52 replies to this topic

[johnnycomelately1]

THIS was from another post,but it probably needs to have a thread of its own:

 

The other aspect of my original post is the use of F1 as a cash cow.

Typically private equity look for 25% to 33% or more as their return.

Who the hell gave the sport to anyone for exclusive profit?

"F1 is now understood to be valued at around $12 billion and CVC has got $8.2 billion of cash out and remaining value. It gives the private equity firm a return of 751.3% (over just a few years)"

With this structure it has resulted in our existing mess and some very rich ebenezer scrooges who have no responsibility, allegiance or good faith to our sport past its profit making ability.

The so called authorities that are muddling around the edges have largely failed to provide progress as well. although as unpopular as todays engine regulations are they have been very brave and right in my opinion.

The perfect storm: human natures greed and fools for authorities.

For quite a while we have all relied on someone or a coalition of someones to rectify a failing model, that has not happened.

The solution lies with all those within to make their voices heard with constructive, intelligent and respectful protests.

 

This sport provides engineering excellence to the wider world and spectacle beyond understanding, save it by contributing rationally and passionately.

[johnnycomelately1]

If you remove the scrooges profit and take the view of the sport generating enormous money, then reduce that a bit by taking out the unscrupulous methods like exclusivity, you are still left with significant capital.

1. so therefore allocate to all teams a more equitable distribution.
2. reduce costs as mentioned elsewhere
3. cut ticket prices to attract BACK all the loyal fans
4. mandate races where they always were, taking away the extortion of b ecclestone. And stop the marketing of countries who have robbed from the poor to give to the rich.

[Beamer]

DO YOU HAVE TO START EVERY RANT, SORRY THREAD, WITH CAPSLOCK ON????????,

[johnnycomelately1]

DO YOU HAVE TO START EVERY RANT, SORRY THREAD, WITH CAPSLOCK ON????????,

that's a bit brutal old chap, i will try to be more aware in the future.

[Watkins74]

Who the hell gave the sport to anyone for exclusive profit?

The teams and the FIA. If the teams would stop signing deals that profit the devil then we wouldn't have this problem. No teams = no FOM.
It's also going to take Manor, Lotus, Force India and Sauber to have the balls to join together and boycott a race until there is a level playing field

[mzvztag]

Capitalism without a strict authorities/state control is simply evil. It will suck the life out of F1 and out of us all if left to reign free.

Edited by mzvztag, 27 June 2015 - 15:54.

[SlickMick]

Personally I'm looking forward to 50% of new threads saying "I don't like this sport anymore so now I'm going to piss off and take my moaning with me."

[Knot]

Personally I'm looking forward to 50% of new threads saying "I don't like this sport anymore so now I'm going to piss off and take my moaning with me."

 

Same should apply to people who reply to threads they don't like.

[jonpollak]

The revolution in well thought out Opening Posts here at Chez Autosport  has been a great thing.

However... NOT EVERYONE IS A DOROTHY PARKER

 

 

Jp

[Guizotia]

The point of leveraged buyouts is to extract cash from a mature business, by making it pay debts rather than wasting that money trying to grow itself or expand into new areas (on the assumption that a business in the mature stage is very unlikely to be successful doing these things).

Is F1 a mature business incapable of growth? Or was the leveraged buyout 'abused' simply to make a quick profit for its new owners?

[itsademo]

sorry jonnycomelately1 you need to check facts as its clear with even a quick glance at reality you have it very wrong

fact one cvc dont own all of F1 they own 35.5% so others own 64.5%

second cvc and other owners dont get anywhere near as much as some claim as just what the top 4 teams took out more in 2014 was far greater than what the owners gained

also you ignore the fact that the teams did have the chance to buy F1 but decided it was not worth it

It was the investment that came into F1 from cvc and others that has allowed the value to be increased so much and hence given the teams so much more than they ever got before

In fact the owners get less than 35.6% of the profits of the company and have to pay the loan repayments and taxes from that amount.

But most haters would rather think it all goes to cvc and BE than ever enter reality and realise the teams had the chance turned it down and are only moaning as they got it wrong

but if the teams had got the rights i am certain F1 would only be worth a small fraction of what it is now even to those same teams.

But dont take my word for it check out what that respected F1 jounro Joe Saward has to say on the matter

https://joesaward.wo...four-sentences/

[Okyo]

I don't like this sport anymore so now I'm going to piss off and take my moaning with me.







As this is one post out of eleven, that makes it only 9%. In your face SlickMick   

Edited by Okyo, 27 June 2015 - 19:55.

[johnnycomelately1]

sorry jonnycomelately1 you need to check facts as its clear with even a quick glance at reality you have it very wrong

fact one cvc dont own all of F1 they own 35.5% so others own 64.5%

second cvc and other owners dont get anywhere near as much as some claim as just what the top 4 teams took out more in 2014 was far greater than what the owners gained

also you ignore the fact that the teams did have the chance to buy F1 but decided it was not worth it

It was the investment that came into F1 from cvc and others that has allowed the value to be increased so much and hence given the teams so much more than they ever got before

In fact the owners get less than 35.6% of the profits of the company and have to pay the loan repayments and taxes from that amount.

But most haters would rather think it all goes to cvc and BE than ever enter reality and realise the teams had the chance turned it down and are only moaning as they got it wrong

but if the teams had got the rights i am certain F1 would only be worth a small fraction of what it is now even to those same teams.

But dont take my word for it check out what that respected F1 jounro Joe Saward has to say on the matter

https://joesaward.wo...four-sentences/

i just quoted the figures from Forbes magazine.

There is a significant profit margin there that detracts from the equitable spread of the income.

i dont think its balanced to portray CVC  as having to repay loans and taxes, of course they do.

that's how it works : you take other peoples money at x % and generate a return of x+y%.

when the sport has three classes of racing going on AND it is so expensive, something is wrong.

this in my opinion is what is wrong. its a dairy.

thats why b ecclestone is always happy, he has structured it to make money and produce one of the graetest shows on earth BUT it has got out of hand.

it now needs to be rationalised.

one starter for that is mutualisation.

the structure to achieve that needs discussion:

the place of the regulatory body has to be questioned when the sport is so dull; the role of manufacturers: the amazing private teams; the drivers , who i think have too little a say but dont agitate because they have money or politics; the fans who can do little more than moan

[itsademo]

well its clear Forbes a non f1 specialist have clearly got their figures wrong

as for balance its clear cvc dont get even a small fraction of Forbes claimed amount yet you still keep on going on about how much they get 

The sum you quote sounds like the total operating profit which clearly far exceedes the amount cvc or anyone gets.

The teams take far the largest amount out of f1 last year the amount was over 63% of all pre-tax profits

Allowing for taxes investment and loans i doubt cvc even made $100M profit or 5% ROI last year a small amount when it comes to venture capital annual returns

perhaps you should do what i did and quote the source then we could argue against that article and its inaccuracies

as for the regulatory body most of the rules are made up by the working groups which mainly have people from the teams on them the FIA only ratify and enforce those rules not make them

a fact once again many seam to overlook in the blame game.

But lets go for the easy and non thinking mans target lets go for those who dont make the rules but claim they do, and those who have funded the massive investment that has gone on and claim they make more money than the whole of F1 generates (after taxes and costs)

 

FYI for all those who think its so unfair lets not forget before cvc we had a thing called FOPA under which 50% of all tv money went to the FIA 49% went to FOPA and just 1% went to the teams.

[KingTiger]

Step one of your plan will be the hardest to achieve. Money sucking corporate leeches are here to stay, unless the manufacturers have the cojones to buy back their series. 

[johnnycomelately1]

well its clear Forbes a non f1 specialist have clearly got their figures wrong

as for balance its clear cvc dont get even a small fraction of Forbes claimed amount yet you still keep on going on about how much they get 

The sum you quote sounds like the total operating profit which clearly far exceedes the amount cvc or anyone gets.

The teams take far the largest amount out of f1 last year the amount was over 63% of all pre-tax profits

Allowing for taxes investment and loans i doubt cvc even made $100M profit or 5% ROI last year a small amount when it comes to venture capital annual returns

perhaps you should do what i did and quote the source then we could argue against that article and its inaccuracies

as for the regulatory body most of the rules are made up by the working groups which mainly have people from the teams on them the FIA only ratify and enforce those rules not make them

a fact once again many seam to overlook in the blame game.

But lets go for the easy and non thinking mans target lets go for those who dont make the rules but claim they do, and those who have funded the massive investment that has gone on and claim they make more money than the whole of F1 generates (after taxes and costs)

 

FYI for all those who think its so unfair lets not forget before cvc we had a thing called FOPA under which 50% of all tv money went to the FIA 49% went to FOPA and just 1% went to the teams.

My point is the profits taken out that should be allocated to where it produces good, entertaining racing with all those concerned in the actual racing and fair promotion making a decent buck, so i dont think its focussed on that point to "argue against that article and its inaccuracies.

and its not only CVC , the question is what is fair distribution and the staus quo certainly is not shown by the 3 classes within.

[johnnycomelately1]

well its clear Forbes a non f1 specialist have clearly got their figures wrong

as for balance its clear cvc dont get even a small fraction of Forbes claimed amount yet you still keep on going on about how much they get 

The sum you quote sounds like the total operating profit which clearly far exceedes the amount cvc or anyone gets.

The teams take far the largest amount out of f1 last year the amount was over 63% of all pre-tax profits

Allowing for taxes investment and loans i doubt cvc even made $100M profit or 5% ROI last year a small amount when it comes to venture capital annual returns

perhaps you should do what i did and quote the source then we could argue against that article and its inaccuracies

as for the regulatory body most of the rules are made up by the working groups which mainly have people from the teams on them the FIA only ratify and enforce those rules not make them

a fact once again many seam to overlook in the blame game.

But lets go for the easy and non thinking mans target lets go for those who dont make the rules but claim they do, and those who have funded the massive investment that has gone on and claim they make more money than the whole of F1 generates (after taxes and costs)

 

FYI for all those who think its so unfair lets not forget before cvc we had a thing called FOPA under which 50% of all tv money went to the FIA 49% went to FOPA and just 1% went to the teams.

"i doubt cvc even made $100M profit or 5% ROI" is patently wrong.

those people wouldnt get out of bed for that.

[Nathan]

Here is why I don't care.

The financials would still be ridiculous if the teams got the money instead.

 

"Who the hell gave the sport to anyone for exclusive profit?".

 

The FIA.  It is their sport.  The FIA is a sport regulator and auto safety advocate, not a TV company.  The teams couldn't afford to pay a fair price for the TV company.  Even if they did they would only use the cows milk to run wind tunnels, hire 1200 employees and do 20,000 kms of track testing.  Or simply line the pockets of billionaire team owners.  Whichever.  Either way billionaires will own the TV company.  Not the FIAs business, really.

Edited by Nathan, 28 June 2015 - 02:41.

[johnnycomelately1]

Here is why I don't care.

The financials would still be ridiculous if the teams got the money instead.

 

"Who the hell gave the sport to anyone for exclusive profit?".

 

The FIA.  It is their sport.  The FIA is a sport regulator and auto safety advocate, not a TV company.  The teams couldn't afford to pay a fair price for the TV company.  Even if they did they would only use the cows milk to run wind tunnels, hire 1200 employees and do 20,000 kms of track testing.  Or simply line the pockets of billionaire team owners.  Whichever.  Either way billionaires will own the TV company.  Not the FIAs business, really.

its everybodys sport. certainly not just the FIA

fans, drivers, engineers, manufacturers who participate, etc etc

democracy would be good to prevent the piracy.

the FIA is a flawed organisation who has contributed the this existing mess.

imho

[BlinkyMcSquinty]

First point .. I don't like the financial structure of Formula One

 

Second point .. it takes money to make money. Those very same Scrooge Ebenezers do not want to see their investment turned into nothing, so they have a vested interest in making sure Formula One keeps running, and making money for them. They are a necessary evil. Behind every successful major sports franchise is big money.

[loki]

sorry jonnycomelately1 you need to check facts as its clear with even a quick glance at reality you have it very wrong

fact one cvc dont own all of F1 they own 35.5% so others own 64.5%

second cvc and other owners dont get anywhere near as much as some claim as just what the top 4 teams took out more in 2014 was far greater than what the owners gained

also you ignore the fact that the teams did have the chance to buy F1 but decided it was not worth it

It was the investment that came into F1 from cvc and others that has allowed the value to be increased so much and hence given the teams so much more than they ever got before

In fact the owners get less than 35.6% of the profits of the company and have to pay the loan repayments and taxes from that amount.

But most haters would rather think it all goes to cvc and BE than ever enter reality and realise the teams had the chance turned it down and are only moaning as they got it wrong

but if the teams had got the rights i am certain F1 would only be worth a small fraction of what it is now even to those same teams.

But dont take my word for it check out what that respected F1 jounro Joe Saward has to say on the matter

https://joesaward.wo...four-sentences/

Joe's Award is so often far off the mark when it comes to business dealings.  Not just this one but a fair amount of the time he comments on them.  The comparisons are simplistic, lack nuance and he typically doesn't have the sort of insight that others do when speaking of business deals.  If he is questioned or asked for clarification or supporting information, he gets defensive, dismissive, arrogant and can't provide any reasoning from what he bases his opinion.  He's good at team gossip, but not so much in deep business deals.  A much better source are financial publications, FT, WSJ or Sports Business Journal, people that do money for a living.

[loki]

its everybodys sport. certainly not just the FIA

fans, drivers, engineers, manufacturers who participate, etc etc

democracy would be good to prevent the piracy.

the FIA is a flawed organisation who has contributed the this existing mess.

imho

It's not everyones sport.  It belongs to those that own it.  They can choose to operate it in a way they see fit.  They are under no obligation to perform in any manner that you or I see fit.  If we don't like it, we can vote with our dollars (and more importantly our viewing) and choose to watch or buy something else.  Choice.  Personal responsibility for our actions.  Drivers, fans, teams, etc are free to go and seek employment or dealings with other sanctioning bodies, motorsport or get out of the business entirely.  Please, comment on what you think could be better or perhaps what might be inequitable for some of the teams.  However, that doesn't afford you the right to call something yours.   

 

The distribution of proceeds is an issue.  But, even as Ecclestone and Todt say, however inelegantly, the small teams knew what they were getting into when they signed up.  While they did know what the deal was, it's a cop out for FOM and FIA to dismiss it in that manner and not focus on what is becoming a bigger issue with regards to distribution of the proceeds.   They are obfuscating and avoiding rather than dealing with a hard question.

[loki]

The point of leveraged buyouts is to extract cash from a mature business, by making it pay debts rather than wasting that money trying to grow itself or expand into new areas (on the assumption that a business in the mature stage is very unlikely to be successful doing these things).

Is F1 a mature business incapable of growth? Or was the leveraged buyout 'abused' simply to make a quick profit for its new owners?

That's the $12 billion question, innit?  Growth how?  Spectators, new fans?  I'm not so sure.  The only motorsport showing growth are geared to a younger audience.  All others are flat or declined.  Growth in terms of profits?  Possibly, as long as you aren't robbing Peter to pay Paul.  If the business can be used as a long term investment tool and not just a short term generator of funds for the shareholders it may just be able to be profitable to more people while still being a sound business venture.

[johnnycomelately1]

It's not everyones sport.  It belongs to those that own it.  They can choose to operate it in a way they see fit.  They are under no obligation to perform in any manner that you or I see fit.  If we don't like it, we can vote with our dollars (and more importantly our viewing) and choose to watch or buy something else.  Choice.  Personal responsibility for our actions.  Drivers, fans, teams, etc are free to go and seek employment or dealings with other sanctioning bodies, motorsport or get out of the business entirely.  Please, comment on what you think could be better or perhaps what might be inequitable for some of the teams.  However, that doesn't afford you the right to call something yours.   

 

The distribution of proceeds is an issue.  But, even as Ecclestone and Todt say, however inelegantly, the small teams knew what they were getting into when they signed up.  While they did know what the deal was, it's a cop out for FOM and FIA to dismiss it in that manner and not focus on what is becoming a bigger issue with regards to distribution of the proceeds.   They are obfuscating and avoiding rather than dealing with a hard question.

the notion of ownership of F1 was a conceived doctrine that was designed to make money from what the dairymaids recognised was a great spectacle for money making with the globalisation of media.

without that great spectacle the profiteering, not the investment, has a very finite life, almost a mature industry except this instead of plateauing off is in serious decline in the long term prognosis.

becoming mutual fully provides for its growth in the capital sense. changing the myopic rules will ensure that growth and to benefit everyone.

the problems mentioned are the reason this very discussion is taking place.

dont let the saying "cannot see the forest for the trees" apply here.

[johnnycomelately1]

That's the $12 billion question, innit?  Growth how?  Spectators, new fans?  I'm not so sure.  The only motorsport showing growth are geared to a younger audience.  All others are flat or declined.  Growth in terms of profits?  Possibly, as long as you aren't robbing Peter to pay Paul.  If the business can be used as a long term investment tool and not just a short term generator of funds for the shareholders it may just be able to be profitable to more people while still being a sound business venture.

growth is not the question here, it is the distribution of the funds:

• ascertaining what is the good faith profit, not the manipulated profit
• growth becomes an excuse of the dairymaids to deflect away from what is evolving.
• its generating money for sure but its not reinvested to make the sport sustainable, its extracted away from where it is needed.
• is there a budget anywhere in the great transparency that exists that shows the proportional needs for distribution
• make no mistake the sport has been hijacked and is in serious decline, limping home to the pits on 1 cylinder

if we are talking about rectification which may include growth ( back to what it was i might add) look at rallycross, motogp, robbie gordons truck racing, motocross, they all fire the excitement, even wec has gotten attention (compared to F1 ...wow, what does that say)

these classes are exciting, F1 is not.

this thread is dealing with what i see as the misallocation of funds that could go to far better use.

[johnnycomelately1]

from Wikipedia "Formula One", very much an important read (its helped my memory

 

When Ecclestone bought the Brabham team during 1971 he gained a seat on the Formula One Constructors' Association and during 1978 became its president. Previously, the circuit owners controlled the income of the teams and negotiated with each individually, however Ecclestone persuaded the teams to "hunt as a pack" through FOCA.^[17] He offered Formula One to circuit owners as a package which they could take or leave. In return for the package almost all that was required was to surrender trackside advertising.

[loki]

growth is not the question here, it is the distribution of the funds:

 

I was specifically commenting to the previous post regarding how an LBO works and what such a strategy might be.  An LBO is performed on many mature companies that have solid assets though lack growth potential.  An LBO is then used to extract the value of the company while saddling the aquired company with the debt of the aquisition.  

 

I don't see your view on this matter being based on how for profit businesses operate in the real world.  You espouse some pie the sky type altruism when capitalism doesn't work in that manner.  This is someone elses company.  Your observations are scattershot and obtuse.  They appear as rambling diatribes that lack focus and a cohesive point.  My suggestion if you want your point taken seriously is to focus more on content and less on prose.

[johnnycomelately1]

I was specifically commenting to the previous post regarding how an LBO works and what such a strategy might be.  An LBO is performed on many mature companies that have solid assets though lack growth potential.  An LBO is then used to extract the value of the company while saddling the aquired company with the debt of the aquisition.  

 

I don't see your view on this matter being based on how for profit businesses operate in the real world.  You espouse some pie the sky type altruism when capitalism doesn't work in that manner.  This is someone elses company.  Your observations are scattershot and obtuse.  They appear as rambling diatribes that lack focus and a cohesive point.  My suggestion if you want your point taken seriously is to focus more on content and less on prose.

Mutual is what i am saying not "for profit businesses"

 

A mutual is therefore owned by, and run for the benefit of, its members - it has no external shareholders to pay in the form of dividends, and as such does not usually seek to maximize and make large profits or capital gains. Profits made will usually be re-invested in the mutual for the benefit of the members, although some profit may also be necessary in the case of mutuals for internal financing to sustain or grow the organization, and to make sure it remains safe and secure.

[Afterburner]

One wouldn't expect to find one of the more intriguing discussions about the business side of F1 in a thread with such a bizarre title. What exactly is 'the milking competition'?

[johnnycomelately1]

One wouldn't expect to find one of the more intriguing discussions about the business side of F1 in a thread with such a bizarre title. What exactly is 'the milking competition'?

it is derived from the widely used term "cash cow"

[johnnycomelately1]

One wouldn't expect to find one of the more intriguing discussions about the business side of F1 in a thread with such a bizarre title. What exactly is 'the milking competition'?

the "competition" comes from the number of "snouts in the trough" , another widely used term (usually referring to politics; and F1 is one of the more political organisations) meaning  "if people have their noses in the trough, they are involved in something which they hope will get them a lot of money or political power - used to show disapproval"

it seems extraordinary to me that a sport can be hijacked to such an unfettered extent where the sport suffers from inequity and has excluded so may fans by ticket pricing and pay tv exclusivity, all models of discrimination.

i apologise for the Orwellian overtures, its just that they seem so apt.

[johnnycomelately1]

and apologies for reversing the name Ebenezer Scrooge, aka b ecclestone

The surname may be derived from the now obscure English verb scrouge, meaning "squeeze" or "press".

[Afterburner]

and apologies for reversing the name Ebenezer Scrooge, aka b ecclestone

The surname may be derived from the now obscure English verb scrouge, meaning "squeeze" or "press".

No worries, mate; the topic's been good so far. The way the title is worded just managed to put a smile on my face.

[johnnycomelately1]

is it fair to assume then that everyone is prepared to stay with a for profit situation rather then mutualise the structure of F1?

yes it can be argued that profiteering brings about efficiencies and better producing (in order to make that profit as big as possible) but......

here is the result right here right now......... it is failing.

the amount of discontent is ubiquitous, you even have the low profile FIA head talking about it, as just one example.

a mutual structure would still employ a CEO, COO, CFO etc etc its down to the charter they would be charged with.

[F1matt]

I am not sure which way the ownership of the sport will go, as much as I hate CVC owning the business I would have massive concerns over some Sheikh or Emir who would buy it using the his countries massive oil reserves and effectively create a "Race to Dubai" series  mostly held in the Middle East and similar nations and care even less about the fans. The idea of the teams agreeing on anything and controlling the sport would never happen or if it did would leave to such a stalemate it would stagnate and die, the FIA under Todt is utterly useless, maybe a full 100% stock market flotation on a reputable exchange offering a maximum of 5% holdings with AGM's and a competent board to run the business is the only answer.

[johnnycomelately1]

I am not sure which way the ownership of the sport will go, as much as I hate CVC owning the business I would have massive concerns over some Sheikh or Emir who would buy it using the his countries massive oil reserves and effectively create a "Race to Dubai" series  mostly held in the Middle East and similar nations and care even less about the fans. The idea of the teams agreeing on anything and controlling the sport would never happen or if it did would leave to such a stalemate it would stagnate and die, the FIA under Todt is utterly useless, maybe a full 100% stock market flotation on a reputable exchange offering a maximum of 5% holdings with AGM's and a competent board to run the business is the only answer.

just on that first part of your post, no one could buy it after mutualising it.

[smitten]

just on that first part of your post, no one could buy it after mutualising it.

 

Eh?  No mutual can be sold?

 

As far as I can see, your argument is that you don't like CVC.  Some notion of the teams owning the sport is, to your mind, the best thing for the sport.  F1 (and a good number of other businesses) have grown to such an extent because they are effective dictatorships.  It's not the only way to do it, but it can and does work for some.  There comes a point where it ceases to be a good thing, but mutualising it is not the solution.

 

Can you name any other major series which is a mutual in the sense you are on about? 

[johnnycomelately1]

Eh?  No mutual can be sold?

 

As far as I can see, your argument is that you don't like CVC.  Some notion of the teams owning the sport is, to your mind, the best thing for the sport.  F1 (and a good number of other businesses) have grown to such an extent because they are effective dictatorships.  It's not the only way to do it, but it can and does work for some.  There comes a point where it ceases to be a good thing, but mutualising it is not the solution.

 

Can you name any other major series which is a mutual in the sense you are on about? 

limiting examples to "series" is not a balanced argument. its the organisational model or structure that is the argument, not the sector. it just happens to be F1 we are discussing in particular here.

if a lot of series were run on a mutual basis (ie, as per normal, but without the significant profit margin) ticketing etc would be cheaper, profits would be distributed in what i think would be a more equitable way.

but anyway here is a list : https://en.wikipedia...odern_mutuality

as it says thatcherism cause da  lot of demutualisations, simply because a profit can be envisioned  and the asset sold off. combine this with a lot of old mutual organisations were very unaccountable had become lethargic in their own way.

[itsademo]

I am not sure which way the ownership of the sport will go, as much as I hate CVC owning the business I would have massive concerns over some Sheikh or Emir who would buy it using the his countries massive oil reserves and effectively create a "Race to Dubai" series  mostly held in the Middle East and similar nations and care even less about the fans. The idea of the teams agreeing on anything and controlling the sport would never happen or if it did would leave to such a stalemate it would stagnate and die, the FIA under Todt is utterly useless, maybe a full 100% stock market flotation on a reputable exchange offering a maximum of 5% holdings with AGM's and a competent board to run the business is the only answer.

what rather than some bankers who dont own any money only invent it owning it as now?

[ch103]

Joe's Award is so often far off the mark when it comes to business dealings.  Not just this one but a fair amount of the time he comments on them.  The comparisons are simplistic, lack nuance and he typically doesn't have the sort of insight that others do when speaking of business deals.  If he is questioned or asked for clarification or supporting information, he gets defensive, dismissive, arrogant and can't provide any reasoning from what he bases his opinion.  He's good at team gossip, but not so much in deep business deals.  A much better source are financial publications, FT, WSJ or Sports Business Journal, people that do money for a living.

 

I beg to differ - Saward is the "source of truth" as far as I am concerned.  While he may not have a true business/financial background - neither does Christian Sylt, who writes about the business side of F1 for Forbes. 

[Nathan]

How does CVC taking profits effect the quality of racing?

 

"when the sport has three classes of racing going on AND it is so expensive, something is wrong."

 

If being expensive is wrong why advocate giving the teams (owned by billionaires and capitalist corporations) even more money to spend?

 

"My point is the profits taken out that should be allocated to where it produces good, entertaining racing"

 

How is the quality of racing related to how much money teams spend?? You listed a number of motor sports that are exciting, but they are not so because the participants have lots of money to spend.  I can agree leveling out the distributions would help, but I fail to see how tossing $40 mln more at each team will make the racing better.  How is that justified?

 

"its everybodys sport. certainly not just the FIA"

 

It's the FIA's sport, and the FIA's alone.  As a fan you are a viewer, not an owner, teams and drivers are participants, not owners, FOM are contractors, not owners.
 

Edited by Nathan, 11 July 2015 - 13:16.

[johnnycomelately1]

How does CVC taking profits effect the quality of racing?

 

"when the sport has three classes of racing going on AND it is so expensive, something is wrong."

 

If being expensive is wrong why advocate giving the teams (owned by billionaires and capitalist corporations) even more money to spend?

 

"My point is the profits taken out that should be allocated to where it produces good, entertaining racing"

 

How is the quality of racing related to how much money teams spend?? You listed a number of motor sports that are exciting, but they are not so because the participants have lots of money to spend.  I can agree leveling out the distributions would help, but I fail to see how tossing $40 mln more at each team will make the racing better.  How is that justified?

 

"its everybodys sport. certainly not just the FIA"

 

It's the FIA's sport, and the FIA's alone.  As a fan you are a viewer, not an owner, teams and drivers are participants, not owners, FOM are contractors, not owners.
 

i am afraid we have to part ways on that part Nathan, it is not the FIA"s sport at all, in my opinion.

originally it was the drivers who had the yahoo to race and then the builders in whatever form. really track owners or builders and for heavens sake promoters are very much last to be able to lay claim.

one of my points is how and who let them lay claim. it most certainly was not by vote.

it was arrived at by ad hoc business negotiations by interests that have another vision cloaked under an interest in the sport.

since then nothing has challenged them for various reasons, one being adequacy. is that in the best interests of the sport and everyone involved, the staus quo says no.

can it work out under the current structure? yes it could, but it isn't, why ? because those money interests do not have the passion for the sport first and foremost.

[Nathan]

OK so you have an opinion on who should be the owners of F1, that's awesome, great..but that doesn't make it fact.  In your head and on the moon you can pretend all you like, but reality here on Earth is the FIA is the sole legal owner of F1 racing, as we can clearly see.

 

The FIA can lay claim this because they created Formula 1.  They control much of it.  History shows us this.  Thus the FIA has the right, and frankly obligation, to sell the business side of the sport.

They sold it to Bernie who then sold it to CVC. Bernie had the right to own the commercial side of the sport because he got consent from the sports owner (FIA), and the participants/entertainers (teams), and the sports owner gave him permission to sell to CVC. F1 teams had the chance to buy the commercial side of the sport and franchise it ala MLB, NHL, EPL etc. etc., but they didn't.  They couldn't afford the fair market price.  And I'm sure if you owned a $/£/€300,000 home you wouldn't sell it for 200,000.

Bernie built the commercial side of the sport with his companies.  Tough to deny.  So now those companies can exercises their right to reap the rewards.  The FIA (the owners) and the teams (the billionaire entertainers) all gave him permission to.


So perhaps you can answer my question, how does giving the teams more money make racing better?  And please, let us not confuse this will equalized distributions.  We agree on that I'm sure, but how does more money = better racing for the fans?

Edited by Nathan, 11 July 2015 - 15:09.

[smitten]

limiting examples to "series" is not a balanced argument. its the organisational model or structure that is the argument, not the sector. it just happens to be F1 we are discussing in particular here.

if a lot of series were run on a mutual basis (ie, as per normal, but without the significant profit margin) ticketing etc would be cheaper, profits would be distributed in what i think would be a more equitable way.

but anyway here is a list : https://en.wikipedia...odern_mutuality

as it says thatcherism cause da  lot of demutualisations, simply because a profit can be envisioned  and the asset sold off. combine this with a lot of old mutual organisations were very unaccountable had become lethargic in their own way.

 

Nonsense.  The mutuals demutualised because they voted to.  The same could happen in your envisioned F1.

 

And limiting it to "series" would seem to be relevant: if it is such a compelling argument to become one.  I note that not one non-financial institution was in teh sample you provided.  does that not tell you something?

Edited by smitten, 11 July 2015 - 15:26.

[Disgrace]

OK so you have an opinion on who should be the owners of F1, that's awesome, great..but that doesn't make it fact.  In your head and on the moon you can pretend all you like, but reality here on Earth is the FIA is the sole legal owner of F1 racing, as we can clearly see.

 

The FIA can lay claim this because they created Formula 1.  They control much of it.  History shows us this.  Thus the FIA has the right, and frankly obligation, to sell the business side of the sport.

They sold it to Bernie who then sold it to CVC. Bernie had the right to own the commercial side of the sport because he got consent from the sports owner (FIA), and the participants/entertainers (teams), and the sports owner gave him permission to sell to CVC. F1 teams had the chance to buy the commercial side of the sport and franchise it ala MLB, NHL, EPL etc. etc., but they didn't.  They couldn't afford the fair market price.  And I'm sure if you owned a $/£/€300,000 home you wouldn't sell it for 200,000.

Bernie built the commercial side of the sport with his companies.  Tough to deny.  So now those companies can exercises their right to reap the rewards.  The FIA (the owners) and the teams (the billionaire entertainers) all gave him permission to.


So perhaps you can answer my question, how does giving the teams more money make racing better?  And please, let us not confuse this will equalized distributions.  We agree on that I'm sure, but how does more money = better racing for the fans?

 

I certainly see the validity to this logic, but at the same time it's missing the point (not a point necessarily directed at you). A more equitable distribution of prize money resulting in a potential convergence of performance, assuming the smaller teams can now afford better drivers and personnel, might even have the effect of worsening the racing.

 

And even if the quality of the racing dipped, who would advocate inducing inequality amongst the teams as a solution? The point is to improve the standard of competition. It could be the fairest sport in all the land, but if the racing is garbage then nobody would care.

 

Where you lose me is when you say giving the teams more money isn't the same as rebalancing distribution. In the event that the distributions are balanced upwards, it is the same thing. It seems more plausible than to take cash away from the top teams and balancing it downwards.

[Timstr11]

THIS was from another post,but it probably needs to have a thread of its own:

 

The other aspect of my original post is the use of F1 as a cash cow.

Typically private equity look for 25% to 33% or more as their return.

Who the hell gave the sport to anyone for exclusive profit?

"F1 is now understood to be valued at around $12 billion and CVC has got $8.2 billion of cash out and remaining value. It gives the private equity firm a return of 751.3% (over just a few years)"

With this structure it has resulted in our existing mess and some very rich ebenezer scrooges who have no responsibility, allegiance or good faith to our sport past its profit making ability.

The so called authorities that are muddling around the edges have largely failed to provide progress as well. although as unpopular as todays engine regulations are they have been very brave and right in my opinion.

The perfect storm: human natures greed and fools for authorities.

For quite a while we have all relied on someone or a coalition of someones to rectify a failing model, that has not happened.

The solution lies with all those within to make their voices heard with constructive, intelligent and respectful protests.

 

This sport provides engineering excellence to the wider world and spectacle beyond understanding, save it by contributing rationally and passionately.

 

 

This is my main frustration with this sport.

 

For the owners, F1 is Low Investment (thus low risk) -vs- High Reward.

 

For the participants it's High Investment (thus high risk) -vs- Low Reward (unless you're the WCC, Ferrari or Redbull).

 

Given the low amount of money the owners invest in the sport, the profit margin for the owners is way too high.

 

I liked the analogy a poster had used the other day, saying F1 is passed around and used like a hooker at a frat party with the poor teams embodying the hooker.

Edited by Timstr11, 11 July 2015 - 16:23.

[loki]

is it fair to assume then that everyone is prepared to stay with a for profit situation rather then mutualise the structure of F1?

yes it can be argued that profiteering brings about efficiencies and better producing (in order to make that profit as big as possible) but......

here is the result right here right now......... it is failing.

the amount of discontent is ubiquitous, you even have the low profile FIA head talking about it, as just one example.

a mutual structure would still employ a CEO, COO, CFO etc etc its down to the charter they would be charged with.

Failing?  Not in any sense of a for profit business is F1 failing. There are declines but that could be argued changing demographic as that sort of issues isn't exclusive to F1 in the motorsport world.  F1 is still massively profitable.  You may not like the direction in which the sport is headed, that's all and well, but don't conflate your personal feelings about the direction of the sport with the profitability or success of the sport.

 

From where is the funding coming to mutualize the sport? There is no one that would want to invest that much money in order to basically make it a co-op.  The current owners are going to have to be compensated for thier share and I don't see the small teams having the money and the big teams willing to part with the money particularly when they'll lose a significant power advantage as well as a significant chunk of cash.  It's one thing to have a theoretical discussion about the benefits of mutualization but in reality it's not a practical solution.

[johnnycomelately1]

it is failing, that is why we and thousands around the world are having this discussion. it really is not an elephant in the room anymore. i wasnt referring to its profitability.

 

from http://www.theguardi...t-as-we-know-it

 

"The co-operative and mutual sector is more in the limelight than ever, but that doesn't mean that we want privatisation carried out in our name. Co-operative businesses in Britain together turn over more than £35bn a year. The sector has grown by 19.5% since the start of the credit crunch in 2008, while the economy as a whole has shrunk by 1.7%.

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It is hard to be a saint in any business, but we have a strong reputation for fairness, because the people who own co-operatives and mutuals are the workforce, the customers, the suppliers or the local community. Seventy-five percent of people say they trust co-operatives to act fairly, while just 18% say the same about business generally."

 

also, this may be of interest - http://www.mutuo.co.uk/

 

so, you have raised some questions

• compensating b ecclestone and others - seeing as how they hijacked what was a participants sport way back in the day, it could be argued they have no such entitlement to compensation and if they did they have well and truly had it. accusations could be levelled at whoever allowed the incorporation as well, that they should not have done so and therefore b ecclestones remedy is in pursuing them for damages.
• you may not have raised this, but who runs it? it would be a vote system where i believe that if income is coming from fans that they have a substantial vote (of course those fans that want a blood sport and only worry about noise cannot have such a vote) (that should get me some votes, no?) seriously though, a constructive use of time would be to suggest a method of weighting the voting so manufacturers could not have too much say, like Ferrari or Honda in motogp. or for that matter the FIA itself, given their track record
•  

[johnnycomelately1]

FYI, i have no conflict of interest in airing my thoughts, i'm just a broken down cow cocky from Australia.

maybe there should be a declaration of interests?

[loki]

 

it is failing, that is why we and thousands around the world are having this discussion. it really is not an elephant in the room anymore. i wasnt referring to its profitability.

 

from http://www.theguardi...t-as-we-know-it

 

"The co-operative and mutual sector is more in the limelight than ever, but that doesn't mean that we want privatisation carried out in our name. Co-operative businesses in Britain together turn over more than £35bn a year. The sector has grown by 19.5% since the start of the credit crunch in 2008, while the economy as a whole has shrunk by 1.7%.

Advertisement

It is hard to be a saint in any business, but we have a strong reputation for fairness, because the people who own co-operatives and mutuals are the workforce, the customers, the suppliers or the local community. Seventy-five percent of people say they trust co-operatives to act fairly, while just 18% say the same about business generally."

 

also, this may be of interest - http://www.mutuo.co.uk/

 

so, you have raised some questions

• compensating b ecclestone and others - seeing as how they hijacked what was a participants sport way back in the day, it could be argued they have no such entitlement to compensation and if they did they have well and truly had it. accusations could be levelled at whoever allowed the incorporation as well, that they should not have done so and therefore b ecclestones remedy is in pursuing them for damages.
• you may not have raised this, but who runs it? it would be a vote system where i believe that if income is coming from fans that they have a substantial vote (of course those fans that want a blood sport and only worry about noise cannot have such a vote) (that should get me some votes, no?) seriously though, a constructive use of time would be to suggest a method of weighting the voting so manufacturers could not have too much say, like Ferrari or Honda in motogp. or for that matter the FIA itself, given their track record
•  

 

So you'd like to have someone's property taken from them to craft something for your personal enjoyment.  You wrongly state they current owners aren't entitled to be compensated for a business which was legally formed for which they paid for the rights.   If anything I'd say you aren't entitled to dictate what someone else does with their legally acquired property.  Co ops are nothing new, they've been around for quite a long while.   Your comparisons are simplistic and naive.  They are not grounded in the reality of the situation.  Making it a co op isn't going to be the magic bullet that will turn F1 into what you think it should be.  It's a solution in search of a problem.  And a poorly thought solution at that.

 

If you don't like the way F1 is going, don't watch.  It's that easy.  That's what will lead to any sort of change is people that are tuning in and going to races to not tune in and go to races.  Even then it will take the sponsors not wanting to fund the sport that will make the most impact.  Not liking a product isn't a sign that it's "failing".  It's a sign you don't like it and perhaps it's changed in a way to which you don't care for or can't relate.  While there are some issues with the revenue distribution to some teams in F1, it hardly calls for the forfeiture of property simply because you've ceased to enjoy the product.