F1’s new CEO Chase Carey has responded to comments by his predecessor Bernie Ecclestone at the weekend in Bahrain that F1 race promoters had been overcharged and will now want a discount or to withdraw from their contracts, as well as his assertion that Liberty is not focussed on profits, where he had to be to satisfy his shareholders, CVC Capital Partners.
The American told the Financial Times on Monday that Ecclestone “managed for short-term profits, we are managing for long term value”, while he said that race promoters “were not tricked” on price, but the problem was “has F1 invested in the right way to support the events?”
Ecclestone was deposed by Liberty Media once they completed the takeover of the sport in January. He was made chairman emeritus. They installed Carey and his management team and they have since renewed circuit deals with Russia and Canada, while the Singapore promoters were in Melbourne to discuss a contract extension. However Malaysia has announced that this year’s race will be the last.
What Ecclestone said
Ecclestone was in Bahrain as a guest of the Bahraini Crown Prince and went on the grid on Sunday. On Friday he met with reporters at the track and said,
“The only thing that would be good for everyone would be if we could charge the promoters a lot less money. I charged them too much for what we provide.
“I did some good deals commercially. They are paying a lot of money, and most of them, if not all of them, are not making any money. Quite the opposite.
“Sooner or later I’m frightened that the governments behind them will say enough is enough, and bye-bye.
“If we could reduce the fee they pay they could then charge less for tickets and sell more tickets.
He also suggested that Liberty Media and the new management were not worried about managing the F1 business for profit, as they are spending money he did not on new areas like commercial research, marketing and digital media.
“I was running the company to try and make money for the shareholders. It doesn’t seem that’s the thing that’s driving them. He (Carey) wants to get more happy spectators I think,” said Ecclestone.
“It’s not for a few years when people start thinking you haven’t done what you thought you would have. I wouldn’t want to be having to deliver to a public company today. I feel sorry for Chase having to do that.”
Carey was reluctant to get into a tit-for-tat with Ecclestone, however on these points he responded to the Financial Times on Monday,
“These were agreements negotiated between two capable parties and if there is a definition of fair value it’s a deal that two capable parties agree on,” he said “These were agreements between two parties that valued the franchise how it was valued. Nobody was tricked.
“If there is a point to it; has F1 invested in the right way to support the events? It’s not that the deal is overpriced, it’s more did we deliver where we should deliver?
“So when Bernie says we are not managing for profits, what he is meaning is: we are investing in marketing, investing in digital.
“He managed for short-term profits, we are managing for long term value.
“Many times to build value you will invest money at an early stage to increase value at a later stage.
“If you look at sports that have had incredible growth, like the English Premier League or the NFL, they have made investments to grow their franchise. We are committed to growing value, but we do believe it’s important to invest in the sport. We do care about the profits, but realistically the long-term value is what it’s all about,
“Therefore some of the things that should have been done to support the events; marketing the sport better, creating access to digital platforms to bring in new fans, to provide research to understand how do you make it better, those sorts of tools didn’t exist.
“The (Ecclestone) comment on profits is very telling; is it about short term profits? No. We’ve been very clear; we think it’s about building long term value.
“Investing money does not mean we don’t care about profits”
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