Once upon a time there was a fabled fabler called Aesop. He was a wise fellow who told funny stories to teach people the ways of the world and to stop them making mistakes in life. One story he told was about a boy – let’s call him Bernie – who lived in a village filled with shepherds. Near the village were the pastures where the sheep lived and the villagers took turns to guard them at night, lest wolves come and eat the animals. When Bernie was old enough he too began to mount guard. The problem was that he was soon bored and thought it would be fun to climb a tree and yell “Wolf!”, so that people would remember he was there. Instantly the villagers woke up and appeared, armed with forks and axes, ready to defend their sheep. All they found was Bernie, laughing at his joke. Although he was punished, he did it again a few weeks later because he got bored. After that he wasn’t allowed to look after the sheep as much as before, because the villagers didn’t trust him in the same way. But one afternoon there was no one else available and so they sent him out again. He noticed the sheep getting edgy and decided to climb a tree to see what was happening. He looked down and saw a wolf. He started shouting “Wolf! Wolf!”, but down in the village, they heard the shouts and shook their heads. “Bloody Bernie again. That boy needs to be the centre of attention all the time.” No one went to help.
It wasn’t until later that someone climbed the hill and found the sheep slaughtered and Bernie hiding in a tree. Finally he had learned that if you always say things that don’t come true people stop believing you – and when you really need them to believe you, they won’t.
So F1 is going to Vegas, Ferrari will pull out of F1, there are problems in Singapore, Brazil, Canada and Germany, we need shorter races, we need new rules, F1 is rubbish, I wouldn’t buy tickets to go to a race…
Who can say what we should believe?
Hope there aren’t too many wolves about…
joeblogsf1 
Ferrari is not planning to pull out of F1. However, for the first time in Ferrari S.p.A’s history it is run by a man who would be willing to do so if he came to believe it were in the long term economic interests of shareholders.
Sure, but how would it advertise its products for free…
Pretty certain spending $400 million a year on F1 isn’t free. Certainly I doubt shareholders would consider it so.
They get it all back
Matt,
I believe (mostly from intel presented by Joe over the years) that the way the funding is allocated, Ferrari are able to run their race team at a profit.
So all the publicity is therefore, effectively, free marketing.
Multiple car magazine TV shows seem to do it remarkably well. Ferrari will always be synonymous with top performance cars and the display of wealth.
Ferrai can switch to WEC… The championship is popular these days and if Ferrari will be there, it will become more popular
No-one watches WEC. The TV viewing figures are nothing compared to F1. It makes no sense.
Probably I am wrong, Joe. You are right saying that TV viewing figures (and number of “contacts” more broadly speaking) of WEC are nothing compared to F1. These big number are essentials for FMCG (products – or services – aimed at a large generic public) but they may not be that important for such a specific product as a very expensive car. That’s why many luxury brands advertise with golf or sailing. Pulling out of F1 would be very dangerous for Ferrari too. Also I do not see them firing a few hundreds people in Maranello just because they decide to close down the F1 activity (with a positive return on investment), and to replace it with a less people + capital intensive form of advertising (WEC)
@Joe Saward @Piero re WEC Ferrari
WEC is only five years into a new format that is still evolving. The ‘split’ between ACO/FIA and SRO is unhelpful. Publicity and marketing is almost non existent for anything other than Le Mans. However things are changing for next season. Eurosport takes over European broadcast rights, instead of the current mess. Slowly, the old guard, who find commercialisation and promotion distatsteful, are being removed. An ELMS blue blazer who suggested that endurance racing of any sort was organised for competitors and not spectators, was dispatched rapidly. Whilst LMP1 needs sorting, the other categories are booming. Car manufacturers are making money from their customer programs, and more importantly, gaining publicity in the vehicle sector that they want to promote. Remember that motor racing started out to prove that cars were reliable over the long distance, and not just fast. I am still interested in F1, but I can’t help but wonder what it would look like if Bernie Ecclestone had applied himself to endurance racing. Would F1 even exist today?
I watch WEC, however admittedly not from lights to flag. A big issue I have with it is that the commentary is dire and they generally haven’t a clue what’s happening outside factory LMP1 and even then they not too hot on what’s happening out front even.
For me Ferrari was mythical as a child and that was driven by my era of the 312’s. To me Ferrari still means the ultimate superstar and all the rest are interlopers that are called this or that but have a sub contracted engine etc. Ferrari is a real Ferrari as the sub contract elements rely on Ferrari to survive. Why does it mean this? Because of Formula 1. If I was in the market for a superstar ever there would only be one, and it would be Red and from Maranello. If they left Formula 1 it would make no difference to me, but that mystical magic that drew me to them, along with Niki, Clay, Gilles and Jody would be gone to snare the next generation.
F1 is not an advertisement for Ferrari’s brand, and certainly not their “products” (I’ve never seen one of their road cars promoted during a race). If it was, they wouldn’t be increasing production, they would be shutting down assembly lines. Or do you think high net worth individuals and schoolboys alike look at the crimson cars running fifth and sixth alongside the likes of Force India every weekend, year after year, and think “Wow, what a great car company! That really makes me want to buy a 488!”?
Ferrari is one of the world’s very few self-sustaining brands, and they are selling more and more products simply because they are making some of the most beautiful and desirable cars ever designed. F1 needs Ferrari much, much more than Ferrari needs F1. And everyone knows it – even this lifelong, dyed-in-the-wool McLaren fan. That’s why they can race every weekend off the podium and get away without any harm to their image.
Ferrari without F1 is Ferrari. But F1 without Ferrari? That, as any schoolboy or racing fan outside of the F1 bubble will tell you, is not F1.
Of course it is. Show me Ferrari advertising apart from F1…
In the early days Ferrari sold cars so that they could go racing and the cars that were raced on Sunday were sold on Monday but today Ferrari don’t need F1 to sell cars anymore than Lamborghini or Porsche do. If they announced at the end of the season that it was their last it would not affect a single car sale.
Lamborghini / Bugatti / Aston Martin / Pagani / even Ford / VW / Toyota / FIAT & plenty of other car marques are not involved in F1 but still sell cars without problem. Yes the large manufacturers advertise, maybe not £400 million a year…but i’ve never seen ads for Lambo or Bugatti /Pagani although back in the 1970’s a do recall one or two for Aston Martin.
F1 does not cost $400 million a year.
+1 – veblen goods are not affected by brand exposure in the same way as standard commodities. When was the last time Lambo, Bugatti, Maserati or Pagani actively advertised their products.
Having said this, Ferrari is more a licensing company than an automotive one – it would not be surprising if their activities other than racing and car making make up a significant proportion of overall revenues. You can now find Ferrari stores selling notebooks, bicycles, perfume, jewellery, clothing and everything over piece of tat under the sun.
The issue here is that all these non-core products dilute the value of the brand – much like when clothing companies such as Burberry and Hackett became fashionable among the lad/ladette brigade a few years back. Its the wrong type of exposure.
So the issue is not how would Ferrari advertise its product without F1, but why they feel they HAVE to in the first place? For a veblen good, this is most peculiar and raises further questions.
F1 isn’t free in many respects Joe including a TV paywall.
I have several friends with red cars who haven’t a clue what F1 is. I agree that over the long term, pulling out of F1 could well damage Ferrari, but in the time horizon of interest to the shareholders, do you think it would concern them or hurt sales? Genuine question, not rhetorical.
The argument here is at very worst, Ferrari break even on F1. As Joe points out, it’s free advertising. Now calculate how many minutes of air time Ferrari gets as exposure every year. Race exposure. Qualifying exposure. Interviews. Specials. This alone is worth hundreds of millions of dollars every year to Ferrari and they get it 100% free. Now ad that to the monitory return Ferrari gets annually, which fully covers all of their expenses. In short, Ferrari have a very return in F1 and on paper they are entrenched in the black. The thought never enters their mind of leaving F1.
“let’s call him Bernie” Ha ha ha. You could have kept us guessing for longer Joe! What about Ernie, or Herbie?
It’s possible the boy Bernie was misunderstood. He meant to shout Wolff, as in Toto, because he saw him hiding from FOM in a little bush. We all know how witty Toto is. He shouted one of his jokes back at the boy and that explains the laughter.
Not F1 but related to the story & a lovely comedy clip if you’ve not heard it – https://youtu.be/66SQKEf7UIs
Are the Singapore threats real? I had a similar thought (crying wolf) in relation to this but who can tell when the source is BCE
A little bit off topic, but this photo http://imgur.com/IJ0GQlV vividly shows what’s wrong with F1. The left photo is Malaysia 2016, the right is the same turn in 2001. Credit to a post on F1fanatic by F1alex.
That does not show what’s wrong. There being no people is not the problem, it’s a symptom.
Surely by now those who negotiate with Bernie know how he operates and would learn to ignore these cries of “wolf”. Yes, he can ratchet up the pressure by getting media types to publish his scare stories but it would seem any negotiator worth his salt would easily fend this nonsense off.
yup
Wait… so am I a sheep, or a villager?
And F1 should have two races per weekend because the attention span of the audience is too short these days.
Sorry, what did you say this thread is about?
One could infer from your courage that B is on the way out, thus there will be no sanctions against critics.
The more he makes statements (sometimes absurd), the more people talk about F1 😉
Also brings to mind Gerald Ratner….
I can’t help but think of this story from 60 years ago.
“…Nikita Khrushchev, the Soviet Party Chief, accused Josef Stalin of massacre, torture of children, and a personal reign of terror, in a sensational speech behind closed doors at the 1956 party congress.
Somebody had stood up while Khrushchev was listing the torture systems and the murderings that had gone on and shouted well if he was so bad, why didn’t you get rid of him? And Khrushchev stopped and said, Who said that? And there was silence in the hall. So he repeated himself. Who said that? And there was still silence, and he said, Well, now you understand why we didn’t do anything…”
Well, we know there’s a couple of Wolff’s around the paddock…
Brilliantly done. Thanks. But F1 should not be a joke and Bernie’s need to be controversial and in the spotlight along with his often ludicrous pronouncements are regularly making it so.
He is an employee. A CEO where the buck stops. He should be fired.
It’s not so much ‘crying wolf’, but more smoke and mirrors with the odd confusion grenade thrown in, something of which he is a Grand Master!
An interview Eddie Jordan had with Bernie, sometime last year at FOM HQ, is an interesting set design. A quick search online and you will see some curious artefacts and props carefully place around the room.
“Who can say what we should believe?”
Well, for a start — the man who believes he built the business of this sport over 35 years isn’t about to blithely turn the keys over to these American interlopers without first trying to scuttle their takeover, hopeful that he can reduce their participation to that of a passive,minority interest.
We can believe anything that furthers the goal can and probably will happen.
does this mindset affect even the inner circles? i mean, at least from what i hear it seems contracts in f1 are as good as used toilet paper.
Liberty radio: “There is a white elephant in the room, I’m not joking”.
In many ways Bernie is the living embodiment of the current state of F1 – and that’s not a compliment.
I’m was really hoping (but not expecting) for a “we’ve captured the dictator” paddock feeding frenzy on Bernie once the Liberty deal became official. This is not how sporting leagues with over a billion dollars in turnover are run. When it’s all said and done, he still acts like a used car salesman. His behavior would never be tolerated anywhere else. I like Nico Rosberg, but when Bernie said Nico doesn’t do anything (like Hamilton) to promote F1, Nico’s reply should have been “My job is to drive the car, you’re the commercial rights holder, it’s your job to market the sport, something which you don’t spend a Euro on. The only person here not doing their job is you.”
I think Bernie is running out of “Greater Fools” to sell F1 to. Liberty is probably the greatest fool.
Somehow, at his age, I don’t think he cares that much anymore. It’s not contempt exactly but he fundamentally understands who he’s dealing with. As does Liberty.
Alternate take:-
The sheep got pretty pissed off with that ‘cry-wolf’ lark as well and managed to find a village with legit shepherds who not only protected them but gave them luxuriant pastures to graze on. Their original home went rapidly into terminal decline.
So are Liberty laughing, ignoring or shaking their heads.
BINGO, Joe, bingo.
Well Bernie seems to be smarter because he is always making up new and different lies. Also he tells different lies to different people. Last, and not least, he mostly pays people he is lying to…
…with their own money and below the current rate.
That’s the perfect definition of genius.. as he is doing that since nearly 40yrs…
WTF Joe ??
as I always said, once MR E is gone most of formula one problems will follow him out the door.
Love this! And totally agree. Bernie has little credibility left…