In five year’s time, we may look back on 2013-2015 as the beginning of the unraveling of Formula 1. Not in a dire sense of the word but in a pushpin on a timeline sort of way that signaled a major event in F1’s long history.
The balance of power is not always impregnable and often times it can become untenable. It seems these days, F1 is continually digging a hole until they fit comfortably in it and along the way its commercial rights holders are enjoying the sale of shovels at the proverbial F1 hardware store.
Today F1 doesn’t seem, on the outside, as fully assembled as it once was and there is an element of searching for the part of F1 that used to suffice fans no matter if Jim Clark won by over a minute or Senna and Mansell battled to the bitter end at Jerez.
F1’s new Strategy Group has certainly changed the landscape but what it really has shown us is that the top four or five teams are all intent on growing alone with their own agendas and political positioning. The fear, however, is that they don’t grow apart and leave F1 bereft of any real, meaningful way to institute much-needed changes in order to survive.
F1 boss Bernie Ecclestone once said that the teams couldn’t agree to do anything as a group—and boy was he right about that! It was in reference to a threat the teams made to leave the sport and form their own series if then FIA president Max Mosley didn’t step down.
Max became unpopular amongst teams over his ham-fisted Chelsea loft episode and the manner in which he exacted punitive actions on teams that had long been a festering relationship and thorn in his side as well as critics of his leadership. All that said, what F1 is missing is Max’s ability and power to get things done even if the teams didn’t like it.
With Max gone and current FIA president, Jean Todt, selling the organization’s regulatory oversight ability for a bigger payday for services rendered in governing the daily running of the sport, it now seems that making dramatic changes will be nearly impossible.
The have’s and have yachts are at serious odds with each other and the conflagration is only being fanned to a white-hot bonfire with each month that goes by. At this point, even if we split the issues in half are we even sure which half we’d champion? If we listen very closely, we can hear the teams all excited about the new engine format they approved and now those voices have turned to shouts and cries of foul play, equalization, untenable costs, team exits and income equality among teams.
The system is devouring itself under the agendas, greed, costs and cash that have long been an effusive part of F1. The series has very few European grands prix left and the it’s chasing far-flung location in AsiaPac, and even the occasional despot, in order to keep the cash flowing and sustain the series. I understand why Ecclestone has to find the highest bidder—revenue must exceed expenses. He’s always been very good at that and he has to be, it’s just good business.
We can claim the percentage taken by CVC Capital Partners is too high but if the total income of the series is not there, CVC takes very little or worse. The teams rely on this revenue stream now more than ever instead of sponsor’s dollars. They squeeze every dime out of drivers along the way and occasionally commit to more drivers than seats they have available in order to keep the lights on.
In the old days the Max Mosley and Bernie Ecclestone show worked. It was a benevolent dictatorship that made the changes the series needed to survive. No longer. Truth be known, more Ecclestone in the series and less investors may have been a much better program—warts and all.
It’s not a doom and gloom story but I do wonder if Ecclestone’s ultimate goal for F1 was not reached back in the late 90’s or early 2,000’s and no one has created a new business model for the series for the next 60 years. The system has become pear-shaped and now we’re effectively paying teams to participate in F1. In the past, the opposite was true and sponsors as well as teams paid for the privilege.
So far, F1 has been able to bend before it breaks but I do wonder where the breaking point is. The halls may echo with the choir and mob singing the famous “get rid of Bernie” refrain but be careful what you wish for. Taking F1 into an even more strung out, corporate, feeding frenzy may not be the best move for the series and we can now see that leaving it to the teams is a fools errand. Don’t look to the FIA to solve it like they used to, they new FIA is not as advantageously positioned to exact sweeping changes as it once was.
In short, Mr. E bought the assets, worked his arse off and built a series that would appeal so much as to grow the value of the assets he owned. Having done that, he cashed out. Now the new owners have shown very little interest in taking the reigns and creating an even bigger value so much as simply ride out the waning value that Ecclestone created for his assets to mature or reach their zenith in the early 2,000’s.
That’s not a very positive business model but then they are a venture capital firm—it’s not like Google, Shell, or Mercedes Benz bought the series and can have their board and executives work their P&L magic and let the marketing team go to work. This is an investment to reap big returns—and very little else it seems.
In the end, perhaps five years from now, F1 may not look at all like it has in the past. Is this the 2008 global crunch finally coming home to roost in F1? Is this simply down to fleecing the series from just about every player except the fans?
It’s most likely a combination of all of them but perhaps F1 will change, grow, die or something else. Regardless, the teams will simply find another series to invest their racing dollars. If you’re the WEC, you may take serious notes and avoid getting yourself in this situation should the day come when you’re not only taking on ex-Formula 1 drivers but a complete grid of ex-Formula 1 teams.