F1 hits the beach
Summer Break 2014
Teams want more say over F1 venues
News
Teams want more say over F1 venues
Posted By: James Allen  |  22 Jul 2009   |  8:38 am GMT  |  39 comments

As we get ready to head for Budapest, the Concorde Agreement is due to be signed, which should bring in a new co-operation between the teams, the commercial rights holders and the FIA.

I noted some comments yesterday by Mario Theissen, the team principal of BMW Sauber, about the need for the teams to have more say over the venues visited by the Formula 1 circus. I’ve heard these sentiments expressed many times before, but it will be interesting to see what traction they get this time around.

Presently there is no race in North America, the largest market for most of the manufacturers and many of the sponsors in F1, while there is a threat to the races Germany and the UK, with Hockenheim unable to pay, Nurburgring unwilling to go back to an annual event and Donington not sure to be ready for 2010. F1 commercial boss Bernie Ecclestone has long maintained that in the 21st century, Europe will become the third world and regions like the Middle East and Far East will become the first world.

That may be some time away yet and  the major TV markets are still in Europe, as witnessed by the fact that there is pressure to delay the start times of races in the Far East.

This season sees the arrival of a second race in the Middle East with Abu Dhabi and next year F1 will go to South Korea.

The manufacturers present in F1 have been applying all sorts of pressure on Ecclestone and on the FIA over the past year or so, culminating in the announcement at Silverstone of a breakaway series.

They backed down from that after talks with Ecclestone and his partners CVC and there will be an uneasy accommodation going forward with the manufacturers keen to push certain priorities. One of them is definitely the calendar. It makes no sense to have a race in Turkey attended by fewer people than there are in the paddock and yet to have no presence in North America.

Race promotion is the second largest source of revenue for the F1 commercial rights holders, making up 27% of the total take (TV and media is 37%). CVC’s projections are for revenues from race promotion to rise by almost 10% per year,  from $304 million in 2006, for example  to $425 in 2011 and $445 in 2012. This will not be achieved by cutting hard-up venues some slack.

The model lately has been to jettison events if they cannot afford the increased fees and this has seen the loss of Indianapolis and Montreal among others. Although the teams receive 50% of all commercial revenues, they argue that a balance needs to be struck between pushing for maximum returns and securing a foothold in the key markets, which will have wider benefit for the teams, their backers and the sport in general.

“We have to make sure that we are in the important markets, ” says Thiessen.

“It is always a matter of finding what the right balance is between what we can earn, what Bernie can earn, and what is important for the market.

“I would expect a much closer co-operation between the commercial rights holder and the teams if it comes to such decisions in the future.”

It’s not a question of “if”, it is a question of “when” it comes to such decisions.

This goes back to the topic of ‘dictatorship’, much in the news a couple of weeks back. In a benevolent dictatorship, one man makes the key decisions for the benefit of all the participants.

The calendar discussions will be an early acid test of how the new relationship is working between teams and commercial rights holders. FOTA was not able to negotiate a veto over venues F1 visits in this peace deal, but this will show how much influence FOTA and its manufacturer activists are having over F1 affairs in general.

Featured News
MORE FROM JA ON F1...
Share This:
Posted by:
Category:
39 Comments
  1. There is a lot of sense for FOTA to want to have some sort of say in where they visit – after all the manufacturer’s are there to increase brand awareness and hopefully sales and the fact that F1 is not in the US is rather absurd.

    By the way, is there any word yet on when common sense is going to be drafted into the regulations?

  2. Al (21prods) says:

    James, you say “In a benevolent dictatorship…”. Sorry, but there is not such a thing. A dictatorship cannot be benevolent, there is a total contradiction of terms. A person can be benevolent, but as a this person gets used to power, the “benevolent” element fails.

    Precisely, democracy works (with all kind of failures, but it works) because there are mechanisms of control on the people exercising the power (which by definition cannot be found in a dictatorship).

    Cooperation and codecision are the key in any kind of social organisation (and that includes from EU to neighbourhood association F1, FOTA, companies…) if they want to success.

    That said, I don’t think Mosley or Ecclestone can really understand the meaning of cooperation and codecision, it’s just that they cannot do any other thing than “dictate” the rules, and now we are facing the problems of the model within F1.

    1. James Allen says:

      Of course it wouldn’t work in the real world politics of a country, but it’s a useful term in sports governance because there you very definitely can have a benevolent dictatorship, take my word for it

      1. Al (21prods) says:

        Sorry, but I disagree. Anyway, it’s a matter of opinion.

      2. PaulL says:

        I disagree. Sport is a micro-model but I don’t see the difference. We can learn from the destructive elements of previous F1 governance like under Jean-Marie Balestre. Neither him or Mosley are bad humans, but the socioeconomics of dictatorship haven’t worked in my view and nothing has changed or enhanced over those decades.

  3. It’s nice to see Dr. Thiessen concerned about the calendar, yet not one mention of the fans has been made in all of this. Yet again, the wishes of the fans are sacrificed for the quest for more riches to Bernie and the teams. Why are we losing such great venues with big fanbases to hold Grands Prix on identikit bland tracks built in countries where nobody cares about F1 and nobody can afford to attend?

    Clearly the TV money and the car companies and sponsors are the only priorities now in F1. The fans are just a nuisance to these people!

  4. jw1980 says:

    This will be the next battleground in F1 and potentially could cause as much problems as we have seen with technical regulations recently. I agree with James in that F1 should be a combination of traditional, and new and innovative. Countries like Malaysia and Turkey have had a “go” at F1 and not really been successful. It’s time for them to move over and make way for traditional circuits or newer ones.
    Another factor that could influence the F1 calendar is which countries will be prepared to pay for the right to host a GP? I am talking about the newer venues. Does it make sense for them to keeping paying huge some of money to hold a race for such little return? Watching the Turkish GP gives me no desire to visit that country but seeing a Michael Palin programme where he visits Turkey would.
    As a final point James, when will we receive details of next year’s calendar? I, and I am sure many others, need to book next year’s time off. I am in competition with other workers. With so few races in Europe these days my concern is that there will be no available dates to visit any GPs left by the time the calendar comes out. Like I said before I have no desire to attend GPs with no atmosphere or will be prohibitively expensive.

  5. Harveyeight says:

    The suggestion of joint management is a good one. A dominant FOTA would have been as bad for the sport as Mosley has been.

    And James, I bow to you on all matters related to F1, but your knowledge of history and the human psyche is way of beam. A benevolent dictatorship is one where one person makes decisions for their own benefit which don’t impinge too badly on those they control. And this is a temporary situation. Don’t blink.

    Despite the title World Championship, as far as venues go F1 has been, with the exception of Japan, largely a European series with the occasional foray into the colonies and a gracious visit to South America. We’ve thankfully had the benefit of drivers from all over but in the main it was seen, and quite rightly, as Europe based. The only reason for going to the middle and far east is money. There has been no suggestion that Turkey, Abu Dhabi and Indonesia have brought anything to F1 apart from spacious, and empty, stands.

    Fickle is a word that can’t be aimed at, for instance, the British and French fans with regards their commitment to the sport. Yet, it seems, Bernie was quite happy to abandon them for Mammon. Now Germany. How long before Italy?

    Bernie’s hint at alternating the GP between Silverstone and Donington is rather worrying. I wonder how the investors in the latter are feeling now that their projected income is cut by 50%. I was at the European GP in 1987 – Mansell’s first win – which was my second GP that year without leaving England. I got to the gates at a bit before 5 am and joined a massive queue. I seem to remember 80,000+ being given as race-day attendance before the problem with the licensing was discovered. There were cars dumped along the M20 as fans, caught in the traffic jam, made their way on foot to the circuit. I spent four hours getting to the A21 and then a long slow journey back to Brighton. It was a tremendous day out.

    Not quite the Turkey experience I believe.

    Such support for GPs was brought in under Balestra. I wonder if he would have stayed so long if he had supervised empty stands and the bussing in of soldiers and bewildered peasants.

    I thought that part of the move away from the big markets was a ploy to make F1 less attractive to the manufacturers. As to Bernie’s idea of Europe becoming third world, we all know how much sense he talks about history despite it being available in books. So this has all the hallmarks of a stab in the dark.

    Europe sustains F1. Without the historical circuits and the massive fan base, F1 becomes a TV series.

    1. tomo says:

      I suggest you come to the Australian GP sometime. You don’t know what you are missing.

      1. Harveyeight says:

        I’d love to come. Any chance of putting me and some friends up for a month or so?

        I’m sorry if my meaning wasn’t too clear. I meant that F1 is based in Europe but should still retain it’s old haunts, including Australia, Canada, the USA and not go off to such places as Turkey. Indeed, I feel we should return to South Africa. F1 was happy engough to go there during apartheid so it’s only fair that we should make the effort now.

        No insult to Oz meant. It’s such fan bases that make the sport.

  6. **Paul** says:

    I’d love to see Laguna Seca host an F1 race. No doubt it’s not safe enough or some other rubbish (and I guess it’s small crowd capacity wouldn’t help matters) but even so, to see F1 cars go through the corkscrew would be an absolute treat.

  7. Casino Square says:

    Bernie Ecclestone might say Europe is heading for third world status but if you can’t see the absolutely massive vested interest dancing on his head then you must be blind. More and more often I tend to disregard anything he is quoted as saying.

    It’s interesting how, over the years, as I’ve began to take more of an interest in F1, I no longer see him as Bernie the tiny, friendly old chap who owns F1, to Bernie Ecclestone, the profiteering dictator who is squeezing the life out of a once great sport.

    I hate seeing CVC’s F1 profit projections, and the devastating impact they are having on the F1 calander. Did anyone see the proposed FOTA series calander last month- venues like Imola, Portimao, Montreal, Adelaide and Indianapolis. That’s where F1 should be- where the fans want it. I hope FOTA don’t come to regret sticking with F1, but I suppose they had little choice…

  8. Hello James,

    Can I ask you where you got your figures for this article?
    These may prove useful to an academic piece that I hope to right for my University.

    Thanks alot.

    1. James Allen says:

      From an official document, can’t say more than that

  9. Martinco5 says:

    James, surely the teams will have to accept the races that CVC/Bernie decide, until the end of 2012!!! THe teams appear to have cosied up to CVC/Bernie as a counter to the FIA.

    BUT, there was a suggestion several months ago that FOTA might promote their own races outside of the championship, any news on this or did I dream it?

    1. James Allen says:

      Exactly, but as I say it will be an interesting acid test of the relationship.

  10. Rusty0256 says:

    I really can’t see how FOTA can win on this.

    If CVC need to hit their 10% annual revenue increases the venues that the manufacturer teams (and the fans) want, will not be the ones CVC and Bernie will give them.

    Abu Dhabi, Turkey, South Korea, Bahrain, China, Malaysia, and next on the ‘we’ll pay what you ask’ list India and Russia are likely to gather a combined gate less than what showed up at Silverstone last month.

    Furthermore none of those countries are significant markets for the F-1 manufacturers.

    Having already lost USA, France and Canada, Britain and Germany have now join Japan, and Belgium on the endangered list. Australia seems safe for now, but just as with other key venues, with ticket prices rising, gates falling and Bernie constantly asking for more sooner or later something’s gotta give.

  11. Mike says:

    In truth, this is a problem brought on by the manufacturers as well as Bernie/ CVC. Years of asinine racing, and the Michelin tyre fiasco killed the Indy GP. If the manufacturers want to “break” North America, they’re gonna have to move to make F1 more interesting in terms of actual overtaking.

    1. Jason C says:

      “More overtaking” is often brought out as a noble aim for the sport, yet I’m not so sure it’s as simple as that. The virtual impossibility of overtaking unless you’ve got a car more than 2 seconds faster than the one in front is a problem, and that must be reduced, but simply adding lots of overtaking doesn’t necessarily make for more interesting racing. F1 has had this problem with overtaking for a good few years, yet it is still top of the pile in motor racing.

      I agree there should me more races in the Americas, but the players in the sport presently continue to rake in the cash without ‘breaking’ America. F1 doesn’t need America, it just wants its cash.

  12. michael says:

    north america is essential for F1. Almost 17 million cars are sold in North America alone. Even the teams have not exploited the commercial aspect of this region. They should be rebadging customer Renaults as Nissans, Toyotas with the Lexus brand etc…It is still a growth market with over 100,000 people in attendance on Friday for free practice in Montreal, and people looking to spend all types of money on everything F1, the middle east will have their time, but Mr. E may have pulled out of N.A. too quickly.

  13. John says:

    It’s all about the money…for FOM/Bernie.

    FOM makes money by going to Asia, including the Middle East, because those countries are willing to pay. In particular, governments are willing to shell out money.

    Traditional venues in Europe and/or North American tracks are not willing to pay the extortion fees. And, western governments aren’t willing to subsidize the tracks. Hard to see this changing any time soon, particularly with the economic situation.

    The manufacturer’s aims (primarily marketing) and FOM’s aims (make money) are not the same and the means of achieving the goals are in conflict. It’s difficult to foresee a positive resolution of this situation in the near future. In the meantime, F1 continues to stretch away from its roots and major fanbase. I’d guess that at some point this situation will boil over much like the FIA/FOTA disagreement.

    1. Rudy Pyatt says:

      Totally agree here. It’s a question of “when” things boil over, not if. The circuit owners at all those abandoned venues may even turn up the heat to a boil. What’s to stop them from putting up the cash to have some non-championship races — things like the old Race of Champions or the Oulton Park Gold Cup? Does the Concorde Agreement prevent the teams from participating in any other racing outside of the FIA F1 WC? Can’t some races be run before or after the F1 calendar starts? Probably can’t happen, but it’s nice to dream!

  14. Paige says:

    Bernie’s “Europe is going to be a third-world soon” line used in justification of taking races away from the west and giving them to Asia is simply ridiculous. How strong an economy is, or how fast it grows, aren’t overpowering factors in determining the success of a race. A country’s historical affinity for motorsport and F1 is the major determinant, and in that category, Asia is still very much in the third world while the West is still very much in the first world.

    1. John says:

      …except for Bernie, the success of the race doesn’t particularly matter.

      As long as there’s a line of tracks/governments (see India, Russia, etc.) willing to pay the fees, I don’t think he really cares. One Asia race drops out, another is ready to pay to hold a race.

      I really don’t think Bernie is looking at this as anything other than a business decision. The fans are ultimately not important in his thinking. That’s not where he’s making the big money. In the long run, it is very damaging to F1, I believe. But, in the short run, Bernie/FOM continue to make a lot of money.

      The teams, particularly the manufacturers, should have the fans’ interest much more in mind, but I remain unconvinced of that.

  15. Luke Dalton says:

    You do hear the drivers whinging that some of the traditional tracks are too dangerous – monza for example, is apparantly too fast for them, get rid of most of the so called ‘racing drivers’ in F1, who are great at driving perfect fast laps but not at racing, swap nico, kazuki and nelson jr for keke, satoru and nelson snr! then you have exciting racing!

  16. Michael says:

    Bernie dreams of F1 like an olympics where a country puts a billion in his bank account to host and gets a medal lol. Ok overstated on purpose – where Bernie and hence F1 is making a massive mistake is going for the short-term expansion money. Surely some new markets are not sustainable and we know exist only due to temporary government suckers. The NHL is about to find out what happens some years later after you try to force a sport into a demographic that simply does not care. Mind you F1 has the TV dough but the whole strategy will at some point fail as real fans and and their tracks are simply priced out of the market. Which reminds me now of why Max and Bernie would not have minded having a sort of F3 with no big car companies to complain about some actual additional reasons to race in certain territories and just keep going after more suckers to pay the ever-higher costs. I am at first quite saddened but glad that so many tracks are throwing in the towel. That is in fact what is going to force to change this for the better. I have never enjoyed so much seeing FOTA bringing Max to heel finally and now Bernie to some degree by extension. Maybe stating the obvious, I would have to also guess that there has been massive corruption and collusion between them over the years. Let’s go racing cheers!

  17. Brian says:

    F1 should really consider the Laguna Seca track here in California. MotoGP does a race here, and its a great track. Indianapolis is such a boring track compared to Laguna Seca. The most important thing in my opinion is that F1 needs a race here in North America. It is very relevant for their business and the teams sponsors.

    1. Rudy Pyatt says:

      Yup. And Road Atlanta (Petit LeMans after all!) and Road America. What was your impression any of these when you covered CART James, especially Elkhart Lake?

      1. James Allen says:

        Loved it. My favourite was Laguna though. Great track, fantastic surroundings. You’d certainly pull a big crowd in California

  18. Rusty0256 says:

    “I’d love to see Laguna Seca host an F1 race. No doubt it’s not safe enough or some other rubbish (and I guess it’s small crowd capacity wouldn’t help matters) but even so, to see F1 cars go through the corkscrew would be an absolute treat.”

    Ricardo Zonta in a Toyota F-1 at Laguna Seca…

    http://www.youtube.com/watch?v=I_bWOdY6mbU

    1. Rudy Pyatt says:

      Thanks for linking this. If there’s no race over here, the teams should at least do more things like this. A lap of Indy proper? Fontana? Watkins Glen? ROAD AMERICA! PLEASE!

      Heck, let Heidfeld really go for it at the real ‘Ring. If a they can run a 24hr touring car race there; if anyone can roll up in a street car; if anyone can roll up on any motorcycle, just by paying a few marks/euros; why can’t “the best in the world” turn five laps there?

  19. Danny Q says:

    Hey James,

    A couple of things, first on your blog. If it is that important to the teams to race in their biggest markets should they not reduce their 50% amount of the fees? In effect, it is another marketing exercise for them. They could then pressure CVC/FOM to lower their expesnes. You know “Lead by Example.”

    Second, can you find out what happened with John Illey and Ferrari? What was the fundamental mistake in the aerodynamics Gazzetto Dello Sport were reporting?

    One last note…Thanks James for the fantastic blog. I’ve always been a big supporter but more so now!

    Cheers,
    Danny

    1. James Allen says:

      I’m on the case with Iley, will post on that tomorrow, Danny.

      1. Danny Q says:

        Thanks James! That’s why you are the best!

  20. Jane says:

    As a Canadian fan, I was very upset to hear about the loss of the Montreal Grand Prix, which was the only F1 race still in North America. Formula One has completely lost touch with its fans, and the series is making itself look very foolish.

  21. philipb says:

    Although the US does not have a huge concentration of F1 fans we do have excellent facilities and cheap travel & accommodation. In other words, for a European live racing fan we could often make more economic sense for a visit than the Middle East & certainly Asia.

  22. Roberto says:

    Hi James, although is July 30th i hope you can read this reply and if possible give us you thoughts about it.

    If there is a time when Formula 1 needs to make a full comeback to North America is now. As contrary as this may sound, the F1 name has been a all over in the principal media networks since the Honda fall out, if you see the CNN.com website, every racing weekend they have the headines with the polesitter and next day with the news of the race results, which in 7 years that i lived there never happened.

    The Massa accident was covered by them in full swing and it was on the top 5 headlines until wednesday, and yesterday the announcement of Schumacher comeback was there too. Nascar and IRL are in serious decline and if the F1 power players make the right moves they could start again in the US & Canada with higher ratings and attendance than ever.

  23. classjazz says:

    May I ask a question?
    I don’t have access to my motor sport reference books at the moment but it strikes me – could be mistaken – that the width of F1 circuits has decreased over the years.
    If the circuit was wider there would be more room for overtaking – simplistc view I know as the drivers will all go for the racing line, but would it not encourage the adventurous and competitive drivers to overtake on a piece of road not on the racing line?

    Perhaps the width of the modern F1 car has increased since I first watched the Maserati’s and BRM’s.

    1. James Allen says:

      Not necessarily; Bahrain and Malaysia are very wide tracks and it’s hard to pass at the latter. However wide the track is, off line it[s slippery with the rubber fragments and dust that accumulate

LEAVE A COMMENT

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Top Tags
SEARCH News
JA ON F1 In association with...
Download the chequered flag podcast today
Download the chequered flag podcast today
MTS
Industry-Leading Testing and Sensing Solutions
Multi award winning Formula One photographer
Multi award winning Formula One photographer