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#51 pdac

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Posted 12 November 2014 - 21:53

Dieter Rencken's numbers came from tax details filed with the British Government and from the teams themselves, as such they can be considered relatively accurate, though obviously given that McLaren and Ferrari's race teams are part of a wider group there's some room to maneuver there. It should be pointed out that Tata Communication are in a partnership agreement with FOM and it's them that do the investement and development on things like 4K TV. As for HD, it was the fans that pushed that agenda after years of complaint of being so far behind other sports. I wouldn't say Bernie actually listened to them but that by 2010 it was obvious F1 was going to be loosing out without it. The world of F1 would have been better off if that idiot Moseley hadn't sold on the 113 years TV rights to Bernie for 1% of their value and left it with the FIA, maybe not perfect, but a damn site better than what we've got now.

 

The last concorde agreement actually expired around 2009, but was extended by agreement of all parties to the end of 2012. Rather than FOTA and Bernie/FOM not coming to an agreement, he saw Ferrari and Red Bull falling out and swooped to offer them a huge incentave to stay on in the championship and then worked through the rest of the teams offering them progressively less for each team based on how important he felt they were. He didn't even offer HRT anything, effectively forcing them to close as the team was unsellable having no comercial agreement in place. Yes, overall the teams are getting more money now than they were under the old Concorde, but it's all concentrated to Ferrari, Red Bull and McLaren, whilst Williams and Mercedes get considerably less then the other teams get a small amount based solely on their Constructors Championship position. 

 

In a world where TV and trackside viewing figures are dropping, Bernie flat out refuses to give a damn about the internet and FOM, the promoter, doesn't do anything to promote the sport, it's become increasingly difficult to sell the sport to TV companies (a loss of revenue here directly impacts FOM/CVC) and sponsors which makes it exceptionally difficult for the teams to attract the finances they need to keep going. Add to that that F1 itself has become a competetor for those few sponsors going.

 

Anyone that can't see anything wrong with this is clearly blind.

 

Thanks for clarifying and adding the detail.

 

My take on the bolded bit is that Bernie has backed himself into a corner. He has been (cleverly and, perhaps, correctly) been protecting the medium term life of F1 by selling long-term contracts. He's maximised the revenue from those contracts by adding penalty clauses for early termination, but most importantly, by giving the buyer exclusivity. It is that which is making it difficult for F1 to expand into the world of the internet. Maybe as those contracts expire it might come about.



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#52 johnmhinds

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Posted 12 November 2014 - 22:10

Why the heck did Bernie sell off F1 to people like CVC in the first place?

 

The couple of billion he got from the sale is nothing compared to what he would have got in the last 8 years if he was still in charge.


Edited by johnmhinds, 12 November 2014 - 22:11.


#53 Nathan

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Posted 12 November 2014 - 22:21

" They have an entity, such as FOM, managing and promoting the sport, then handing on the profits to the participants and governing bodies. And most of them are significantly more healthy."

 

How many times did the teams pass that up???  The chances were there, and now the price is skyrocketing.


Edited by Nathan, 12 November 2014 - 22:30.


#54 johnmhinds

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Posted 12 November 2014 - 22:36

" They have an entity, such as FOM, managing and promoting the sport, then handing on the profits to the participants and governing bodies. And most of them are significantly more healthy."

 

How many times did the teams pass that up???  The chances were there, and now the price is skyrocketing.

 

Wouldn't it be a conflict of interest if the teams owned the sport they were also competing in? And what would have happened when Honda, Toyota and BMW left if they still co-owned part of F1?



#55 Fastcake

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Posted 12 November 2014 - 22:41

Why the heck did Bernie sell off F1 to people like CVC in the first place?

 

The couple of billion he got from the sale is nothing compared to what he would have got in the last 8 years if he was still in charge.

 

Bernie was already in his 70s when he started selling off stakes in the sport. Presumably he wanted to earn a few billion while he was still able...

 

" They have an entity, such as FOM, managing and promoting the sport, then handing on the profits to the participants and governing bodies. And most of them are significantly more healthy."

 

How many times did the teams pass that up???  The chances were there, and now the price is skyrocketing.

 

Sure they apparently passed it up. But the rights should never have been up for sale in the first place.



#56 EthanM

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Posted 12 November 2014 - 22:46

Thanks for clarifying and adding the detail.

 

My take on the bolded bit is that Bernie has backed himself into a corner. He has been (cleverly and, perhaps, correctly) been protecting the medium term life of F1 by selling long-term contracts. He's maximised the revenue from those contracts by adding penalty clauses for early termination, but most importantly, by giving the buyer exclusivity. It is that which is making it difficult for F1 to expand into the world of the internet. Maybe as those contracts expire it might come about.

 

 

actually all tv contracts are 5 years or less, there was a kerfuffle in the EU a few years ago (don't remember details) and Bernie had to redo a bunch of contracts to make them under 5 years. But you are correct in that FOM generally takes the view the exclusivity commands a higher price



#57 Murl

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Posted 12 November 2014 - 22:56

I hear what you say. Let me put it this way ... say someone told me that a company called Acme Roadrunner Seed Inc was really profitable and that the owner was looking for a buyer, I might think that I could make some money there. Now, I don't know the first thing about Roadrunner seed, however I've found out that the current owner, who I know has built the company from nothing, wants to stay on an manage the operation. Well, I just might be temped to buy, leave said manager in place and just collect the profits. I would not dream of interfering with the running, as I don't know the Roadrunner seed market.

 

You mean like this?

 

http://www.forbes.co...eking-behavior/



#58 Nathan

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Posted 13 November 2014 - 14:40

"Wouldn't it be a conflict of interest if the teams owned the sport they were also competing in? And what would have happened when Honda, Toyota and BMW left if they still co-owned part of F1?"

 

Exactly.  The franchise system may work for ball sports, but F1 is different in that regard.  A good third of teams have a shelf life for their owners.  If you were Ferrari, why accept taking a piece of money pie that is the same size as some three year old team that runs around at the back of the grid?

 

 

 

"But the rights should never have been up for sale in the first place."

 

The FIA was never established to do what FOM does.  Can it even legally operate in such a manner? Is that within it's mandate? It seems just because the FIA establishes the regulations for the sport people assume it is an organization like the NFL, EPL etc. etc. where there is also a commercial element.  They are an impartial regulator.  If the FIA becomes concerned with making $$, well what if helping Ferrari win WDC's presents a rise in profits.... 

 

How on Earth can anyone trust the FIA as much or more than CVC & Co.??  That won't become corrupt and messed up?  It's political, it would be worse.  Instead of money leading decision making it would be ego.


Edited by Nathan, 13 November 2014 - 14:43.


#59 mclarensmps

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Posted 13 November 2014 - 15:46

I would make a slight change

 

FIA = Owner + Management

Bernie = Marketing + Management

Teams = Employees

F1 = Product

 

Then a number of issues could be resolved better.

 

:cool:

Definitely. Theoretically, this is exactly how it SHOULD be (conflict of interests aside). 



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#60 BlinkyMcSquinty

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Posted 13 November 2014 - 16:53

From a very good article by Nigel Roebuck http://www.motorspor...-them-eat-cake/

It has long seemed to me that virtually all the ills of the contemporary sport may be traced back to this unholiest of deals. Soon after its announcement I had what was to be my last conversation with Ken Tyrrell, then in the final throes of cancer, but still feisty: “You wait,” Ken said. “Bernie’ll flog the commercial rights on to a bunch of bloody asset-strippers…”

 

IMO the unholy deal involving Mosley and Ecclestone was done purely for personal gain. Formula One and the FIA were perfectly capable of running the show without the involvement of CVC. There never was a need to sell the commercial rights to a third party.



#61 Nathan

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Posted 13 November 2014 - 17:30

Who/what is Formula One? Is that FOM?  CVC Capital are not asset stripping F1 - in fact they have consolidated F1's commercial assets. 

 

How was there never a need when the FIA is not a commercial enterprise?  Why do people expect the FIA to do something beyond it's purpose and function?

 

http://www.fia.com/about-fia

 

 

About the FIA
 
The FIA is the governing body for world motor sport and the federation of the world’s leading motoring organisations.
 
 

Founded in 1904, with headquarters in Paris, the Fédération Internationale de l'Automobile (FIA) is a non-profit making association. It brings together 236 national motoring and sporting organisations from 141 countries on five continents. Its member clubs represent millions of motorists and their families.

 

One of the core responsibilities of the FIA is the development of motor sport worldwide. Through its national member clubs the FIA is involved in every level of motor sport and its remit extends to the millions of amateurs and professionals who enjoy motor sport in all of its variety.

 

The FIA has been dedicated to representing the rights of motoring organisations and motor car users throughout the world via campaigns and activities that defend their interests. On issues such as safety, mobility, the environment and consumer law the FIA actively promotes the interests of motorists at the United Nations, within the European Union and through other international bodies.

 

The FIA is also the governing body for motor sport worldwide. It administers the rules and regulations for all international four-wheel motor sport including the FIA Formula One World Championship, FIA World Rally Championship, FIA World Touring Car Championship and FIA World Endurance Championship

 

 

 

Where in there does it say the FIA has an interest in the commercial aspect of motor sports?  Where does it say it has the responsibility to broker sponsorships, TV deals, TV production, merchandising, and the promotion of races?  It is a non-profit organization.  Why is it responsible for collecting money for teams and then distributing it to them??  The FIA makes rules and leads safety, that's it.

 

 

For 40+ years now the FIA has been nothing but a self-anointed political cockup, run by dictators, corrupt, grandiose, can't make rules to keep Formula-1 and other forms of motorsports affordable with happy fans, yet people want to put a multi-billion dollar business on their lap to play with just so profiteers can't manage it?  Good grief!!


Edited by Nathan, 13 November 2014 - 17:56.


#62 KWSN - DSM

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Posted 13 November 2014 - 17:40

Who/what is Formula One? Is that FOM?  CVC Capital are not asset stripping F1 - in fact they have consolidated F1's commercial assets. 

 

How was there never a need when the FIA is not a commercial enterprise?  Why do people expect the FIA to do something beyond it's purpose and function?

 

http://www.fia.com/about-fia

 

 

About the FIA
 
The FIA is the governing body for world motor sport and the federation of the world’s leading motoring organisations.
 
 

Founded in 1904, with headquarters in Paris, the Fédération Internationale de l'Automobile (FIA) is a non-profit making association. It brings together 236 national motoring and sporting organisations from 141 countries on five continents. Its member clubs represent millions of motorists and their families.

 

One of the core responsibilities of the FIA is the development of motor sport worldwide. Through its national member clubs the FIA is involved in every level of motor sport and its remit extends to the millions of amateurs and professionals who enjoy motor sport in all of its variety.

 

The FIA has been dedicated to representing the rights of motoring organisations and motor car users throughout the world via campaigns and activities that defend their interests. On issues such as safety, mobility, the environment and consumer law the FIA actively promotes the interests of motorists at the United Nations, within the European Union and through other international bodies.

 

The FIA is also the governing body for motor sport worldwide. It administers the rules and regulations for all international four-wheel motor sport including the FIA Formula One World Championship, FIA World Rally Championship, FIA World Touring Car Championship and FIA World Endurance Championship

 

 

 

Where in there does it say the FIA has an interest in the commercial aspect of motor sports?  Where does it say it has the responsibility to broker sponsorships, TV deals, mechanising, and the promotion of races?  It is a non-profit organization.  Why is it responsible for collecting money for teams and then distributing it to them??  The FIA makes rules and leads safety, that's it.

 

I simply expect the FIA and by extension the teams in a manner so there are no teams entitled, and for the funds distribution to be according to the finale standing in the WCC, and for all teams in the championship to get something, first to last.

 

I do not expect that the commercial rights holder is marginalizing the sport, I do not expect the commercial rights holder to have any influence on the rules and regulations, I do not expect the commercial rights holder to have a 100 year contract.

 

The commercial aspect can most certainly be run by an outside company, but should not be under the current indenture forced upon the sport.

 

:cool:



#63 Fastcake

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Posted 13 November 2014 - 19:30

Who/what is Formula One? Is that FOM?  CVC Capital are not asset stripping F1 - in fact they have consolidated F1's commercial assets. 

 

How was there never a need when the FIA is not a commercial enterprise?  Why do people expect the FIA to do something beyond it's purpose and function?

 

<snip>

 

Where in there does it say the FIA has an interest in the commercial aspect of motor sports?  Where does it say it has the responsibility to broker sponsorships, TV deals, TV production, merchandising, and the promotion of races?  It is a non-profit organization.  Why is it responsible for collecting money for teams and then distributing it to them??  The FIA makes rules and leads safety, that's it.

 

 

For 40+ years now the FIA has been nothing but a self-anointed political cockup, run by dictators, corrupt, grandiose, can't make rules to keep Formula-1 and other forms of motorsports affordable with happy fans, yet people want to put a multi-billion dollar business on their lap to play with just so profiteers can't manage it?  Good grief!!

 

Do you follow any sport outside of motorsport? If you do, can you think of one where an external company is stripping out as much as F1?

 

You won't, because this sort of arrangement is completely atypical. If you name any professional sport league or series, the commercial affairs will generally be run by one of two broad models. Either it will be directly managed by the relevant national or international governing body, or there will be a body owned or controlled by all of the participants and stakeholders in charge of the commercial side. In both cases, the administrators are there for the benefit of the sport, not a private equity company, and most of the profits will flow towards the participants to be reinvested back into the series. 

 

You can of course point out how some sports (FIFA seems relevant today) are not quite as egalitarian as they claim, but that is not really relevant here. Your argument appears to be that CVC are in some way necessary, and as near enough any sporting event can show you, that is utterly asinine.


Edited by Fastcake, 13 November 2014 - 19:38.


#64 pdac

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Posted 13 November 2014 - 20:04

We are where we are. It sucks the way the F1 commercial rights were sold off, but that's what happened. Bernie got the lot for 100 years. He then sold most of it. It them went through the financial system and ended up at CVC. And that's where we are.

 

It would be nice if it weren't so, but it is. I'm sure if someone managed to raise enough money, CVC would be happy to sell to them. But anyone likely to do that would probably be after the same things that CVC are after.