There is an interesting piece that Kate did over at ESPN with regards to Liberty Media’s view on several elements of the series they purchased a year ago. Chase Carey sat down with ESPN to explain his views on the new Formula 1 and I think there are several interesting and encouraging points that he offers.
“Decisions aren’t democracy of making a vote. Getting input and feedback from others is not the same consensus — I think it’s making informed decisions. Bernie and I used to have this debate: he said the sport needs a dictator, and I said, no, the sport needs a leader. What a dictator does is make decisions and doesn’t care if everybody is grumbling behind. I think a leader feels people have had an opportunity to have input and then hopefully you have more of a following.
“If you’re trying to create a partnership and trying to have people working together to a common goal, I think it’s important that they feel that they have a voice in it and you talk.
“We had a meeting two weeks ago. We had all the promoters in from around the world and they’ve obviously been expressing concerns about costs and other issues and we’re dealing with it, engaging with it. They said it was the first time they’d all been together in a room. The first time they had an opportunity to hear about the things we’re trying to do to grow and expand the sport, as opposed to just doing things and everybody grumbling. Their issues haven’t been considered, they haven’t had a chance to be heard… I don’t think it’s the healthiest way to try to grow the sport.”
I’m not a fan of Chase continually referencing Mr. Ecclestone to add weight to the differentiation points because, much to the credit of Chase, I am not focused on Mr. E’s process any longer, I am eagerly awaiting Chase’s approach. A couple things here that struck me as certainly a fresh approach to F1.
The promoter meetings are a terrific place to start for Chase. I applaud the effort to get input from those who purchase F1’s series and carry a significant financial investment in the sport as well as risk in making F1 what it is. I am sure he heard a lot of concerns and sanctioning fees was most likely one of them. Delicate issue #1.
The other position that I find encouraging is that Chase is seeking a collaborative effort. Now, let’s be honest, collaboration efforts can fail all the time and not every collaborative approach will gain complete harmony amongst stakeholders, it does give each entity a chance to make their case as measured against other special interests and should a decision go against a stakeholder, they have a better line of sight to the entire decision matrix.
As Kate points out in the article, the discussion turned to some physical aspects of the F1 show as well as just metaphysical notions and money.
“Every time somebody told me this track we’re going to is bad for passing, my first reaction — I’m a neophyte in this — would be, ‘well, then create three spots that are good for passing’. And I know it’s not that simple, but we’ve got to solve it. If we want competition, action and less predictable races, then we’ve got to dig in. We’re obviously midstream in that, and as you get to the specifics there are always going to be differing views on how do you achieve it.”
This is a tough discussion because if there are circuits that aren’t producing the opportunity for more exciting races-and I am looking at you Abu Dhabi-then Chase is willing to dig in to those conversation about track re=profiling and changes or even kicking those circuits off the calendar (per Ross Brawn’s comments today about league tables).
The reason this could be challenging is because if I were Bobby Epstein at the Circuit of the Americas and Chase said that the infield section isn’t up to scratch with what F1 needs and he’d like it changed, I would counter with something along these lines, “Yeah? That’s great…with who’s money? I pay in the neighborhood of $20M for the privilege, FIA approved us a grade 1 track and how can we both work to get the changes you’d like made? A reduction of race sanctioning fees?”
Now, Kate makes an accurate point in this article about the marketing, programs and features that F1 wants to bring in to the sport and in order to do that they’ve increased staff significantly and their expenses have increased, and all of this immediately impacts the amount of prize money that is available for the teams. There may not be one team that is excited about that because many of them rely heavily, if not darn near solely, on this prize money as they have few sponsors and limited backing resources.
It seems to me that what you are asking team is to take much less prize money and roll the dice with F1’s new owners that the marketing efforts they invest in will impact the revenue streams and not only reclaim that lost prize money but dramatically impact it in a positive way meaning even more prize money in the near or medium term. Then there is the question about how the prize money is distributed.
“I want healthy teams and I want a healthy sport. That’s the goal. Our goal is to have a healthy sport for fans and a healthy sport for teams. It should be balanced. There should be rewards for success and failure and the like, but I think today I don’t think it’s… The business model we’ve got really isn’t as healthy as it should be for teams. The economics are too difficult for too many teams to play and I think we need to make that better. I don’t want to get into petty words that are implying ‘how do you make that better’, but I think we want to make it a better business for teams.”
You can almost see the friction and challenge Chase is facing here with increasing F1 management’s costs, pressure to reduce sanctioning fees for promoters and ticket prices for fans and reward success for top teams. There is nothing easy at all in any of this and Chase has a very tough job. I admire his willingness to take it on and I’m excited to see how he is approaching it.
There is a side of me that thinks Mr. E is sitting at home saying, “yeah, I learned the lesson about leader vs dictator back in 1987 so good luck with that…you’ll find that I was right about the dictator thing in about 2021.”
Hat Tip: ESPN F1
Bernie must be thrilled with all the free publicity he’s getting from Chase.
This is a complex business, F1. 1.Part of the issue for me – seeing this over decades – is that what worked in the Marlboro era won’t work any more. And no, I am not taking about cigarettes – I am talking about product placement/visuals on TV which had a huge impact on the ROI for Phillip Morris. In other TV shows I have been part of or privy to – the fee for product placement has dropped, year on year since 1995 to today by 20+ percent a year. Coke pays a primetime TV show on CBS for two… Read more »
You’re very kind. Would love to work with Steve.
Your points are well taken and I think this is where Chase and Sean could make an impact in understanding the changing broadcast and marketing environment. I try to be fair with both of them because they have a lot to learn about F1 but I am also aware that F1 may have a lot to learn from them about the commercial side of the equation as well. They are intelligent folks at FOM.
Remember, if you want to put a proposal before them, I can bolt-on some impressive LA Execs – one of which can get Ferrari on board.
Yes, I do. Martini deals with alcoholic products. (anyone ever heard of the commercial catch-phrase “Martini & Rossi on the rocks”?) Of course, I’m old enough to remember when those types of drinks weren’t banned from advertising.
I agree with you, I too remember, but as a brand, it’s not household as Jack Daniels in the USA or Budweiser. I am not saying it doesn’t pay Williams for the UK, but seriously? That’s brand advertising serious ROI worldwide? Nope, ego trip or like Haas, product marketing with invites to clients.
I think we’re well past the point of identifying what’s wrong with F1, he’s got 3 or 4 races tops to put some concrete proposals on the table before the shit finally hits the fan.
They (the three at LM) cannot be believed because positions/decisions are taken because of deceitful behavior and hidden agendas with the only aim being of how to milk the system better and best and fastest.
The latest wish from their new gamekeeper if not an early April’s fool it’s a sign that the sports power that be are losing the plot. “Brawn reveals that he would like to see a league table were races could be dropped in favor of others”. This F1 rendered asylum is being run by patients, or LM believes that all else concerned are gullible mugs.