Money makes the world go round, so they say, and in the case of Formula One the money is billions of dollars a year in profit for the American giant corporation Liberty Media. Now in their eighth year since acquiring the commercial rights for the sport, Liberty are ramping up their income with the addition of new race promoters who often are prepared to pay double the hosting fee of the traditional European circuits.
Many of the new F1 venues are in non-democratic countries where the local population has no interest in motorsport and has no tradition of competitive racing. With F1’s global audience of 500 million, it is the third most watched sport in the world behind the Olympics and the Soccer World Cup and the likes of Saudi Arabia and others are using it as a vehicle to push a growth in tourism to replace their oil revenues which will disappear over the next several decades.
US media giant acquires F1
Prior to Liberty Media acquiring the rights to promote Formula One the sport was owned by another global capital investment company by the name of CVC partners, who retained the services of a certain Bernie Ecclestone to run the show. Ecclestone’s business model was create an exclusive brand which demanded mega high fees from a small number of elite sponsors who could market their relationship on the back of the sport.
But its been all change since the American global giant acquired Formula One and the number of USA based companies who partner with the teams has more than doubled in less than a decade, despite there being just three races in the ‘land of the free.’ Even the once sparsely livered teams like Williams, Haas and Sauber now have a plethora of global brands adorning their bodywork and innovative on board cameras inside the cars are clever designed to maximum every inch of the body works as advertising space.
The newbies who came to love F1 via the Netflix series “Drive to Survive” will not remember the roots of the sport, where in the 1950’s and 60’s a passionate motorsports fan could rally together a few wealthy mates and buy a customer car from the likes of Alfa Romeo along with a gas-guzzling engine and go F1 racing with a crew of ten mechanics and engineers.
Pre-WWII Grand Prix racing decided the starting order for the race by drawing lots but since the inauguration of the FIA world championship in 1950, the way pole position was decided found its roots in the ‘sport of kings’ – horse racing. Up until 1996 qualifying followed a fairly standard pattern – there were two sessions in which to set times, one on the Friday and one on the Saturday, and no fuel restrictions of any kind. There were foibles in each decade of course – from special one-lap qualifying tyres and engines in the turbo-charged Eighties to early morning pre-qualifying in the late Eighties and early Nineties – but essentially the system remained the same as it always had, with the fastest overall time securing pole.
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Historic F1 competition with 33 cars
Further up to 33 cars would compete for the starting order in the Grand Prix on Sunday, with just the fastest 28 allowed to participate in the race. Teams with restricted funds would pick and choose which events they attended and many of the European drivers didn’t bother to enter the Indy500 race which was part of the F1 schedule.
Today the starting grids look sparse when compared to other motorsports events with just ten teams and twenty cars lining up each weekend waiting for ‘lights out.’ Yet the commercial agreement which binds the teams, the FIA and the commercial rights owner still provides a legal clause for up to thirteen teams participating which of course would expand the grid to 26 cars, just two less than was the case in yesteryear.
In an effort to expand the competition, Bernie Ecclestone agreed to admit three new teams to F1 in 2010 being Lotus, Virgin and Hispania (HRT). Yet it was quickly apparent they did not have the financial backing to properly compete and the F1 supremo described them during their rookie season as ‘cripples’ and an ‘embarrassment’. All three eventually disappeared from the sport, yet during their time there was opportunity for 24 drivers to showcase their skills – or lack of talent – each weekend for the fans to support.
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Lack of opportunity for young driver talent
With drivers in the modern era having careers which can span three decades, the opportunity to participate in motorsport’s top table is highly restricted and there are skilled young racers who will never get the chance to shine in the F1 spotlight even though they are potential world champions if given the chance. The legally empowered regulator of Formula One decided early last year, to open the door for applications from new teams to join the competition.
After a lengthy six month process which required exhaustive documentation from the applicants, the FIA gave the green light to Andretti Global Motorsports to take their place on the grid in the future. Yet unfortunately the three headed monster which is the teams, the FIA and Liberty Media fought a bitter battle in the media, with Liberty and the teams refusing to countenance Andretti’s participation.
The current agreement which binds the three parties allows for up to three new teams but they must pay an anti dilution fee of $200m. This number was agreed but the F1 team bosses around three years ago nut it appears they had paid little attention to the consequences.
When Andretti arrived on the scene, there was almost universal push back from the F1 competition, and quickly a number of $600m was now mooted as more appropriate compensation for the dilution they would suffer due to an additional competitor sharing the prize pot.
Andretti a global household name
Of course Liberty could just increase the prize pot from their gazillions of incremental revenue they’ve raised since acquiring the commercial rights, but clearly the company car Ferrari’s and private jets for the executives at the US media giant take precedent over the sport they control.
Even more surprising is the fact that the USA has just one F1 legend of the sport, Mario Andretti. He sits amongst the greatest ever drivers in motorsport having won the F1 championship. Mario Gabriele Andretti is just one of three drivers in the history of motorsport to have won races in F1, Indycar and the World Sportswear championship and he claimed the F1 drivers’ title in 1978.
The American household name is the last US driver to win in F1 which took place at the 1978 Dutch Grand Prix. With his final win in Indycar in 1993, Mario became the only driver in history to win Indycar races across a four decade long career. Such is the legend that is Mario, his name has become synonymous with speed in popular culture. Police officers in the UK would even admonish drivers exceeding the speed limit with the quip, “who do you think you are, Mario Andretti?”
Yet despite the incredible success of his global racing organisation which competes on three continents around the world, Andretti has had the door to Formula One slammed firmly shut in his face. At the recent Miami Grand Prix, the icon of motorsport was insulted in public by the president of Liberty Media – who nobody really knows and is some corporate boffin raking in his hundreds of millions a year from the humble fans of the sport.
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F1 legend publicly insulted
Mario was chatting with F1 CEO Stefano Domenicali who is an F1 man through and through and is the longest standing Ferrari team principal (2008-14) since the glory days when the team was run by Jean Todt. As the Sprint race came to a conclusion, along came Greg Maffei the president of Liberty and rudely interrupted the conversation they were engaged in.
According to reports from NBC, Mario revealed the nature of the exchange with Maffei which was brief but categoric in nature. “Mr Maffei, broke in the conversation and he said: ‘Mario, I want to tell you that I will do everything in my power to see that Michael never enters Formula 1,’” explained the motorsports icon. According to Andretti, Maffei then stormed of giving him no right of reply. “I could not believe that,” said Mario. “That one really floored me.
“We’re talking about business,” he added. “I didn’t know it was something so personal. That was really — oh, my goodness. I could not believe it. It was just like a bullet through my heart.”
Maffei has presented in the past like he’s a man with. a chip on his shoulder commenting after the cost cap was finally agreed :“We got there. Dumb Americans, what do we know about the sport? We say we want to get it done, and they laugh at us. Chase gets it done, full credit – Chase and team.”
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US Justice department investigate F1 ‘cartel’
It is unclear as yet whether the FIA intend to enforce their approval of the Andretti F1 application but the organisation recently opened a base in Silverstone with a workforce 80 strong making technical preparations for their entry into F1. During the recent Miami Grand Prix, US lawmakers opened an investigation into F1’s restrictive practices which will more than likely end up in front of a senior US Judge.
Six senators have now petitioned the US Justice Department’s Antitrust division to investigate their concerns that Formula One is a de facto Cartel.
The USA is the land of opportunity for Liberty Media with billions on offer from corporate sponsors desperate to be associated with F1
Which has seen Liberty expand the US racing schedule from just one to three races.
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Andretti beef up F1 technical team
“Clearly there is a financial incentive to adding an American team to F1’s roster, and there is no reason they should be blocked unless [Formula 1 Management] is trying to insulate its current partners from competition,” they stated. Of course this flies in the face of everything the ‘American dream’ stands for and the consequences for Liberty Media may well be substantial.
Pat Symonds this week announced his departure from the FIA role as chief technical officer to join Andretti in their preparations to join F1. Symonds for the past seven years has been responsible to creating the current set of car design regulations in 2022 together with the next set of rule changes coming in 2026 when Andretti intend to take their place on the grid.
Ex-F1 drivers, media pundits and fans alike who have been repeatedly polled are all overwhelmingly in support of an eleventh team on the grid and the opportunity it brings for talented young drivers to take their place in F1. Yet it is corporate America and the US legal system who will decided whether those who fund the sport from their hard earned income get what they want, or whether greed and personnel vendettas win out at the end of the day.
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Newey’s manager finally reveals his next F1 mov
Its rare a Formula One engineer is the centre of attention in the paddock yet at the Miami Grand Prix all the talk was about Adrian Newey. The Red Bull design guru announced he was leaving the F1 team with immediate effect although he will remain with the energy drinks corporation to complete the roll out of the RB17 hypercar.
In his only interview that weekend with Martin Brundle, Adrian claimed he was “a little tired” and would probably get a motorhome and travel down through France with his wife and their dogs. Of course there was immediate frenzied speculation over where Newey might end up next with Ferrari being most commentators best guess….READ MORE
Suppose US tax law was amended to make sponsorship of F1 no longer deductible? What then Liberty?
Perhaps they’d buy “the World Sportswear championship” (sic) to which His Lordship refers.
I can’t believe that anyone is actually taking this third-rate soap opera seriously. There has been more on-track passing for the lead at the last three Indy 500s than there has in the same season of F1, yet some still call it “racing”. It isn’t. When tire degradation, rear spoiler position and pit stop strategy have become “racing”, we’d all be better looking back at the definition. As for Andretti, be Americans: tell F1 to self-fertilize.