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Bahrain not the only flashpoint for Formula 1 teams
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Bahrain not the only flashpoint for Formula 1 teams
Posted By: James Allen  |  05 Jun 2011   |  6:55 pm GMT  |  86 comments

There has not been any reaction yet from the Formula 1 teams to Friday’s FIA World Council announcements on the Bahrain Grand Prix being reinstated.

It is likely that they will discuss the developments at the start of next week and may even respond before travelling to Montreal for the next race. Not for the first time, Montreal is likely to be the setting for an intense weekend of politics.

Several teams, including Red Bull, Renault, Virgin and Sauber issued press releases after Friday’s announcement, but these mostly featured only preview material for the Canadian Grand Prix, without making any mention of the Bahrain news.

Only Renault had a position, wherein Eric Bouiller said, “Lotus Renault GP acknowledge the decision made by the FIA World Motor Sport Council today (Friday 3rd June 2011). That decision is likely to be discussed internally within FOTA, and a more detailed joint position may be defined after those discussions have taken place.

“I have already spoken at length about our team’s position recently: we are happy to go to Bahrain as long as our safety and the security of the people living there is guaranteed.”

Photo: Darren Heath


Most teams will be conflicted about the Bahrain development and will also be dismayed that the Indian Grand Prix has been moved to December 11, leaving little time for mechanics and engineers to rest before the new car-build begins in January for the new season’s testing at the start of February.

But another point which hasn’t had much airplay is that the maximum number of events under the current Concorde Agreement is 20 whereas the calendar issued on Friday has 21 events on it. Turkey has an asterisk next to its name and it may be if the teams push back hard enough against a 21st race, that Turkey drops out.

But, as Bernie Ecclestone is always keen to point out, more races equals more money for teams. On Friday morning, before the FIA World Council sat down to meet, financial journalist Christian Sylt, put out a press release saying that “revenue from Formula One’s commercial rights will reach more than $3bn annually by 2016 “. This is in comparison to the $1.5 billion it generated in the 2010 season.

This assertion is based on race hosting fees increasing dramatically, such that “the highest race hosting fee, which currently stands at $50m, will be more than $100m by the end of the decade,” because of the fee escalator, which works on compound interest year on year. Clearly it is assumed that TV revenues will also jump dramatically.

One paragraph stood out in the statement, relating to how the increase in revenues will be good news for the F1 teams; ” In 2016 the total prize fund will come to $1,575m, with the winner of the constructors’ championship taking home a $222m reward. This amount is bigger than the entire annual budget of seven of the current 12 teams and compares to the $87m that Red Bull Racing received for winning the championship in 2010.”

This assertion is based on teams continuing to receive 50% of the revenues, rather than an increased percentage that they are looking for in the current round of negotiations.

Clearly there is a simple message here, which Ecclestone wanted the potential buyers of CVC’s stake to get. But also there is a message about how the ramping up of F1 activity would be good news for the teams. The nub of it is that in F1’s push for prosperity, they are all in this together.

It is an important point to bear in mind, as the report was picked up by Reuters and many other news organisations and spread widely on the day that the FIA decided F1 should reinstate Bahrain.

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1

However there’s plenty you can do that’s within your control!

2

 Why do people judge the situation in Bahrain depending  on false information spreading by protesters while the truth is every thing returned to normal and the country is peaceful !! You can check by your self rather than listening to the lies of protesters 

3

#F1 racers are concerned about their safety in #Bahrain. Focus in ur tweets that Bahrain is safe despite all rumors going around

4

Hello all About Bahrain and so on f1 and fia should just say its not up to the targets in terms of money and local involment unlike china and wat about India. India which been in Kasmir for over 63 years ileagly and for every 20 locals there is an army person so plz just say you dont want bahrain as race and dont play the human rights as f1 seems to but on blinkers on when it neets too….

5

Lol. SteveH enjoy Montreal on Sunday afternoon while I get up at 2am Monday to enjoy it b4 work… Bernie will look after you. 😉

6

BTW. Some of us fans look forward to a few hours on Sundays in front of the plasma, enjoying watching the worlds best drivers wringing the neck of the world best cars around the worlds best circuits. I’ve watched almost every race since AJ won the championship in 1980! They even give us qualifying live in Australia now and the racing this year is some of the best I’ve ever seen. DRS, Pirelli, KERS.. it’s fantastic! 52 races a year would suit me, I LOVE it!

7

And some of us American fans wish we didn’t have to get up at 2:00 am to watch the live BBC broadcast. How about making all the ‘away’ races night races for us US fans? Thanks Bernie, I knew you could do it!!!

8

Some interesting & insightful comments above. But i detect a distinct ‘anti bernie ism’ Surly we must admit that Bernie at the helm has brought F1 to some great heights.

Thanks Bernie. Time to go now….

9
Victor Winarto

I am at the moment fine with more races into 21 rounds. But instead of take the 21st round into early December, why wouldn’t the make the usual March races into every one week (Bahrain-Australia-Malaysia-China) and less summer break (less money spent into development will be good for small teams). Actually my ideal is 3 races for a month for 5 months and 2 races per month for 4 months (cross continent, except Australia & Asia); total are 23 rounds but no race in December. Anyway with less race, teams are still working, so it’s no different and even more money for them. Also for the 3 races per month, people can be separated into different teams for intermediation between one race into another and mean less people have to come into the actual one gp.

10

A $1.5B to $3.0B jump in revenue, in 6 years, sounds too optimistic. Countries are already baulking at the fees as it is. We’ll all loose out on great racing venues like Spa, if fees keep going up. They just won’t be able to afford it.

Where will the money come from then? Unless they are thinking of going pay-per-view across the board? Where are their heads at, do you think? I read on your site that Bernie already said that pay-per-view would be tantamount to “suicide”.

11
Alanis Morissette

With that escalator in place, I cannot see anything but £500 grandstand ticket being the ‘cheap’ option at the British Grand Prix in 2017.

As was said before, unless we get really rampant inflation (in wages as well as base commodities), it’s going to be impossible for most fans to go.

12

James, can you do a piece on the life and times of a race team over a season? People say that the season is getting too long – how many days per year do the crews actually work? I do 220 days per year, which I regard as pretty typical – how does this compare?

13

If they’re gonna race into the Winter we’re gonna need more places ‘down-under’ to go.

Are there facilities in Perth?

How about S Africa?

Argentina?

Any suitable venues in New Zealand?

14

Riverside drive in Perth, along the river. Makes for spectacular TV images – just check the Red Bull Air Race footage for details.

15
theRoswellite

…so many issues, so little time…

The teams must refuse to go to Bahrain. Period.

If it isn’t obvious why, then one needs only imagine the beautiful sound of F1 engines intermingled with gunfire and the screams of injured protesters. Of course the government will guarantee that no protests will interfere with, or even reach the area of, the race itself…which is to say, any killing will take place off camera.

FOTA needs to ask itself exactly who will benefit from returning to Bahrain. The answer should be obvious.

Dealing with the other issue.

The FIA long ago abrogated it’s authority in controlling the F1 schedule, with Mr. Ecclestone assuming that role.

It has become, most simply, a case of the tail wagging the dog.

Put simply, the FIA should decide where and with whom a Grand Prix will be held, and Bernie can then make his commercial arrangements. As the situation now exists, Mr. Ecclestone/CVC “control” the schedule and the fees… with the governing body and teams invited, if they so wish.

It is a beautiful business model, and Mr. Ecclestone has been duly rewarded.

The question should now be…is this schedule and fee structure sustainable into the future and, with my emphasis, IS IT EQUITABLE FOR ALL THE PARTIES CONCERNED?

16

I’ve no problems with a longer season and more races [mod]

17

I think reinstating the Bahrain GP is risky. The situation in the Middle East is still difficult. Formula 1 is about entertainment, why should people that will attend this (as crews or spectators) be at risk? I agree also with one of the comments seen above in regards to the people that had arranged a trip to India to see the GP and now will need to reschedule absorbing a cost increase.

In regards to the 21 races, I think the increase of races is for the benefit of everyone as it will mean more races for us fans to watch (Winter Sundays are quite boring without GPs). It will give the opportunity for more people to see it live assuming the continuation of giving GPs to more countries and not giving second ones ot the same country (such as the Valencia one). It will be good for the teams as well because more races and more opportunities to “touch” more consumers will mean more revenues for them from their sponsors and should draw even more sponsors then now from global companies. It will also mean more TV money which will be driven towards them through the prizes given by FOM. Then there will be another important element which are ecomonies of scale. A big part of the costs (like designing and building a car) are fixed, done once per year so not all costs of the teams will increase because of the extra races. This means more profit for the teams. More profit for the teams means that more teams will be attracted to the sport increasing the competition for the benefit of us the fans.

More races? Yes please! Bring US, Russia, reinstate the French one, reinstate the South African one, reinstate the Argentian one

18

“Several teams, including Red Bull, Renault, Virgin and Sauber issued press releases after Friday’s announcement, but these mostly featured only preview material for the Canadian Grand Prix, without making any mention of the Bahrain news.

Only Renault had a position, “

Red Bull put a statement on their website on Friday: http://www.redbullracing.com/cs/Satellite/en_INT/Article/2011-Bahrain-Grand-Prix–Team-Reaction-021243027546084

19

James, if 50% ofthe money goes to the teams what happens to the other 50%? Surely not to pay off the 5cents it cost Bernie for the rights

20

Push race fees to 100m and watch F1 crumble, based on what’s happened in the world in the last few years, my guess is that number is not sustainable.

21

James, what you failed to mention is that if FOTA get 70% of total income, based on 2010’s revenues, F1 would have accumulated a debt of £76,000,000.

So if the teams desire more money to fund their brand centres, either it has to come from higher fees, or savings due to a cost cap, because taking a bigger slice of the pie could see F1 go the same way as A1.

22

Is it just me, or is Chris Sylt increasingly just Bernie’s mouthpiece on the net?

23

James, has anyone pointed back to the 1985 South African Grand Prix? There are parallels with the current situation, and eventually the race here was taken off the calender until 1991.

24

Sorry, 1992. (BTW, I still own a 1993 recording of the final South African Grand Prix!)

25

Apart from it being a really bad decision (F1 is non-political! what a joke!), I feel for all the fans who had booked to go to India and will now have to rebook (and pay again for) their flights.

26

The race hosting cost escalator is completely unsustainable in the current economic climate and I can’t see free to air broadcasters paying higher fees either.

Then you add the FIA demanding an increased share for doing, frankly, nothing more than interfering in the rules, and it becomes obvious that this is a circle that can’t be squared.

The only way Bernie and CVC can achieve what they want is to either sell FOM to Sky or sell just the TV rights to subscription only channels.

Neither option is going to be acceptable to sponsors or the manufacturer’s teams as it will mean the loss of a very high percentage of the TV audience.

This and the new engine rules make a breakaway far more likely in my view.

If CVC and the FIA were taken out of the picture it’s true that the teams would face an increase in costs to run the show but this would be nothing in comparison to the amount currently taken out by CVC and being demanded by the FIA.

A breakaway is the only hope fans have of retaining free to air coverage and any chance that race tickets could actually come down to affordable prices.

I’m off to LeMans tomorrow : our entry tickets for the whole event including practice, pit access on Friday and the race cost less than £60 and a campsite pass for the best campsite right by the track, Maison Blanche, was under £100 for four of us.

That’s the kind of pricing that F1 needs to aim at and it’s why so many of us real enthusiasts return to LeMans year after year.

Come on FOCA, you know it makes sense !

27

James,

can you explain this statement again please : “with the winner of the constructors’ championship taking home a $222m reward. This amount is bigger than the entire annual budget of seven of the current 12 teams”

Does that mean the current annual budget of most teams is in the range of 30m$/year ? That sounds absurdly low as Force-India had announced a while ago they have a secure budget of 100m$/year (thanks to endless pockets of Mallya’s liquor coffers).

28

Bernie has clearly lost the plot regarding the racing, it is now only about money, the money itself is the sport for Bernie. How far can he push everyone before it collapses? This is his game, the actual racing is immaterial to him, it is a game of manipulation and playing the various parties off against each other.

Well before the end of the decade the majority of existing circuits will have given up their GPs, unable or unwilling to pay the extortionate fees, their track visitors, the paying punters no longer standing for being ripped off. TV audiences will dwindle as “Ethics” becomes prominent, it is likely that the mainstream press and media will start to push the FIA and Bernie for their justification for supporting repressive regimes. It will only take one gutsy/hostile tv interview with Bernie to do the damage and reduce tv audiences and for sponsors to flee.

I can’t help wondering if Bernie knows he is leaving and has decided that if he cannot run it then he will destroy it so that nobody else can have it after him.

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