The post-Melbourne stories have focussed on how F1 can be fixed. This, of course, assumes that it is broken, which is an interesting discussion. My view is that the sport is OK in terms of its ability to deliver messages to the world, but it is playing with fire by heading towards pay-TV only. The other point is that it needs to rethink how it deals with its followers.
Pay-TV is probably inevitable given the economics of the sports industry, but there are different ways to switch over. Going for premium pricing is not smart and cheaper bundling deals might be wiser. But the financial people don’t care about anything but short-term gain so the sport is stuck. What is also required with pay-TV is an active and integrated social media programme to attract new viewers, but F1 is still in the Neolithic Age when it comes to electronic media and – more importantly – the art of engagement. That latest Stone Age act is to switch much of the f1.com content to pay-per-view, which I fear will result in some disappointment at Princes Gate when the numbers start coming in…
The sport needs to understand how to make its fans feel loved, which assuredly it does not do at the moment. The problem, of course, is the philosophy of screwing every buck from every possible source. The suits may be happy, but the fans assuredly are not and with pay-TV now the big thing, they are truly fed up. The big teams are squared away and not troublesome because they have had some whacking great pay-offs. However, this has created a situation in which the have-nots are skating on very thin ice, not only because of the unfair distribution of prize money but also because of unsustainable engine bills. This is the primary problem in F1 today. The engine suppliers must be forced to lower their prices. This is essential for the health of the sport. The manufacturers could afford to do it, but no one has the oomph to tell them that this must be done, in case they walk away. The only people likely to quit are the losers, as the sport is too valuable for the winners. It would be useful now to have a Cosworth-like company to provide solid cost-effective power units if the big players will not play ball.
If the teams had cheaper engines, the budgetary problems would ease. The secondary step would be a different distribution of prize money, but that is not going to be an easy fight.
The other thing that would really help the sport is to become more user-friendly. The teams are struggling more than ever with tougher pass restrictions which are aimed, it seems, on driving sponsors into VIP hospitality. But the actual result seems to be that more sponsors are responding by having off-car deals and hosting their own events away from the Grands Prix, which allows them freedom to do what they want to do, which is not the case at races.
In terms of spending, the teams have pretty basic fixed costs, which can be reduced with some gentle weeding of the regulations. If the engine problem is gone the budgets are much more manageable. The big teams spend vast amounts on research and development in technology that has no great value outside F1. This makes no sense. The idea of banning wind tunnels is an interesting approach as it would put the emphasis on CFD and better simulation tools, which might be more useful technology as it can be applied in other fields beyond racing.
The decision-making structures as they are today make it hard to get anything done but there are still some questions about whether it not the current arrangements are in line with competition rules. It would be good for this to be sorted out quickly. In truth, it would have been much smarter for the racing authorities to have asked about the arrangements before they were put in place and then all would be clear. As they chose not do this, then they must face any challenges if they come. That will make it harder for the finance people to sell the business but that might be a good thing. There may be worse jackals out there…