The Motor Sport Business Forum kicked off today with Tony Fernandes the new team principal of Lotus F1 talking about the opportunity he sees in F1 and continued with a fascinating discussion on the changing model of team ownership, involving Gerard Lopez, one of the men bidding to buy Renault F1 team.
The discussion moved from how the sport had fared through the credit crunch and the ‘bumps in the road’ like the Singapore crash scandal and the breakaway threat, to whether the end of the manufacturer era in F1 is permanent, but the most interesting aspects focussed on the new media and F1′s need to embrace the new channels and opportunities it offers.
Fernandes made his name in the music business, but got out when he saw that illegal downloading was ripping the base out of the business. He started an airline in 2001 a few days after 911 and has seen it grow to a huge business. He believes that he can use Lotus as a platform to build a strong business, not reliant on traditional sponsorhsip methods, but with other means of monetisation using new media and business to business links,
“We have a great opportunity (in F1) because Air Asia sits on massive market. We started eight years ago with 200,000 people flying with us. Eight years later, we carry 25 million people and we sit in a playground of 600 million people in south east Asia, and a billion in China and India that we fly to us. So the opportunities to do things together are wonderful, and that’s what we’re looking at, ” he said.
“I’m not so sure that the traditional form of just sticking the name on car just for branding purposes will be enough going forward. I think Formula 1 teams have to look at other revenue streams as well and over the next three or four years we have many ideas.”
Lopes also sees Formula 1 in a different way from many people inside the sport, coming as he does from a new media world. He compared the sport with Itunes and asked how F1 can protect its rights across the internet which has no geographical boundaries and which offers its customers what they want when they want it.
“The pace of change in social media, and the internet in general, is so fast that unless you’re prepared to break away from the shackles of the old way of doing things, you’re rapidly left behind,” he said. “You will very quickly find that the people who are passionate fans will seek out and access the content in one way or another.
“The smart organisations are trying to find a way of monetising those rights, rather than trying to create a walled garden to protect them as long as possible. We have to get to a point where the audience immersion, social media and associated technologies are a key component of the way motorsport – and sport in general – is delivered to the global audience.”
He spoke about the challenges for the sport of embracing the opportunities the new media channels involve. He has been in the background in F1 for some time and I get the impression that he is offering some insights to Bernie Ecclestone and CVC into new potential revenue streams through online media, helping them to maintain the integrity of their rights holding position, while also taking the sport into new demographics.
Lopes made an offer for BMW Sauber in the summer, which BMW turned down and is looking at Renault as a platform for a new way of doing business in F1.
“We see the whole environment as providing an opportunity,” he said. “We’ve been involved in Formula 1 for some time as friends for some people, but never thought about getting more heavily involved than that. The situation is such right now that it provides an opportunity for new teams and new investors – it’s not a time of uncertainty but a time of change.
“Times of change usually provide an entry point. We believe there is a chance to enter the sport and build a platform that has to reinvent itself. If we were to become part of F1 we could be part of that reinvention. The business opportunities in F1 lie very rarely in making money out of your team; they should lie in making money out of the business platform that you have.
“Put any seasoned executive into F1 and they turn into a big kid, essentially. It makes them much more approachable. So for us, F1 is an excellent business-to-business platform.”
Lopes brings a skill set and experience F1 could really do with. He was the first investor in Skype and has created a successful career out of investing in and then selling on tech companies.