F1 World Champion 2014
Lewis Hamilton
Fernandes and Lopez get Forum off to a great start
News
Fernandes and Lopez get Forum off to a great start
Posted By: James Allen  |  09 Dec 2009   |  2:29 pm GMT  |  56 comments

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.

Featured News
MORE FROM JA ON F1...
Share This:
Posted by:
Category:
56 Comments
  1. Huggy says:

    I’m going to be very interested to see how the new Lotus team fares. I’ve a sneaking suspicion that they are going to be the surprise package of the new season.

    In Gazza, they’ve got a pure bred racer in charge of producing the car and Tony Fernandes looks like the sort of bloke who knows how make a few quid. If they can get themelves a decent pair of drivers, ie an experienced old hand (Trulli?) and a young charger (Di Resta has looked impressive) they might just surprise everyone.

    Oh and wouldn’t it be great if they painted the car green….

  2. Tom Adams says:

    I hope JV is one of the Lotus pilots…
    James please try to persuade Tony Fernandes that we dont need the Trulli train next year.

    1. James Allen says:

      I’m not sure Villeneuve is one of the Lotus targets

      1. Simo says:

        Surely Villeneuve has been out of Formula One for to long now to realistically return?

      2. Dale says:

        Thank heavens for that :)

      3. Tom Adams says:

        Hi James,
        I saw the Reuters news about this.. can you explain what all this media coverage was about with JV and Lotus? The Lotus visit, the media photos, the initial interest, was it just to generate some publicity for Lotus…
        SKY news, a somewhat credible media source one would think even had a story saying that JV was soon to be signed at Lotus….
        I know some people like to bash Jacques but he is a talent and his CV speaks for itself, i still think he could be quick and lots of people love the guy.. would have been perfect for Lotus… Im so bummed out about this news.
        Jacques mentioned he had been training hard for a return, do you know if he is linked to any other teams?

      4. Ace says:

        I think we’ll see Jacques back, and I think he’ll surprise his critics.
        His style was always more suited to slick tyres than those terrible grooved numbers.

  3. Sideways Bob says:

    It does rather sound as though Lopes is trying to get into F1 to make money, not to go racing. Something that failed for BMW.

    Does he want to be Lopes F1 World champion, or Lopes F1 Buisness man of the year.

    Imagine Champman or Enzo talking about maximising the brand potential of Lotus or Ferrari in Buisness to buisness link transactions.
    Enzo would have laughed in your face an dtold you not to slam the door on the way out. Chapman would have told you that was all very nice but culd you just pass that spanner over there.

    i appreciate that F1 needs money to go racing, but is there a danger that buisness men like Lopez are getting into this for resons that don’t involve the punter behind the wire paying through the nose to watch their heros risking all for 2 hours on a sunday ?

    BMW, Toyota and Honda went racing to sell cars. replace the word cars with “buisness links” and is it so much different ?

    1. James Allen says:

      Well I’m not sure about that. Enzo Ferrari liked making money and he knew a thing or two about how to build a brand and leverage it, it’s just that they didn’t use that language in those days.

      1. Kepners says:

        James, i am going to have to disagree with you there on enzo. The Old Mans passion was racing not making money… Like Ford it was the product that made the money.

      2. Dale says:

        With respect I don’t think we can compare Lopes to Ferrari.
        % years forward I’d bet Lopes is off doing others things and that’s if he lasts that long in the first place.

    2. Stephen Kellett says:

      but is there a danger that buisness men like Lopez are getting into this for resons that don’t involve the punter behind the wire paying through the nose to watch their heros risking all for 2 hours on a sunday ?

      Isn’t that what you want? Bernie is screwing everyone and no one is happy. A business man that focuses on the consumer (thats you and me BTW) will realise they need to provide more value. The NASCAR guys get this (dreary racing though (*)), shame the Bernie doesn’t.

      (*) I did go to the NASCAR website and watch some of the video. The whole race shot from 2 or three camera positions that can pretty much cover the entire oval from each position. Boring, boring, boring. I had to stop watching, even the computer monitor was going to sleep.

      1. rpaco says:

        Is that the one where they just drive in circles with no data apart from the speed of each car?

    3. Howard Hughes says:

      Nice imagery, but wrong methinks. Enzo didn’t respect his road car customers, but there was no-one more shrewd when it came to exploiting them via the clever marketing of his products in order to fund the racing. And lest we forget, the very first car ever to bear modern sponsorship was a Lotus – in fact it was Chapman’s dealings that ultimately put paid to the old national colour schemes – White for the States, Blue for France, Red for Italy, Silver for Germany, Green for UK etc…

      Ferrari and Graham would have had much to chat about with modern guys like Lopes…

      1. Sideways Bob says:

        good point. I’d forgotten about the lotus bit.

  4. tombong says:

    Well i do agree with every ideas that comes from Lopez and Fernandez. But still, talking loud about changing the commercial side of F1 (of course it was a brilliant one) without the presence of the big player or the old guys, to me it is like a new school boy wanted to take over the school.
    I mean, why don’t they talk about this in the coming FOTA meeting?! To send a message to the big guys if the new player don’t taste any profit (money) from their participation then they just walk away??!!

  5. Nicollers says:

    The people you rub shoulders with eh James?

    Made his money in the music industry, then decided to setup an airline!

    Nice!

  6. Nicollers says:

    Meant to say, you sure this guy’s name is Lopes and not Branson?

    :)

    1. Brace says:

      I did think you were referring to Branson. :)

  7. rpaco says:

    Is Mr Lopez related to Jose Ignacio Lopez de Arriortua, who joined GM and cut costs dramatically (by screwing suppliers through the floor) then defected to GM with his 7 loyal henchmen and many boxes of GM secrets. (for which Mr Peach had eventually to let him go, as GM brought a major mega court case) He then proceeded to screw suppliers through the floor at VW as well, he was probably the most hated man in the 1st tier oem suppliers sector for several years.
    Anyway assuming he is not related please dont let him give Bernie new ideas for revenue streams or we will soon find that Bernie has bought the UK, packaged our debts and sold us to South America as collateral for buying the oil rights to the entire Middle East.

    1. Smellyden says:

      now that was funny

      1. rpaco says:

        Im an idiot, he defected to VW of course.

        Yes you take a bundle of debts and package them. give them a name which turns it into an asset, then sell it. then buy it back with a higher rating, borrow against it, spend the money buying something which generates loads of cash. Then form a new company which buys the cash generator part of it from your first company for very little, leaving the first company with a huge debt, you then use the first company to run a sport having removed the cash cow.

  8. Howard Hughes says:

    Very interesting post, thanks… How about a similar article perhaps on YouTube founder Chad Hurley and his journey from tech innovation to F1 investment..? One gets the impression that when the current old guard (Bernie, Williams, Briatore etc) are gone a new raft of differently bred businessmen will be reshaping F1 in their likeness…

    1. John F says:

      Yes, and I find this scaring for F1. Bernie, for all his short comings (no pun intended) has still a passion for racing and has been part of it from the early days.

      Those potential next generation of business men only think and breathe money, but not racing.

      Any one remember Snyder and Midland? Do we want more teams that see only ROI in a racing team?

      No thanks, please move on …

  9. James,

    I’ll think you’ll find that Itunes is geographically limited. You can’t download items from the US store if they’re not already available in the UK store. This applies to music, iphone apps, movies and TV shows.

  10. It’s all very well talking about taking Formula One but are CVC prepared to risk their investment by messing with Bernie’s winning formula for printing cash? No. They’ll just keep doing whatever brings in the money, therefore I can’t see any of these ideas coming to light.

    1. rpaco says:

      I think it was intended to be more of methods for the teams to make money. If you can keep the sponsorship level but reduce costs then a good few F1 teams could make money.

  11. Simo says:

    Who do you believe James in your honest opinion will be best for Formula One overall in buying the Renault F1 Team?

    Lopes or Dave Richard? Lopes being a businessman like Richard Branson and Dave Richards being more of a Ross Brawn/ Frank Williams type of guy? To complete opposites.

    1. James Allen says:

      Hard to say, Lopes brings something new, but Richards has the track record. Lopes wouldn’t run the team, he’d put a professional management team in to do that. But he is an F1 enthusiast and owns several F1 cars, apparently

  12. Andy says:

    James,
    great article. Hope you’re enjoying Monaco !

    It’s great to see some fresh blood into f1 on the business side.

    In relation to lotus i also think they will be strong. A proven tech lead.

    James, Any thoughts on how competitive you expect cosworth to be on their return? I believe you said their power expectations were decent.

    I don’t get the perception they’re coming in to build second tier engines. Good look to them!

    1. James Allen says:

      Cosworth will be pretty competitive I think, performance wise. There is some doubt about reliability and fuel economy but the power is there

    2. Simo says:

      I think Cosworth will surprise many people with how good their engines are next year.

      So thats – Mercedes, Ferrari, Renualt & Cosworth for 2010.

      Do you see any new engine suppliers coming in to Formula One in 2012 once the new regulations come into force?

  13. Werewolf says:

    This is a debate that will run and run. F1, like all businesses, needs to adapt to survive but evolution is normally more successful than revolution; and before telling the sport’s grandees how to run their future, I think I would like to see Fernandes and Lopez succeed on track!

    F1 is not music or the movies, where ‘what they want when they want it’ is not a bad adage. F1 is about specific prestige events that are best appreciated live, with all the anticipation and drama that involves. Traditional television (or satellite) is an ideal platform in these circumstances.

    Expanding into the newer media would need to be complimentary, bringing better access to teams, drivers, commentators, pundits and other fans than television is able to do at a price people are prepared to pay. Part of F1′s already global success is that it is essentially free-to-air; and much of the success of digital media is that they are cheap to the consumer.

    Remember Ecclestone’s disastrous umpteen-quid-aGP satellite broadcasts of a few years ago? What future for overpriced, licensed or franchised web channels and what effect of internet sites such as this or Autosport, etc?

    There is beyond any doubt increasing room for modern media, particularly with younger fans, but let us not forget what the present technology has provided for F1 and be mindful of the risks.

  14. gavin says:

    Hi James,

    Really enjoy your posts. I am a fan from New Zealand and our access to F1 info is limited as we only get the races shown on our pay TV. I spend all my time on websites reading news etc. For a sport that is supposed to be the pinnacle they do a very poor job on the net. A few of the teams have video blogs and the offical F1 site has a few vids of races etc. Why doesn’t Bernie bypass the broadcasters and sell F1 content on the net (contracts no doubt!) If I had to pay a yearly subscription to access races and other F1 shows on the net I would happily pay. Another link is into the gaming market as they have done with codemasters. Wouldn’t it be cool if you could download the race data after a GP weekend and install it into your PC/xbox/PS3 so that the game replicated what happened in the race on the weekend. You could review passes or pitch yourself against the fastest lap. Also Bernie should push to be the first sport to be broadcast in 3D. Now that would be cool!

    1. Daniel Neves says:

      Great idea with the X-Box.

    2. rpaco says:

      The UK does not have a decent enough broadband infrastructure, most of the country gets it’s broadband down the telephone line. Many areas cannot get broadband at all. The THEORETICAL speed limit for most is 8Mbps, in practice most are lucky to get anywhere near half that. As soon as you start to stream video, the speed drops, if you have half the country streaming at the same time what is currently on BBC, the IPs main pipes will come to a halt.
      It’s bad enough just using it on practice days or to get a decent commentary. Besides if I had to pay, to watch I would give up.
      Still, smile people, we have a new broadband tax whether you have broadband or not.
      Window tax back soon!

    3. Dale says:

      Excellent point. F1 is supposed to be global and should be available to all around the world to watch on TV FOC.
      Not knowing anything about New Zealand TV I only assume that’s it’s not available FOC either because ths cost from Ecclestone is way to high (most likely) or you simply don’t have the free to air channels?

      1. rpaco says:

        Another point is that it is much easier and cheaper for Bernie to screw the few TV companies than to set up a direct to punter operation. That way he is always raking in the money whilst other companies do the work. Dealing with customer oriented organisations is much more tiring.

  15. darren says:

    This is what i have been waiting for since the 90′s the name Lotus back with us. My dream car company ;-) if they let the team build race cars as they do with the road cars watch out for a suprise or two this coming season. ;-)

    1. george debenham says:

      Get real,Lotus was Colin Chapman and died with him.
      The team now called Lotus is a new team to F1 with no historic connections, sad but true.

    2. rpaco says:

      Sorry mate this has nothing to do with the old Lotus company at Hethel. Who won a few WTCs in the good old days, except some of the money is coming from Proton I believe. (Proton own Lotus Cars and Lotus Engineering at Hethel)
      Pity they can’t use the old active suspension that Lotus developed though.

    3. SteveEarle says:

      But all it is, is the name isn’t it? I loved the old Lotus team, especially when Herbert & Hakkinen were driving for them but this isn’t the same team surely? Haven’t they just bought the rights to the name or something?

    4. Dale says:

      The name in itself means nothing, it was the spirit behind it that made Lotus the Icon it was.
      There will never be another Chapman, he was simply a one off.

      1. rpaco says:

        “There will never be another Chapman, he was simply a one off.” For single mindedness and pig headedness Chapman takes some beating, but I give you John DeLorean.

        Did anyone see the excellent documentary on Graham Hill, a few months back on BBC4 which revealed a lot about Chapman, who always thought he knew more than his engineers, drivers and design experts. (I had a boss like that, hi rbc)
        He was also the one who got nearest the car designed to fall apart as it crossed the finish line, if it held together longer there must be a possible weight reduction in there. Unfortunately latterly, he got it wrong too often risking his drivers lives and loosing their confidence.

  16. Murray says:

    Illegal downloading hasn’t destroyed the music industry, James. The people who are making money out of music nowadays are fast adapters who’ve been quick to think outside of the conventional music industry paradigm, which has been run by the same people for 40 years. The industry and revenue streams from it are more widely accessible (and more egalitarian) than before, tapped into by newcomers who couldn’t get access or distribution from the old dogs. It’s the fast adapters who’d flourish in F1 if they had a passion for it, not the afraid-of-competition carteliers. Those that are bleating “pirating is ruining us” are dinosaur cousins of conventional bankers and conventional car makers. It’s someone else’s fault that their business plan isn’t up to this millennium.

  17. Jem says:

    Paragraph 3 wins the award for most use of the word “business” in a sensible context. :-)

  18. Criscles says:

    Honestly, Bernie is going to have to be in a pine box before any serious new media strategies are made real. The debacle that was Digital F1 in Europe ( amazing product – waaayyy too expensive ) is totally indicative of FOM and their neanderthal business models. As for building a fan base, their raging YouTube McCarthyism is beyond petty and more pathetic. My love for F1 is undying but in the eyes of the untapped masses, it is still only car racing – and elitist, protectionist car racing at that. BTW James you omitted the fact that Lopez left the music industry, not because of the illegal downloading, but because of the pig-headed refusal of the company to acknowledge, let alone embrace, the digital age. Smells like Bernie spirit to me…

  19. Adam Taylor says:

    These guys who are potentially entering the sport seem to know something that the current crop of managers or at least their marketing team dont. Id be very interested to see what they have up their sleeves to help market their teams and more importantly Formula 1 as a brand. Although Formula 1 seem to be moving in the right direction, for instance F1 Rocks, they are moving very slowly. Maybe its perhaps they are cautious through previous bad experiences (digital F1) and want to make the right strategic moves at the right times that would benefit the sport.

    Also maybe these guys could also help improve the show for the viewer and perhaps anymore ideas on the piece that James produced on car launches and ways of improving coverage of the lesser teams.

    Im sure Tony Fernandes is going to have a launch involving his Air Asia company and the new Lotus, a race maybe??

  20. ElChiva says:

    I understan it is a bussiness meeting to sing contracts but where is racing? fans are the target audience … :(

    1. Mario says:

      This two things are one thing really. It is all connected together. Racing is only possible because there is some business being done and business is being done because fans want to watch some racing, etc.

  21. Josh Gant says:

    I think Lopez has some great ideas.

    “You will very quickly find that the people who are passionate fans will seek out and access the content in one way or another.”

    He is quite right about that. I have been downloading ITV and now BBC coverage of F1 for several years now. I am in the US and Speed does a very average job at covering F1 IMO. The insight and commentary that James and Martin and Kravitz provided at ITV and now on the BBC (minus James) was/is much better than Speed.

    What if Bernie decided to provide both a live stream of the weekend events and also a high quality download afterward? He could hire James to call the race! I would be willing to pay for decent coverage that I can put on my computer.

    As it is now I have to pay huge monthly payments to a cable company in the US to have access to Speed coverage, and then even more $ to have a DVR so I can record it. Then I can only watch it on one TV in my home. I wish these media companies would listen to leaders like Lopez more often.

    - Josh in Michigan

    1. rpaco says:

      you are aware that it is available live on the BBC website during the practices, qualies and races and later on the BBC iplayer. The advantage there is that you get Croftie and Ant doing the commentary instead of Deadleg and Brundle (nothing wrong with Brundle but Deadleg talks over the top of him)
      You would have to make your pc believe it is in the UK though.

      1. Josh Gant says:

        Yes I did see that. Finding an open proxy in the UK is a bit of pain in the neck. I used to get my F1 news from itv.com and had the same issues when I tried to stream video.

        What I like about my current download/torrent method is a I get full resolution videos. Perhaps the iplayer would do the same thing.

        My point was more that none of this preferred coverage (ITV/BBC) is available to me through a legal means and that I will seek it out in other ways because I am an F1 enthusiast and I want the most informative and enjoyable presentation of the content. Lopez realizes this and it would be good for content holders to get on the same page.

    2. Mario says:

      Certainly good point!
      I am among those ever growing number of people who use the Internet as the only source of things to watch. I do not like TV because it throws at me immense amount of rubbish and you get turned into a couch potato before you realize it. I like the Internet because it gives me the choice, it is up to me what I want to do and when, for how long etc, and I can easily find what I look for. It is that kind of freedom that I like the most, so like the others of my kind. It is a trend that will inevitably carry us through into the future… sorry, wrong choice of words, it is a trend that will inevitably drag most of the people along and make them join us in this so called new media reality.
      Therefore I am very happy that some one in F1 sees it too. That some one is Mr Lopes in this case.
      Also excellent point about the quality of the sport commentary. BBC has the best package, always had. And it makes so huge difference. As a kid I preferred listening to English commentators even though I could not speak English back then because my native Polish ones were so hopelessly disengaged and basically dull. They still are, by the way.

  22. Andy says:

    Thanks.

    Could you tell me who the chief designers are of the new teams? I know lotus but I’m assuming they’ll be ex f1 designers?

  23. John Snow says:

    Completely agree with Tonys comments on new media. For F1 to be at the cutting edge of so much technology but to be light years behind in its use of the internet is crazy. e.g:

    Different TV streams directed by different people (not just the world feed)
    Access to data (not just the fastest lap of a session)
    Press passes for internet based media (not just TV, newspapers etc)
    I could list hundreds more

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
Multi award winning Formula One photographer
Multi award winning Formula One photographer