GIVE US LIBERTY
Formula One has new owners and, on the whole, this is a good thing
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?