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Carey draws up the battle lines

NEWS STORY
30/11/2017

While there is no doubting his business acumen, and his knowledge of his chosen field, it is a fact that in terms of Formula One, the sport's new supremo, Chase Carey, is well outside his comfort zone.

Listen to him talk about business, about communications and media and you are listening to a man who appears to be on top of his game. But when it comes to talking F1 specifics, there is a nervousness, a tension in the voice, and the same pretty much goes for the sport's new commercial boss, Sean Bratches.

It is because they are well outside their comfort zone that they needed a direct link into the sport, someone who not only knew it back to front but was capable of being their eyes and ears. Step forward Ross Brawn.

In describing himself as "poacher turned gamekeeper", Brawn does himself a gross injustice, for he was to poaching what Lewis Hamilton is to race driving, a master.

Quite why Brawn accepted the role isn't immediately clear, after all he certainly doesn't need the money. On the other hand, having won F1 titles with numerous teams, including his own, not to mention his success outside F1, perhaps the idea of going one step further, effectively filling Bernie Ecclestone's boots, appealed.

With Liberty Media's plans for the financial future of the sport yet to be outlined, far less agreed, at present all parties are trying to take things cautiously, though the engine rule proposals allowed both sides to fire a few warning shots.

Come the issue of money however, it is going to be all out-war.

At the best of times trying to get the teams to agree on anything is like herding cats, particularly obstinate cats. When it comes to their life blood money however, that's a different matter entirely.

Already expressing unhappiness at the thought of the revenue stream diminishing the bigger teams are already making noises, so by the time Liberty Media begins to outline its plans, later this month, you can expect the first serious screams of derision.

Not only is Liberty seeking to even out the prize pot, it is seeking to do away with the bonuses paid to the likes of Ferrari, Mercedes and McLaren. On top of this, and further diminishing the prize pot, Liberty is spending money on various projects it claims will take the sport forward... be it logos or the event witnessed in London last summer.

Indeed, not for the first time, Ross Brawn has the opportunity to build an F1 team on other people's money, which if nothing else appears to have saved the careers of a number of former colleagues who appeared destined to spend their remaining working years genuinely working on the gardens.

While the teams grumble about the fall in prize money, which is around 13% down on the same period last year, Carey warns them, in no uncertain terms, that one has to speculate to accumulate.

"I think the sport has been underserved by a continual short-term focus," he said in an official F1 Q&A. "I think we've got some fresh momentum back into it.

"A lot of things were not going in the right direction in recent years," he continued, "but this year attendance is up, viewership is up and I think we've got a much more positive spirit behind it. The sport needed fresh energy and investment.

"To grow things, well, to use an American phrase, there are no free lunches," he said. "We didn't have an organisation that was able to properly develop, to build the sport. We had no research, we had no marketing, we had no digital organisation and realistically if you don't have capabilities like that, you are going to fall behind.

"When you're building a digital organisation, usually you have costs before you get returns. If you're building research capabilities, normally you have to invest in those before you get to use them. It's the reality of building capabilities that haven't existed.

"To do things like the Trafalgar Square demo, to do things at broader fan fests, requires investment," he insists. "However, all are investments in the future of the sport. From the teams' perspective, sure, everybody would like to have free lunches and get the growth without the investment. The world doesn't work that way. I think that there is an understanding of and an appreciation for what we're doing, and in many ways we're very much agreed on what needs to be done for the sport.

"When we started the year, the first three months of the year we had three people," he said. "If you look at things like the marketing and research and digital, our head of digital started three months ago, our head of marketing started four months ago.

"We have been putting the team in place as the year has evolved and in many ways a large part of our operating organisation is new. Before, we really didn't have a large part. We had a financial and legal staff but we didn't have an organisation able to support the business operationally."

Quite how the teams will react to being told about "free lunches" remains to be seen. However, the fact is that the teams themselves are already investing vast amounts of money just to make it to the grid.

Christian Horner has said he is happy for the smaller teams to receive more money, though he is adamant that he doesn't want to see it comes out of his share. No doubt he, and his colleagues, will feel the same about Liberty's 'investment' in the sport and its desire for the teams to pay their share.

In essence, without going into the nitty-gritty, the teams' prize money works out at around 55% of the total revenues of F1, leaving Liberty with 45%. Admittedly, this is not pure profit as Liberty has various costs, considerably more than under Bernie, but will the teams be prepared to share them. We think not, especially when they will have little say in how Liberty spends the money?

Traditionally, costs like salaries (only three people back then according to Carey) and freight came come out before the teams got their share, but now Liberty is increasing some of those existing costs (like salaries) significantly and is also heaping on a whole load of new ones, so the costs are considerably higher than the teams expected when they agreed to how the prize money is decided.

As for "free lunches", if only there was a Friday press conference coming up, as we're sure Toto, Maurizio, Christian et al would be only too happy to comment.

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READERS COMMENTS

 

1. Posted by Paolo, 04/12/2017 17:41

"I wish I could get a bonus just for turning up to work!?!
Seems the only people who get that are (some)F1 teams and (some) bank employees

Time to start rewarding for current success not past glory"

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2. Posted by Ro, 03/12/2017 10:55

"And what about the new F1 logo? What a waste of time and money. I know its all about perception, but honestly, how is a new logo that looks like blood streaks on a handkerchief going to make F1 more attractive ? "

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3. Posted by Spindoctor, 01/12/2017 14:56

"The music goes round & round....."

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4. Posted by Editor, 01/12/2017 12:15

"@ cathalobrien

Correction: They offered the teams the opportunity to buy stock a couple of times… but no takers, while other existing investors sold their stock.

Perhaps they could see the writing on the wall."

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5. Posted by cathalobrien, 01/12/2017 12:09

"Stop been so negative to the new owners . How about a bit of positivity? They offered the teams a chance to have a say in he board by buying into F1 at the start and they refused. Don't start complaining now about not having a say where the money is spent."

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6. Posted by imejl99, 01/12/2017 11:24

"Research, digital, marketing, blah, blah... anyone assigned with that 305 Km bi weekly convoy ? Did it crossed anyone`s mind to take a closer look what is going on on Sundays? A hint - nothing.
No one seems interested in dealing with that? Yeah, digital, put Fernando sunbathing at Abu Dhabi, that helps. Getting to wait for two weeks to look forward to someone screws up at the pit stop also helps a lot.

it should be simple, simplify PU, simplify aero. PU gets some attention, aero none. Those 78 finned diffusers, 7000 pieces front wings, Picasso like side pod curvatures, every little lid, every even smaller opening, that is probably free to develop. And quite essential for car performance. Performance of the one behind.

Lower costs, more track action."

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7. Posted by Motorsport-fan, 01/12/2017 9:55

"There is no doubt a change of direction is on the horizon, a few pointers.
A wider spread of money to help smaller teams.
Reduce the monopoly of the larger teams.
Entice a couple of extra teams (24 car grid).
More races per season 25?
More standard parts in certain areas for the cars to lower costs.
Being able to buy 1-2 year old chassis from top teams.
Simpler engines
Lets see how many of these suggestions can get implemented and whether it has the desired effect."

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8. Posted by george, 01/12/2017 8:30

"Mr Carey,
It is time to look at some very basic realities. Like them or not. Ferrari is F1. Take them out, and you are gone. Do you really think the other teams, given any other situation, would have accepted the special Ferrari bonuses ? Monaco and Ferrari. Monuments and classics to F1. Love them or hate them.
Second there is no racing now, there is a 2 lap sprint after the start followed by 90 minutes of car processions. It is boooooooooring.
Some simple solutions exist. MORE cars, 20 is not enough. Narrower circuits. It is less expensive to narrow a track than it is to widen it.
You own F1 now for about a year, I have seen NOTHING change for the better. Do you know that I read a book or do a sudoku with the race on tv in the background. For old day's sake. "

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9. Posted by TokyoAussie, 01/12/2017 3:16

"I have little doubt that Carey is correct in saying the organisation was much smaller. I think that's exactly how Bernie wanted it to be run (i.e., Bernie and Bernie alone). It makes sense that Liberty needs some Brawns.

As for tramping on teams money, surely that is inevitable, because the current situation is patently unfair. Some teams getting bonuses is just case in point.

As for free lunches, are we to believe that Carey pays for his own lunch? I think not. Perhaps he should use a different metaphor."

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10. Posted by FormerF1Fan, 30/11/2017 18:35

"So, the F1 tail is about to wag the F1 dog."

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