Saving F1 (2018 edition)

[Izumi]

Izumi "No one knew it was expensive" is not a plausible argument, you do the research and analyse the findings and then cut out the unnecessary parts that is costing more .... apparently you do that it will cost people jobs

These 3 are global car manufacturers they always look at ways to be operationally efficient and maintain quality ie share car parts, commercial partnerships, joint ventures, global sourcing . Its part of the way they work to sell cars so I don;t buy that rubbish they can't reduce the costs down

Oh I didn't mean to suggest they aren't trying or willing to smash cost. They do have. From 25 to 20, then 15, and 12 MM per unit. Then they hit the "idea-wall", and new research is needed to push this line further. Problem is, if you freeze development, and standardize modules (McLaren will do this or that), Ferrari and Mercedes will not take it sitting down, and the will leave the series.

 

[Ruslan]

Ruslan

The unnamed supplier possibly the taxman - HMRC ?

The unnamed supplier might be Mercedes. I was trying to read between the lines of what Mallya was saying. Don't know how business works in the UK, but in the U.S. when businesses get into trouble and they have to choose between paying their employees or paying their taxes, they sometimes take care of maintaining their business first. It is not unusual when a business slides into bankruptcy that it is also carrying a large unspecified tax bill. Ignoring Mallya and sponsorship claims, Force India in certainly carrying tens of millions in debt already and of course, Mallya claims he is owed 159 million.

So anyone buying into the business will need to address 10 or 20 or more million owed to suppliers, contractors and employees, probably back taxes owed, plus have to pay for maintaining and operating a team. There are 400 employees. Is this a $40 million bill? And you will have to pay for engines for next year (for some reason the figure $30 million sticks in my mind). So you are now talking about a significant investment to get a team that will be flailing around at the back of the pack.

 

[Il_leone]

the current set up does not help entice other car manufacturers to come into F1 - Honda's return has been nothing great to shout about, Renault still have not cracked . F1 is suppose to entice all the major players to come in but instead they've all gone to Formual E because it is cheaper and more viable for them to compete

 

[Il_leone]

Ruslan The quoted figure owed to Mercedes was $13m so £10m and apparently they too wanted administration not a wind up order

A wind up order would mean certain creditors not getting paid an the team can be start afresh as a new company without baggage

 

[Izumi]

the current set up does not help entice other car manufacturers to come into F1 - Honda's return has been nothing great to shout about,

Agree.
Current setup is hostile to new entrants.
1. Fuzzy future regarding PUs after 2020
2. Secrecy and restrictiveness on development (it may take several years to develop a competitive hybrid)

What I would like to read about, how FiA and FOG define F1 after 2020. Start describing and agree on race character and only then define the car and sporting rules. There might be 18 races. Should the same technical normative references apply uniformly for them all?

• 4 suppliers could be actually enough for 18 or 20 cars, if other issues will get into complementary balance.
• There are issues which could resolved right now. Get rid of that nonsensical Parc fermé, and there are a few others.

 

[Ruslan]

Ruslan The quoted figure owed to Mercedes was $13m so £10m and apparently they too wanted administration not a wind up order

A wind up order would mean certain creditors not getting paid an the team can be start afresh as a new company without baggage

OK, so that was probably the supplier that Mallya was hinting about when he mentioned one at close to 10M and the rest less than that. So at least 13M to Mercedes and Perez and then there are other bills. So would not be surprised if the total owed is 20M or greater. There may also be taxes.

But, if it is in administration, does this mean that they have to pay Mallya his 159M? If so, Mercedes, Perez, and whole lot others are not going to be seeing a lot of their money.

But, in the end you are looking at:
Owed to Mercedes, Perez and suppliers: $20M+
employ 400 people: 40M?
Buy engines for a year: 30M?
Other expenses: Not insignificant.

So we are looking at a buy-out cost and operating budget for a year of well over $100 million.

 

[Ruslan]

There could be a problem with this focus. On one hand I am hearing complains about absence of noise we remember from era of normally aspirated engines in the past, and now they will fall in love with no noise of electrical engines? Well, maybe, but I doubt that is a main problem.

I would rather suggest to look elsewhere.

1. Market over saturation (too many races), with lost of exclusivity. Rare and elusive becomes mundane, predictable and boring.
2. New digital generation and its attention span. Do they prefer watching the race, or participate in the race (in brainstorming fashion - having enough on their iPads they can "advise" driver HOW TO, before, during, and after the race and live with his decisions, etc.)

I am not a marketing man, but it is clear to me that how I am watching the race and how 9 year old kids do is vastly different. I can sit there 3 hours, however they watch 10 min and heading for the fridge, yet let them drive the car (active participation), not watch it (passive consumption), and you will have difficult time to tear them off it.

Well, it was your posts over at another thread that inspired me to start this thread.

I do have a teenage son. He has no interest in racing. I have even offered to take him to Montreal.

So yes, if F1 does not appeal to the next generation....this results in the sport in permanent decline. Bernie was not being completely absurd when he said that his market was a 70 year-old guy who can buy a Rolex.

 

[Il_leone]

Ruslan

Administration they can decide who should be owed first or at least some of the money back

Where as wind up/ liquidation/ bankruptcy - a lot of people who are owed money will miss out . Creditors are much further down the pecking order because the taxman is pretty much the first people to get paid

 

[Galahad]

I have no doubt that Force India will find a buyer. But now they've gone from the fourth best team on the grid to being a serious backmarker.

Again, I think this is based on a very small sample size of recent races - ones that were unlikely to suit the car anyway. They're still outperforming McLaren on 1/4 the budget.

I think the last 18 or less car grid was in 1982 as a result of the FOCA strike. Before then, it was back in the 1960s.

We had 18-car grids as recently as 2014. I challenge the average race-watching fan to be able to tell the difference between 18, 20 or 24 competitors.

Of course you're right, there needs to be a way for new teams and manufacturers to come in. Porsche were all ready to enter from 2021 until dieselgate continued to rumble on and half the executive board got arrested...hence the proposed change to the MGU rules. Now the sensible thing is to keep the engine rules unchanged, set a fixed price for the customer teams and try a lot bloody harder to create a product worth sponsoring - that means reversing the recent aero rules changes, as a starting point.

 

[Bill Boddy]

Suggesting measures to cut the cost of F1 are all well and good, but without spectators it is pointless. Hand in hand with any improvements which are made the cost to Joe Public has to be brought down.

10 years or so ago there were 8 million people in the UK watching the show on TV, it is now around 2 million, Sky has ruined every sport it has touched, none of them can afford to do without the money coming on. Watching has to be made easier and cheaper and new methods need to be brought in. Watching online with streaming is one way, fans may want to watch Melbourne live but far more would prefer to sit down after lunch and watch it when they want to. It would also boost sponsorship.

 

[Il_leone]

Then Liberty Media aint doing enough because all the engine manufacturers and teams are going to formula E. The day the viewing figures take a real dive will be when people realise what is wrong with F1.

Like I said Formula E and Moto GP are far more enjoyable to watch if you were a neutral.

In Moto GP they've managed to start breaking the Honda-Yamaha factory stranglehold by using the CRT rules which was laughed about at the time and dismissed in an attempt to get more teams into Moto GP. There was one stage only 17 riders where 15 score points , the CRT was rubbished to what was becoming a two tier championship but it got teams to participate , then followed by a single supplier and the trigger point was the Open class which was meant to bring the private teams closer to the factory teams. Ducati saw a loophole and took the open class which allowed them more engines and a bigger fuel tank, free engine development which meant they had more flexibility than the factory class teams. It was significant because a factory team wanted to get to the front quicker over Honda and Yamaha basically lead them to the current situation where the series is more competitive with a standard ECU, and single tyre.

Max tried his own ideas to make it more fairer but he did not have enough allies and nor did he or Bernie have the foresight on how to make it work without getting into a confrontation.
I think only Renault signed on beyond 2021 I believe

 

[Izumi]

Suggesting measures to cut the cost of F1 are all well and good, but without spectators it is pointless. Hand in hand with any improvements which are made the cost to Joe Public has to be brought down.

10 years or so ago there were 8 million people in the UK watching the show on TV, it is now around 2 million, Sky has ruined every sport it has touched, none of them can afford to do without the money coming on. Watching has to be made easier and cheaper and new methods need to be brought in. Watching online with streaming is one way, fans may want to watch Melbourne live but far more would prefer to sit down after lunch and watch it when they want to. It would also boost sponsorship.

In business 101 they tell you to find out first who is your customer for product you are selling. I am not convinced FOG has done it. All that talk and focus on louder engines and other useless (mostly cosmetic issues) to be honest drives me crazy. How they can define sporting and technical regulations without letting us on what kind of show is being planned once current CA expires. What kind of a fan will carry them into next cycle? Is Brawn a man who is a visionary, or a paramedic with bunch of bandages in his hands?

 

[Bill Boddy]

There have been several surveys which have been done for F1 about what people want but one of the great failures is that the questions are loaded. Yes, fans wanted faster cars which we now have but did they want that at the expense of close racing? Events are linked but no notice is ever made of this and digital questions (vote for Joe) will not help to get analogue results (quality of racing).

 

[Izumi]

There have been several surveys which have been done for F1 about what people want but one of the great failures is that the questions are loaded. Yes, fans wanted faster cars which we now have but did they want that at the expense of close racing? Events are linked but no notice is ever made of this and digital questions (vote for Joe) will not help to get analogue results (quality of racing).

Agree. From professional point of view survey is however not enough IMO. There is a profile of a fan in start of the next cycle, and then end of the cycle. This is a dynamic situation and FOG has to find out how to make most of us happy. Right now they are placing a cart in the front of a horse; so it seems.

In race time I do freeze for 3 hours and breath very quietly, if at all. Kids around me adopted Maori attitude and let F1 officials know it. Their is a job to make both parties wanting to come back. I didn't say it will be easy.

Distribution channels have to be retooled.

For example i would be perfectly happy if I could watch a race on my 15" Mac, but guess what, Liberty has not made possible on location I am for me to watch their TV. I will get over it and find another way, younger generation shrugs shoulder, and do something else. Maybe Brawn and his buddies should think whether customers needs them, or they do need customers.

 

[Angel]

So those of you who have heard me put this rant out here before just bare with me:

I do not believe in a budget cap. I believe in limiting the amount of things that can have money thrown at it to make improvements. If I was in charge things would change thusly.

1 - The FIA would pay top money out to a team to design a standard chassis which would be tested to within an inch of its life. This chassis would then be supplied to the teams to test for a month. At the end of the month they can either decide to keep it or return it and build their own (those returning would get a reduced entry fee). This would then be the standard chassis for 3 years with teams doing as much development as they wish.

2 - The aero would be serverley restricted being cut back to basics like the current F2 car. Aero adds nothing to the sport and causes so many issues.

3 - The line between race teams and engine suppliers needs to be drawn. All engine suppliers will now have a contract with the FIA and not the teams. Each team will put in their engine preference at the end of the season and the engine supplier can chose who to work with but MUST supply a required number. This way we'll never get Ferrari not running Ferrari engines but we also won't get teams stuck without one. All engines will be supplied to the FIA directly who will them pass them randomly to the teams, this will eliminate anyone getting 'special' engines.

4 - In October of every year the FIA will release a list of 50 drivers deemed suitable for F1. The teams must chose off this list of 50.

I have more but you've prob heard them.

Well this sounds better than anything Bernie or Liberty have come up with so far!!

 

[vintly]

... i would be perfectly happy if I could watch a race on my 15" Mac...

https://www.totalsportek.com/

Edit - apologies if I am in breach of any codes of conduct here, but hey it’s no biggie

 

[Road of Bones]

I cancelled my Sky subscription today. I realised that I was only keeping it for F1, and the only bit of that I watch these days is just before the formation lap to the podium. Everything else is just fluff, and I could care less about what Johnny Herbert or Damon “um” Hill think about stuff. My interest in F1 has waned gradually over the last few years anyway. The cars are ugly, the fuss over the rules and fees is just mind-numbing, and £60 per month can be better spent elsewhere.

 

[Izumi]

https://www.totalsportek.com/

Edit - apologies if I am in breach of any codes of conduct here, but hey it’s no biggie

 

[Ruslan]

We had 18-car grids as recently as 2014. I challenge the average race-watching fan to be able to tell the difference between 18, 20 or 24 competitors.

Yea, I had forgotten about this season. They started with 11 teams, but were down to 9 for a couple of races at the end of the season. I don't think you want to make the argument that this is a good thing.

I believe that for marketing, development and long-term health of the sport you want more teams rather than less. For marketing and entertainment purposes, a three-ring circus works better than a one-ring circus.Larger fields are more exciting that smaller fields. People tend to pay more attention to F1 if they have one of their own drivers in the mix (for example, Spain or all the fans wearing Orange). It also gives more drivers a chance to prove themselves and more stories to develop. Finally, it gives you more depth when things are bad. If you only have 10 teams when the economy is growing, what are you going to have when things get rough? Or to grab a quote from the bible, just for the hell of it: "For if they do these things when the wood is green, what will happen when it is dry?”

F1 was more interesting to me when there was more teams...but I have a bias towards complexity. Most sporting series bore me.

 

[Ruslan]

Ruslan

In response to Force India situation, they finished 4th in the constructors but they only get the money by making sure they complete this season as well in some stupid agreement about the money for their constructors to stop people taking the money and running off immediately. So teams are delayed in getting their money, for big teams it does not matter because of the resources but small teams it could make a difference between racing and survival.

Also the biggest teams were getting royalties payment based on how long they've been in F1 with Ferrari off course getting $50m a year and Williams getting a smaller amount as they are the 3rd longest team in existence in the paddock

The smaller teams like Force India were pretty much frozen out of the arrangement or got a small crumb

Even then with the cost of F1 being expensive, the money has been all used to develop the car and there is very little money left available from sponsorship to fulfil other financial obligations

The unnamed supplier possibly the taxman - HMRC ? At least one creditor wanted the team to wind up which would have been catastrophic.

VJ is the main financial contributor but all his assets are being frozen and he does not have access to them until he explains himself about his failed businesses. Similarly their other major owner Sahara - are almost invisible to comment on the teams current situation

An article I read yesterday (but did not tag) said that the Force India payout for 4th place last year was 150 million. I gather they have not received it yet, which is why three teams are now objecting to Force India being allowed to continue as an existing team.