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1 Jan 2016


This is the second article in a series, so, if you missed my first piece you can find it here: Formula Zero - Part 1.

It's pretty obvious that Bernie's original 99 year lease of the commercial rights was a little bit of a mistake.  Don't get me wrong I appreciate what Bernie has done for the sport over the last few decades but the current model is part of what is crippling the sport.  You can't claim to be a promoter and not actually fulfill that role.  "How's that?" I hear you say.  I don't see FOM as a promoter, they're a facilitator, they are like the glue that binds all of the parties, but it is everyone else that actually promotes the sport, be it broadcasters, written media, the teams or the circuit promoters.
That's where things have got a little out of hand, you see.  Bernie and subsequently CVC, who are currently the majority shareholders of FOM, are milking their cash cow.  Of the approx $1.3bn generated by the sport in 2014 the teams, who initially installed Bernie / FOM as their mouthpiece to negotiate contracts and promote the sport, received but $850m (65%) of it (approximately). What was once about delivering the teams an equitable stake has become an exercise in how much can we make off the back of this bunch of mugs.  Furthermore, in the last round of negotiations the way in which the money was distributed to the teams changed the landscape too.  As has always been the case results don't necessarily hold the key to the way the wealth is distributed to the teams, something that was further exacerbated by the teams negotiating individually with FOM (bi-lateral agreements) rather than as part of the Concorde Agreement as they had in the past.
Ferrari get the largest payout based on their history within the sport taking $97m, which is actually more than Mercedes got for winning the Championship ($92m).  The historic/relevance payments are also made to Red Bull ($74m), Mercedes ($34m), McLaren ($34m) and Williams ($10m) with the rest of the money split amongst the top 10 teams.  As an aside the re-introduction of Renault to the sport as a manufacturer in 2016 will also see them included in this pay structure, something they had to negotiate with Bernie as they planned to buy back the Lotus team. 
Payments to only the top ten teams always causes an instability when there are more than 10 teams in the championship as someone loses out, making it even more difficult for new entrants.  Put simply there should be a payment irrespective of placing as any team entering into the championship brings a new dynamic, making the sport easier to promote.  The English Premier League's monetary distribution is something that F1 should aspire to achieve and would help those teams that are currently struggling.

Taken from PremierLeague.com
As you can see in the table above, the first column sees 50% of the UK broadcast revenue split equally amongst the 20 teams.  The second column makes up 25% of the UK broadcast revenue and relates to how many games are televised in the UK (UK live column).  The third column is the remaining 25% of the UK broadcast revenue and represents where the team finished in the table.  The last two columns are again split equally amongst the teams.

Whilst the Premier League has teams that have helped to bolster its rise to the top of the broadcasters wish lists they don't get anything for their historic achievements.  It could be argued therefore that since 2007 Ferrari have been rewarded for their mediocrity and whilst I don't have the financial figures to hand I'd suggest they contributed far less to their budget in a percentage term compared to the rest because of this.  The inclusion of Red Bull, McLaren, Mercedes, Williams and now Lotus to this group only fortifies the financial gap to the other teams.  

Apparently the face value of the sport now lies in the F1 brand but, without the teams it has no brand, giving them a larger share of the equity and a fairer distribution of the funds is therefore a no brainer.  In other words stop filling the shareholders coffers, rewarding those just for turning up and stop strangling the smaller teams and we may see the gap between the front runners and rear gunners close.  I appreciate there are costs involved in what FOM do, especially in terms of freight etc but these do not tally the remaining 35% by a long stretch...
Whilst this opening salvo has been more about money distribution lets take a closer look at the major money spinning contracts that Bernie and FOM negotiate... Broadcasters, circuit promoters and major sponsors.

Broadcasting

One of the biggest problems for F1 is that it's in a straight jacket, it has locked itself into one mode of thinking, which was all well and good when TV was king and the broadcasters could afford to pay the ransom that Bernie was touting.  The problem now is choice, the once fierce entertaining battles broadcast on a Sunday afternoon have to compete against not only a huge array of televised sports, other tv shows that have a better production value than they used to have, streaming services that allow you to watch anything you fancy at the click of a button but also against gaming, a platform that allows the player to immerse themselves in a similar world, against other drivers from around the world, rather than just watching someone do it.

In a world where everything is at your fingertips F1 now seems tame in comparison.  Whilst the rest of the world has moved on, F1 seems to have got stuck in a little time warp.  Having said that, the production element is still leaps and bounds beyond some series.  For example, IndyCar. With the emergence of the aero kits for 2015 I decided to give the sport another go.  Sat watching the broadcast, I thought I'd been transported back to the 80's.  Now I know a lot of American TV has a low production value (don't be offended by this my American friends, just watch some British TV and you'll quickly understand where I'm coming from) but the graphics looked like something straight out of KITTs dashboard.

It gave me a renewed sense of F1's achievement in how it presents itself BUT, there is still room for improvement, especially if it is to garner a new, younger crowd but we'll touch on this again later as we need to renew our look at the money...


I realise that at this point the article will become somewhat UK-centric but please bear with it as much of what I'm talking about reflects in the global F1 broadcast stakes.  When the BBC needed to carve some of the fat off their budget in 2012 they were forced to renegotiate their deal (originally due to run from 2009-2013), opening the door to the simulcast scenario we've had with Sky ever since.  The BBC forfeited their right to show every race live, replacing it with a highlights package when they didn't.  Sky swooped in with vigour, promoting the sport on its own channel and so was born the first UK pay to air model.  Not so fast Matt, it wasn't the first time at all. See Bernie had been here before and failed, spectacularly with F1 Digital+.

The graphics as used on the F1 Digital+ platform courtesy of F1Broadcasting
The Digital+ service ran from 1996 to 2002, with the German, French and Italian broadcasters paying additional fees to have access to an array of new onboard feeds, live timing, pit lane cams etc they used within their regular packages.  BSkyB carried the service in the UK in 2002 with the enhanced footage commentated on by Ben Edwards and John Watson whilst Peter Windsor provided pitlane support.  Matt Lorenzo fronted a studio style show away from the track with guests such as Damon Hill offering their insight too. However, this foray was to be F1Digital+'s death knoll, with a rather weak uptake, as the free-to-air model was still available and at £12 per race the general public didn't fall in love with it.  Not all was lost though, as the Digital+ package is essentially what FOM offer to all the broadcasters today.  No more race director solely focused on the home nations driver, instead an altogether more polished package arose  (Although that tide appears to have turned again more recently, but we'll come back to this later)
Anyway, back to Sky, who since 2012 have promoted F1 with its own channel, investing huge sums in the production of the show around the event.  Presenters and pundits don't come cheap, especially when you have 3 drivers of the last generation onboard...  The Sky team looks huge when compared with what the BBC offer but with the right production work the latter often appears to outdo their more expensive rivals.
Sky have Simon Lazenby, Damon Hill and Johnny Herbert in the paddock, Ted Kravitiz in the pitlane, Natalie Pinkham and Rachel Brookes covering the bull pen and interviews around the pitlane/paddock, David Croft and Martin Brundle in commentary box (for the race), assisted by Mark Hughes and the occasional appearance of ex drivers Ant Davidson, Bruno Senna and Karun Chandhok when they're on site to give additional insight.
The BBC meanwhile had Suzi Perry and Eddie Jordan in the paddock, complimented by David Coulthard when he's not on commentating duties.  Tom Clarkson in the pitlane, Jennie Gow and Lee McKenzie in the bull pen and doing interviews around the pitlane/paddock.  Ben Edwards and David Coulthard in the commentary box (for the race) and Allan McNish doing several of the aformentioned roles when he's on site and a space is opened up.  Furthermore, the BBC have a presence for their radio station, 5 Live, which uses several of the assets already mentioned, on rotation, along with James Allen on main commentary.  Gary Anderson was also part of the team up until 2014, reporting on the technical side of the sport.  His loss at a juncture when the sport was about to increase its technicality was poor timing from the BBC and smacked of budgetary issues, although it is my understanding that Gary wanted a larger role within the presenting team too.
If we take a look at what is being done over the pond, NBCSN took over from Speed / Fox Sports but continued to offer a similar broadcasting configuration.  Like the aforementioned Digital+ arrangement they have Leigh Diffey, David Hobbs and Steve Matchett providing insight from a studio in the States, whilst Will Buxton provides insight direct from the circuit.  Once in a while the entire team do go trackside but obviously from a budget standpoint they can't do this at every event.  I've watched races in the US and I can say, the experience of watching live events like a GP with the interruption of adverts (like we had in the UK with ITV) is not one I'm fond of but I can see why it is a necessary evil for NBCSN, although I'm sure they could package it better, what they have is symptomatic of US production again IMO.  The 'Off the grid' mini series that Will Buxton and Jason Swales have produced go to show what kind of content can be produced.. After all Formula One often has as much action off the track as it does on it!

The FOM 'world feed' means that everyone is working with the same coverage, meaning Bernie and FOM essentially have control of what we see.  Some broadcasters will edit the feed from time-to-time using some of their own graphics and cut between onboards etc but on the whole we all see the same stuff.
Whilst we all pretty much see the same thing live there is a distinct difference in what we hear and also the package that surrounds F1.  I won't get into what each country gets up to but suffice to say that for the rest of the English speaking world there was/is the opportunity for the broadcaster to buy commentary from Sky/BBC/Channel 4.
 
F1 Digital+'s failings were it was ahead of the curve in terms of the pay-per-view model but this led to a disconnect between the fans and the sports itself.  I feel that if a similar scenario were to crop up now the uptake would be much larger, especially with how content can be delivered via streaming services on several devices.  Cost is always a barrier, especially when you feel like you're having to buy something as a package, only to get the one thing you desire.  For me this is the problem with Sky, firstly I cannot have it at home in any case, as I live in a rented apartment that forbids the installation of a dish.  Anyway, if I could it would cost me £45.50 per month or £546 per year.  Which ever way you cut it, that is too much unless you're going to get some side benefits from the other channels you'd accrue.  I'm a football fan so a few additional games available to me would be ok but, not everyone is a football fan...
The other option is NowTV, who offer a daily (£6.99) weekly (£10.99) or monthly (£31.99) subscription service, which is clearly cheaper than a fixed Sky contract and enables the use of two devices and can be dipped in and out of.  I just wish they'd realise there is a market for these passes for F1 fans, as I don't need/want a week pass (unless I can take advantage of some mid-week football games) as on a back-to-back race weekend I'll need two. I'd need to be signed up for 9 months at a cost of £287.91 to cover the entire 2016 season (based on the ratified calendar). 
An F1 pass that allowed access to just the F1 channel for Friday, Saturday and Sundays on race weekends at the right price point and allowed access to two/three devices would be perfect for most.  This allows you to have the world feed up, but also have other devices doing onboards, live timing, driver trackers etc.  I'd happily pay around £7.99 for that and with 21 races in 2016 that'd bring the tally up to £167.79 for the season...  Although you could halve that by watching half on NowTV and the other half on the fresh faced Channel 4 offering (more on this later)
Subscription services like NowTV, Netflix and Amazon Prime are changing the landscape of the industry.  Which has as much to do with piracy as it does with the actual product at hand.  Bernie seemingly fears the internet because he doesn't understand how to monetize it, yes we are back to money, however, it could actually be the goose that lays the golden egg.  For me there are several ways that F1 could be packaged that will give fans both better access to content and create a new revenue stream for F1.   Bernie's Digital+ package was priced at £12 per race back in 2002, putting it at the premium end of the market and perhaps out the reach of the average fan.  There enlies one of F1's biggest problems, audience.  We keep hearing about dwindling audience figures and that the sport is in decline but one of the metrics that cannot be accounted for probably holds the biggest key: Internet viewing and piracy.  I understand FOM's reluctance to have their product out in the open, it means that it can be freely manipulated, which often leads to a frustrating time when you're searching for your favourite overtaking move from the 90's etc, with FOM issuing takedown orders the moment content hits the likes of YouTube.  The problem is, whilst it gathers dust on the shelves at FOM headquarters it isn't doing the sport any promotional favours either and isn't that what FOM are supposed to be doing? Promoting...



Furthermore, these subscription based services open up a whole new platform for FOM to divulge that classic content that is currently getting dusty in the archives at Biggin Hill.  Simply pay a monthly opt-in/opt-out subscription fee like or on the Netflix or Amazon Prime services and you get access to content you may never have even seen, especially as you can stream multiple camera angles simultaneously.  I'm sure it would be a massive hit, I'd suggest we'd even see events built around it, whereby fans watch the same race as one another and use social media to talk about it, even though they couldn't when it was first broadcast.  It has the chance to be sensational and if we are getting even more creepy, Bernie could resell the trackside advertising space, using the virtual overlays that we now see on the broadcasts (Just do a better post editing job of it please Bernie ;))

Classic F1 footage with the modern on screen graphics
One of the largest problems with moving to a new model is the transitional phase, especially as many of the broadcast contracts are staggered.  Although as we know content can be geo-locked, not that, that stops the most proficient internet users like myself who simply use VPN services to access foreign content...  Currently the following broadcasters have the right to broadcast F1 via streaming methods...

Australia - Tenplay (races shown live on Channel 10) & Fox Sports
Croatia - MAXtv to go
Finland - MTV3
Germany - RTL
Japan - Fuji TV next smart
Romania - Dolce Sport
Spain - Antena 3 and Esport 3
Sweden - Viasat
UK - Sky Sports and previously BBC iPlayer (Will be available on Channel 4's online platform All 4 from 2016)
United States - NBCSN and Univision Deportes

Neither of the big streaming services currently carry live sport, although I see it as an inevitability, it puts F1 in a prime position to jump the gate.  However, such a switch is entirely outside of Bernie and FOM's comfort zone as it would require plenty of activation from their side, especially if they were to create their own platform rather than piggyback Netflix or Amazon Prime.  In that respect I can't see it happening, although a previously frosty approach to Social Media has thawed during 2015, with F1 actively using their Twitter account to provide both serious and comedic commentary.

Building their own platform, using proprietary software is one way of protecting the brand and delivering the classic content without fear of redistribution.  However, doing so will only ingratiate the service with the current crop of Formula One fans, of which we keep being told is in decline.  Therefore, although it brings with it some risk, it does seem that using a platform that is already in place will endear F1 to a new crowd..

Switching back to content, F1 needs to continue to innovate, especially when it comes to the presentation of the sport.  Bernie's gripes with the current hybrid formula being a prime example.  Firstly, he has perpetuated the problem of the powerunits, from a commercial perspective, of them being too quite.  Granted they're somewhat attenuated in comparison with the V8's and I can understand that means they lose an element of the the theatre.  However, they're quieter for good reason, as sound is but wasted energy.  On the flip side, they aren't THAT quiet and most have found a new appreciation for hearing other details, such as tyre squeal and the plank clipping the track, that were unheard over the V8 wail.  Trackside you might not get the same wail as before, something that is easy to note if you press yourself against the railings at Becketts (Silverstone), as previously you could feel your chest being bullied by the cars as they filed through the complex.  But, I'm not that bothered by that and to be honest my ears are a little thankful too, 10 minutes stood there without ear defenders was enough to damage you for life.  The issue I have is that Bernie/FOM appear to have used this as an opportunity to push their own agenda (nothing new there) as trackside the cars don't sound too bad but from the main and onboard feeds the microphones don't appear to pick it up very well.

The same can also be said for the apparent loss of speed, whilst I'll agree that things can and should be done (although not what the Strategy Group are planning for 2017) to improve things with the design of the cars I also feel that the broadcast has made the cars look somewhat slower too.  Over the last decade (or so) we have seen a move from the 4:3 to 16:9 aspect ratio because as consumers our technology purchases have driven the industry in this direction. This widens the frame improving what you see on screen, or at least it should... 

Image from: theonlineracingassociation.com but a further edit from myself adding the outer borders to simulate the 4:3 screen area.
As we know FOM's production of the feeds means that they've always shot with 16:9 in mind, with the race director keeping the action as close to centre as possible.  Therefore I believe the truncated 4:3 format made it seemed like the trackside camera's had to pan faster to keep up with the action.


Talking of action I don't know about you but I often find myself questioning what I'm watching and why it isn't the interesting battle, with FOM sometimes seemingly going out of their way to show other shots.  Don't get me wrong having a unilateral broadcast direction is far better than having what was once a follow the drivers of our country setup, where regional production was used.  However, don't ruin the race experience with politics, show us the action...

Going back to the graphical overlays, I can wholeheartedly say that I appreciate the job that Framestore did on the new graphic set (You might remember them from the Tooned series that McLaren/Sky ran).  However, there is always room for improvement..
The newer (current) graphic set is more aesthetically pleasing, with team colour co-ordinated accents that make seeing where a team/driver is placed much simpler.
For comparison here is the last set of graphics
Taking cues from other motorsports I've long wondered why, especially on the replays of the restarts, we don't see moving identifiers used..
This is from Nascar and helps to identify the drivers in a pack, I'm quite sure this could be applied to the FOM graphics set in a way that helped the casual viewer to see who, is where.
A screen shot of a similar thing being employed by Sky Sports last night during the live broadcast
Meanwhile, DTM introduced a neat graphic, showing who had the best reaction time on the grid

I've also wondered why we don't see F1 use overlays for line comparison, it was mentioned back in 2009 but I don't believe ever saw the light of day.  It would give the broadcast teams a great way of showing just where drivers pick up time over others.  Besides, anyone that is remotely interested in gaming will have used a graduated racing line to guide you around the track before.

Taken from a random YouTube capture of some F1 2015 online racing YouTube we cn see the green racing line ahead, demonstrating the ideal line the gamer should be on. 
I'm sure these could be overlaid from the onboard footage (I'll have a go in After Affects if I get chance) to show how say a pole lap compares with another drivers lap.  The other option, stripped from the gaming world would be the use of a ghost, to display the lead drivers advantage over his counterpart(s).

Something that F1 could transfer from Indycar is the use of the visor cam, the onboard pictures we currently get from FOM are fantastic, however, they seem a little sterile.  Compare them with the frankly crap, grainy quality of the past and they lose some of the drama.  However, as I've already alluded to aspect ratio could also be playing its part there too.  (Although as you'll see the following video is clearly in 16:9)


This onboard with James Hinchcliffe accelerates the scene, making everything seem more dramatic and makes your appreciate the work going on in the cockpit.  Just note how early he scopes out the apex in the corners, as we see his head track toward it....

Back in 2012 Paul Di Resta had a visor cam for the Monaco GP, the footage studied here by Ant Davidson...



Remember it's easier for things to be tested at Monaco because it's the only circuit currently on the calendar where production of the footage isn't done in-house by FOM..

Something that I think could really elevate Formula One's broadcast images if done right could be drone footage.  It's something that the teams already use, during promotional filming days, capturing images that previously needed the huge overheads of a helicopter.  Now whilst I admit it's still a costly endeavour and something that would need to be heavily controlled for safety purposes it looks stunning.  Just check out the following footage from Kingdom Creative..



Lastly, for me at least, as I'm sure you all have plenty of your own ideas.  I'd like to see a pitstop window prediction graphic, as for newbie's or casual viewers it must be frustrating not being able to understand how/when and why pit stops are being made.  A simple calculation of the average time through the pits including a tyre change could show in an overlay of the track (Or even more simply just have an estimated position he'd feed back into) where a driver would feed back into the pack and why it's important they stay out a little longer in order to stay away from traffic even if they seem to be loosing a little time due to tyre degradation.  It's a simple calculation that I track in my head for each driver but if you don't have the data to work with I can see how it would be confusing.

UK viewers will now be aware that from next season F1 coverage will no longer feature on the BBC, with the same half the season of live races configuration and the rest highlights finding its way onto Channel 4.  This isn't the first time Channel 4 have tried to be Formula One's terrestial TV saviour though.  Back in 2011 when the original deal was struck between the BBC and Sky to split the coverage between free-to-air and pay-tv they proposed a wholesale takeover of the Beeb's contract with FOM.  At the time Bernie/FOM wanted the continuity of the BBC and had still been left wondering "what if?" over the demise of F1 Digital+.
The 2011 Channel 4 manifesto - original source http://duncanblog.dailymail.co.uk/2011/08/revealed-channel-4s-last-ditch-bid-to-keep-formula-one-on-terrestrial-tv.html
Channel 4 doesn't outwardly seem like the place for Formula One but there is no denying that they do try to innovate.  The template from their 2011 pitch is likely to be followed for their foray starting next season, however, their challenge is a huge undertaking.  Something that lies central, in my mind at least, to their approach will be they do already have a ace in the hole...

Whisper Films is a production company fronted by Jake Humphrey (Yes, you know the ex BBC F1 presenter and now with BT Sport covering the Premier League), David Coulthard (Ex McLaren and Red Bull driver and frankly one of the best parts of the the outgoing BBC F1 team, albeit he can be very Red Bull biased at times ;)) and Sunil Patel (Ex BBC Sports producer).  On top of this, the close nit team they have assembled have an extensive back catalogue of successful programming.  In August this year Channel 4 announced it had took a minority stake in the company, putting it in pole position to assist in the packaging of the Channel 4 content.  They've produced some fantastic content already, working within the Formula One environment... http://www.whisperfilms.co.uk/films

Whilst it is easy to make the connection between the two don't expect Jake to front the show, as he's just signed another 4 year deal with BT, continiung to present the Premier League but will also help front the Champions and Europa League alongside Gary Lineker coverage.  Meanwhile, Whisper's association with the production of F1 might give DC a stay of execution.

In terms of the Channel 4 offering I suspect we'll see a play on words used by the Channel, unless Bernie puts the kibosh on it, as 4mula One is an obvious cross promotional tool.  The short turnaround between now and the start of the season could present some issues to Channel 4 in terms of being ready, certainly something that won't help them to prepare content that lives and breathes around the sport as their original manifesto suggested would be the case.  However, it's easy to see how they can leverage their current programming to assist in cross promotion.  Much of which would be short term programming using special cross over shows like Come Dine with Me, 8 out of 10 cats, Gogglebox etc to garner interest from other demographics.  Thinking long term Formula One has such depth that creating both comedic and factual programming should be a breeze.  Furthermore, creating programming around the countries that the sport is currently visiting could also help to entice viewers too. 

In terms of the on screen talent and production package I suspect we'll see a scaled back on-site presence, with a studio to cutaway to when the cars aren't on the track.  Don't be dismayed though, I actually think this can be a great way of presenting sport if done stylistically and punctuated by great features.  (Whisper Films are currently working on the BBC's American Football coverage, bear in mind it's not live but it's great and shows how a studio environment can work.  If you're in the UK or use VPN this weeks show is available on the iPlayer for the next 29 days... http://www.bbc.co.uk/iplayer/episode/b06t0j76/american-football-201516-11-race-to-super-bowl-50-nfl-week-16).

In terms of the screen talent I think we'll see a few faces carried over from the BBC, with David Coulthard resuming his current duties and providing post race support to the studio from the track.  They'll need a pit-lane reporter and so I suspect Tom Clarkson may be bought across too.  However, we must remember that the BBC are retaining their radio broadcasts from the circuit too and so there could be cross-over used although I'm not sure I'd go as far to say that James Allen will lead commentary as it's an altogether different application of commentary when it's not accompanied by the visuals something many fans had disdain for in the ITV days as his style does lend to the radio broadcast.  (Don't get me wrong, personally I like James' commentary and I have often used the 5Live feed whilst watching on the iPlayer.  I appreciate the depth of knowledge that he has accrued, especially on a technical level, which comes across in his commentary.)

If we were to assume that both production companies can work together and need to save costs in doing so that leaves several spots open, the main presenter role, a studio pundit and a trackside reporter.  I'd also like to see the return of a tech reporter like the BBC had with Gary Anderson, I'm pulling for Scarbs on that one... I have no qualms as to who the presenter is, although someone like Peter Windsor would be fantastic, I can't see it.  However, it really needs to be someone who knows F1 even if they haven't been associated with it before.  They need to know the mechanisms behind the sport as otherwise they'll quickly come off as plastic.  In terms of the studio pundit(s) it has become more difficult over recent years to tied down ex drivers as they all seem to be moving onto Formula-E, however, Karun Chandhok gets my vote having done plenty of media work in the past with the other outlets and having a good grasp on how to translate what he see's for the viewers.  A fresh faced Jaime Alguesuari could also work with the Spaniard having retired from racing recently, although he may be a little green to start with.  Meanwhile, from time-to-time I think it would be fantastic if they could get special additional pundits onboard, legends of the sport such as Sir Jackie Stewart, John Watson, Nigel Mansell etc.

Aside from the 'main events' of Friday's Free Practice sessions, Saturdays FP3 and Qualifying sessions and the race on Sunday, I think there is scope for a short post news daily roundup of the F1 news, (I'll be doing something similar in 2016 via Snapchat) along with some magazine shows during the week like Sky currently produce.

Whatever comes of the 4mula One coverage I think it arrives at a pivotal juncture, where F1's relevance is being questioned and the fresh input of a channel unshackled from the restraints of a corporation like the BBC could make huge waves.

Hosting Fee's

Money is the root of all evil... something that certainly rings true when it comes to the F1 calander.  Over the last decade or more Formula One shed its previously predominant Euro-centricity and has become a truly global sport, racing at venues previously unheard of in top flight motor racing.  Countries like Bahrain, Abu Dhabi, Russia and Azerbaijan who have no real racing pedigree see Formula One as a vehicle for which to display their wares to the world.  They have been prepared to pay handsomely too, as it helps to accelerate growth for their nation.  This has put huge pressure on the 'classic' circuits not only with Bernie/FOM able to increase hosting fee's on contract renewals, it has also meant the circuits have had to make improvements to come inline with the new circuits.


When Silverstone agreed it's new 17 year deal in 2010 it helped to finance the infrastructure changes required to bring it inline with some of the newer facilities.  The original plans drawn up in 2008 (above) for the wing complex and alterations to the circuit were quickly ratified and completed in time for the 2011 GP costing somewhere in the order of £30-50m (I'm yet to see precise figures) something that needs to be paid for over the tenure of the F1 contract and accounted for along with the ever escalating race fee.  The British GP contract was believed to be around £12m in 2010, on which a 5% escalator is placed each year, meaning this year they'll be paying around £15.3m and by the end of their 10 year walk away clause just shy of £20m to host the GP.  Forced into a financial corner, Silverstone under new guidance, tried something different last year, encouraging a family audience that previously would have had an eye watering bill to attend a GP.  They slashed the general admission fee to £99 for Sunday and £120 for the weekend, whilst raising the age threshold for free tickets from 2 to 11 years old.

A bold, but smart move by the circuit promotors who've now ingratiated F1 to a new generation, turned a profit for the first time in a while and saw a race day attendance of around 138,000.  Silverstone have bucked a trend though, with many of the other circuit promoters, like the teams, on the brink.  Some of that comes down to outside funding, with the likes of Circuit of the America's (COTA) looking shaky, owing to their government funding being slashed.  However, that doesn't hold water when it comes to attendances.  The German Grand Prix at Nurburgring for example, was missing from the 2015 calender as the race wasn't financially viable.  A strange occurrence given a German manufacturer heads the F1 pack with a German driver chasing the title, whilst Sebastian Vettel a 4 time World Champion, now wearing red, also lay in contention.  The issue faced here is perhaps one of cost with F1 fans often feeling short changed when compared with other sports.  A seat at a Bundasliga game, for example, costs around half that of the Premier League and so cost perception is critical.

As an aside an issue for COTA this season was the inclusion of the Mexican GP, which meant a loss of some travelling fans, something that plagues many circuits when they're in close proximity.  As such I've often wondered why the circuit promoters and Bernie/FOM haven't banged their heads together to work on cross-promotional activities, especially as the calendar is now the largest we've ever seen.  I've long held the opinion that we should have four drivers titles on offer, of course the World drivers and constructors titles which will remain the main focus but why not have a *'The America's drivers title' (4 races), 'The European drivers title' (9 races) and 'The Asian/Oceania drivers title' (8 races) perhaps with the Champion of each also accruing some additional points toward the World title changing the landscape of the championship in its entirety.  This will not only then help with the promotion of the sport Internationally but also Continentally even if they aren't raced consecutively, with a similar calender as we currently have retained.

*Bracketed race allocation based on the 2016 calender

Other commercial deals

Use the F1 moniker at your peril, afterall it is a trademark, however, this elitest attitude does throw up a number of entanglements that disuade many companies from engaging with Formula One.  F1 as a brand only ever really aligns itself with one major commercial partner, of which the current flavour of the month is Rolex, a premium brand able to afford the stellar price tag I'm sure Bernie covets.  It's not an uncommon trend though and so perhaps a winning one, with the like of the Premier League being title sponsored by Barclays, albeit they're a UK based competition not a Global one like F1.. Perhaps if the Continental titles were to be applied it could open up avenues for more title sponsorship deals, especially as the likes of Vodaphone have withdrawn their logos at certain races in the past owing to the races being held in countries they don't want to be allied with.

Team Sponsorship

Whilst this article has more to do with the F1 brand as a whole I think it's important to also look at revenue generated by the teams too, as this is what helps them to operate in the sport.  F1 offers sponsors a global platform with which to advertise their wares, it's why we see the largest advertising spaces on the cars filled by conglomerates as they're able to leverage advertising for many of their brands, whilst also forming partnerships that'll advance both their own and the teams interests.  Sponsorship within the F1 ranks is circular, with many sponsors simply moving from team to team based on performance orientation which also has its own performance effects, due to budget constraints.  Then there are the teams that have to work outside of this model, accruing sponsors on a regional and smaller budget basis, Manor being the current example but perhaps BrawnGP are the 'biggest' team to have done it in recent history.  Arriving with their predominantly white with fluorescent accent livery devoid of sponsors back in testing in 09 they had little to worry about for that season, having been given a budget to operate by the outgoing Honda board.  However, if they were to continue to develop at a decent rate and have enough money to carry themselves over to the following season they needed to get logos on the car.  Richard Branson's Virgin were the first to eye a deal that would see their logo's emblazoned on what came to be the best car on the grid.  Many more followed suit on what turned out to be an almost race-by-race change of sponsors based on region.

This will clearly make for a more difficult task of filling the car but, if done with the model in mind from the outset fortune can favour the bold.  As at the other end of the spectrum McLaren proved last season that a sudden downturn in form and a disconnect between the team and the sponsors leads to losses.  McLaren are looking down the barrel of a rather bare car in 2016, if 2015 wasn't already bare enough.  The once juggernaut of the sport has had no title sponsor for several years and lost long time partners Johnnie Walker and Tag Heuer to rival outfits going forward (Force India and Red Bull respectively).  This leaves them with Santander (another deal on rocky ground), Segafredo, Hilton, CNN and Chandon and of course Honda who not only supply the team with free powerunits but also put money toward the driver lineup/budget.

In conclusion

If you've made it all the way to the end of this post, especially in one sitting you deserve a medal.  I'm sorry it's been quite a long one, however, there was plenty to cover.  Money sits at the core of F1 as to why there is a disparity between the top and bottom teams.  I'm not saying money can buy you succes but it can go a long way to getting you there, a fairer distribution of the funds collated by FOM seems to me to be an obvious way of achieving a closer field.  As always don't be shy to air your own thoughts in the comments below...
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7 comments:

  1. With respect, you seem to fall into the same trap as many other commentators, accepting the "inevitability" of pay-per-view.

    I don't see it as inevitable; in fact, far from seeing the land of opportunity you conjure, I see the start of a death spiral for F1.

    Unlike, say, Premier League football, F1 needs to continually promote and market itself to the fan base. The two aren't comparable. There is little "tribal" element to support, orders of magnitude less matches, and so on.

    F1, in my view, should be free to air, an event promoted as "newsworthy" rather than paid-for entertainment. TV networks should compete on quality to receive rights; venues likewise should be judged on their ability to put on a good race.

    Everything possible should be done to keep F1 front of mind amongst as wide a number of people (not just hardcore fans) as possible.

    More viewers = more sponsorship for teams, more hardcore fans born, more loyalty, and so on.

    Bernie loves pay per view because he earns a % on every £, whereas he earns no % on any £ of team sponsorship - in my view, this is a money grab pure and simple, supported by views such as the ones you seem to be promoting.

    Bernie built the sport without all of the new revenue channels, and still amassed a fortune. There's no need for more £ to be taken out, and the plans you so breathlessly propose will do nothing to ensure the lasting appeal of the sport for years to come.

    Radical thinking isn't "look how cool the digital platform is"; radical thinking is "how do we get F1 to _matter_ for the largest number of people, casual viewers or fans alike?"

    But if Bernie's path _is_ inevitable then at least we might get to enjoy a couple of years of fancy viewing options until the collapse comes...

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    1. Thanks for your input Silas, whilst I agree I'd love to see F1 retained on free-to-air channels I'm being realistic and looking at angles whereby we'd actually get decent value for money..

      The fortune amassed by Bernie et al during F1's formative years worked because FTA was the only option and F1's 'entertainment' value could be paid for by the FTA channels, this is no longer the case.

      Whilst I agree that F1 needs to promote itself to the widest audience it possibly can it is already close to the financial brink, with everyone trying to royally screw as much out of it as possible. To retain that level of financial income it must adapt with the market.

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  2. One characteristic of the F1 coverage in the US is that they embrace the fact that F1 is a niche sport. It airs live, often in the middle of the night. It is not easy to watch, but the commentary lineup of Hobbes, Matchett and Buxton make you feel like you're watching a race with friends.

    My takeaway from this article is that F1 needs to be able to segment the market. Segment it across national media markets, languages, digital, over the air, pay vs. free, live vs. delayed.

    I'd definitely pay a little more to be able to watch with my favorite commentators, focused on my favorite team and driver, with my level of technical understanding, at a reasonable time of day.

    Having me pay a few dollars to do that, instead of missing a race, is better for me and for F1. The more races I see in the spring means I'm more likely to buy tickets to a race in the Summer.

    To your point, the promoter of F1 has a huge task to get F1 out to the viewers and maximize profits, using whatever market segmentation techniques and technology it can. The promoter is paid a lot of money to do so.

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    1. That's exactly what I'm proposing, it needs to be available to as many markets as possible whilst retaining its financial integrity. Using the football example again the BBC may have lost F1 to save money but just ahead of that they signed a deal to retain their Premier League highlights show MOTD (Match of the Day) at a cost of £60m per season. Now whilst you have the choice of watching (and paying) for live coverage you still have the FTA coverage too, just in a highlights package instead.

      I didn't include it in the article, as frankly I already went on far too long, but I'd like to see the teams have a punt at their own content/channels too. The mechanisms involved would be quite convoluted but it is just another way in which you could view the sport (ie from the perspective of your favourite team, with their content packaged around it - including sponsors)

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  3. From what i remember about f1 digital when it was around, it was a bit of a faff to sign up. It wasnt like today when you can just press a red button and get it instantly. Its probably why I never tried it even once and maybe contribued to its low viewing.
    Regarding coverage of races , I think my favourite was when the BBC
    used David Coulthard and Martin Brundle in the commentary box. No professional commentator , just good insight into the sport. Unfortunately it was the last season of exclusive coverage and Brundle moved to Sky

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  4. I think the whole business of F1 has led itself up a huge cul-de-sac. There seems to be a general belief that somehow exclusivity is what makes F1 attractive whereas I would agree with the other commentators that accessibility is the minimum requirement needed to build the fan base year-on-year.

    There seems to be a belief that the technology of F1 is very important, yet no broadcaster makes the slightest attempt to undertake the sort of analysis that you do in this Blog. The BBC tried with Gary Anderson, who sadly he is not the greatest broadcaster, but if C4 does one thing different then having a Mike Gascoigne type explaining what has changed race to race is paramount.

    As things are, I would prefer to see much simpler regulation a 3-element front wing for example so if something is changed then it is obvious. The engines are very clever, but so is University Challenge, but it does not attract big viewing numbers.

    All that is really needed is a Gladitorial contest amongst the best Charriot racers. Save £millions on the cars and teams, charge the tracks less to get bums on seats, regard terrestrial TV and social media as cheap promotional material. Currently, F1 also dismnishes the value of every other form of Motorsport to near oblivion.

    I would be in favour of a simple engine as suggested by Todt and BE if I did not believe that the motivation is solely about who controls the power base and cash.

    As things are, I believe F1 could be virtually dead within a couple of decades.

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  5. As a 44 year old life long F1 fan, and father of a 23 year son who is a car nut it is painfully obvious the current way F1 is presented to the world is outdated. In my view the changes in the world that are happening are not evolutionary, but revolutionary. F1 has to change. For those of us who grew up in an era when information was scarce and had to be worked for, F1 and with it's deep politics, technicality and exclusivity was/is very appealing. When I listen to my son who walks away after just moments making yet another effort to watch F1 with is old man, it is obvious these same factors are not only unappealing but concepts that aren't even on his radar.

    I don't mean to suggest he represents all twenty somethings, but he is a car fanatic and F1 leaves him completely bored. My worthless theory is that to the new generations the vast amount of information/entertainment available at a click or voice command means the time and effort needed to invest in F1, and particularly it's current quagmire of endless rule changes and political wrangling is just not appealing.

    Simply put Bernie has built this empire on something that is in the current technological environment too much work to watch. I find it sad, but today's world is about quick and now, a product or person is given seconds to succeed and draw attention. One area that DID succeed as far as an immediate wow factor was the sound, certainly not the root of all problems but it was exciting and made F1 unlike anything else.

    I agree with just about every point in this article and feel F1 will have to change in many ways, or it will cease to exist.

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Whilst I'm trying to keep atop of the blog you may have noticed of late that there is less content appearing. For those of you that haven't realised, most of my work has now been moved over to Motorsport.com where I'm working with Giorgio Piola.

I'm still doing the technical image gallery for each GP with the continued support of friend of the site Sutton Images. However, as always my time is limited and so this might not be updated as quickly as it once was, so keep checking back.

As some of you may have found out already I'm also working with the Missed Apex crew on their podcast from time-to-time, either doing race reviews or dedicated 'Tech Time' shows.

I've embedded the latest version of the podcast below and will update this a frequently as I appear. However, please head over to Itunes if you want it to appear in your player when episodes are available. The show is great to work on and has a great lineup of 'regulars' but has also enticed some bigger names recently too, with Will Buxton and Bradley Philpot on shows during the summer break.


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