Rating Liberty Media's First Year In Formula 1
As we near the end of 2017, the sport, the teams, the drivers – everyone is looking forward to the 2018 Formula 1 Season. We are too. However, in one of our last posts that talks of the 2017 Formula 1 Season, we invite readers and listeners to rate Liberty Media’s first year as new owners of Formula 1.
For starters, they’ve put a marketing plan in place. Bernie Ecclestone almost never bothered to market the sport, especially to the new audiences. However, Liberty Media have done well to embrace the power and reach of social media and use it to reach out to the younger audiences. The other small but crucial change they made was to relax the use of what teams and drivers were allowed to post on social media. We also had the F1 Live in London event – a first of its kind! In my view, altering the marketing plans of Formula 1 was the easier part.
The tougher part would be to change the basic thinking of the sport. At the moment, the sport is divided between the have and the have-nots and they are resisting any form of change that could harm their position in the sport. A position that offers them money to participate – and we know how money is key to winning races and launching a championship challenge in a sport like Formula 1. This would mean altering prize money pay-outs and putting budget caps in place – two key foundations that Ecclestone built the sport on.
An equitable prize money payment structure will go a long way in bridging the gap between the front runners, the mid-field and the minnows. And no, I don’t mean making equal payments to all the teams. The iconic teams bring much more to Formula 1 and should be compensated, but is the value of their brands more important than a sustained model of operation for Formula 1 overall? I do expect Ferrari’s quit threats to intensify over the time to come.
Apart from the business of the sport, the racing too needs changes. Liberty Media is already understanding what it can do to make it easier for cars to race each other and while 2018 may be too early to see the changes, trust Ross Brawn to put forward ideas that will make more sense than what any of the previous Working Groups have managed. And while we’re talking of fixing the cars, it would be nice to fix the circuits and tyres too. I explain my thoughts below:
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- Circuits – They spend tons of money in hosting fees, some of them even spend tons of money in the publicity, the fireworks, etc. Can a fraction of this be spent on making specific modifications that would encourage wheel-to-wheel racing? We hear that Liberty Media may already be considering this.
- Cars – They’re sexy, they’re fast, but they get nervous and insecure when they get near another car to compete – like most humans do? Let’s build cars that behave like cars and not humans, in that case.
- Tyres – Pirelli’s 2017 compounds were far better than the ones from the previous seasons. However, instead of introducing an additional tyre compound, how about increasing the performance gap between two immediate compounds?
- Engines – Well, the 1.6 litre hybrid turbos are here to stay. But can the FIA and FOM work to ensure that there is fairness in competition in the field? At the moment, Ferrari and Mercedes are controlling the competitive quotient of the grid.
- Budgets – Will Liberty Media be able to do what no one has previously managed to do, introduce a cost cap for the teams? This one is a tricky subject and will ruffle few feathers in the paddock, but it is a case of how soon will Formula 1 be cost-effective for new investors, manufacturers and privateers?
- Prize Money – Even mentioning this point ruffles more than a few feathers! Can Liberty Media work on a model that pleases the iconic teams in the sport while also helping the mid-field and minnows maintain a healthy business? Yes, the teams overspend in their own right, but hopefully the cost cap should control that urge. At the moment, Formula 1 is like the capitalist economies – the rich are getting richer, the poor are almost at the poverty line.
There’s a lot more in the podcast, so go ahead and tune in. And by the way, here’s wishing all our listeners, their families and friends a ‘Merry Christmas!’.