A lot has happened since the last blog post. The Bahrain Grand Prix was terrific and completely debunked the politicking that Bernie Ecclestone and Luca Montezemolo were up to before the race. The new formula was not only brilliant technically but it led to a great race.
For whatever reasons, the two grandees were busy talking down the sport and saying that things needed to be changed. Perhaps they were simply testing the water to see if there would be any response from FIA President Jean Todt, who is doing a very decent impression of The Invisible Man at the moment.
When Bernie wants to put out a message he wanders into the Media Centre at a Grand Prix and very quickly he is buried beneath a pile of people. In 15 minutes he has delivered the message and departs. Luca Montezemolo is much the same but he tends to chatter only to the Italian media, allowing his message to filter through the system. Those who miss these events (if they care) look upon it as having been unlucky, or in the wrong place at the right time. Todt, on the other hand, insists on choosing a few friendly journalists and in consequence manages to alienate all those who were not invited. It is a brilliant way to make enemies and such a simple thing not to do. I understand that Jean is not good with the media, but this is why he needs to hire people who know what they are doing, and to tell him how best to get his message across. Hiring the wrong people, or people who only tell their boss what he wants to hear is always going to lead to failure.
Right now the powers-that-be in Formula 1 are on the back foot: Ecclestone has legal actions coming at him like Zulu spears at Rorke’s Drift, Montezemolo has not had any decent results from his F1 team for years and knows that the eyes of the Agnelli Family are on him. Todt could throw his weight around more as a lot of the other teams would support him if they sensed weakness in Ecclestone.
The big teams may say that they don’t want a cost cap but there is no logic in this position. They may be all right, but if there is no-one to race against, their achievements are cheapened. And let’s face it, one of the smaller things that the race in Bahrain showed us is that money is not everything. Force India and Williams were just as good as Ferrari and Red Bull Racing. Think about that for a minute. If the people funding Ferrari and Red Bull stopped and thought about it, they would realise that if the middle-ranking teams can outperform the big guns, then the money being spent on the big teams is wasted investment. It is profit cast upon the ground. And, let’s face it, the big companies are generally run by those who seek efficiency. Force India and Williams are efficient. Ferrari and Red Bull are not. Mercedes has spent so much that it is probably where it should be: a second clear of the rest. But if all the teams agree on a cost cap, then Mercedes would be embarrassed into it as well then everyone would be better off for it because F1 would be about efficiency, not just technically but also commercially.
Ferrari is red-faced right now because it gets the best deal of all the teams from Bernie Ecclestone and still cannot deliver… No wonder Montezemolo is worried.
The bottom line here is very simple. If the teams remain pits into which money is thrown, they will eventually run out of potential owners because there is no real incentive to be a team owner. They might have business plans and big egos, but paying for it all gets boring after a few years. If F1 teams made money there would be a queue of potential owners. America is full of sport billionaires who would line up to grab a team that made some cash. The key to success is to create a situation in which the team owners do not feel that they are being exploited. If they did not feel that way they would be happy. The share of the profits of F1 would no longer be an issue.
Right now, greed rules the roost: Bernie has had his slice of the pie (and a very big slice it was). He has done so much for the sport, but he will forever be remembered as the man who let the asset-strippers of CVC get a foot in the door and exploit the people who make the show. The problem is that CVC’s greed means that the sport is now laden with debt and cannot afford to pay more to the teams. Not for many years at least. And the chances are that they will get out and sell the business to the next generation of asset strippers, who will not do what is needed and put money back in and fix the sport.
The one way to break the cycle is for the FIA to act decisively if Bernie Ecclestone is found guilty on corruption charges in Germany. There has to be some kind of morality clause in the deal between the FIA and the Formula One group and if not there is an Ethics Committee at the FIA to rule on those who have brought the sport into disrepute. If the 100-year deal is declared null and void as a result of indiscretions, the only real loser will be CVC and it has already had enough money out of the sport. They are a company that takes risks and if they lose the F1 deal the risk averse will likely not fight too hard for fear of too much dirty linen, which could affect all the other investments they have… The option is for CVC to sell, but the Formula One company remains the company and if its officers have been up to no good then the deal could still be broken. And that means that buying into the business is a huge risk for any new investor.
So, Jean Todt has the power to turn the sport around without causing anyone too much pain. If he then finds a way of creating a new structure with 15 percent for the promoter and 85 percent for the teams, with all the teams getting the choice of an equal share of the money, without any special deals, all that is then required is a sensible cost cap, written into the rules. If he could do this he would have solved all the problems and then he could then go off and do all the road safety stuff he wants to do without fear. But for all this to happen, two things must occur: Ecclestone must be found guilty and Todt must then pounce and show some steel.