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Is it time for FOTA to threaten a breakaway series?


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Poll: Is it time for FOTA to threaten a breakaway series? (194 member(s) have cast votes)

  1. Yes (156 votes [80.41%])

    Percentage of vote: 80.41%

  2. No (38 votes [19.59%])

    Percentage of vote: 19.59%

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#51 highdownforce

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Posted 17 June 2011 - 14:12

Is this the time of the year to make this question again?!

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#52 Risil

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Posted 17 June 2011 - 14:24

For once I am optimistic that the game (as far as MM is concerned, could be just about up). The feeling I think among teams may just be that as well. The consequences of breakaway are horrendous. As was subtly mentioned here - the ghost of CART. Let us not consider a repeat of that tale of woe.


What barriers would a FOTA breakaway face that are comparable to the Indy 500, with its separate purse, rules, officiating body and organisation? The most distinctive, 'F1' event, Monaco, is positively homogeneous compared to how the Indy 500 sat in the CART calendar. Also let's not forget that the CART breakaway happened in 1979, not 1996.

Dieter Rencken has raised the spectre of a teams' breakaway again, from behind the paywall. He also claims that the 2009 one was actually not a farce at all, but extremely successful, given the big increase in the commercial revenue share that it won. He also raises the good point that the most sensible thing to do would be for the F1 teams to enter a consortium to buy the series from CVC. It makes sense -- without FOTA signing off on the deal, any prospective buyer risks the value of their purchase dropping to zero via a teams' boycott.

I don't see why the teams need to break away. Surely with the business contacts and trust teams like Mclaren, Ferrari, Williams and Red Bull have built up (and Genii Capital's apparent access to the Renault bank), sorting out and financing a takeover deal would be relatively straightforward. The 'nuclear option' of a breakaway would be unnecessary.

The move came after a decade of being paid an aggregate of just 23% of the sport's billion dollar revenues despite being its major players and after two years of spending hundreds of billions without as much as a formal contract in place. The teams were pushed to breaking point by a governing body which steadfastly refused to heed warnings and instead formulated an F1-Lite championship complete with budget caps.

The breakaway was averted only after the teams achieved their objective – having a tripartite agreement in place, one paying them at least 50% of underlying revenues; and a wholesale change of the sport's governance from dictatorial to transparent. The current popularity enjoyed by Formula 1 is in no small part due to the responsible solidarity displayed by the teams on that June evening at Renault F1's headquarters in Oxfordshire.


The final possibility is a breakaway series, even with the January 1, 2012 restriction. Although sceptics see this as unviable, Howett believes it to actually be a viable and rational alternative, with the teams taking control of their commercial rights and commercial governance. By eliminating the 50% margin he believes they, the teams, could quickly create a sustainable future.

Howett reckons there are major weaknesses in the way CVC manages its asset. The move into high definition broadcasting came late; there is little promotion of the sport; no marketing support services are provided to teams; and the CRH's appreciation of a changing media landscape is lacking. In addition, CVC has not, he says, invested substantially in promoting or developing F1 – and believes there is no reason to expect a substantial change in this regard in the medium term, certainly not without huge pressure from FOTA.



#53 bauss

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Posted 17 June 2011 - 14:36

What barriers would a FOTA breakaway face that are comparable to the Indy 500, with its separate purse, rules, officiating body and organisation? The most distinctive, 'F1' event, Monaco, is positively homogeneous compared to how the Indy 500 sat in the CART calendar. Also let's not forget that the CART breakaway happened in 1979, not 1996.

Dieter Rencken has raised the spectre of a teams' breakaway again, from behind the paywall. He also claims that the 2009 one was actually not a farce at all, but extremely successful, given the big increase in the commercial revenue share that it won. He also raises the good point that the most sensible thing to do would be for the F1 teams to enter a consortium to buy the series from CVC. It makes sense -- without FOTA signing off on the deal, any prospective buyer risks the value of their purchase dropping to zero via a teams' boycott.

I don't see why the teams need to break away. Surely with the business contacts and trust teams like Mclaren, Ferrari, Williams and Red Bull have built up (and Genii Capital's apparent access to the Renault bank), sorting out and financing a takeover deal would be relatively straightforward. The 'nuclear option' of a breakaway would be unnecessary.


A breakaway may be more commercially viable than paying the asking price of CVC.


I tend to think the breakaway won't happen simply because of the stakes....CVC/Bernie basically have too much to lose, the whole thing FOM, F1 Brand is hollow...an empty shell without the teams.
Which is why they caved in 2009 and they are gonna have to cave again in 2012.

#54 Alfisti

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Posted 17 June 2011 - 15:09

I honestly have NFI what the teams need CVC for at all, to me they are absolutely powerful. All they need to do is stick together, if they all walk CVC is left with NOTHING, not a thing. F1 is Ferrari, McLaren, Williams, if they buy in then really the others will 100% follow.

#55 differential

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Posted 17 June 2011 - 16:36

I honestly have NFI what the teams need CVC for at all, to me they are absolutely powerful. All they need to do is stick together, if they all walk CVC is left with NOTHING, not a thing. F1 is Ferrari, McLaren, Williams, if they buy in then really the others will 100% follow.

:up:

#56 ExFlagMan

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Posted 17 June 2011 - 16:39

It's not that time of year already is it....

#57 SCUDmissile

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Posted 17 June 2011 - 16:47

I honestly have NFI what the teams need CVC for at all, to me they are absolutely powerful. All they need to do is stick together, if they all walk CVC is left with NOTHING, not a thing. F1 is Ferrari, McLaren, Williams, if they buy in then really the others will 100% follow.

:up:

before i was thinking 'no'

but now, i want some of the weak links replaced. CVC. what do they do exactly? take loads of money, resulting in high race fees, and ticket prices. temas want their share aswell, so hope the teams take over the sport, so there are less parties taking the money, and hopefully the teams realise that the good tracks must stay. (dont know about Macca and Mercs position, but Luca D has publicly defended these traditional races, so i would assume that they stay, along with the races in the markets these manufacturers want to be in.

then there is the FIA, who in my view, ar noe extremely inconsistent and hypocritical. they want to cut costs, but then tell the teams to spend a huge amount on new engines.
under thise FOTA meetings, imo they can deal with rules a lot better, like the case of the F-Duct. was allowed until the end of the season, and no worries. look at this year, with the FIA imo farcical banning of the overrun midway through the year.

so, if the teams break away, i hope they take Bernie, as he knows how to run the sport well, and let FOTA take the place of the FIA. they will have the commercial rights, so the name F1 stays, and theoretically the ones that are stopping F1 being as great as it could be are taken away.

#58 Fastcake

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Posted 17 June 2011 - 17:06

I honestly have NFI what the teams need CVC for at all, to me they are absolutely powerful. All they need to do is stick together, if they all walk CVC is left with NOTHING, not a thing. F1 is Ferrari, McLaren, Williams, if they buy in then really the others will 100% follow.

Williams is struggling to stay above water in recent months, there is no way they will take such a financial risk to start a new series, I'll question how they would take a leading role. Then we've got to question how united the teams actually are. Monty may be able to say what he wants, but the rest of the grid's bosses either have to answer to someone else, or are run by people with their own assets invested in the teams. It's hard to remain united when your boss is telling you to do otherwise, and doubly so when your own money is on the line. There is so much money invested into the current Formula One, investing more into a series that might not even make it off the ground, will not be approved by the higher ups.



#59 onewingedangel

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Posted 17 June 2011 - 17:09

The teams wouldn't even need to raise money to buy the rights from CVC - if the teams leave the resale value to the f1 commercial rights would be virtually zero -so the teams could petition for the commercial rights being gradually transferred to FOTA over a set period in return for their participation in the sport - CVC will continue to get their income and more than pay off their investment (considering they have already broken even) - and it mitigates the risk of a breakaway. WIN/WIN.

The only issue would be in terms of teams leaving and new teams entering the sport and how any ownership would be transferred - essentially the commercial rights would have to be held in trust with the participating teams getting the revenues but not actually owning the rights and being able to resell or profit without participating.

Edited by onewingedangel, 17 June 2011 - 17:15.


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#60 Alfisti

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Posted 17 June 2011 - 18:10

Williams is struggling to stay above water in recent months, there is no way they will take such a financial risk to start a new series, I'll question how they would take a leading role. Then we've got to question how united the teams actually are. Monty may be able to say what he wants, but the rest of the grid's bosses either have to answer to someone else, or are run by people with their own assets invested in the teams. It's hard to remain united when your boss is telling you to do otherwise, and doubly so when your own money is on the line. There is so much money invested into the current Formula One, investing more into a series that might not even make it off the ground, will not be approved by the higher ups.


The key thing is that to Joe Punter it's not a new series. Ferrari are there, Williams are there and so are McLaren and one or two manufacturers, so it's Formula One yeah? They just need to stick together, there is no natural/useful "league" management like there is in other professional sport, i don't see what CVC actually do to help.

#61 Red17

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Posted 17 June 2011 - 18:58

I was very young at the time of the FISA demise, but I got the impression that people did not want an organisation that was sort of a sanctioning body and that everyone cheered that the FIA was taking things into their own hands.

The main issue is this, do the teams actually have the means to fight and win this war? In America both sides were even and that lead to disaster. The breakaway should not last more than 1, 2 years and at the end of it it should efectively replace the old F1 as a continuation. If it goes for longuer both championships will loose importance (not to mention the confusion) leading to a escape of drivers and sponsors to more stable series.

#62 Fastcake

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Posted 17 June 2011 - 19:19

The key thing is that to Joe Punter it's not a new series. Ferrari are there, Williams are there and so are McLaren and one or two manufacturers, so it's Formula One yeah? They just need to stick together, there is no natural/useful "league" management like there is in other professional sport, i don't see what CVC actually do to help.


But Joe Punter doesn't really count in this (although we'll probably be the ones to suffer). It's a new series in the eyes of the team owners, the ones who will either be buying the rights off CVC, or splitting and building up a new series. Either way, this will be expensive, and given the situation of many teams, there will not be the unity necessary to achieve it.

CVC don't do anything for the sport, but they also don't interfere either, their place as majority owners of FOM could be replaced by anyone, but half the cash will still end up in some shareholders pocket. That goes for the teams owning it to. Arguably, the money could be far better spent by the FIA, or put towards developing grassroot motorsport. Either way, funding the FIA's safety programs, or helping young talent to afford the massive costs involved in getting to professional motorsport, is a far, far, better than paying for some bankers new yacht, or allowing a team to run another wind tunnel. It's such a shame Mosley threw away their share so cheaply.

#63 Boing 2

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Posted 17 June 2011 - 19:37

It's such a shame Mosley threw away their share so cheaply.


It wasn't long after 'giving' the sports rights away for nothing that mosley moved to a tax haven, still, I'm sure he had a legitimate reason......