There is much talk at the moment in F1 circles about what the sport has to do when the moment comes (whenever that may be) to replace Bernie Ecclestone, now 85 years of age. Bernie does not want to be replaced and would like to go on running the F1 business, but big wheels are turning and it may be necessary for a change in order for the Formula One group (the holdings of Delta Topco) to be sold, particularly as in recent times the decision-making process of F1 has been a log-jam with no-one able to break through. It has become a world of compromise and that is not good for the sport.
There is, of course, a natural sense of security in inertia, and a fondness for Ecclestone’s idiosyncratic ways, but more and more people are saying (off the record, of course) that things need to change. Some find it difficult to imagine an F1 without Bernie, but the Ford Motor Company survives without Henry Ford, Walt Disney was replaced by men just as clever, and so on and so forth. Some in F1 also have the rather blinkered belief that the sport cannot be run by anyone who does not know the ins and outs of engine tokens and who does not know who hates whom and why. Others see a complete change in attitude as being a much better way to shake F1 out of its current way of thinking, so that it can become a more functional international business. An outsider with good advisors might be a good choice. However some of those currently in powerful positions are only there because they do what they are told to do and so may not be the best qualified to be the advisors.
To a large extent it will depend on the personality of the person chosen, just as much of F1’s current success depended (and depends) on Bernie’s many talents. Bringing in an outsider might not work if it is the wrong person. One thinks of Randy Bernard at IndyCar, who arrived from the world of Professional Bull Riders and was something of a CEO in a china shop with the old guard of motor racing. Perhaps he did not consult them enough. It is obviously a balancing act, but if the business can be developed in obvious ways, this would soon shut up the critics.
The argument that only Bernie can get engine parts through Russian customs is not really a valid one either, as the real question is not whether the boss knows the right people, but rather whether the sport should be involved in places where knowing the right people is the only way to get things done. The image of the sport is important and that requires strategic thinking. If the sport is really going to transcend politics, then it should treat national leaders with the same kind of behaviour and not have Vladimir Putin using the Russian GP as a photo opportunity, and being granted the right to do things that no-one else is allowed to do. That simply comes across as a sport that is allowing itself to be used as a propaganda tool.
Strategic thinking is more than just a question of where the sport goes, it is also about what the sport is and what is the audience that it wants. An outsider would perhaps better understand that screaming cars are not necessarily the biggest draw because the noise drives away the kind of demographic that the sport wants to have. Similarly, the location of the circuits and the facilities that they have are important. Welcoming people with better facilities and cheaper tickets is something that F1 promoters cannot currently do because they have to pay so much to get a race. The recent $400 million rebuild at Daytona highlights the fact that the audience is changing and the sport needs to adapt. Giving the sport global relevance is something that is currently ignored, but a new CEO might understand that the current F1 engines are incredibly efficient and that such development could make a huge difference in the world today. If that was promoted heavily, technology would draw in people, particularly if the action is spectacular and properly promoted on social media, which is rapidly knocking holes in TV viewing habits.
A new CEO would also likely see the value to the sport of the cinema and rather than trying to squeeze money from film-makers, would use this medium to sell the F1 message around the world. Merchandising would be dealt with properly and not in the cack-handed way it is done today. Computer gaming and virtual activity would be developed better and so on.
It is crystal clear that leaving the decision-making to the competitors is not the way to do it, because they always argue for what is best for their own interests, but dividing and conquering has always been the Ecclestone model, and it has worked well for him, and for the sport in many ways. You do not want rule by committee because F1 needs to move quickly.
It is very clear despite months of hot air being pumped into the media about buyers, that there is no-one willing to buy at the price on offer. It is too high and CVC Capital Partners cannot reduce it because of the debt and the commitments that they have made to other partners. To do otherwise would mean a loss of face in their own industry, which is a tough thing for egotistical financiers to be able to accept.
The people who are interested in buying the sport (there are some) might, however, pay the price being asked if the whole thing is functioning properly and I believe that they have told CVC Capital Partners that they will take the plunge if things are changed. Paying all the money and then having to sort out the mess is not an attractive option. However, like a house that needs a little redecoration, it might be worth the price tag if the plumbing works properly and the window sills are painted.
This is only really a sound business practice. All of those who are currently quibbling would be better off if there was a new governance structure and new commercial ideas. The car manufacturers don’t want to run the sport, they just want to use it to sell their products. The small teams want better business models and the race promoters want to be able to survive. Governments can help and perhaps more would if things changed.
The key to the problem is to figure out who is the right person to do this complex job and whether they need to have motorsport qualifications. If that is deemed to be important, one might look to someone like Lesa France Kennedy (54), the chief executive officer of the International Speedway Corporation and a member of the board of directors of NASCAR. She’s smart and has great experience and there is no reason why F1 and NASCAR cannot work more closely to achieve their different goals. There are other smart people who have passed through F1 and have learned without sticking around. One thinks of an Adam Parr or a Marco Mattiacci, both of whom showed that they were smart and had vision when they were involved in the sport.
Car industry executives are people with big global vision but most would see F1 only as a retirement job and the sport probably needs someone more dynamic than a retiree.
If one looks beyond the immediate sport, the question is really whether this is a marketing job or whether it should be viewed as being in the mass media and entertainment sector. If marketing people are what is required then there are some very good people, including Sir Martin Sorrell, the advertising mogul, who is someone who knows the sport well as he has been on the Formula One board for the last few years. The trouble is that he is 71. There is no shortage of folk in their forties and fifties in the advertising industry who might be lured into the role. Plucking names out of the sky, one might imagine that it might be an attractive job for Robert Senior, the 51-year-old boss of Saatchi & Saatchi, an advisor to the Association of Tennis Professionals. There is also France’s Arthur Sadoun (44), a rising star at Publicis, although he has his eyes on the top job there. There is even Tamara Ingram, the new CEO of J Walter Thompson, who is celebrated for her team-building abilities. There are many others as well.
If it is mass media and entertainment, the best place to look would be in a firm such as the Walt Disney Company which has a raft of executives who understand the business on a global scale, one obvious choice might be Thomas Staggs, who recently quit as COO at the age of only 54.
Closer to home there is also Jean-Marc Huët, the former financial director of Unilever, who has retired and is on the Formula One board. There is also marketing man Zak Brown, who know the sport well. He is a clever and ambitious individual but perhaps he is better at commercial things rather than strategic matters. These are the kind of people who will provide potential investors with the confidence to take on the profitable mess that CVC wants to offload.
I should add that this is all largely speculation, but it something that needs to be thought about, even if one is not allowed to mention such things out loud.