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Carey admits to naivety on sponsorship

NEWS STORY
29/11/2018

In the months that followed Liberty Media's purchase of F1, much was made of the fact that this 'new broom' would have a very positive effect on the sport, and that the fans would notice the difference.

No sooner had Bernie Ecclestone been shifted stage left with a meaningless title and even less meaningful role than his successors were making clear that his dictatorial style of management was not for them.

Other than his dictatorial approach to management, the bosses also questioned the fact that basically the octogenarian was the man doing all the deals, be it securing new races, new sponsors or keeping the team in-line in readiness of the next Concorde Agreement.

Indeed, as the criticism of Ecclestone's approach continued, one wondered how it was that Liberty Media had paid $8bn for a business that had been so badly run.

Courtesy of fan surveys and various soundbites we learned that F1 was flourishing under its new management, which had great plans for the sport.

However, while we got a new logo (and font), a new theme tune, revised start time, a 'phantom' F1 team under the auspices of Ross Brawn aimed at creating the ideal formula, a plush new London HQ and a headcount to rival a midfield team, some of the other issues facing the sport remained far from settled.

After all the broo-hah-hah of the proposed engine regulations, aimed at simplifying the power units, reducing costs and thereby encouraging new manufacturers, we learned that essentially nothing will change.

New aero regulations to be introduced next year, ahead of a far more radical change in 2021, and intended to allow closer racing, are already looking likely to have little impact.

As written so many times before, the Concorde Agreement is far from settled, and with deal-busting issues such as the budget-cap - something that even Max Mosley couldn't get agreement on - and prize money, leaving the field as divided as much off-track as on, one can only say 'good luck with that'.

In the meantime, the Financial Times reveals that F1's pro forma core revenues fell 1% cent to $1.48bn in 2017, the first year under Liberty's ownership, with payments to teams falling 5%.

In the months following Liberty's purchase of the sport, much was promised but little actually delivered on. New races in America, Liberty's back-yard, haven't happened, though the sport will now go to Vietnam. This at a time, Silverstone is looking to drop off the calendar after 2019 along with a number of other iconic tracks.

Along with new races, the sport's new bosses, having criticised Ecclestone's failure to make the most of F1 in terms of sponsorship, making clear that this was a key target of theirs, though their cause was not helped by the loss of Allianz and UBS shortly after.

Along with retaining Heineken and adding Swiss engineering group ABB, Liberty has secured a controversial $100m deal with Interregional Sports Group (ISG) and Sportradar to enable live betting during races, a move that already has fans fearing that they'll be seeing betting odds appear on their screens and devices during races next season.

Approaching the end of its second season in charge, Chase Carey admits that in terms of its ambitions, the new management might have been somewhat naive.

"The perception was just there are sponsors waiting," he days. "They were lined up out there and as soon as we had somebody to go call on them, they were just going to sign up. The world's not that simple...

"We have a lot of discussions going on," he insists. "Obviously, we've got to turn them into partnerships, certainly, we hope to really take business from here to there by 2020."

Referring to the U-Turn on the engine rules, he says: "I think we actually became persuaded as we went (along) that the better path was... stabilising the current engine as opposed to creating a new engine," he admits.

"There's no question one of our goals, whether it's cars or engine suppliers, (is) to be inviting and (be) interesting to new participants, but not at the expense of our existing players."

Carey, like commercial boss Sean Bratches, comes from a broadcasting background, indeed, he was formerly Rupert Murdoch's top lieutenant and remains on the board of 21st Century Fox. Despite the initial excited reaction to that 'new broom' some feel that the American, having taken a control of a sport with which he had no previous connection, is out of his depth. Indeed, though his contract doesn't end until 2020 some are already questioning whether he will go the distance.

"Realistically, I've been around long enough to know growing anything or building anything is not easy," he says. "You don't win every battle, but I think we're winning more than we're losing. I think we're making headway."

Reflecting on the various claims made by F1's new management in those first few months, the approach does indeed appear to be more "realistic" now, as Carey realises the enormity of the task at hand.

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READERS COMMENTS

 

1. Posted by NS Biker, 30/11/2018 20:49

"I seem to keep coming back to the scene in the Harry Potter movie with the Rastafarian bus driver ....
"Hand on, it's going to be a Bompy-Ride".
From Steve Jobs ....
"¤f you want to make ever one happy, don't be a leader, sell ice cream."
Yep, Time for leadership is now."

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2. Posted by mickl, 30/11/2018 17:05

"Moustache wax cost's a lot..........."

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3. Posted by English Tony, 30/11/2018 15:22

"Chase Carey is an idiot - he gave Bernie 8$ Bn

I rest my case M'lud"

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4. Posted by PlayF1, 30/11/2018 13:12

"For sure, Bernie did a great job building F1; but was it sustainable in an acceptable form?
I have my doubts, when key races are being lost.

As I understand it, the business was grown in the manner it was, in order to sell it high.
Bernie didn't hide this fact.

The problem that Liberty Media now face, is that the model has reached its peak.
There isn't the money to pay the ever increasing race fees, as the races must run at a loss.

With free to air TV disappearing, eyeballs on the sport are lost, along with sponsors.

As a result, payouts to the teams drop; many of whom were already struggling.
This produces a less competitive field, ergo we have an A championship and a B championship.

With all these negatives in place Liberty must grow the revenue to meet their financial obligations.
Yet that isn't going well.

Their chosen option seems to be to increase the number of races, only that the calender is already full, and anyway those additional races increase the costs to the teams, who will want a bigger chunk of the new revenues.

So we have both the teams and Liberty needing to increase their revenue.
Yet revenue is falling.

It doesn't look great.
"

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5. Posted by JClark-Monza1967, 29/11/2018 19:13

"Going back to Bernie-land is NOT the answer. Maybe Liberty isn't the answer either but in the mean time, we have to hope that they can learn from their mistakes and make some real progress., though I admit I'm a lot less optimistic than I was a year ago. the way they have caved to Merc, Ferrari and RB on the 2021 is very worrisome. If they don't make some REAL progress on a meaningful budget cap, it will be the beginning of the end, which will come sooner rather than later.

BTW, I know it's only a small part of the picture but F1TV Pro has been having streaming problems with it's full race replays of Abu Dhabi and many other 2018 races since last weekend. I've getting the run around about when it will be fixed for days. Just another example of amateur hour at the F1 corral."

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6. Posted by ESTM PRFT, 29/11/2018 18:59

"Sometimes it's best to continue with "The devil you know...""

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7. Posted by Rock Doc, 29/11/2018 16:41

"Time to walk away Carey and take Bratches with you."

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8. Posted by Paul C, 29/11/2018 16:17

"Bernie Ecclestone knew the racing side first and came at managing F1 from that corner. Carey and Bratches were Murdoch employees who look at F1 as a programming asset and not a very serious sport. They need to go back to reality show and cartoon series programming. They are pulling it out of somewhere in running F1. Hand it all off to Ross Brawn, Briatore, Gene Haas and Christian Horner before it falls to pieces."

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9. Posted by mickl, 29/11/2018 15:07

"I now have an image of Bratches and Carey a couple of years ago, on a Sunday evening. sat in their pants and team shirts one size too small with beer baseball caps on their heads. Watching a race and saying I can do better than that and picks up the phone"

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10. Posted by mickl, 29/11/2018 15:01

""The perception was just there are sponsors waiting," he days. "They were lined up out there and as soon as we had somebody to go call on them, they were just going to sign up. The world's not that simple..."...these are probably the same armchair idiots who think they can kick a ball better than Ronaldo or Messi. If there were that many sponsors don't you think Bernie would have signed them up and pocketed the commission by now instead of waiting for someone else to do it. Whatever Bernie is, he isn't stupid."

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11. Posted by imejl99, 29/11/2018 14:42

"Hats off to BE, what a salesman! He managed to sell them a PERCEPTION of F1 while hiding F1 deficiencies in plain sight! Surface glitz and glamour over muddied waters beneath :)

The F1 logo dispute accompanied with the checkered flag Montreal fiasco doesn't leave much confidence in that new London HQ headcount, we can only hope they learned something.
"

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12. Posted by Ro, 29/11/2018 14:04

"What a load of tosh! They wont admit that what BE built was better than anything they can dream up. What a shambles!"

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