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FOTA bosses say teams need to take ownership of the sport
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FOTA bosses say teams need to take ownership of the sport
Posted By: James Allen  |  06 May 2011   |  7:38 pm GMT  |  34 comments

FOTA held a press briefing this afternoon in the top floor of the McLaren motorhome to look back on what has been achieved so far and to look forward to what lies ahead.

It was an interesting hour, with recently re-elected chairman Martin Whitmarsh doing most of the talking, backed up by his newly elected vice chairman Eric Boullier of Renault.


Inevitably seventy five percent of the content was about the News Corp/Exor takeover story. In their press release this week the two companies said that “Over the coming weeks and months, EXOR and News Corporation will approach potential minority partners and key stakeholders in the sport.”

This led to the story that the four leading teams are to meet in Stuttgart next week to hear overtures from the consortium. Although Ferrari is in the driving seat on this, sources suggest that the consortium feels that buy in from the teams is essential and clearly the impression that they are starting with the most important teams is a divisive one for teams like Renault and Williams.

Whitmarsh appeared to deny that this meeting was taking place, but picked his words very carefully, saying that neither he nor Ron Dennis were going to any meetings and he knew that Stefano Domenicali, Christian Horner and Norbert Haug weren’t either

“But we are all part of entities where our shareholders talk and they may well be having discussions, but it’s not for me to confirm what they are doing and where they are going.”

Nevertheless, both men agreed that at some point, it would be desirable for the teams to have a share of the ownership of the sport,
“Ultimately it is desirable to have team ownership of the commercial rights,” said Whitmarsh. “CVC have claimed that they are not looking to sell but there aren’t many venture capitalists who want to keep businesses on their books ad infinitum. The teams want to ensure that we have stability and we want the sport to be sustainable. To be sustainable you need the appropriate level of investment to promote the sport and the appropriate distribution of the revenue to the teams to make it sustainable, Who owns it, isn’t the biggest concern. We’ve all got to look at whether each of us want to be involved in the ownership in the future if the current owners want to sell.”

Boullier added, “It’s a new era for F1. Manufacturers were here for 10 years and their core business was to build road cars, not F1. Now most of the teams on the grid are private companies and our core business is F1. So yes I think we should be involved in some way in the ownership of the show.”

Many fans have been concerned about the notion of F1 going to a Pay TV model, with a number saying that they would not watch it any more if that happened. Whitmarsh went out of his way to say that preserving the mass reach of F1 was fundamentally important to FOTA,

“The business model of the teams here is currently structured on having a mass exposure of moving pictures that we generate that it s free to air,” he said. “What ever happens going forward, the teams must insist that there is free to air in the major markets. We need a model where F1 remains the 3rd largest sporting spectacle in the world and I’m sure we can achieve that.”

One thing FOTA have been quite vocal about in recent days and which was restated this afternoon was that a percentage of F1′s commercial revenues should go to centrally promoting the sport, something which hasn’t been done in the past.

The direction of travel since FOTA was created, has been to find consensus and stop fighting each other and then to work together to increase the revenues and the team’s share of the revenues and to decrease the costs. That work continues, with the new Concorde Agreement clearly central to that.

It came out in a discussion on the cost savings in F1 that teams are now spending one third of what they were spending before the Resource Restriction Agreement was introduced, following Honda’s withdrawal in December 2008. Whitmarsh noted that the fact that the consortium is interested in investing in the sport is a positive sign along with indicators that sponsorship is again starting to flow into the sport after a couple of tough years.

Photo: Darren Heath

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34 Comments
  1. Bec says:

    “teams are now spending one third of what they were spending before the Resource Restriction Agreement was introduced,”

    Overall spending (all teams combined) is about 1 third of its previous level, but only because the 3 new teams spend very little, and Toyota and Honda spent an awful lot.

    If you look at the returns from the top teams, their spending has actually increased under the RRA, it’s only the skewed statistics of 3 low spending teams in, and 2 high spending teams out, that allow FOTA to claim otherwise.

    1. James Allen says:

      Perhaps you’d like to share your figures with us

  2. Andy H says:

    James
    Do you regard it as folly for indivdual teams to buy into the rights? If this is the way forward then FOTA as an organisation must buy into this so all teams are represented and not steamrollered by the big teams. After all teams may come and go, but FOTA has to remain for the common good of the sport (its still a sport, just!).
    Thoughts on it James…………..
    By the way Grumpy Joe,ScarbsF1 and your site are shining beacons of light in the stormy seas of F1 sites. Well done.

  3. jmv says:

    Let’s see how far they get in having unity. This has always been the weak point of the team’s collective.

    As for Bernie.. is it me or is he disappearing in the background.

    No vicious quotes from the ringmaster. I almost get the feeling that Bernie is retreating (considering his age that would be understandable)

    Also his move to sell of his QPR share. It looks like he’s selling off things. Cashing in… so his family can carry on in peace after him.

  4. Mark L says:

    Good article. It’s reasurring to read what Whitmarsh is saying about free to air tv, and I agree that the teams should have at least a partial ownership of the sport.

  5. Ben G says:

    Why do the teams need to buy from CVC? Why not just breakaway, and start afresh?

    1. Sebee says:

      You have to say that Ferrari so far has pit itself in a fantastic position. Their parent can bid a “fair” price. If not Ferrari pulls put an devalues significantly what CVC has. Bigger teams obviously are going to go with the best position. Williams, Force India and others joined Bernie early on in last fight. We don’t know the contract details, but this one looks to put Bernie and CVC in a bad negotiating position. This could be the reason for the quiet. Buying time to figure out moves.

    2. F1_Dave says:

      because they know that forming a breakaway would do more harm than good.

  6. Stephen Kellett says:

    “where F1 remains the 3rd largest sporting spectacle in the world ”

    #1 is The Olympics.

    Not sure what #2 is.
    Commonwealth Games
    Athletics World Championship
    FIFA Football Championship
    Tour de France
    Er…

    Any idea which it is?

    Can’t be NBL, NFL, NASCAR, etc as they are US only (despite some of them having “world series” in the name).

    1. Steven says:

      world cup!

    2. Jack says:

      obviously the World Cup, which is actually Number 1 by a fair way over the Olympics

  7. Andy says:

    A very interesting article James, with which I understand from MW’s comments is that they want it all for themselves.
    He doesn’t deny the proposed meeting in Stuttgart – is this allowed in the current Concorde Agreement?
    I like his comment about the resource agreement, so they have made a one third reduction. As Toyota were reputed to operate on a budget of 700 million, euros, dollars or sterling it doesn’t really matter, the bigger teams are still running close to 500 million. Not something to brag about when the newer teams came in on the understanding the budget was a tenth of this.
    Finally, the competitors owning the sport is ridiculous. Teams come and go over the years, it’s just not realistic. It’s another sad sign of Fota wanting to be power mad.
    Surely it is for the Fia to govern.

    1. James Allen says:

      There are nor many positive precedents of Series run by the teams themselves. It’s very important to have a strong regulator

    2. FINALLY somebody else with some common sense! A sport owned by the participants, which everybody else seems to be hailing as the ‘right way’ is, as you pointed out, ridiculous!

  8. Born 1950 says:

    Sponsorship is vital to the teams and the sponsorship revenue they receive is so high only because the sport receives such massive exposure through free-to-air in so many countries.

    For that reason the sport will go down the pan if Sky or similar take control and try to milk it through pay-per-view. Viewing figures are bound to fall which in turn would reduce the level of sponsorship the teams could attract. It’s doubtful whether Sky would be prepared to make up the difference from their takings.

    Having all the teams own the rights is surely the best way to go.

  9. TheWon4 says:

    Private racing companies whose business is F1 (not production cars) should be in the drivers seat. Furthermore, the engine manufacturing should also be taken from the production car manufacturers b/c they have little interest in engineering the visceral thrills of speed. If manufacturers only care about production relevance, they have little to offer other than bags of shareholder money.

    Production car manufacturers (with few exceptions) have made a laughing stock of motorsport. They show up when they want to. They leave at random. The fume and fuss and spit venom at one another over the proper formula to entice buyers into the showroom. They denigrate the competitors by demanding the drivers learn to cope with intrusive electronics (to be fair the teams are guilty as well). BUT the car manufacturers do have MONEY!!

    I’m not wooed by money. I want to see people who’ve made motorsports their life’s work go racing year in and year out for as long as the Concorde can provide funding. I want to see drivers drive.

    Privateer ownership is not a magic bullet, but it can rehabilitate the sport. FOTA can create formulas that people want to watch rather than pandering to the major manufacturers. FOTA can hopefully gain a larger share of the revenues and spread the money more equally which should even up the playing field (and in turn generate more revenues).

    Breakaway is best, but allowing private racing teams to own F1 is a decent compromise. As long as they get the Concorde right, the sport will improve.

  10. Sebee says:

    This road we are hearing about has many outcomes, and right now results in more questions and speculation than answers.
    1. You must never be willing to sell something someone wants if you want top dollar.
    2. Some here wants to make a lot of money. CVC and Bernie must be on that list. To do that you must need bidders.
    3. Are the teams serious or is this a front for negotiation?
    4. Teams can devalue F1 by committing to leaving. Infact only one team needs to issue this threat. The red one.
    5. Many posts will be made on this subject and James won’t know it all. Few will.
    6. They will play this out in public when they will want to get us outraged and help their position.

    Put on you 5 point and helmets for this one. It’s gonna get bumpy.

    1. James Allen says:

      Some very good points

  11. theRoswellite says:

    Any disproportionate distribution of the monies resulting from the F1 show can only engender instability between the participants. In the long term this is not in the best interest of any of the teams or investors.

    It would be interesting to know how the three or four teams at the back of the grid presently share in the general commercial revenues.

  12. agusn says:

    “…with a number saying that they would not watch it any more if that happened”.
    I’m on this ship too.

    I watched F1 since my college days in Japan when Senna vs Prost was at it’s peak, but will stop immediately if they require me to pay for it even for a small amount of $. I will be fine with it, “for sure” :)

    I’m an avid football fan too, but I did the same when Premier League was moved to the pay channel here. Now it’s free again, but I just lost my passion for a sport that’s too commercialized, so I prefer not to watch it again. It’s my own business and political statement. I found many sport fans here do the same, and lost interest on the game because of the hiatus.

    Some may call me naive on this, but F1 for me is a sport at the core of it. Business is just a means to make it going concern. So, it’s up to them to decide how they will sell the product, but as a fan I have mine to decide to buy or not.

    peace be upon you all!

  13. Hannah says:

    On 5live it was mentioned that in the concord agreement that the teams weren’t allowed to meet with third party individuals (can someone clarify as I cannot remember the exact wording) is this true? And if they went ahead who would place any sanctions and what would they be? Thanks

    1. James Allen says:

      I heard that, which is probably why Whitmarsh was keen to point out that no team employees would meet, but he said the shareholders are free to meet

    2. Steven says:

      What I’ve heard is that when they signed they last Concord, it was included in the contract that the teams were not allowed to aproach any current tracks or broadcasters to be part of the new series.

  14. Mon Pen says:

    Surely all of this raises the ugly head of a “Breakaway Series”? A very well informed friend of mine asked the pertinent question “If it is so lucrative why don’t FOTA buy it?”. Good point, though obviously FOTA couldn’t afford it. Point is, why would they pay $5bn for something they can have for nothing? Surely highlights a couple of points (1) that CVC are on a real knife edge and (2) that Bernie is not as stupid as he pretends to be.

  15. mohamed south africa says:

    when u say it shoulld remain on free to air, which country are u referring to since here in order to watch f1 we have to subscribe to the premium package

    1. James Allen says:

      Exactly – people look through their won prism and forget that the whole world is watching in many different ways, some paying for it, some at the other end of the scale getting it free and not even having to look at any adverts (ie UK)

      1. Bill Johnson says:

        Ummm, as I understand it, you in the UK pay a ‘license fee’ for each and every television. Now isn’t that a lot like paying a cable bill? Oh, except the police don’t come round to extort the cable bill. I think it is bollocks to whinge about ‘paying for the premium package’ when in fact, the F1 race is a tiny minority of what is delivered with said package. But as long as one is to whinge, I cannot let stand the idea that it is ‘free’ in the UK.

      2. Ambient Sheep says:

        The police don’t come round to extort the licence fee either. Admittedly the licence fee people can be a bit heavy handed, verbally, but you’re under no obligation to let them through the door.

        Also, it’s not for each and every television, just one per household that contains a TV that’s wired up to receive pictures is enough.

        Small points, I know, but worth making.

        Oh, and in the UK you can watch F1 on iPlayer (the BBC’s online TV service) for free, no TV licence required, provided you don’t watch it live. Of course, then you have to pay your internet provider for a connection instead…so it still comes as part of a greater package!

    2. Tom in adelaide says:

      Hi Mohamed,

      An option for you might be to download the bbc coverage via torrents shortly after the race? Or alternatively, set up a proxy so that you can view bbc online coverage live (a bit tricky, but not too hard). Both options are free, and as far as Australia goes, both entirely legal. Best to check south african laws first.

      I really dislike the concept of fans having to pay to view what is essentially a mass marketing exercise. F1 should be for everyone.

      1. mohamed south africa says:

        not complaining about the subscription. i would have it anyway

  16. Robert Powers says:

    From the land of C.A.R.T. and the I.R.L.-BEWARE!Enough said says me.Except for this:Formula One is not for sale.If it comes on the market you will not know it until the deal is done.Another area where F1 stands out.

    1. Bill Johnson says:

      CART? oh, yeah – the defunct. I agree with the point somewhat, but would point out we see Indy cars free here – if one has cable…

  17. Steed says:

    This issue is all about greed and envy. F1 generates big money and the share out is not equitable to many. One whiff of a chance to get a bigger share and the games begin.

    But the bottom line is that F1 is a collaboration. The commercial rights are worth nothing without the teams putting on a show that we all want to watch. The teams can only put on a show if the regulator allows it through the rules. Sponsorship will disappear if there is no show.

    No one actually owns F1. They each own a bit, but without the others, the bit they own is worthless.

    Unless the size of the cake can be expanded, which is unlikely right now, any rearrangement will create winners and losers. The FIA wants more money, the teams want more money, and CVC needs to get a return on its investment.

    So the only way forward is a collaborative deal that works for everyone. But keeping a separation between teams, regulation and commercial rights should be maintained.

  18. F1_Dave says:

    not sure the teams owning the sport would necisarily be good for the sport.

    back when we had cart, while the racing was great and the fans were happy with the product, behind the scenes there was never any unity from the teams which were running the series.

    each team had its own intrests and many of the small teams were pushed aside with the bigger teams doing what was best for them which is why many of the smaller teams switched to the irl when it was forced in 1996.

    im all for the teams having some say in certain aspects, however history shows that giving teams too much control can cause more turmoil.

    all in all i actually think f1 as it is now (in terms of how things are run) is actually in a pretty good place.

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