GIVE US LIB­ERTY

For­mula One has new own­ers and, on the whole, this is a good thing

Car (South Africa) - - COLUMN -

IBERTY Me­dia has taken the rst steps in a R115,5 bil­lion deal to be­come F1’s new owner. Early days yet, of course, but the ini­tial signs are good. In­deed, they could hardly be any­thing else given the money-grab­bing ethos of the out­go­ing CVC Cap­i­tal Part­ners, a pri­vate-eq­uity com­pany that had no in­ter­est what­so­ever in de­vel­op­ing the sport.

It should be said from the out­set that the ac­tual rac­ing, at least in the short term, will not change. Lib­erty Me­dia, as the name sug­gests, is more in­ter­ested in ex­pand­ing me­dia rev­enue growth and spon­sor­ship de­vel­op­ment. The com­pany has ac­cepted that F1’s big­gest weak­ness in that area is de­clin­ing spec­ta­tor and TV view­ing gures and a fail­ure to en­gage the younger gen­er­a­tion. As a me­dia con­glom­er­ate, Lib­erty should be able to put that right.

There are, of course, pos­si­ble down­sides. For a com­pany such as Lib­erty to get a re­turn on its in­vest­ment, there could be a need for 25 races (a pos­si­bil­ity en­shrined in the agree­ment bind­ing the sport). This would place an im­pos­si­ble de­mand on en­gi­neers and me­chan­ics al­ready strug­gling to cope with this year’s record ros­ter of 21 Grands Prix.

On the other hand, Lib­erty ap­pears to be aware of the need to as­sist race pro­mot­ers rather than con­tin­u­ally beat them over the head with an out­ra­geous es­ca­la­tion of the race fees de­manded by Ec­cle­stone and his bosses at CVC.

Mean­while, Ec­cle­stone re­mains at his com­mand post in the F1 pad­dock.

LLib­erty’s knowl­edge of F1’s unique ways is ex­tremely lim­ited, so it’s a sen­si­ble move to re­tain the ser­vices of the man who con­trols ev­ery­thing from race fees to the colour and dis­tri­bu­tion of pad­dock passes. Once Lib­erty has a bet­ter un­der­stand­ing, ex­pect to see Ec­cle­stone hand over the com­mer­cial reins, pos­si­bly to Zak Brown, the 44-year-old en­tre­pre­neur re­spon­si­ble for bring­ing UPS, Johnny Walker and Mar­tini to Fer­rari, Mclaren and Wil­liams re­spec­tively.

Lib­erty is not a char­i­ta­ble in­sti­tu­tion. The American con­glom­er­ate – part of 21st Cen­tury Fox – owns the sec­ond­largest US ca­ble tele­vi­sion com­pany and is listed on the New York Stock Ex­change, oblig­ing Lib­erty to re­main trans­par­ent and keep the au­thor­i­ties and cur­rent share­hold­ers happy.

The di­rec­tors have clearly been at­tracted by an in­come of more than R123 bil­lion guar­an­teed by ex­ist­ing con­tracts over the next 10 years. But the signs are that Lib­erty is also aware of F1’s past. Chase Carey, chair­man of the newly formed F1 group, hinted as much dur­ing a re­cent in­ter­view that also demon­strated his com­pany’s will­ing­ness to em­brace the sport.

“As a global sport, there are op­por­tu­ni­ties, and we’re ex­cited about the op­por­tu­nity to grow it in the Amer­i­cas and Asia,” said Carey. “But I want to be clear that the es­tab­lished mar­kets that have been the home and foun­da­tion of F1, with Europe in par­tic­u­lar, are of crit­i­cal im­por­tance. We do want to con­tinue to take ad­van­tage of the global foot­print of this sport and we think there are those growth op­por­tu­ni­ties. Those mar­kets in the US and Asia are ones for us to de­velop.”

Even al­low­ing for Lib­erty’s need to make money, this is en­cour­ag­ing for tra­di­tional venues such as Monza, Hock­en­heim and Sil­ver­stone, cur­rently be­ing squeezed dry to the point of with­er­ing on the cham­pi­onship vine. This prom­ises to be a sub­stan­tial change to the ex­ist­ing pol­icy of chas­ing new venues oated by govern­ment sub­si­dies, re­gard­less of how ten­u­ous the long-term busi­ness plan may be (South Korea, In­dia and Turkey; here to­day, gone to­mor­row).

Such short-term op­por­tunism has fu­elled F1’s greed and raised the race fee bar to a ridicu­lous level. This, in turn, has driven ticket prices up and at­ten­dance down. CVC could not have cared less about the ac­com­pa­ny­ing disen­gage­ment be­tween F1 and po­ten­tial young fans. Nor could they be both­ered about the loss of the French Grand Prix and the threat of the Ger­man, Bri­tish, Italian, Bel­gian and American races fol­low­ing in the sad wake of the old­est Grand Prix.

Lib­erty’s wish to soften the blow for race pro­mot­ers will nec­es­sar­ily en­tail per­suad­ing the teams to spend less and re­duce their ex­ces­sive de­mands: no bad thing. There are clearly choppy seas ahead, but the course be­ing set by the new owner is aim­ing for calmer wa­ters that may be some dis­tance away but worth striv­ing to reach if the very fab­ric of F1 is not to be torn apart by greed.

It is heart­en­ing to learn that Lib­erty is keen to ex­plore the vast, largely un­tapped home mar­ket in the United States, as well as pre­serv­ing some of the sport’s tra­di­tions. Dur­ing this nec­es­sary re­set­ting of F1’s his­toric com­pass, wouldn’t it be nice if a means could also be found to recog­nise and rekindle South Africa’s signi cant con­tri­bu­tion to F1’s her­itage?

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