Liberty Media buy F1

[Izumi]

FIA to take $120m F1 ownership stake

Most of F1 related cases were driven by Brits, however since Brexit fun came to life, who knows where those issues are (yes plural, there were at least two if not more). Probably forgotten, however someone with more patience than I have could easily find out. I do not recall reading about it again.

This is all wrong, just as when a commercial owner writes a rule book.

 

[cider_and_toast]

With regards to advertising, I can't recall seeing Mercedes advertising their cars in relation to their F1 victories. I see Hamilton advertising watches and other personal sponsorship items far more regularly.

As for Liberty, if they can't make money they'll pass it on.

 

[Izumi]

I still don't understand what value Liberty (or CVC) brings to the table to deserve a single buck from profits. It is teams and promoters who invest their money, accept risk, and work on the Event realization. There is no need for nonessentials like CVC or Liberty. If FiA would do their job, a small office (promoter) run by the teams as commercial owner could do the job, and teams could get paid better, not to say about potentially increased of new external interest to join if pay is good. Now reward for the teams is being slashed for a lot of work with workload increased from 18 to planned 25 races. Something wrong with this "business" model.

 

[Angel]

without a doubt. the man spent 40 selling & buying F1
-------------------------
the problem for liberty is still bernie legacy where he tried to the sport over the last 10yrs kf his rejgn that he spent 30yrs building. chasing the money pay tv circuit fees & trying to please the big teams to the detriment of the sport. which has also sent budgets sky high & pay drivers ate creeping in which is lowering standard of the grid

this is big tanker to turn around & its going to take time & help from participants which in F1 isnt very forthcoming. maybe liberty just realised how big

Oh I realise there was a lot to do post Bernie, I also realise the teams have tied Liberty's hands to some degree by digging their heels in over changes to the sport. I actually think it's in a worse state now than when they took over and that is sad for F1 and those of us who have loved it for so long. They came in promising so much and what difference have we really seen? A change of start time (which I don't like) and not much else.

 

[Publius Cornelius Scipio]

Didn't the European Union stop the FIA from running the commercial part of F1 due to a "conflict of interest"?

it might well have been the case, but EU law is a bit of a laugh and maybe the issue was "running the commercial part of F1", as Izumi says in his post why should there be a "commercial part of F1"? the teams have their commercial issues, so the event organisers. The FIA should just come up with the rules and a few engineers to enforce them, the rest should be left to each event organiser: they sell x number of tickets for each even, get paid y amount of money in sponsorship and on that basis come up with both prize as well as start money and the teams should base their business model on the money that they get from the events organisers and from their sponsors. TV contracts should be awarded only to free to air channels, that would make F1 a big event once again, the sponsors would be back and we would all be happy because we would have solved most potential conflicts of interest (and the sport would be, in pure business terms, financially sound and with a glorious future ahead).

 

[Dartman]

Publius Cornelius Scipio Except for TV coverage you advocate returning to the 60's, not a bad suggestion, the drivers were paid a retainer, they also received a percentage of the prize and starting money which was paid by the circuit/race sponsors. Jim Clark as a WDC was on a retainer to Lotus for £1500 and yet his earnings were enough to cause him to live abroad due to tax implications in the UK
I wonder how that would work out today your position in the race would depend on a finish as would the drivers income and the teams income, engines varied in price according to the teams success as did tyres and oils.
Today consumables are similar but engines are sold on the premise that you can race but not beat the engine supplier, only Red Bull seemed to avoid that pot hole with Renault

 

[cider_and_toast]

I still don't understand what value Liberty (or CVC) brings to the table to deserve a single buck from profits. It is teams and promoters who invest their money, accept risk, and work on the Event realization. There is no need for nonessentials like CVC or Liberty. If FiA would do their job, a small office (promoter) run by the teams as commercial owner could do the job, and teams could get paid better, not to say about potentially increased of new external interest to join if pay is good. Now reward for the teams is being slashed for a lot of work with workload increased from 18 to planned 25 races. Something wrong with this "business" model.

You are absolutely correct, CVC or Liberty bring nothing to the party except to take from it. Ken Tyrell pointed this out when dear old Bernie was handed F1 on a plate by his best friend Max.

I'll try and find the quote somewhere.

The trouble is, the teams have too much control over the sport and are content for it to destroy itself for their own gain. Every time in the last 25 years we've read "to improve the show" that was Bernie code for "increase revenue"

Basically the cow has been milked dry and there is nothing left to generate cash from. Pay-per-view was the last untapped revenue source and there was a reason why its taken 15 years or more to get off the ground (remember Bernie TV? The failed digital wonder vision).

 

[cider_and_toast]

Found the quote. It was in an interview with Nigel Roebuck.

“You wait,” Ken Tyrrell said to me at the time. “Bernie’ll move the rights on to a bunch of bloody asset-strippers…”

There are also a number of reports that state when Ken Tyrell realised that Bernie had dumped on FOCA and subsumed F1 into his own companies, at a meeting with the teams, Ken had to be physically restrained from strangling Bernie.

 

[Izumi]

Oh I realize there was a lot to do post Bernie, I also realise the teams have tied Liberty's hands to some degree by digging their heels in over changes to the sport. I actually think it's in a worse state now than when they took over and that is sad for F1 and those of us who have loved it for so long. They came in promising so much and what difference have we really seen? A change of start time (which I don't like) and not much else.

I may disagree with you Angel. I think it is one of most repeated misunderstandings and basically misrepresentation of facts which one can find on pages of F1 media, always ready to sway blame away from true causes why we are where we are with the series.

Commercial owners together with FiA and several teams (Williams, McLaren, RBR and Force India) had always upper hand and final say over various issues - had they wished - when ratification of crucial strategy decisions was before them. It's not just Ferrari and Daimler - favorite scape goats who "screwed up" the F1.

Issues today are too complex to be explained (as I understand it, thus my opinion) in a short post. I can be of course wrong, but I think the result of unfortunate decisions had accumulated over decades and now we see it more clearly. You can start with CVC accepting basic incompatibility of objectives among teams when they CA was negotiated. Commercial owner however cannot have both ways, namely first to accept twenty-first century ways-of-the teams just to lure them in (rather their money), or return to baseline type of racing developed in early part of twenty-century instead, just to satisfy a few on the grid. FiA and CVC had a choice to make, and they chose.

Then take all that really costly restrictiveness, ever-changing rules, etc. It is a mess, and who is responsible for it? Ferrari or Daimler? Dr. Marko said just not too long ago that last changes for this season cost them over 1MM, and no-one is assured it will actually work. (Remember them have Newey on staff.)

Possible mismanagement by FiA-F1 branch and by commercial owner cannot be overlooked, yet almost never discussed or questioned. Its always easier and inconsequential to badmouth Ferrari instead. Anyway, maybe this is enough from me for one morning...

 

[Publius Cornelius Scipio]

Found the quote. It was in an interview with Nigel Roebuck.

“You wait,” Ken Tyrrell said to me at the time. “Bernie’ll move the rights on to a bunch of bloody asset-strippers…”

There are also a number of reports that state when Ken Tyrell realised that Bernie had dumped on FOCA and subsumed F1 into his own companies, at a meeting with the teams, Ken had to be physically restrained from strangling Bernie.

pity the other team owners and Balestre were not half the man that Ken Tyrrel was or F1 would be in a much better state now

 

[RasputinLives]

There are 2 things that every F1 fan knows and agrees on.

1 - It's the aero which means we don't have close racing

2 - The teams have too much say over the rules.

Despite everyone knowing this it is never addressed. Liberty Media made noise around fixing this and waved Ross Brawn in our face but nothing has actually been done. These are basic principles on how they'd get the sport back to being a sport. They are not done because it would mean there would be a chance that the people at the top would no longer be at the top anymore and would lose their profit and power.

F1 is broken but the people could fix it do not want to fix it. They're all to busy feathering their own nest. All of them. Do not believe them when they say otherwise. Do not believe Ross Brawn, Do not believe Jean Todt, Do not believe that Chevy Chase fella and certainly do not believe Toto Wolff. Only when there is no money left for them to fleece will something start to change. F1 has to fall before it can fly again. It might die completely who knows but I hope not.

 

[Publius Cornelius Scipio]

Publius Cornelius Scipio Except for TV coverage you advocate returning to the 60's, not a bad suggestion, the drivers were paid a retainer, they also received a percentage of the prize and starting money which was paid by the circuit/race sponsors. Jim Clark as a WDC was on a retainer to Lotus for £1500 and yet his earnings were enough to cause him to live abroad due to tax implications in the UK
I wonder how that would work out today your position in the race would depend on a finish as would the drivers income and the teams income, engines varied in price according to the teams success as did tyres and oils.
Today consumables are similar but engines are sold on the premise that you can race but not beat the engine supplier, only Red Bull seemed to avoid that pot hole with Renault

I wouldn't say that it would be going back to the 60s but it would imply a significant change in the business model of the teams: they would get some money from the event organisers (IMHO start money should be the same for everyone, x cars turn up at an event and they should all get an equal share of it) and some from the results that they achieve but especially on their sponsorship deals as well as from merchandising or from selling other services (for example, they could sell subscriptions to watch online feeds of what goes on in the pits, technical briefings, live onboard feed with full access to the radio communications between drivers and the pit wall, some limited access to telemetry, some comments from the race strategist, etc), with current technology there are many ways for a team to earn extra revenues, In a sense I would put the teams back in charge of their finances. And by having the FIA, and the FIA alone, to come up with the rules there would be room for some sort of stability in the rules, and that in turn would reduce costs and allow the smaller teams to catch up. Also if event organisers were not saddled with massive costs just to host a race the costs involved in the whole of F1 would decrease, and they could decide to go racing where F1 is relevant and there are eager fans. Also if the teams' revenues were down to sponsors they would have an incentive to promote good racing at good tracks that in turn would mean increased viewers' number and therefore more sponsorships money.

 

[Izumi]

Formula 1's promoters aren't happy with Liberty Media!

Hello, one more...

 

[Izumi]

There are 2 things that every F1 fan knows and agrees on.

1 - It's the aero which means we don't have close racing

2 - The teams have too much say over the rules.

Despite everyone knowing this it is never addressed. Liberty Media made noise around fixing this and waved Ross Brawn in our face but nothing has actually been done. These are basic principles on how they'd get the sport back to being a sport. They are not done because it would mean there would be a chance that the people at the top would no longer be at the top anymore and would lose their profit and power.

F1 is broken but the people could fix it do not want to fix it. They're all to busy feathering their own nest. All of them. Do not believe them when they say otherwise. Do not believe Ross Brawn, Do not believe Jean Todt, Do not believe that Chevy Chase fella and certainly do not believe Toto Wolff. Only when there is no money left for them to fleece will something start to change. F1 has to fall before it can fly again. It might die completely who knows but I hope not.

Permit me to let myself go (just for a minute).There is a contract - last CA! Are you suggesting in today's world on renegades contracts should be abandoned, and whip used instead on backs of some people? To what aims? Your vision who should be in, who should be out and what a car design should looks like? There will be a new agreement and then those who stay will run on those rules. I think that's how it works.

 

[RasputinLives]

Izumi all I'm saying is that F1 is a sport not a business. It's rules should be dictated by a governing body dedicated to ensuring it is a competitive sport. This is clearly not what is happening at the moment because there are too many people/busineses making money out of its current format. It's current format is losing its audience and therefore eventually the money will dry up and this individuals will go off somewhere else to get their money. Maybe then someone will make the F1 we all went.

Of course it is possible to have both. You only have to look at the NFL. There are people who make a load of money out of that which is made from it being a popular sport. It stays popular by being unpredictable and good to watch. The people who run the sport make sure the rules and the format keep it that way and therefore the money keeps coming. F1 seems to have forgotten that rule.

 

[Publius Cornelius Scipio]

Of course it is possible to have both. You only have to look at the NFL. There are people who make a load of money out of that which is made from it being a popular sport. It stays popular by being unpredictable and good to watch. The people who run the sport make sure the rules and the format keep it that way and therefore the money keeps coming. F1 seems to have forgotten that rule.

well said

 

[FB]

Should you care to read it, this was the case and judgement between the EU Comissions and the FIA:

EUR-Lex - 52001XC0613(01) - EN

FIA changed it's statutes, at the behest of the EU, so that it cannot have any commercial involvement in either F1 or the WRC. It only exists to make the rules, which does call in to question the influence FOM have on the rule making in F1.

 

[Angel]

I may disagree with you Angel. I think it is one of most repeated misunderstandings and basically misrepresentation of facts which one can find on pages of F1 media, always ready to sway blame away from true causes why we are where we are with the series.

Commercial owners together with FiA and several teams (Williams, McLaren, RBR and Force India) had always upper hand and final say over various issues - had they wished - when ratification of crucial strategy decisions was before them. It's not just Ferrari and Daimler - favorite scape goats who "screwed up" the F1.

Issues today are too complex to be explained (as I understand it, thus my opinion) in a short post. I can be of course wrong, but I think the result of unfortunate decisions had accumulated over decades and now we see it more clearly. You can start with CVC accepting basic incompatibility of objectives among teams when they CA was negotiated. Commercial owner however cannot have both ways, namely first to accept twenty-first century ways-of-the teams just to lure them in (rather their money), or return to baseline type of racing developed in early part of twenty-century instead, just to satisfy a few on the grid. FiA and CVC had a choice to make, and they chose.

Then take all that really costly restrictiveness, ever-changing rules, etc. It is a mess, and who is responsible for it? Ferrari or Daimler? Dr. Marko said just not too long ago that last changes for this season cost them over 1MM, and no-one is assured it will actually work. (Remember them have Newey on staff.)

Possible mismanagement by FiA-F1 branch and by commercial owner cannot be overlooked, yet almost never discussed or questioned. Its always easier and inconsequential to badmouth Ferrari instead. Anyway, maybe this is enough from me for one morning...

I wasn't bad mouthing Ferrari Izumi just saying that the teams do tend to complain when changes are due to be brought in. I didn't single out any team there. In fact they're probably all as bad as one another when it comes to the rule changes, they only agree with changes that will help them for the most part.

 

[Izumi]

...F1 is a sport not a business....

I must be confused why manufacturers would be accused of violating this creed. Mr. Whiting (of FiA) and many others made business of it and no one is complaining.
I think that's how Williams and many others initially lived of this sport, which in reality was a main source of their income - thus business. The same is true for Ferrari when racing winnings supported racing, thus business sort of.

Today some teams take money and allocate winnings to their racing budget, label it anyway you wish. Some went step further, and found the way in which racing research can contribute to some other human favorite endeavor, driving. Had FiA and CVC dusted off their crystal balls, they could predict where it will lead, and put stop to it 10 years ago. This is not after fact guessing. I do not buy the argument that FiA and Ecclestone didn't know what a new power-plant will cost. Did they actually asked and were OK with the answer before the had accepted? Technology companies must had preliminary estimates, and I am (almost) sure they could tell FiA it will cost initially over 20 - 30MM each unit. Without such study home office at Stuttgart would have kick them out, instead giving them any money. Based on that agreement for first year homologation of technology I am hesitant to guess how much discussion, if any, there was about risk these kind of developments posing to the supplier, buyer, and ultimately a track promoter.

So, business or pleasure, it is one bowl of wax.

 

[Izumi]

I wasn't bad mouthing Ferrari Izumi just saying that the teams do tend to complain when changes are due to be brought in. I didn't single out any team there. In fact they're probably all as bad as one another when it comes to the rule changes, they only agree with changes that will help them for the most part.

Yeah, I know you didn't mean it that way.

Depends what kind of changes. Changes to a technical man are disruptive, mostly costly, posing new risk-wave of new issues, if badly implemented. Improvement of a safety related problem is one thing, changing power-plant from hybrid to a 6 cylinders turbo is a different kind which is fundamental to suppliers who made tooling investments. One could at the end ask whether the last CA carries any value, or it is just a piece of European paper which could be tossed to waste by an American firm. Regarding future - FiA can put their foot down, and it is up to teams whether they stay or leave. I do however submit for consideration, if all teams do agree to continue on current format, why would FiA object? It is up to them and Liberty to convince teams and show them error of their ways. So far I gather Brawn is not doing a great job, otherwise we would not have that discussion. A team like RBR has their own Newey, and they surely want to take power-plant out of the equation, and dominate aero developments, which only reaffirms my suspicion, whatever is at the end of the rainbow, there will be always someone who will be complaining.