At 67 years of age, Luca Montezemolo is “old school” F1, his involvement in the sport dating back to the early 1970s, when Enzo Ferrari took a shine to the youngster and put him in charge of his Formula 1 operation. There was an upturn in the team’s fortunes, with Niki Lauda as the lead driver. Montezemolo then floated off into other Fiat enterprises – leading an Italian America’s Cup project and overseeing the 1990 soccer World Cup. He then returned to Ferrari to revive the team a second time, which led to Michael Schumacher’s successes at the turn of the century. This in turn led to Montezemolo being elevated to the leading role in the Fiat empire, and to become the head of Confindustria, the employers’ federation in Italy. A failed political career led to another full time return to Ferrari, but last year he was ousted by Sergio Marchionne, obviously supported by the Fiat-owning Agnelli Family, albeit with a golden parachute of Dantesque proportions. He has since become not only the chairman of Alitalia, but also a non-executive director of the Formula One group.
In an interview published today in the German magazine Manager Montezemolo has joined in the calls for something to be done for the sport, following on from similar comments made about F1 by Max Mosley, the 75-year-old former FIA President. Mosley attacked the non-role being played by the FIA, which seems to be focussed on other matters. There is a school of thought that suggests that it would be better for everyone to support the soon-to-be 70-year-old Jean Todt’s desire to become a big cheese in international road safety, as this would mean he would depart the FIA and no longer have time to do whatever he is doing. The federation could use someone with a little more vim and vigour in relation to Formula 1, which – lest we forget – is the primary source of all FIA revenues.
Montezemolo has now zeroed in on CVC Capital Partners, the private equity group that controls the Formula One group. He has supported Bernie Ecclestone (no surprise there) but has made it very clear that he believes F1 needs some serious care and attention from CVC – and if they don’t want to invest, they should sell up and leave.
This is not an unusual view in the F1 world where CVC is viewed as an opportunistic bunch which Ecclestone allowed into the sport, which has since sucked every possible penny out of the business, loading it with debt and not putting anything back in. CVC’s co-chairman Donald Mackenzie argues that the company has added value to the business, and that F1 people do not understand, but you would be hard-pressed to find anyone in F1 who thinks that the current trends are positive.
“They must decide now: do we want to sell or not?” Montezemolo says. “If they do not, they must change their business philosophy and finally invest in the sport. They must set clear priorities, and they need to engage a management team that is fully focused on those new objectives.” This does not mean Bernie has to go, but rather that the 84-year-old needs “top people and experts for finance, marketing and the digital world.” Montezemolo said that the priority of the sport should be to slash costs for the struggling teams and to find a way to push up race attendance and TV viewing figures. It is all rather sensible, compared to his ill-considered rants last year about engines and “taxi racing”, which did much to damage his reputation.
CVC does not have to listen to anyone (and is probably arrogant enough not to), but when a non-executive director comes after the company, in public, it is a sign that things must be getting serious. CVC has pretty much let Ecclestone do as he wishes and accepted all manner of things that one would not have expected a private equity company to accept in relation to its employees, notably the messy legal actions in Britain and Germany. The conclusion therefore has been that either CVC cannot remove him, or does not want to take a risk of trying to run F1 without him.
It is worth noting, by the way, that Mackenzie, one of the remaining founders of the business, which was spun off from the Citigroup in 1993 in order to free the venture capital operations from US banking regulations, is a mere stripling compared to other F1 figures, but that he recently turned 58. The last two of the founders to retire (Michael Smith and Hardy McLain) both went in their 60th years in 2013 and 2012 respectively, which means that Mackenzie will probably be on the move soon after he hits 60 in March 2017 – less than two years away.
One wonders whether the F1 shares will be sold before that happens or whether his successor (whoever that may be) will be as in the thrall of Ecclestone as Mackenzie has been.
US media mogul John Malone was interested in buying the Formula One shares last year, but CVC asked too much money and Malone went off and bought a chunk of Formula E instead. He may still be interested in F1, but only at the right price…