£10m wasted on rival series to F1

25/05/2011

You would have thought that after the F1 teams' previous attempt to pull off a rival series they wouldn't have the gall to mention it ever again. Back in June 2009 F1 fans were promised that "the major drivers, stars, brands, sponsors, promoters and companies historically associated with the highest level of motorsport will all feature in this new series." It sounded like the Formula One Teams Association (FOTA) had something really good in store but it was never to be. Just six days after their announcement the teams put an end to their plans and agreed to race in F1 from 2010 instead. It is part of a pattern.

Before FOTA, the Grand Prix Manufacturers Association (GPMA) claimed it would spearhead a rival series. Before that the Grand Prix World Championship (GPWC) had the same objective. The latter grouping in particular engaged advisers and experts to assist in its aim to run a phantom series. According to an article in the Express by Pitpass' business editor Chris Sylt, this has all come at a cost.

One industry insider is quoted by Sylt saying that the aborted plans have cost "probably slightly less than £12m but more than £9m." In the current economic climate, it is money which should not be wasted. Of course talk is cheap and Ferrari president Luca di Montezemolo said recently that if the teams fail to agree on terms for a new contract to race in F1 after 2012, when their current agreement expires, they could "create our own company, like the NBA. Just to run the races, the TV rights and so."

If the plans were to get traction it would involve spending yet more money with the same likelihood that it will lead to nothing concrete. One wonders whether this would sit easy with the shareholders and unions which have great power in the owners of several F1 teams.

For example, Erich Klemm, deputy chairman of the supervisory board of Mercedes' parent Daimler, was not even happy when Mercedes sold its stake in McLaren and bought the world champions Brawn GP in 2009. "The staff would have understood better if Mercedes had withdrawn from the expensive F1 business altogether," he said adding that "in these economically difficult times, the company should invest in better marketing of its real cars." Would he be happy with spending millions on preparations for a series which has been threatened numerous times before and never come to anything?

Then again, compared to some of the other hurdles which a rival series would face this is nothing. It couldn't be called F1, Formula One, Formula Grand Prix, Formula GP or GP1 since Formula One Licensing B.V. owns the rights to all these names. It couldn't even call its races Grands Prix for the same reason. Then comes an even bigger hurdle.

The teams' current contract to race expires at the end of 2012 so a rival series would have to begin in 2013 at the earliest. However, Nick Clarry, UK managing director of F1's majority owner CVC told Sylt that 10% to 20% of the overall value of TV contracts renew each year. Accordingly, at least 60% must already be in place for 2013. Outside Europe TV contracts are still allowed to contain clauses which prevent them from broadcasting rival series so it could struggle to get broadcast exposure. Without top TV coverage it would have no real prospect of success. It is yet another reason why there will be no rival series despite the talk.