There are few things that create such a storm in the proverbial tea cup like the distribution of rights from Bernie Ecclestone’s Formula 1 mega-empire. There have certainly been some that stirred the emotions of the British public in the sport’s history but the Beeb’s fraternising with the enemy has caused more commotion than ever before…at least on this little island.

I feel the need to preface this blog with a disclaimer that I have been a fan of the BBC’s coverage over the past few years. The entire team has covered the sport from all angles and has given the viewing public the chance to experience the season across pretty much every platform available. Perhaps the on-the-ground crew seem to favour talking about the British drivers a little too much to the incredibly knowledgeable audience, most of whom are interested in the majority of teams, but maybe that’s just me.

Back to the issue at hand. Was this the right move for F1 fans in the UK? Was this the right move for F1 in the UK? Does the UK have a right to claim such an ownership of F1 that FOTA should take action?

The BBC has managed to retain the rights to broadcast F1 for a period longer than its original contract – not such a bad thing in isolation. The sharing of the rights with SKY, however, has caused so much concern among the British public because we are now being asked to pay for the right to watch an entire season. Is this fair? To our mind this is not because we pay our licence fee every year and we expect to be able to watch what the licence fee-paying public want and with audience figures through the roof in 2011 does this represent a suitable way to cut costs? I think it’s very difficult to analyse where the broadcaster could have saved money without knowing the extent of budget cuts, balance sheets and other financials that include channel costs, programme creation budgets etc.

The argument from Bernie that “This will open F1 up to a much wider audience” and “Be good for the sport” is perhaps not true. Let’s not forget that the UK isn’t the only country in the world that receives the BBC’s feed. To look at numbers and see that an average of 6 million people (to be generous to the Beeb) tune in to watch Jake, Eddie, Martin and DC chew the fat throughout the season and then reflect that just over 10 million people are signed up to SKY is not an accurate way to look at the spreading of the rights. Not all 10 million SKY customers have SKY Sports, let alone the SKY HD package.

The BBC have defended themselves by drawing parallels with their Match of the Day programme that summarises the day’s/weekend’s football action and there is certainly a case there. The viewers for that programme are, however, at around the 3 million mark and this is for a sport that is infinitely more popular than F1. Who’s to say that over 50% of the current viewer will watch the highlights?

But what about the level of coverage that SKY will give us hard-working, knowledgeable UK F1 fans? Well, who’s to say? In 1992 they delivered top flight football like we had never seen before, but let’s remember that they, along with the Premier League, produced an entirely new sporting proposition. Even if this is the first step towards purchasing the sport from CVC, they are not doing that here and will have to report within Bernie’s guidelines. We can be sure though, that some £125 million (or so) will not be wasted and the entire production will be of the highest quality.

Without question, the UK is the sport’s home but for a long time now, it hasn’t been the most important market for either the teams or the sport as a whole. Although as a fan I don’t always like to admit to it, the sport is governed by an exhaustive combination of factors including circuit fees, sponsor pressure, team pressure and national governments. Why is F1 going to America? Because so many sponsors have the USA as one of their key markets. Why is the track in Sochi being built to launch Russian F1 just months after the city holds the Winter Olympics? Because Vladimir Putin is looking to re-establish Russia as a destination and stabilise the near-10% financial growth they have experienced over the past few years. How did Sergio Perez or Pastor Maldonado get their respective feet in the doors at Sauber or Williams? An equal measurement of talent and sponsor dollars.

I think that as an audience the UK is entitled to a view and a voice, but I don’t believe it will be heard. The Concorde agreement (and Bernie’s deal with the European Commission) says that the sport should be shown on free-to-air television and this agreement honours that. As such FOTA doesn’t necessarily have a leg to stand on should it want to dispute the recent deal as the Great British public can still watch their fastest sport on the Beeb.

So in answer to my own questions above, this is certainly not the best development for F1 fans in the UK but it may just be the best compromise. We might just have to take solace in the fact that we still get to see half of the races without paying, unlike most of the world. I’m intrigued to find out if this is the best thing for F1 in the UK, especially from a sponsor’s perspective – more viewers equals more money for the teams and for F1 through Allsport (who sells circuit signage and hospitality packages).

But how about this to finish off: SKY buys into the BBC’s rights deal starting in 2012. Come the end of that year, when the Concorde Agreement reaches a sticky conclusion, SKY throws its name back in the ring for the purchase of CVC’s shares and now owns the sport. With a better financial package for the teams (because who could negotiate as successfully as Bernie with 12 warring factions?) they agree to signing the new Concorde Agreement which now allows F1 to be broadcast on pay-per-view channels. A lengthy but ultimately successful buy out from SKY. Is this the first rung of the ladder for the broadcaster?

I know I’ve been a little controversial in places here but I’d be really interested to hear your thoughts, especially now that the dust has settled a little.

Advertisements

Since the early ‘90s a heavy question mark has hung over the fastest sport in the world. The age-old question is ‘man or machine’. The toughest of criticism to even the most talented of drivers has been levied since the introduction of the numerous electronic systems intended to aid the drivers and the technological development of the sport.

2010 saw the return of Michael Schumacher to Formula One amidst a swell of emotion and excitement, however the anticipation placed upon the 41 year old’s shoulders seemed to have dented the German’s assurance. The most decorated Formula One driver in history has returned to the track in an attempt to add to his 7 World Championships, 91 victories and 154 podiums with the sport in a very different position to the way he left it in 2006.

Not content with changing the rules of the sport in an attempt to prise the world titles from him, the authorities have since made a conscious decision to remove the majority of driver aids that so helped the legendary elder statesman of the sport win his 5 titles in a row. With such a meagre return of points in his first 4 races people have asked the inevitable question: “Was it simply the car that drove him to those titles?”

Ahead of the Spanish Grand Prix in Barcelona, Mercedes GP has altered the weight distribution of their cars. Reports suggest that both Nico Rosberg and Michael Schumacher have been involved in the discussions about this and have even gone as far as to say that the redesign has been in place for two months – its publicity only hindered by the fly-away schedule of the first 4 races. Alternatively we are led to believe that this is the first sign of Schumacher asserting his garage dominance in an attempt to gain parity with his flying team-mate. Either way, Schumacher has out-qualified Rosberg for the first time this season by claiming 6th spot on the grid and has cut a notably happier figure around the paddock in doing so. His conversations before Saturday’s session painted a picture of a relieved man who could finally start to enjoy his time behind the wheel of his Formula One car again. “It now points where I want the car to point and it takes less time to get there!”, proclaimed Schumacher after finishing third in both Friday practice sessions.

Irrespective of the result on Sunday, we find ourselves asking the same question once again: “Does this mean it’s only the machine that makes him fast?”. I disagree.

It is a rare sight when man and machine work in such perfect unison that it’s hard to tell where the abilities of the driver stop and the technology of the car takes over. With Michael Schumacher and a good car, this is what you have. Throw in the magic of Ross Brawn and you have a rare mix that really can compete at the highest levels of motorsport time and time again.

The Formula One world has, in fact, seen it since Schumacher first retired with Jenson Button in 2009. Ross Brawn has already commented on the similarities of Jenson and Michael and many people drew the same technology-related questions when Button was powering his way to 6 victories in 7 races as when Michael was racing to 5 titles in a row.

In these two drivers we have men who can perform as one with their machinery. Their performances can be enhanced by mechanical and electronic devices and without the symbiosis that exists between them and their machines their abilities would be merely human.

So what, then, is the answer to the 15-year-old question of ‘man or machine’? The answer is still both – as it always has been. With the correct blend of natural ability, mechanical support and managerial guidance, however, cyborg-like performances can be found. Michael Schumacher, with the right car under him, has shown this, time and time again, turning out phenomenal performances that defied human logic or understanding. Jenson Button’s metronomic success in the first half of last season proved just that.

Just as The Terminator proved in the two (original) films, some cyborgs are more successful than others (defeating the T1000 in Terminator 2). In the films, Arnie stuck to his promise by returning to save the world. Whilst we may not have heard Schumacher utter “I’ll be back” in 2006, most people in the paddock are still confident that Formula One’s Terminator can return to save our memories of his first 15-year career in the sport.

Richard Soddy

F1 Paddock Insights

August 21, 2009

After nearly a month since the last race, the F1 drivers are strapped back in their seats and ready to hit the Valencia harbour. The teams have had to take a two week break from anything F1 related, but don’t be surprised if you see a raft of new changes – development happens very quickly in F1, it’s our job to try and keep up with it. Find out what’s happening in the paddock in sunny America’s Cup Harbour.

– When Fernando Alonso’s tyre went bouncing down the circuit to end his chances of a good finish in Hungary, the F1 world was taken back to the tragic accident that killed Henry Surtees only a week prior and the freak accident that injured Felipe in qualifying the previous day. Perhaps that is why the FIA took the accident so seriously and immediately banned them from the European GP. Crowd favourite Alonso was in disbelief and the race organisers were starting to count their ticket losses. In the end, though, it was four of the major teams in F1 who came to Renault’s rescue (Red Bull Racing, Vodafone McLaren Mercedes, Panasonic Toyota Racing and Ferrari), by submitting letters to the court in support of the French team. Either way, the Spaniard and his French team are racing in Valencia, but Nelson Piquet is not. The unsuccessful Brazilian has been dropped by the uncompromising Flavio Briatore for his lack of points this season. Then flew a tirade of abuse towards the Italian and the whole team, saying that Flav on the radio is “like listening to something my sister would say about the car. Pat Symonds is the guy who really understands what is going on with the team” and that “he makes comments that don’t make any sense”. As Romain Grosjean takes the seat still left warm by the young Brazilian, one can only hope that he has more luck than its previous inhabitant.

– There was a time where all F1 fans’ hearts were lifted prior to the Valencia GP – Michael Schumacher had climbed back into a Ferrari Formula One car with the hope of filling the injured Felipe Massa’s boots for the rest of the season. Unfortunately for the great man, the neck injury he sustained in February on his bike was too severe for his F1 racing career to get back on track and the F1 world could breathe again. No worries for the bookies – his replacement is none other than Luca Badoer…Who? I hear you ask. Luca Badoer – the man who has started more Grands Prix than any other man in F1 (48) without scoring a single point. Now that’s a replacement to a seven-time world champion who has won a record 91 Grands Prix, scored a record 1,369 points and finished on the podium 154 times. So who is Luca Badoer? He is an Italian man through and through. Born in 1971 and a graduate of the Italian karting system. He has raced for only Italian teams and is the first Italian to drive for Ferrari since 1992, when Ivan Capelli scored a total of 3 points. He has been a test driver at Ferrari since 1997 and according to his engineers has completed “over 150,000km in F1 cars since he joined Ferrari – nearly 5 times the amount covered by an F1 driver in that time”. The decision to chose him over Marc Gené, Ferrari’s other test driver is one that confuses a number of people. Luca di Montezemolo told insiders that “In agreement with Stefano Domenicali, we have therefore decided to give Luca Badoer the chance to race for the Scuderia after he has put in so many years of hard work as a test driver”. Sounds to me like he has been given the drive as they are already testing for 2010 and Luca is the best person to test the new parts.

– Felipe Massa has recently told insiders that he is expecting to be back in time for the Brazilian GP from the 16-18 October. This, given the Brazilian suffered a double-fractured skull and eye injuries as well as injuries to his brain. The comeback would be remarkable and, of course, subject to an FIA medical. Having spoken to insiders close to Felipe, they say he “is confident that he can make it back with some karting laps before the weekend.” Suspicions across the paddock suggest that Felipe’s encouraging words ahead of his home Grand Prix have been used in an attempt to bolster ticket sales as without Piquet Jr and Massa, Rubens Barrichello remains the only Brazilian interest on the grid. Even then he might be on his way out of a Brawn team that he has fallen out with on more than one occasion this year already.

– The man to watch this weekend will be Lewis Hamilton. Not only has he been tucking into pancakes, care of his Pussy Cat Doll, in LA but he is coming to the Harbour circuit off the back of his first victory all season. He promised his fans one when the MP4-24 was a second off the pace in Australia, but few believed it was possible. Speaking to McLaren engineers in their Woking factory, it seems that the two week break came at just the wrong moment this season. They have been working “19 hour days, 6 days a week” to get the car up to speed and the break in August could “potentially de-rail their plans to take another victory in Valencia”. It’s not only the engineers under pressure at McLaren at the moment, though, as Heikki Kovalainen is fighting to retain his seat into 2010. With Nico Rosberg apparently “ready to relish the opportunity to drive for McLaren”. He added that he “would like a competitive team mate, that’s for sure” – is he saying that Kazuki Nakajima isn’t doing well this season?!

– And finally, with Luca Badoer returning to race in F1 for the first time since Japan 1999, I tried to think of anyone who had made a comeback after so long. The only man that beats Luca’s 9 years and 10 months is Jan Lammers, who retired in 1982 and returned a full 10 years and 3 months later at the 1992 Japanese GP. Lammers failed to finish that race, by the way…

After 4 more weeks of off-track news, F1 finally returns to the tarmac. Expect Valencia to be hot, tight and close, with at least half the grid looking to take podium finishes. With only a week to wait until the next round in Spa, the next fortnight could make big steps towards the destination of the Championship trophy. Or it could make it all the more confusing.

Enjoy the racing.

The importance of the business of F1 has grown in the previous few years and has reached a certain level of fever pitch since 2008, where every conversation seems to be about income generation and value for money. Despite the disintegration of Super Aguri and the credit crunch in 2008, the total spend on on-car sponsorship peaked at almost US$837m, a rise of US$5m on 2007 (source: Formula Money 2008). Although not significant, it shows that sponsors were willing to justify the astronomical spend in F1.

Now that the credit crunch has set in and a number of high profile sponsors have pulled away from the sport – RBS and ING to name a couple – it will be interesting to see the eventual level of investment in F1 in 2009. One question that has risen in prominence is the level of activation around F1 and its associated success, especially focusing on brand loyalty and resultant income generation – a way of justifying sponsorship spend to stakeholders.

Having looked into studies carried out over a period of 14 years, it can be seen that 72% of NASCAR fans reported that they would ‘almost always’ or ‘frequently’ choose the brand/product associated with their team/sport (Performance Research). At the RAC British Grand Prix in 2000, it was the opposite, where almost 40% of fans insisted that they would ‘almost never’ choose the sponsor’s product ahead of a competitor (Performance Research).

As an example, the RAC British Grand Prix in 1999 was Damon Hill’s last and as such the crowds flocked to see the retiring driver in his last appearance before quitting F1. Benson and Hedges was a major F1 sponsor at the time and took to the Grand Prix stands, handing out a huge number of free goodies, offering Grand Prix simulators and temporary tattoos! The free recall of F1 sponsors onsite resulted in 83% of fans recalling Benson and Hedges (advertising at the time as “Buzzin’ Hornets”), with Marlboro and West at least 35% below.

Performance Research reported a dramatic decrease the following year, back down to 39% of fans able to name B&H as a F1 sponsor. So why did the onsite activation work for B&H and can this be translated to other sponsors?

The onsite fan engagement was honest and open –a simple brand awareness programme that transparently made F1 fans aware of the company’s presence in F1. There were no figures on whether this then increased brand loyalty or boosted sales, but we can deduce (from 29% of F1 fans saying they would be more likely to select the brand associated with their sport) that there would have been a short-term increase in revenue.

I believe that fans are still open to onsite sponsor activation, but are more receptive to non-cynical communications where they are encouraged to learn more at their own pace. For companies that are trying to promote their brand messages through their sponsorship of F1 the task is harder as fan engagement is necessary to allow empathy and understanding of the brand.

We can see from this example that onsite activation can work and would probably have greater merit if the campaign was extended to include a number of races, different markets and continuous campaign theme.

F1 Paddock Insights

July 24, 2009

As the Formula One season briefly settles back into its fortnightly cycle, the ten teams, global media and VIPs make their way over to the Hungaroring circuit just outside Budapest’s eastern ring road. One of the oldest circuits on the calendar, it held its first race here in 1936, only to wait 50 years before the zenith of motorsport lapped the track once more. Here what’s happening in the paddock at the historic Hungaroring:

As if the legal war between the FIA and FOTA has not dragged Formula One through enough of a public quagmire, poor old Sebastian Bourdais has joined in on the action. Having recently been booted out by Scuderia Toro Rosso for not delivering on the track, the French driver is considering taking his former employers to court for wrongful dismissal. Adding fuel to the already freely-burning fire, STR then promptly employed young Spanish racer, Jaime Alguersari. At only 19 years of age, he will likely be the youngest driver to ever race in Formula One, with his only experience before the Friday practice in the 2009 a straight-line test this week back in Italy. The 30 year old is unsurprisingly upset about being replaced, especially by someone so young, but with only 6 points in 27 races, perhaps the team is right to turn its attention to one of the brightest stars on its Red Bull young driver programme. Felipe Massa – who himself started his Formula One career at 20 years of age – recently told insiders, “Maybe he’s an incredible talent and he will do much better than everybody thinks, but for me it’s not good for him.” Jaime Alguersari has recently defended the decision for him to compete in Formula One alongside the Formula Renault World Series simultaneously by telling critics in the paddock that “I need to do as many races as possible. I need to experience as many situations as possible. For me, for sure it would be good because it would give me more experience and of course there are no clashes with Formula One, so there is not really a reason not to do it. If it becomes an issue, then obviously we may have to reconsider.”

The on-track struggles of 2008’s most successful teams have not gone un-noticed by the world’s media, despite the roaring success of Brawn GP or Red Bull, and questions have often been asked of their commitment to improving their 2009 contenders. Stefano Domenicali recently told F1 insiders that he expects Ferrari to turn its attention to the 2010 version of its F60. Having been caught up in the nail-biting finish to 2008’s Formula One season with McLaren and, to a certain extent, BMW, all three teams are feeling the pressure this year, with a severe downturn in their performances. “We have already started some work on the new project and in the next couple of weeks we will basically move on to that to make sure we do not lose any time. Next season will be crucial and we really want to start with a different pace compared to this year.” Interesting that Domenicali and his Ferrari friends should come out with this when McLaren has recently stated that Lewis Hamilton has a greater chance of winning then before with a number of new parts to the MP4-24 coming to Hungary. Some of the team mechanics in the paddock have told me that perhaps Ferrari should look at continuing their development in 2009, either that or McLaren are so far behind that they feel they need to keep working on the car before they can consider being competitive in 2010.

With McLaren looking stronger this weekend than they have all season, are we going to see another shift of power on the Formula One grid? There’s a few conversations flying around the paddock this weekend that make me think that it’s going to be down to the drivers, rather than the cars in Hungary. With all the teams looking stronger and making the right noises, we can expect to see the Brawns back somewhere near the top (the higher temperatures with put the heat back in the their tyres and returning to the site of Jenson Button’s first ever win), Red Bull are still on a high and have a car to match the Brawns in all departments, the Ferraris have looked stronger and stronger every week with the new/last developments of 2009 working wonders for Felipe Massa in particular. A number of the chief mechanics in the paddock have told me that the team with expectant smiles on their faces is Toyota. Timo Glock claimed second place here in 2008, where a Toyota podium was more of a shock than this year and with a new rear aerodynamic package to boot, it could be the Toyotas who surprise the crowds.

And finally, it is with great sadness that we are reminded about the danger of motorsport as Henry Surtees was killed in a Formula 2 race at Brands Hatch on July 19th. After achieving his maiden podium in the race on Saturday, Surtees was involved in an incident in which a loose wheel from fellow competitor Jack Clarke’s car hit him on the head and caused him to crash on the entry to Sheene Curve. He later died of his injuries in hospital. Henry’s father, John Surtees, remains the only man to claim the World Championships on both 2 wheels and 4, winning the Formula One World Championship with Ferrari in 1964 and the Motorcycle World Champions in 350 and 500cc in 3 consecutive years from 1958-1960. Henry Surtees, at only 18 years of age was only just embarking on his career as a racing driver. His own father issued a statement that read, “Despite his young age he had shown maturity, technical understanding and speed.” He was also described as “one of the best Brits in the racing series” and will be sorely missed by everyone involved in motorsport. Our sincerest condolences are with the Surtees family and friends.

So, as we return to the summer heat of eastern Europe, keep your eyes out for a mixed field, a close race and some all-important tyre choices.

The freshly released discussions between the FIA and FOTA certainly make for interesting reading – let alone embarrassingly dirty washing, hanging out to dry. Many are saying that the Max Mosley-led FIA is now standing up against the playground bullies of FOTA and is taking a stance that the true fan of Formula One would like to be allied with. A federation that cares about its members, that cares about introducing new teams to the upper echelons of motorsport and that cares about those who ultimately pay its wages – the spectators.

FIA’s press release
The FIA does not hold back in this most recent of public slanging rounds and makes no apology for naming names throughout the entire the document. It is interesting, though, that one of the most severe accusations of the document receives only one line: “Is it about an attempt by some teams to take over the commercial rights to Formula One?”. However tangled Bernie’s web of commercial rights finds itself, I, for one, find it hard to believe that FOTA’s members are looking crowbar his business bread and butter from him. Bernie is as astute a man as you’ll find in any motorsport paddock and I’m pretty certain that he can defend himself when it comes to Formula One’s commercial rights.

The obvious accusation was again thrown into the mire, as FOTA was tarnished with the brush of trying to assume the “regulatory function” of the FIA. Everyone involved is well aware that FOTA is looking to have greater regulatory power over the future of Formula One and perhaps this shouldn’t be a decision so sniffed at by the FIA – at the very least it might lead to a greater level of team retention in the future.

Finally on the FIA’s press release, it reminds us that Mr di Montezemolo was tasked with gaining letters to confirm the inclusion of a Formula One team from all the incumbent manufacturers currently in the paddock. A fantastic idea in principle – a man with such international recognition that even the door of Fort Knox would swing open for him. It may have been a more difficult task than Max or Bernie had originally hoped, however. With the exception of FIAT, the charismatic Italian has no sway in the corridors of Honda, Renault (or even the French Senat, for that matter!) or any of the other manufacturers and asking them to commit their future to F1 at a time like this is as absurd as proposing a two tiered technical specification in F1.

It’s the FIA’s party and it can cry if it wants to
So what is the most recent release trying to do for the FIA? Is it trying to re-position itself as the stronger of the two warring factions – amplifying the voice of the people, owning up to the mistakes of the past? Or is it simply looking for other ways to win this battle?

In a churlish attempt to heap scorn on the actions of FOTA, the FIA has taken the bait and bitten. The FIA is the first to crack under the pressure of war and, in doing so, has exposed its weaknesses. The FIA takes the proud ownership of a Championship that it claims can survive without Ferrari and co., but has not yet had the confidence to rid the resistance from its embattled frontiers. It reads: “In light of the success of the FIA’s Championship, FOTA – made up of participants who come and go as it suits them – has set itself two clear objectives:”The FIA announced a provisional list of entrants for the 2010 Formula One season and included the new teams in Campos, Manor and USF1, the FOTA breakaway teams in Force India and WilliamsF1 and, remarkably, the conditional entries of, among others, Renault, Toyota and McLaren. If the FIA believe that they are standing on the higher moral ground, that they have given the teams the right to a fair negotiation and that they are simply invited guests at its not-so-expensive-anymore party, a strong decision would have been to eliminate the warring factions and focus on those teams who are willing to play the party games under the rules that the FIA want so badly.

I certainly agree with the many analysts who view this Friday as either a new dawn or an apocalyptic day in the history of Formula One, however the FIA has let its guard down. The FIA appears desperate and will try to get the teams to play its game at all costs.

The only thing for the FIA is, however, that there is no mother behind the door to boot out the unruly children. The FIA has to stand up to them. Given the current evidence, I’m not convinced that the FIA is prepared to make such critical decisions for the future of its sport.

The F1 civil war over the proposed budget cap has shaken the motorsport world in more ways than one. Not only have the incumbent teams been awoken from their extravagant slumbers, but the rest of the Formula racing world has been made aware of the opportunities that are opening at the pinnacle of motor racing.

With a total of ten teams having now submitted their entries into F1 for 2010, the grid could feasibly be made up of entirely new outfits, with the exception of Williams and Force India – two teams whose only business is Formula One and as such, their entire livelihood is dependent upon participation in the sport.

The ten teams who have submitted their cost-capped entry to Formula One for 2010 (including names like Lotus, Prodrive, Brabham, March and Lola) could make up the vast majority of a very different looking grid. With such a raft of new teams, questions remain over the funding of their participation.

If we suppose that the cap will remain at around the €45m mark, the TV revenues and prize money from FOM will cover the majority of the associated costs. What necessity then for sponsors of the participating teams? Virgin has proven this year, even without a cost cap, that smart sponsors can invest in Formula One at a relatively low cost.

Irrespective of the level of commercial investment in the sport, however, the sponsors will still demand a return on investment that can only be achieved in Formula One. I believe that the role of agencies or in-house specialists in leveraging the sponsorship properties will be amplified to achieve these results. In the same way, I think that the rights holders themselves will have to allow far greater access to their assets to generate the return that they will demand.

If this is accurate, it could completely change the way that teams and sponsors interact. Previously investment in the team directly contributed to the development of the car and would therefore form part of their overall budget. Now, with the cap in place, less of the money from sponsors can or will go on car development – even less if the plans to place a ‘value in kind’ on supply deals also goes through. As such the teams will have to justify the spend on sponsorship as simply marketing spend, thereby placing even more emphasis on the return on investment expected.

In addition to this, the role of agencies will have more emphasis on the objectives of the organisation. WilliamsF1 claimed British Leyland as a sponsor in the 1980s. A seemingly unexpected sponsor of Formula One, Williams simply understood that the company wanted to have conversations with a key figure in the Russian Transport industry – another WilliamsF1 sponsor. The conversations were had and a deal was struck between the two sponsors, WilliamsF1 giving both companies the platform to achieve their objectives.

With money at a shortage and expectations ever growing, Formula One may well be in a position to exploit its global audience better now than ever before, but only if the spend can be justified by the returns.

F1 Paddock Insights

May 6, 2009

Despite taking two weeks off, Formula One is still a hive of activity inside both the garages and law courts of the world. McLaren escaped with a slap on the wrist for their part in the lying scandal that has rocked Formula One since the opening Grand Prix of 2009, even though many people thought that the sanctions would be a great deal harsher. A suspended sentence, the firing of Dave Ryan and the expedited departure of Ron Dennis will, I think, be enough to scare McLaren into not trying to pull another stunt like that – this season, at least.

Almost like a new season – Never before has the start of the European season heralded such a breadth of technical developments to carry the hopes of the teams. The two week break has encouraged a raft of new developments across every single team. Perhaps the most eagerly anticipated development will come at the hands of Renault who teased us with their new diffuser at Bahrain. Spaniard Fernando Alonso has said this week that, “seeing the support of the fans always gives me a big boost”, couple that with “a new diffuser and floor, new wheel fairings to increase downforce and a new rear wing” and we should see a “reasonable step in performance this weekend.” Expect to see more this weekend from Ferrari, with their new, fabled double diffuser, too.

£40m enough? – The big news from the FIA in the last week has been the proposal of the £40m budget cap. The proposal has left FOTA divided, with the smaller teams delighted by the plans and the big boys now having to look at how they can seriously reduce their budgets. Even some of the satellite teams, such as Toro Rosso manage to spend upward of £60m per year. It leaves teams asking big questions of their finances and, unfortunately, now of their workforce. An F1 insider told me over the weekend that “the first thing to go will be the staff”, leaving even more people out of work, where the budget cuts had initially planned to prolong the life of teams and jobs. There are suggestions in the paddock that FOTA will respond by proposing a reduction in expenditure by 30-40%, rather than a budget cap – a good idea, but one that will not resolve the issue of new teams joining the F1 paddock.

Donington saga continues – As talked about in Bahrain’s F1 Insider, the Donington-staged British Grand Prix of 2010 could still be under threat. Donington Ventures Leisure Limited (DVLL) CEO Simon Gillett has met with the local council who had underwritten £100m for his re-development of the Donington site and the North West Leicestershire District Council has extended his grace period until the end of June. It is claimed that Gillett is yet to sign the planning agreements to detail the development of the site – necessary before any substantial backing can be put in place. Turns out he is still fighting on two fronts, too, as Tom Wheatcroft is still after his £2.47m, for which a law suit was filed two weeks ago.

Every car running McLaren? – Following the success of McLaren’s standard ECU throughout the paddock, an insider at the Woking-based technology firm are looking to implement the only truly productive Kers throughout the whole paddock next season. With limited downforce so far this season, the cars’ Kers have propelled them to the unexpected heights of 4th in Bahrain. Another potentially cost-saving measure, this could be the answer to the FIA’s Kers prayers, following the first 4 rounds of the season and less than a quarter of the field using the power booster regularly.

And finally – With the weather forecast looking mixed for this weekend, the paddock could be, once again, thrown upside down. An abrasive track surface, plus the high downforce requirements mean that tyre-life is limited around the Circuit de Catalunya. Will the rain play into the hands of the already-strong Brawns and Red Bulls or will we see yet another team leading the pack this weekend. Expect to see tight lap times, though, as most of the teams tested here in pre-season and should be on fairly familiar set-ups.

Enjoy the first European race of the season.

April 29, 2009

Decision Day Looms at Donington

Bernie Ecclestone, the man at the heart of the FIA’s crown jewel, has (yet again) thrown the British Grand Prix of 2010 in serious doubt this week. In fairness to the pint-sized powerhouse of Formula One, the troubles at the East Midlands circuit started long before Bernie got involved.

Simon Gillett, the impressive CEO of DVLL, has agreed a 150 year loan for the use of the Donington circuit from Tom Wheatcroft, the Park’s owner. However, following a string of financial complications (including the small matter of a recession) the rent bills have been lying unpaid, and most likely unopened, on Gillett’s desk since September 2008.

It clearly all got a bit too much for Wheatcroft and his son, as they reached the final straw with DVLL and commenced court proceedings for the outstanding £2.47m. So the big question is now, where does that leave the British Grand Prix? Industry insiders are mulling over a number of different options – quite which one will prove correct, only time will tell.

First, there is the (slim) option that Gillett and co. will find financial support from a third party investor – someone with a lot of money who believes in Ecclestone’s rhetoric on how the economy will benefit and companies, local and national, associated with the race will enjoy unprecedented exposure.

There is also the chance that the £2.47m won’t be paid back to Wheatcroft and Sons, leaving the Donington Park circuit a half-built, empty sand-pit languishing in the hopes and dreams of what could have been. Does Wheatcroft seriously believe this will be the most sensible option for him and his circuit? What repercussions would an empty track over Grand Prix weekend be for the future of Donington Park?

The final and most cynical option comes from the anti-Bernie camp. For years, Bernie has been forcing Formula One into the Far East or the oil-rich states of the Middle East and has long made the British Grand Prix the pariah of the Formula One calendar (much like he did with the French Grand Prix – where not enough razzmatazz caused the Magny Cours circuit’s downfall). The view from the most hard-nosed of paddock folk is that Bernie knew Donington couldn’t live up to its original pitch. If that is the case, it certainly was a timely ruse to drag the British GP away from a dilapidated, tired Silverstone only fit for club days and the odd BRDC meeting and towards a sparkling new venue on the calendar.

Bernie Ecclestone is calling for national investment in the project at Donington, as a return for the amount of income motorsport generates for the government. The House of Commons has spoken to say that motorsport is an independent entity and the government cannot be drawn into bailing out a racetrack in addition to the already nationalised banks.

So where from here for the pinnacle of British motorsport? Only time will really tell, but one thing is for sure – Tom Wheatcroft, with his crafty business nouse, his unrelenting desire to be in charge and his unwillingness to shirk away from a fight is unlikely to back down in the ensuing legal battle with Simon Gillett.

F1 Paddock Insights

April 24, 2009

Have we just seen the emergence of the new Schumacher? A consummate drive in seriously treacherous conditions guided Vettel to his second (wet weather) victory behind the wheel of an F1 car. First in Monza last year, now again in China, the 21-year old German left the field for dead. He managed his fuel behind the safety car to extend his refuelling window. Then with the extra lap he pulled out 10 seconds on teammate Mark Webber to guarantee him coming back out in front. Nice work, kid! Find out what’s happening in the paddock at Bahrain.

– Is Flav just jealous of Ross? – Flavio Briatore has attempted to mount a serious Fota mutiny against its own technical delegate, Ross Brawn. Despite the team principals supporting the reincarnation of Honda over the winter, they have now made themselves victims of their own success. First there were the quick testing times resulting in diffuser-gate. Then came two Grand Prix victories and a fresh attack on their TV money or transportation allocation as a new team in Formula One. Shouldn’t the team principals simply forget the fighting and focus on the racing – it seems like that’s what Brawn is doing!

– Experience counts – It seems as though Bahrain holds a special place in a number of Formula One drivers’ hearts. A technically difficult track and one that look likely to stay dry, Bahrain will offer some different challenges this weekend to that experienced in China. Only Ferrari, Toyota and BMW have been at Bahrain since the new regulations kicked in, so you would imagine they would have a fair idea of the set up required, but at the moment their on-track performances are anyone’s guesses. Let’s see how Ferrari’s quickest time of 1.32.102 will compare to the Toyotas and the BMWs this weekend.

– Fortune favours the brave – Following the late night garage work in China and the urgent delivery of parts to Bahrain, this weekend will provide an interesting conclusion to the first of the fly-away races. We all expect to see a host of new diffusers lined up on the grid, and with the conditions expected to be hot and sunny, word from the paddock is that this is the first glimpse we will see of how far the teams have come from Australia. Jenson Button recently told an F1 Insider that “braking from over 300kph to first gear into turn one is an amazing feeling. It is surprising to see how early people get on the brakes, so if you’re confident in your grip and corner-speed, you can really make it count.” A race engineer told me that the average corner angle for the circuit in Sakhir is 143 degrees (the F1 average is 121 degrees) so the driveability and the speed taken through the corners is going to be critical this Sunday.

– Donington in trouble already? – Donington circuits owner, Tom Wheatcroft has taken DVLL (Donington Ventures Leisure Ltd) to court over unpaid rent of £2.47m since September 2008. Simon Gillett, CEO of DVLL, took a 150-year lease and had acquired the rights for the British Formula One Grand Prix for the next ten years. Wheatcroft is a notoriously ruthless businessman and I’m certain he is not going to back down until he gets his money from Gillett.

– And finally – It turns out the Red Bull 1-2 still wasn’t the perfect weekend for the team. The Austrian (yes, Austrian) registered team, based in Milton Keynes (UK), celebrated their Constructors’ victory to the sound of the British national anthem. Helmut Marko, Red Bull Racing’s advisor, told an insider in the garage that he “was disappointed that the wrong anthem was played”. Perhaps the Chinese didn’t expect the Red Bulls to perform so well in Shanghai.

As the curtains falls on the first set of races this season, Eddie Jordan will be back in front of the BBC cameras, the sun should be shining and expect Bahrain to have prepared the Austrian national anthem. Maybe.

Enjoy the racing.