What to watch out for in F1… (and it isn’t testing)

Rather than filling small districts of the endless virtual space of the modern media by rating the F1 car launches, making hopeful predictions or chasing around trying to work out why the latest social media crusade is good or bad for motor racing, I thought I would take a step back from the day-to-day grindstone to look at some big issues in the motorsport world. And they don’t relate to the latest meme, equality, Nikita Mazepin, Fernando’s jaw, electric vehicles or even F1 aerodynamic devices.

I am, of course, looking forward to seeing what the new F1 season will bring, but I am not sure that it will be very different to 2020. Yes, it’s true, the teams have been working hard on improve their machines (because painting them different colours does not traditionally make them quicker). The problem is that when you have lots of clever people all doing the same thing, one ends up with what used to be called “an arms race”, when one nation or alliance developed weapons more complex and expensive than another nation or alliance. It might have been something of value when they were building battleships 100 years ago, but once the world reached the point of mutually assured destruction (brilliantly shortened to MAD), there really isn’t a whole lot of point in spending vast sums trying to try to help us kill each other more quickly. No-one is that MAD.

And this is F1’s problem at the moment. Everyone is moving forwards all the time and to move forwards faster than another team requires more resources, more people etc. This is the genius of Racing Point in 2020. Because they recognised their restrictions and looked at how to make things go faster without spending more money and the conclusion was that they should copy the Mercedes as closely as possible, within the limit of the regulations.

And that is how they managed to get to a place where they could win a race last year.

Anyway, with the pandemic, the money supply in F1 hasn’t dried up, but let’s say that the fountains are not gushing as once they did. In that situation it was entirely correct and sensible to stop everyone spending money pointlessly and so the freeze came along. This means that while it probably won’t change a whole lot in the F1 pecking order, it will mean that talent and brains may have a bigger impact on the results in the future. And it will pump some value into the teams because there might one day be a moment at which they can all make a profit, even if they lose on the track. F1 is a formidable money-making machine, unless you are a team owner. And that doesn’t make any sense at all. It means that the sport relies on finding people who are sufficiently passionate about motor racing or want to promote themselves, their children or their businesses and are willing to spend vast sums of money doing it. Finding enough of these people when budgets are so high is quite hard, and the folk who turn up have often been just a little bit weird.

Still, it all makes for great soap opera. And the story lines are forever changing, along with the cast. People come and go, some faster than others.

I have been hearing more in recent weeks about people who want to get their hands on the 11th and 12th “franchises” for teams. It isn’t going to happen in 2022, but I keep hearing that there are at least two mega-budget operations (non-manufacturer) which want to be involved quickly. I am not sure they want to pay the $200 million that is supposed to be the money they have to pay to join in, but I struggle to see how paying your opposition to join the party isn’t some kind of cartel that restricts trade – and the dear old EU is rather keen on stopping cartels.

There will be new rules in 2025, but coming in earlier is not necessarily illogical. Renault is very keen to have more teams involved and is offering engine deals and newcomers will be in a relatively stable environment in 2023 and 2024 to get things started.

Assuming the FIA and the Formula 1 group want them to join in.

And here’s the thing. What will the FIA be after next December?

In case you don’t know, Jean Todt’s term as FIA President is coming to an end and it is time for the next generation to step up to do battle. This is the big story going on in the background in motor sport at the moment and from what I am hearing it is going to be a two-horse race between the current FIA Deputy President of Sport Graham Stoker and former rally driver Mohammed ben Sulayem, who comes from the United Arab Emirates. From what I am hearing David Richards and Alejandro Agag are not in the running and Stoker seems to have the support of Todt and the current leadership (which one might argue is a way for Todt to keep some clout after they make him a President d’Honneur, or whatever title comes along.

Ben Sulayem has long been keen on the idea of being FIA President and is playing up the concept of a more global team, while Stoker is more of the old school. It’s an interesting contest. This isn’t speculation by the way, you can read about Ben Sulayem’s plans at https://fiaformembers.com. I’ve met him a few times over the years and I’m still not quite sure what to make of him, and I have some vivid memories of him saying some quite extraordinary things after Max Mosley ran into trouble with his lady friends some time back. Others remember him for crashing an F1 Renault, while some can even recall when he was a multiple rally champion in the Middle East.

I have a better idea about the man who would become his Deputy President for Sport, Robert Reid, who is a very good man. If the name is familiar it is because he was a World Championship co-driver with the late Richard Burns. I have a huge amount of time for Robert.

Having said that, I think that Todt has done a very decent job, which was not always what I expected. He’s been a solid steady force and he has played the political game well and he has shaped F1 how it should be.

Anyway, we’ll see how things develop, but it seems that the battle lines are now drawn.

The other key story that I think is about to happen, is that Ferrari’s green sponsor may be about to walk – and that would be a real earthquake in F1 terms. I must say that I have not really understood what Philip Morris International (PMI) was gaining from the relationship in recent years once they were no longer allowed to use any hint of Marlboro, but active tobacco sponsorship is now a very long time ago. The current partnerships ends at the finish of this season and what is really odd is that no new deal has been announced.

The last Ferrari-PMI renewal was announced early in 2018 (having been agreed late in 2017). It was a three-year deal from the start of 2019 to the end of 2021, so it was all decided a long time in advance. It was also only a three-year deal, the second in a row, whereas in the older days PMI deals were for five years at a time.

If there was going to be a 2022-2024 deal, it ought to have been announced by now. Losing PMI would be a big loss for Ferrari, but I am sure that the Italian car company has sufficient clout to find a similar kind of backer from another industry. Ferrari wants to be seen as a luxury brand and so the most likely target will be from that world. I cannot say I’m an expert in this sector but I do know that before the pandemic, luxury goods firms were whizzing along, growing fast and generating daft amounts of money. They are headed (one might say, of course,) by LVMH which had revenues of $59 billion in 2019. This dropped a little during the pandemic but it is now scooting along again, with the owner Bernard Arnault reckoned to be worth an eye-watering $113 billion. The list of LVMH brands is fantastic, with the latest being Tiffany and Co., which joins Louis Vuitton, Moet et Chandon, Dom Perignon, Hennessy, Givenchy, Sephora, Fendi, Fresh,Bulgari, Christian Dior and a load of others. If I was Ferrari this is the firm I’d be chasing. The second biggest is another French firm: Kering, which might not mean much, but it is owned by the Pinault family. It’s much smaller than LVMH but that’s motivation too. And then there are Estee Lauder, Richemont, L’Oreal, Chanel and others, all churning big money.

2 thoughts on “What to watch out for in F1… (and it isn’t testing)

  1. Thanks for the insightful article.
    Kering is already present on the grid with the watch brand Girard-Perregaux on the Aston Martin.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s