At the moment the politics of F1 are rather murky, with all manner of stories swirling about in the mist. There are stories of deals being done with Mercedes-Benz, of rival bids, of Ferrari changing sides and so on. The only thing one can say with any certainty in this matter is that at the root of it all, the discussion is about money and very few, if any, of those taking part care that much about the sport beyond the fact that they see it as a goose that lays golden eggs.
No-one seems to be satisfied with the idea of doing things is a fair and sensible manner. Ferrari thinks it is more important because it is Ferrari. That being the case, one might argue, its reward should come not from the sport, but rather from selling more merchandise to the fans.
There is a suspicion that most of those who fight these battles are doing it not because it will make them rich, but rather because all that really matters to them is the winning. The money is irrelevant. It is victory that is important.
Taking away all such thinking, what would be the perfect structure for the sport to function properly? My feeling is that the teams, as the actors in the drama, should be given 80 percent of the money. The FIA, as the owner of the sport, should get 10 percent in order to do its good works, which would include developing the sport at grass roots level around the world, in addition to such bigger campaigns such as road safety and automobilism. That would leave 10 percent for a promoter, who would put together the deals and promote the sport. Given the scale of the money involved today, that would be more than $100 million, which is money aplenty. And there is still plenty of development possible, in areas where the sport currently does little or nothing.
If the teams were getting 80 percent of the cash, broken down fairly, based on performance there would be no need for constant fighting. With sensible cost-control and budget-capping they would all have businesses that had great value and these could be bought and sold, floated or whatever. No-one would feel disadvantaged and the competition could remain on the race track.
Instead we have a god-awful mess with proposals and counter-proposals, financiers who are taking away huge sums and giving nothing to the sport. We have proven cheats writing rules for championships that are designed only to lock the sport into another generation of this sort of mess.
Is this is the right way to go in the future? Is the sport more successful with a “bad boy” reputation that means that the big family-oriented brands look elsewhere for their advertising? Studies show that when it comes to spending available money on leisure activities, the choices in the average family unit are more often than not dictated by the mother figure, or at the least they are heavily influenced by her. Their decisions are based on what they think is good for the education and the good health of their child and so a sport with a bad reputation is less likely to attract new young fans than a sport that works hard to impress the mother figures. The products she chooses to spend money on need to reflect her values…
joeblogsf1 
My understanding Joe is that the FIA currently take nothing away from the sport other than a fee for the provision of their sporting oversight activities? Is that true? If so, what opportunities are there now for them to better leverage their position through the Concorde negotiations? I realise they sold the farm a while ago, but surely a Promoter in conflict with the sanctioning body is less attractive to investors?
That is basically correct.
What promoter? Surely the Commercial Rights Holder is completely negligent as a promoter, it does little, if any, positive promotion for the teams and tracks but generates lots of poor publicity that must put off sponsors, potential sponsors, spectators and viewers. Think Bahrain, reduced Free to Air, court cases etc etc.
Here Here!!! Best thing you’ve written this year Joe.
Also , look at the North American Franchise system where the franchises are defined and owned by independent entities. There is a written code for transfer of these.
The Franchisees appoint a regulator and pay the expenses – as with promoters.
Most of the cash ends up with the Franchisees.
CVC and Ecclestone got a $1.5bn dividend last year, and we have teams trying to compete on $50m budgets. Its a joke.
The current system is broken, but the above suggestion doesn’t leave anything for the circuits that host the events. They’ve been screwed over for too long.
Also, as CART showed, if teams get control (as well as a lot of the money) things degenerate quickly due to self interest and lack of leadership.
I’d like to see something more along NASCAR lines, with a strong centre (separate from the teams) whose word is effectively law. what percentage the teams and tracks get is less of a concern as long as the structure is such that they can realisticaly make a profit and compete.
That is not always the case. Untill last year V8 supercars were 75% owned by the teams and they still have 49%. The teams have 2 full time and 2 part time board members (the seats get rotated around the teams) and it has been growing year on year for the past 15 years. This proves teams can get together and run a sport.
100% agree Joe. Whilst I like to be aware of F1 politics I’m increasingly finding this constant sqaubling over money tiresome and its going to take away from what is shaping up to be a great season.
If only the spliting of the money could be as is suggested in Joe’s blog, it would give the small and mid field teams a fighting chance but also the encouragement to move forward and try and improve their position (though I suspect most in F1 would naturally want to do this).
Also if something like this could be agreed, how wonderful would it be for the agreement to last years and years, so this constant renegotiating didn’t need to happen constantly.
Not going to hold my breath though….
All common sense points Joe, but HOW do the teams extract the ownership rights from the cut throat investors currently in charge?
Frankly I find it difficult to believe that a bright boy like Max would cede the rights for 100 years without a renegotiating position within the agreement, say every 10 years.
Not only cede, but it was his idea!
Exactly. So this bright boy must have had a good reason for doing so, maybe even millions of good reasons.
I’m trying to reconcile the news over at today’s Financial Times (ft.com) concerning the coming stock sale, and this article. I realize that auto racing is akin to a disease (“a f-ing disease” in the words of one IndyCar mechanic I talked to), but at some point you gotta ask — would any other company be able to do a good IPO without firm, settled contracts in place for its employees, vendors, etc? Is this stock offering more “disease” than sound financial investment?
I also look at two prime examples of auto racing series here in the USA that “went public”, and neither bodes well. NASCAR is now ruled by investors in New York City, a far cry from the lovable, entertaining, redneck sport of years past, and the TV/attendance/sponsorship numbers are reflecting that change. CART, of course, went from IPO to bankruptcy in 5 years.
A very interesting insight for a non-F1 specialst, though I love the idea that a mere £100mn will keep some people (who may or may not have the surname Ecclestone) satisfied. I also didn’t know about the motherly influence, which will inform my analysis of things a lot more sports wise.
A very interesting insight for a non-F1 specialist, though I love the idea that a mere £100mn will keep some people (who may or may not have the surname Ecclestone) satisfied. I also didn’t know about the motherly influence, which will inform my analysis of things a lot more sports wise.
Not enough thought about the ultimate payees, the fans.
If they made the sport more accessible to fans in general, that would be good, it’s just too expensive for most as it stands. We have more disposable income than a lot of families as our brood have left home, but so many places that we would like to go to are just too damn expensive, Silverstone being one of them.
Anything new in here Joe? http://uk.reuters.com/article/2012/05/21/uk-formulaone-ipo-idUKBRE84K0C020120521
Guess it really is all about the money, a shame really because the sport could achieve so much more with more sensible management / distribution of money.
I would say that it would be wise to make the tracks keep a bit of what they earn as well, for investments and to enable them to lower prices a bit.
I heard that the cheapest Indy 500 ticket is about USD 30, hardly comparable to the cheapest GA tickets to most F1 races!
My limited experience suggests that US sports venues have a vast array of prices, compared to the usually pretty flat price structure over here. Perhaps easier with the much higher capacities they have. Still, they won’t come down until they no longer sell out. Test cricket learned this lesson a couple of years ago and (Ashes apart) they’ve come down somewhat.
Joe,
I think you made a valid point the other day when you surmised that when all is said and done F1 will get what it deserves in regards to the final outcome of these negotiations. In all honesty I don’t think the teams deserve 80% because if they did they could have gotten it along time ago. I truly believe Bernie Ecclestone would do everything in his power to not allow a break away series and therefore all it needs is the teams to stick together, present a united front and they’ve got Bernie in a corner. However as with all things when money is involved greed and ego trample on logic kicking it to the side as it goes the way of the countless teams who have left the sport penniless and humiilated.
It doesn’t have any significance wether your Ferrari or HRT get the basics right first and foremost then scrap over the crumbs off Bernies table.
http://fernandoisfasterthanyou.blogspot.co.uk/
I don’t think young mothers are F1’s target demographic to be fair.
F1 is the chance for the dad and the son to forget what mum says for once!
Which is why F1 fans these days are all middle aged men
I’m thirty seven, I’m not… uhh, well I guess I am middle-aged. Oh, how I loathe reality sometimes.
Previous season:
Viewers by demographic:
Female – 37%
Male – 63%
Is that good?
Not sure where that figure came from but it’s above average for major sports. But hey there’s always room for improvement!
http://sports.yahoo.com/top/news?slug=ys-forbes-sports_women_watch_most_093011
One thing of interest to back up those viewing figures, is a list of the top global Brands as stated in the FT today. In the top 10 only Microsoft is there at 5.
Looking down the list, and seeing which main brands are in F1 right now, here is a quick snapshot.
12 – Vodafone
46 – Mercedes-Benz
80 – Red Bull
95 – Santander
at the top is
1 – Apple
100 – DHL
The top car Brands –
BMW – 23
Toyota – 28
Mercedes-Benz – 46
Honda – 65
Nissan – 81
VW – 96 – new to the list
This would back up Karen’s viewing figures, as to why a lot of these global brands have stayed away from F1, as they don’t hit the target market. But looking down the list, I can make a good case for about 80 of them to be in F1
67% of that female demo skew down to my diligent efforts!
one has to try, in life, you know 🙂
Nivenesque wink to the ladies . . .
Some of us are old gits.
Some are premature old gits!
I’m not middle aged yet lol! The problem with my others my age is a lot have dismissed it as processional and won’t get up at 6am to watch the Eastern races.
Joe,
I first stepped up to the spectator fence at Brands in 1955 and for many years lived and breathed F1,( I even had a weekly 1/2hr radio programme for many years in the ’70s) but everything changed on May 8th 1982, and then a month later Riccardo Paletti died right in front of me. I’ve kept the faith over the years and thank goodness I’ve had blokes like you to guide me through the morasse of modern F1.
I’m a dinosauer who loved and remembers the days when someone like Mo Nunn or Alexander Hesketh could buy a Cosworth and Hewland and become giant slayers. Modern closed shop, big money, highly rules restricted and gimmicky F1 holds little thrill for me any longer as the greed trumps everything. There is the odd fairy story that happens like Williams a week ago I’ll grant you, but it’s all too damn precious. Oh for the days when I could just walk up to a driver and have a chat or do an interview, bet you have to make an appointment with a PA nowadays, and still have a ‘minder’ sitting in the background……….
Thank goodness our sport has a rich history that we can enjoy, so I will continue to maintain my interest in F1, I will revel in innovative projects like the DeltaWing, continue to despise ‘spec series’ and pray that they pull the plug on the embarrassing SLOWtus IndyCar engine programme.
For entertainment, I will continue to go to Historic Racing events and for sheer thrill watch the local guys race their 700BHP winged sprint cars on dirt on a 1/4 mile oval turning 13 second laps and lifting the front wheels out of the turns! A whole evening or afternoon of that costs me $30!
Thank you Joe for keeping me plugged in (just!!!!). Keep on doing it right, and I hope you don’t loose your enthusiasm.
Don’t you think the opprobrium you profess for CVC and their stewardship of F1 is misplaced? After all, they didn’t hold themselves out to be something different from what they are: speculators. They didn’t present some long term strategic plan for the development and growth of F1 in order to win the bidding and then reneged on it,they simply asked how much $$$ do you want for the CRH? and then when told the price said, done deal.
Seems your fire would be more appropriately targeted at the FIA, but there is a reluctance (understandably) to take on the source of this issue, given the behavior of The Litigious One.
I don’t get your point. Just because an outfit doesn’t deny being a parasite, how does that make them immune from commentary which points out that they’re a parasite?
One unfortunate development in recent decades is the formation of the apologensia: those who justify virtually anything on the basis that profit is supposedly a sound justification for virtually anything. If one hopes to have a decent society, that kind of thinking needs to go back to where it belongs: in the bin of shame.
That last paragraph was a bit of nonsensical ramble.
Remember, at least for long time F1 watchers, half of the entertainment value of the sport if what happens off the track. It’s F1, there will always be politics and drama. And, while I agree that the teams should receive the lion’s share of the revenue, your contention that if teams did receive 80% of the revenues they would not fight over money. I’ve news for you. They’ll always fight over money, power and influence.
Regarding Ferrari, they are special and deserve more than the rest. F1 is fortunate to have such iconic names like Ferrari, McLaren and Mercedes. Each team has a personality and a culture, and without Ferrari’s sense of self-entitlement and superiority . . . well they would not be Ferrari. They’re Italians for crying out loud.
Great article as always Joe, some very interesting points raised.
Any idea, as you mentioned above, what catalyst the teams need to actually stand up and get around 80% of the revenues?
Joe
Every sympathy with your views but there is no way that greedy paws will be prized loose from F1 now. Eventually, people over-reach themselves. GP1 developing in such distinguished hands as you name will be a worthy successor to GP2 leaving existing teams and their cars out of it. That has been the way that it has been heading for years.
Being too clever by half will leave the door open for a new Super Team World Championship to be owned by the FIA for the current teams to produce cars to new criteria. The “Formula 1” title was always redolent of baby feed among those outside the sport. Many circuits are tied up in exclusive contracts but there are many more race organisers and countries that would want to join in a premier series at more realistic pricing. Put it all another way around, 50% of the money actually runs the sport. There would be a drop in the cash value of that with lower race priced event contracts but not significantly so. There would be more than enough to run the sport including an equivalent to the current FOM organisational input.
“GP 1” would quite properly retain the “commercial rights” to the F1 series and would stagger on for a season or so running what? One litre engines in a standard far-east produced chassis with audio effects. But why bother with cars at all. More back projection of Scalectrix teams on the big screens at the current tracks woulld do.
It is crucial that all decisions now taken by Bernie and whoever else contain a grain of wise thinking before that goose is a gonner. It sounds like you’re not very optimistic, Joe…
A nice quietly reflective article that speaks sea view balcony, wine cooler, good stock of Chablis 2004, perfectly warm afternoon ….I can almost smell that Mediterranean
“The FIA, as the owner of the sport,” But CVC and Bernie are the current lease holders, soon to be added to if the float, floats.
A good chunk of the income that ends up at CVC/Delta Topco is still going to be used to pay down the huge debt they renewed recently.
Any news on the confusion of the LBL shares? Does US law prevail or CVC share sale rules?
Suppose Merc buy the LBL shares or maybe Bernie already has.
On the other hand Joe, (in response to the ‘mother’ idea), F1 showcases young virile drivers and engineers and specialists, the likes of which we rarely see in any other industry (when was the last time you saw a man responsible for the design of the new Airbus actually working on the plane at the airport?).
If I was a parent (gods, no) I’d be pretty keen to get my kids interested in one way or another. Drivers may be the ‘bad boys’ but the show don’t go without the hard work of entire teams. I agree with your points on finance and the games constantly being played with the concorde agreements and so on. It’s frustrating to think about what F1 could look like without all the money being sucked out of the sport by bankers (I guess if you REALLY wanted to get your kids involved in F1 you’d send them to business/finance school, right?)
Very interesting article. During the GPWC years Montezemolo frequently spoke about the comparison with the Champions League and NBA. He used to say there is no other sport where the actual players get such a small piece of the whole cake. Would you know if there are official details about how much the football and NBA clubs take home? And also, do you think the current system of paying the teams according to points in the constructor’s championship is not fair enough? While we are at it, how would you explain to mere mortals, that the teams have been unable for so long to get more money from Bernie? My simple theory is that nobody thought Mr E would live forever!
Separately, how do you think to police the case where, e.g. Ferrari does wind tunnel tests at Pininfarina and Fiat pays for it?
Joe:
It is my hope that you will keep your message going, and that you will never tire of delivering it. It resonates with me as I believe that it resonates with many, if not most, F1 followers. One day, at the right time, the word will strike the right chord and the change will come. Then, it will be real sport: fair and honest.
Until that day, sermonize, brother. Sermonize.
This is my sort of rhetoric. How right you are, well said. These days, as a matter of principle, I do not buy caps/t-shirts whatever over-priced merchandising on offer, including Sky of course. When I started to be interested in motor sports in the ’60’s t-shirts were very often given away as freebies for free publicity. I’ve still got my ‘Gold Leaf Team Lotus’ ‘sew-on’ logo given away free with something or other in 1968.
I’ve contributed plenty over the years to enjoy my chosen sport but it’s become a one-way street.
God forbid, by the way, that the sport should reflect today’s mother figures values – from what I’ve seen that’s why the sport attracts undesirables in the first place!
Just returned from a weekend at Indy, where F1 “horror stories” still are being told. What I’ve been told — and as confirmed in the press with the CoT “Austin” F1 effort — F1’s first source of income are the taxpayers of the host country. Why wouldn’t a government, after all, resist forking over US$25 million for an F1 race? (/sarcasm).
At Indy, where they had around 100,000 fans (one of the largest in F1 I’m told) that translated into $250 per fan. I’m not sure what the average profit is on money spent in an F1 venue per fan, but $250 might be far in excess of that.
Certainly, most of Europe as well as the USA is not in the mood to subsidize more than basic, essential government services with tax money. That Bernie has gotten that money in the past is certainly interesting, but it certainly is doubtful for the future.
That basically leaves the venue to live off of gate revenues, as far as I can tell. Given the demands of F1, I’m not sure at what point the investment into an F1 facility pays off. And as we all know, a lack of profit for the promoter/site means a lack of F1 races.
A US study calculated that the positive economic impact of F1 on Indianapolis and the surrounding counties to be just over $170 million a year.
Okay, playing along with your number — just what percentage of that goes back the government that paid the fees in Bernie’s world? What is the profit margin on that $170 million for local shop keepers? Certainly IMS would never see a profit of $25 million to pay for that — which is my point. BTW, I have a tough time seeing an influx of 100,000 fans making that big of an impact, just doing the numbers here — $1700 per fan?!?! Don’t think so.
You obviously have not experienced prices at Grand Prix weekends.
It’s Economic impact, everything that costs, from beer to clean linen due to higher hotel occupancy.
It’s not just the fans that spend money, it’s the passing on of that extra money by locals who now have a bit of extra cash to splash due to the influx of out of state/country visitors.
An example of visitor spend comes from a study by the University of Malaya, which found that US$144 million in foreign exchange came directly from hosting the F1 race.
Back in the USA, Austin’s comptroller’s office estimates the positive economic benefits to the Texas economy of the F1 race will be just under $300 million, with 10% coming from sales tax alone.
I agree with Karen. The numbers are right.
Putting aside that dubious Keynesian argument (I’m not a good believer in most of what Keynes believers say, and I’m betting Keynes wouldn’t be either), my questions remain, and not even touched in these comments.
1. Where would a government go to get back it’s s$25 million? There is no way that, even if the numbers given above are true, that $25 million is returned to the tax coffers.
2. IN an era when cuts are being to welfare, medical care, etc, and people are literally rioting in the streets in response, how are the “visuals” for politicians when the give $25 million to a billionaire and a club of billionaires and multi-national companies?
My claim remains — this idea of having government pay for that sanctioning fee (and in many cases, facilities) is not sustainable in today’s political environments.
Please try to justify the Olympic Games.
Finally! Someone (Joe!) wrote what I was thinking. Which leads to the logical next question: what could/would put (either of) them out of business?
No way to justify the Olympic games. Except to note that, here in the USA, corporations pay for a good share of the tab, kinda like our auto racing here. Our current Republican Presidential candidate managed the Salt Lake City Olympics, which got US$1.3 billion in funds — but most of that was “for highways, transit systems and other capital improvements that federal and state officials assert eventually would have flowed to Salt Lake City regardless of the games, but was accelerated to accommodate them.” (factcheck.org).
If you’re talking about $25 million to build roads you’re gonna build anyway in Texas (or New Jersey) then yeah, people might actually “buy” that one. Pretty sure $25 million to Bernie isn’t in the same class, you know?
Keynes’ work has routine been used by anyone wanting government funding for their pet projects, even though Keynes himself (based on what I’ve seen in his later works) would decry that. You cannot simply call a government expenditure an “investment” and make it so. If all government spending had a multiplier effect greater than “1” then after a few years, we could have an economy where no one has to work — right?
Again, the optics of a government giving $25 to CoA, while not being able to replace 10+ year old servers for its welfare system and cutting back on other government duties (purely hypothetical, right? Not that I know first-hand) is not sustainable for F1 in the USA, and probably most of Europe.
Yeah the olympics = £10 billion, 13,000 troops on the streets, and even the olympic torch(s) are costing the tax payer £4 million.
You could have a quarter of a British GP for the cost of the olympic torch alone … And much more environmentally friendly too.
Also the FIA and FOM don’t insist on governments changing their laws so no officials can be arrested for ANY crimes, unlike the IOC.
Montreal tax payers are still paying for their olympics, and that was in 1976, whereas Raymond Bachand (Member of the National Assembly of Quebec) said, “The F1 race generates $75 million for Montreal’s economy, $16 million in sales tax alone.”
Well, Geek49203, if we take that 300 million USD made for Texas as pretty accurate, and 10% of that is sales tax, that would make a healthy 30 million in taxes, which is 20% up on the “invested” 25 million going to FOM.
Add to that the fact that Austin will get positive buzz and all people who will get work will definitely see a positive turn of their personal accounts (and property for some close to the GP site), this is really not too bad a deal.
It will provide more money to put into the things you mention (welfare, medical care …) and education as well.
As a former Austin resident (ahem), I can assure you that the Texas tax rate is nowhere near 10%. It’s 6.25% if I recall correctly. Meaning that the State will have to see $400 in taxable sales to break even.
As for the positive return on the investment for the property owners… is that why they’re already courting IndyCar for a race? (yup, they are).
Austin doesn’t need “buzz.” If Austin needs “buzz” then Austin can pay for it — and again, I don’t see that happening, even with the political climate in Austin. They will fill up every hotel in town for a lot of other events, such as Austin City Limits, 6 U-T football games, etc etc.
My point here again — I don’t see the political will in Europe and the USA to fund this stuff. Looking at today’s press on Bernie’s daughters buying up the most expensive houses in the USA, it simply won’t do to give them money.
A few wild thoughts :
1) Should a portion of F1 income be passed down into feeder series? Taking the seemingly logical stance that a lower financial entry barrier means more selection-on-merit, the standard of GP2 and then F1 drivers will rise.
2) Surely the circuit fee bubble will have to burst at some point? Sooner or later we’re going to run out of oil-kingdoms to race in aren’t we?
3) Irony check : does the fact that running an F1 team is generally a loss-making exercise actually discourage the “wrong” sort of investors (ones with no interest beyond golden-egg laying geese) as opposed to those with a genuine passion who’re prepared to frankly blow their fortunes on the loss-making rollercoaster ride of going racing? If F1 were a safe, profitable business, would we not see more CVC-style suits investing in teams and doing just as much harm to the sport?
4) Is Flav’s GP series rulebook one of the reasons for getting the F1 float done and dusted ASAP? Whilst no-one is going to actually take it seriously, all it would take is some daft posturing from some key players (looking at you, Ferrari) to rock the investor boat.
Income can’t really be passed down through the FIA anymore, (unless a work around can be found) as the EU (actually the European Commission) put a stop to that, FOM used to provide 15% of all the FIA’s income, but the EC said that these payments from FOM constituted a conflict of interest with regard to the FIA and the commercial rights, that’s why F1 now has a new contract with the FIA, and the €230 million was popped into a charitable fund so as to keep the EC’s sticky fingers off it, and the FIA out of court.
However the FIA have recently brought Rallying back under their wing, and the EC haven’t bated an eyelid, so it’s game on.
Of course, all EU action against F1 was based on abuses at the time and not on a sensible structure that might be created today.
It can’t go on forever. Soon, inevitably, Ecclestone will be gone, and with him the semblance of stability. That will be a volatile time, with potential to do enormous damage to the sport.
People have a proclivity to believe things go on forever, but it is entirely possible Formula One will be ruined, piece by piece by those with an interest far from the sport. All this talk of deals and breakaways; I don’t know how you don’t lose your mind, Joe. In each rumour there is equal potential for truth or nonsense.
80% revenue to the teams? At those numbers, why can’t he teams own the series and pay a management fee to a promoter and a tribute to the FIA?
Because it is owned by the FIA and leased to a promoter
My opinion on this is that you’re slightly over exaggerating the negatives of F1.
In reality, F1 doesn’t have a bad reputation Joe. To the few who’s business it is to follow every detail of F1 yes perhaps so, but to mothers and even to a large extent CMO’s etc don’t remember what happened in Singapore 4 years ago, know about the current concord negotiations and most certainly won’t be aware that Flavio is supposedly writing some rules for another championship or whatever. You are blowing it out of proportion unfortunately.
Plus football has players boasting of £300k weekly wages and cheating on their families and match fixing, the Olympics has drug cheats as does the Tour de France and Cricket has betting scandals…
F1 attracts its fair share of ‘big named’ sponsors that aren’t partners of other sports, ‘our’ sport unfortunately will never attract every company who has a sponsorship budget – for reasons other than mums are the ones that buy P&G products and because Mr E is a superb negotiator and businessman.
It’s almost impossible for F1 to go grassroots, motorsport is not built like that because grassroots needs to be accessible to every child in the world, at school, or at the playing field like football. And even if there was one would you really expect pampers to become a partner of McLaren or Ariel to become the Official Washing Partner of F1? No, it doesn’t fit.
F1 is regarded as high end and is something people aspire to be in or to understand. Believe it or not, not every brand wants to be portrayed in the market place as being high end or the most technologically advanced product on the market. But, F1 is built for big global companies like Microsoft or Vodafone that touch consumers of all ages in different ways and are not involved in other sports at the same level of investment.
Different horses for different courses.
(plus am I the only one that finds P&Gs olympic messaging offensive? Head and Shoulders gives Michael Phelps the confidence in his hair which allows him to win…and it’s only mothers that bring up and look after children?!)
Name the big global consumer companies such as Coca-Cola, Disney etc that are involved in F1?
The list runs out pretty quickly, doesn’t it?
You have a few telecom companies but then what?
The NASCAR roll call of sponsors makes F1 look positively club level.
FMCG companies are seemingly breaking down the door to have their name on a car there.
Indeed, even in Indycar it astounds me how teams can run totally different sponsors on two cars.
@ Mike and James:
There are hardly major companies breaking down NASCAR teams doors for sponsorships of late. Many NASCAR teams are selling partial sponsorships throughout the year; the names on the same cars seem to change frequently.
Indycars have individual sponsorships per car because no one is willing to invest the cost for sponsoring two cars.
I hate that Indycar and NASCAR run different liveries on the same team. That was one thing the FIA did right when BAR tried it.
How is that astounding? Each driver represents his/her own set of commercial partners. They each have their own pit crews, too. So, they really do look and perform as independent teams on race day.
This is one area where F1 truly missed the boat. Is there a good reason why an F1 team should not be permitted to have each of its cars branded or sponsored independently of the other (as BAR tried to do in their first season)? If anything, it would make it much easier to follow one’s driver on TV. All in favour of individuality say “Aye!”
Yeah, it’s a colourful parade on a NASCAR pit lane. But, actually, the economy sucks. For example, Roush Fenway Racing – 2011 Cup championship runner-up (by countback to number of wins!) – has shrunk from a four-car to a three-car team for 2012. And they are not fully sponsored for the season either. RFR won the 2011 Nationwide championship and have scaled back that operation, too. It’s not all doom and gloom, but they are beating the bushes for sponsors a lot more than they used to do.
For the ‘consumer’ to enjoy the sport it doesn’t mean that there has to be 100% consumer focused firms in it, consumers just need F1 to go racing 20 times a season and give entertainment one way or another. But, Mobil, GE, Shell, Petrobras, Total, Santander, Vodafone, Eni, Microsoft, Allianz, Siemens are involved in F1. All cater for the consumer one way or another but are also business facing and that list comprises of 1/5 of the top 50 companies in the world. That’s more impressive than having a fizzy drinks company involved because it also shows that the F1 politics is inconsequential too them and that F1 is where the leading companies want to be.
Having the likes of Coca-Cola or Disney in the sport would be good, my opinion isn’t different to yours on that but they’re not the be all and end all. Plus, it might not be the ‘sport’ that is the reason why they’re not involved – perhaps the right opportunity hasn’t been pushed in front of them.
The financial history of F1 is a roller-coaster containing all sorts of associations, alliances, partnerships, and wars, most of which were decidedly anti-competitive and a complete closed shop. It’s only in relatively recent years that things look all neat and nice. (as far as it can be seen from outside) But follow Gribosky backwards into the F1 history and you can see that Bernie nowadays has comparatively little power. Don’t get me wrong he still runs the show, but most of the stuff he used to have a grip on has gone. (like the rules, the money, the entrants and the competition of other series, though half the rules now seem to be hidden in the CA instead of the FIA regs )
I love the sport and the internal politics, the only thing that upsets me is the greed that is tearing the very fabric of the sport apart. Ferrari should have the lions share of the revinue because of the history, i dont buy that. It should be on the performance related, year by year so if you have not performed well in the last 10 years you get a smaller slice of the cake, just like the constructors monies. red bull should do well. im not a red bull fan, but its about fair play, but i wish they would go and race and stop bickering about who gets this and i get that….
Joe:
wouldn’t you say that ticket prices to the races are a big factor in the sport not growing faster and having an aging demographic, I mean the lack of wholesome, transparent image of F1 is a problem in making headways with the mothers but at the same time if you look at say NASCAR(I hate the series but it’s just an example). It has shady elements to it, drivers punch each other out, some of them celebrate race wins by shooting guns in the air, half of the attendees at the races are permanently drunk throughout the weekend and the safety car seems to find a reason to be deployed a few laps before the end of most races to as to bunch up the field. And yet their numbers have grown massively over the past decade or so and every race sells tens of thousands of tickets.
My point is that once a parent takes their kid to a race it is a good chance that that kid will become a fan and yet not the FIA nor CVC care that the ticket prices are sky high and most venues are left with thousands of empty seats come race day. The problems for growing F1 viewership go far beyond the image of it being a sport being run by shady people so any proper long term solution should address all aspects of the problem.
6 wheeled Tyrrell,
I enjoy your comments so please don’t take this as an untoward swipe. Ticket prices are set by the circuit in question, and yes they have an almighty task in securing an appropriate return on investment, but empty seats are partly the result of their price points, and alas is true for many other ‘top-level’ events. Personally I believe that a ‘sell-out’ contributes as much to the status of an event as the event does itself, which puts some Grands Prix on a par with County cricket. Any event can ‘sell-out’ with the right pricing formulae. The most expensive tickets at the US GP 2001 bar the paddock club, were 70 USD. The real issue is when the maximum return on capacity still falls short of the cost of goods sold.
Well, your suggested scenario makes perfect sense. And that in and of itself is the problem: you haven’t included any unfair profit or sneaky side deals for anyone. The only way such a thing could work is if one party had the power of king and could decree it. And, while you might make a fine philosopher-king, you’re not the sort who would climb over enough bodies to get there.
AFAIK, the only person who has ever had such power over F1 is Bernie. (I’ve long suspected the British affinity for, or at least tolerance of, royalty is the main reason the very Anglocentric F1 has put up with him for so long). And, as we all know, Bernie’s got the perfectly wrong set of priorities for achieving the respectable goals which underpin your suggestion. If anyone wants to know where the source of “To hell with them, what’s in it for me?” comes from, they need only look to the top. It rolls downhill from there. (Not that Enzo didnt have it too, but he just ran his own noteworthy shop, not the whole shebang.)
Joe – I think perhaps that you are a little light on your praise for the current management. The FIA did a commercial deal with Mr E. You can argue that perhaps the FIA didn’t get the best value at the time, but thats probably with the benefit of hindsight. You have to give Mr E the credit for making the sport what it is. You can’t just keep seeking to renegotiate contracts when you don’t like their terms down the track.
Sports need people with the vision to grow its revenues and seek new markets. Its hard to say whether the alternative of a non-profit style body running the sport would have taken the risks that Mr E took and pushed on with continuing to make the sport relevant. A benevolent dictator style of management can sometimes be best. I find it hard not to give Mr E the benefit of his billions given what he has achieved over his lifetime. His daughters on the other hand…
I take nothing away from Mr E. However, Disney started with a mouse and a duck, not beautiful people and fast cars in exotic locations.
Joe
Your 80-10-10 split would not solve the problem of underinvested venues and high ticket prices? (unless someone with deep pockets picks up the bill). Thought you were a fan of the NASCAR model where race organisers get their share of the pie? (the promoter getting some of it back through track ownership)
If I understand it correctly from a owner of an F1 track, the banners / billboards / posters ect, the income from those go to F1 – Bernie, not the track owners. Karen maybe able to confirm it, but that is a shed load of money that a track could use to keep ticket prices down. Yes the track owners can get in other funds from people / companies who have stalls at the track, but that is very little in the overal scheme of track side income.