The Business of Formula OneFormula 1 

prisonermonkeys

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We have threads for races and threads for cars, threads for the calendar and threads for the driver market and for technical development, but we don't really have any threads for the business side of Formula One. If and when it comes up, it tends to get integrated into current discussions and so it can be difficult to follow the narrative arc unless you're in all the right threads. Given the sheer amount of money involved, I thought it merited discussion, especially since the politics driving everything tend to make headlines.

It's worth starting with this - Bernie's desire to restructure prize money and television rights so that teams get an equal base payment, citing the EPL as a possible model to follow:

http://www.speedcafe.com/2016/06/28/ecclestone-seeks-f1-revenue-reform/

But (as usual) there's a catch - in order to push the reforms through, he needs the agreement of all of the existing teams, or else he has to wait until 2020 when the current agreements expire.
 
Well 2020 it is then. You have to force them to not be selfish, left up to them they'll do everything to keep getting their money they don't need just for showing up, while small teams go bankrupt.
 
With Sauber and Force India filing a complaint to the EU and now Bernie wanting to restructure the agreements, it will be increasingly difficult for the big teams to resist the pressure, especially when they love to present themselves as acting in the best interests of the sport.
 
Is Ferrari still getting their "Ferrari" money just for being in the sport? Formula 1 is arguably the most ridiculous motorsport going right now...and its business/money/politics aspect is the most bizarre.
 
The thing with the Premier league is there is a cap on the amount of Clubs in the league, and is supported by lower divisions that get promoted at the expense of top tier teams being relegated F1 doesn't have this, and even if it did it wouldn't work as the promoted teams would have a major development disadvantage.

By going with this system they will have to figure out what that cap will be, which creates a dilemma if teams drop out or come into the series, they could with hold some of the money for future teams to join but then how will that money be distributed given there will be a left over amount etc.

Either way this is the way forward to add stability across the field, and should in theory lower the dependency on pay drivers.
 
Call me crazy but I think it's unfair that everyone get the same money. F1 is a capitalist sport and as such, team should be rewarded according to last year result I think. The historical bonus have to go tho, especially seeing how much is it.

Or introduce 2 sort of reward, 1 for the the ranking at the end of the year, driver and team, then a base fund that everyone would have to support a bit the lesser team.
 
Call me crazy but I think it's unfair that everyone get the same money. F1 is a capitalist sport and as such, team should be rewarded according to last year result I think. The historical bonus have to go tho, especially seeing how much is it.

Or introduce 2 sort of reward, 1 for the the ranking at the end of the year, driver and team, then a base fund that everyone would have to support a bit the lesser team.
Read the proposal properly, you would support it.

It advocates a base money for all teams then a position bonus on how well they do, scrapping anything that isn't performance related in the process.
 
Read the proposal properly, you would support it.

It advocates a base money for all teams then a position bonus on how well they do, scrapping anything that isn't performance related in the process.

Actually yeah that's pretty spot on, <.<

If they do this, which I doubt they will, they need to cancel the new rules about having custom engine for reduce price.

Maybe we get a new sort of Formula championship in 2020 XD I doubt Ferrari and the like gonna let all there money goes away, especially since most people are watching F1 for the top 3-4 teams.
 
they need to cancel the new rules about having custom engine for reduce price.
Why? If the big teams lose their extra money and the engine pricing regulations are removed, the first thing they will do is jack the price of an engine up to make up for the lost income. Give the small teams more money, and the big teams will find a way to get it.
 
Why? If the big teams lose their extra money and the engine pricing regulations are removed, the first thing they will do is jack the price of an engine up to make up for the lost income. Give the small teams more money, and the big teams will find a way to get it.

Why should big team invest tons of money into developing an engine just to hand it over cheaply to a rival team with the same money ? It's not fair to them simply. And what would happen if Mercedes, Ferrari and Renault quit F1 in 2020 and there's no engine left to provide ?

I'm all for having an even field but you can't expect big company to develop engine for billions and sell it for 10-15 millions to team with no engine cost but same revenue. It wouldn't be fair in my opinion.

F1 worked so good for so many years because there was engine manufacturer that werent interested in making chassis, the trouble now is that all the engine manufacturer does make chassis and that's something they should check on and try to get more engine manufacturer like honda to commit but only for the engine. That would help greatly.
 
Why should big team invest tons of money into developing an engine just to hand it over cheaply to a rival team with the same money ?
Because they already jack the price up as it is. And they already have additional revenue streams; it's not like they're in danger of going bankrupt because they have to lower the price of their engines. Even with the price regulations, they're still turning a profit.

It wouldn't be fair in my opinion.
So your solution is to create a situation where the big teams are free to charge whatever they like for their engines, effectively giving them a licence to milk customer teams dry and prevent those teams from competing because they can't afford to develop their own cars?
 
Eddie Jordan is reporting that the sale of Formula One from CVC to Liberty Media has been completed and that Liberty will take over before Singapore. According to EJ, Bernie Ecclestone will be leaving his position once the transition is complete, and could leave as early as Tuesday.

Still awaiting official confirmation.

EDIT: Bernie being Bernie on the grid, giving nothing away.
 
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Well as much as a fool EJ can be he's generally spot on with this sort of stuff so I certainly won't be surprised to see that happen. I didn't catch it all because I wasn't focused on it but Coulthard was also talking about a change of approach with the new guys, something akin to the Football Premier League when it comes to finance distribution.

New era for F1 commercially, potentially.
 
James Allen on the budding sale to Liberty Media:

https://www.jamesallenonf1.com/2016...cisive-for-the-future-of-formula-1-ownership/

Two key sections stand out:

[Donald] Mackenzie is also keen for the teams to become shareholders in the F1 business, which will tie them into the business long term and give them a share of the upside and a motive to work for the mutual benefit of all to grow F1. All teams will be offered the chance to take a stake and even smaller teams like Sauber, now they are owned by Longbow Finance, might be able to avail themselves of the opportunity.
There are signs that the new management, under new chairman Chase Carey, currently exec vice-chairman of 20th Century Fox, will seek to reduce the burden to circuits of hosting fees by working with their local partners in each country F1 visits to promote the sport and connect with the fan base, then sharing in the upside when the ticket sales and gross revenues increase. Making the tickets more affordable should be a part of that strategy.
 
I honestly thought Bernie would be in a wooden overcoat before he released his grip on F1.
 
I honestly thought Bernie would be in a wooden overcoat before he released his grip on F1.
He has to go at some point. It should be on his terms, when he is confident that the future of the sport is secure and it no longer needs him.
 
And he didn't think Bernie would ever 'go' alive. F1 is long past the point of needing Bernie. He might have been the hero of days gone by but since then F1's demise has been so associated with him that he's been the scapegoat for so many other problems with the sport that he doesn't even control.

Painted as a senile dictator who's only goal was to milk everyone not named the shareholders or Ferrari of as much money as possible despite long term consequences, I think his exit is long overdue. Despite being a hero in the past he's only remembered as a villain.
 
Oh dear. Bernie going nowhere.

http://www.bbc.co.uk/sport/formula1/37298242

Formula 1 boss Bernie Ecclestone says he has been asked to stay on for three years once a takeover of the sport is completed by Liberty Media.

The US-based company is in advanced talks to take control of Formula 1 in a deal reported to be worth $8.5bn (£6.5bn).

Talks with CVC Partners, which owns a 35% stake in F1, are at an advanced stage, the BBC has learned.

F1 commercial supremo Ecclestone, 85, has run the sport for 40 years.

"They want me to be here for three years," he told Reuters news agency on Wednesday.
 
Oh dear. Bernie going nowhere.
It's a good thing. The Liberty Media deal represents a significant shift in the sport's management, and further changes - like an NFL-style model where the teams are stakeholders - have been mooted. Replacing Ecclestone, the man with all of the connections and the man who has grown the sport significantly, would be an enormous mistake and would mean changing too much, too quickly.
 
It's a good thing. The Liberty Media deal represents a significant shift in the sport's management, and further changes - like an NFL-style model where the teams are stakeholders - have been mooted. Replacing Ecclestone, the man with all of the connections and the man who has grown the sport significantly, would be an enormous mistake and would mean changing too much, too quickly.

I agree to a degree but the man is 85 and has had ample time to pass on his knowledge and connections, what happens if he kicks the bucket tomorrow? There should be some people in place to smoothly take over and not be fish out of water.
 
I agree to a degree but the man is 85 and has had ample time to pass on his knowledge and connections, what happens if he kicks the bucket tomorrow? There should be some people in place to smoothly take over and not be fish out of water.

There's nothing to say that there aren't people in place and probably have been so for some time.
 
So the various companies and contractors that Bernie has been making deals with for decades keep their confidence in the sport and the organisation that effectively runs it.
 
So the various companies and contractors that Bernie has been making deals with for decades keep their confidence in the sport and the organisation that effectively runs it.

Going round in circles here but what happens if Bernie croaks it tomorrow? Are there people in place that could takeover and keep the confidence/deals or are we on for a meltdown when he eventually does go?

It makes sense for Bernie to stay on during the takeover, 3 years seems a rather long time to steady a ship though.
 
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I can't see that Bernie is a one man band in regard to running the entire commercial interests of F1 (including GP2, GP3, Paddock Club etc) They'll be many qualified individuals used to working to 'Bernie's Vision'.
 
More details on the Liberty Media deal:

https://www.jamesallenonf1.com/2016...berty-media-takes-over-ecclestone-very-happy/

Let's just cut to the important part - we'll get to see more of this guy:

Screen-Shot-2016-09-07-at-19.53.26.png


Dieter Zetche and his moustache have met their match.
 
Whoa...moustache showdown. I'm very curious to see where F1 goes even if Bernie is still going to haunt the place for a few more years.
 
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