get more money, in terms of shares in the business, but one cannot imagine anti-competitive funding and rule-making as being things that the US regulators will accept. Liberty has a great opportunity to create a new structure, employ new ideas and generate new revenue streams and so new leadership will inevitably follow. Chase and Ecclestone are guaranteed to stay in their roles for 30 months after the deal completes, which means around three years from now. But one can imagine Ecclestone walking away if he is not happy (it’s not like he needs the cash), but he will miss the deal-making… Chase may see this as his final job before retirement and thus the identity of his successor may be more important for F1. There have been lots of names bandied about, including Martin Whitmarsh and Stefano Domenicali (the latter who just happened to be in Singapore on Sunday) but it is not clear whether Liberty will want old hands, or whether they will look outside the F1 bubble for the future. Much will depend, I suspect, on who impresses Chase Carey in the months ahead and which names are whispered into his ear by people he grows to trust. The biggest problem he faces will probably be figuring out who he can trust…

There are lots of other things going on in terms of the driver market and changes in the F1 calendar, but there is no space in this story to go into detail. Suffice to say, one needs to be aware that there is some opposition in Singapore to the renewal of the F1 contract there (which expires next year) despite the fact that F1 loves the city and the local government loves the race. Carey will need to do some number-crunching with the mandarins of Marina Bay to find the right solution…

Watch this space.

Six hours after the race…

The Singapore Grand Prix seemed to be rather a staid affair. Nico Rosberg was ahead and there seems to be nothing that second-placed Daniel Ricciardo could do to catch him. Kimi Raikkonen had managed to sneak up to third ahead of Lewis Hamilton and the World Champion wanted to get the place back. He needed a strategy to do it. So the team decided to call him into the pits and give him some new super-soft tyres to give him a chance to get Kimi. Ferrari responded a lap later and then Red Bull decided to do the same with Ricciardo, just in case… The Australian was not going to catch Nico on speed alone, so it was worth the risk. Nico was exposed… if there was a Safety Car he’d be in trouble. The team called him in. But two corners before he arrived in the pits the radio told him to stay out. Ricciardo had done a very fast lap and Nico had lost time with traffic and a small mistake. He no longer had the margin. And so the chase was on. Rosberg on his old soft tyres, was no match for Ricciardo on his new super-softs. There were 12 laps to go and a 21-second gap. It was great stuff…

Also in GP+ this week…

– We look at the Liberty Media purchase of Formula 1
– We look at the first Singapore GP in 2008 – and the scandal that followed
– We follow IndyCar star James Hinchcliffe’s adventures in ballroom dancing
– JS wonders about the future of the Singapore GP
– DT reminds us that some people should not be listened to
– The Hack ponders a long association with Max Mosley and a whole lot more
– Plus the usual fabulous photography from Peter Nygaard in Singapore

GP+ is the fastest F1 magazine. It comes out before some of the 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 have attended more than 2,000 Grands Prix between us.

GP+ is an amazing bargain – and it is designed to be, so that fans will sign up and share the passion that we have for the sport. We don’t want to exploit you, we want you to join the fun. You get 23 issues for £32.99, covering the entire 2016 Formula 1 season.

For more information, go to www.grandprixplus.com.

En route to Singapore

It’s been a busy few days with the news of the sale of Formula One and it will be interesting to see if any of the new owners turn up in Singapore to take a look at what they have bought. And to gauge the reaction to the sale with the F1 teams.