43 replies to this topic

[sterlingfan2000]

https://www.motorspo...bewerbsgesetze/

First Member now called into Investigation to F1 Teams and Owner Liberty City. Alongside US Department of Justice , EU might investigate them too.

The First Member has already filed an for investigation into Liberty Media

Edited by sterlingfan2000, 12 October 2024 - 12:50.

[ensign14]

And a lot of this is thanks to the EU's own stupid ruling about separating sporting governance from the television rights. 

[New Britain]

And a lot of this is thanks to the EU's own stupid ruling about separating sporting governance from the television rights. 

Not looking to start a disagreement, rather am genuinely curious: Assuming that you are referring to the 2001 agreement (and leaving aside the 100-year contract scam), what should the EU have done instead?

[pdac]

Not looking to start a disagreement, rather am genuinely curious: Assuming that you are referring to the 2001 agreement (and leaving aside the 100-year contract scam), what should the EU have done instead?

 

Perhaps the obvious answer is that they should not have accepted the proposals for change that were put forward (and subsequently enacted).

Edited by pdac, 12 October 2024 - 14:07.

[New Britain]

Perhaps the obvious answer is that they should not have accepted the proposals for change that were put forward (and subsequently enacted).

You are begging the question. If the EU should not have accepted the FIA's proposals, what should the EU have done instead?

[ensign14]

Nothing.  When did the EU take the same measures against UEFA or FIFA or the IOC?

[Sterzo]

And about time too. The linked article appears to refer to Andretti - are there other issues connected with monopoly power and breaches of competition too?

[sterlingfan2000]

And about time too. The linked article appears to refer to Andretti - are there other issues connected with monopoly power and breaches of competition too?

We can only speculate but I think there could be other Car Manufacturer behind it. If for example BMW or Hyundai wanted to join, there would be no way to enter F1 since FOM would block a creation of a new Team. The only way is by buying a Team. A Team cost now more then 1 billion

Edited by sterlingfan2000, 12 October 2024 - 17:04.

[New Britain]

Nothing.  When did the EU take the same measures against UEFA or FIFA or the IOC?

The FI was found to have abused a conflict of interest by interfering with the promotion of other FIA-sanctioned races that would have competed with Bernie's F1 whilst it (the FIA) benefited from its financial stake in F1.

 

The Commission's Statement of Objections issued in June 2000 made the preliminary assessment that FIA had a "conflict of interest" in that it was using its regulatory powers to block the organisation of races which competed with the events promoted or organised by FIA (i.e. those events from which FIA derived a commercial benefit). Moreover, for a certain period of time, FIA may have been abusing a dominant position under Article 82 of the EC Treaty by claiming the TV rights to motor sport series it authorised. An analogous situation was created in formula one by the imposition of certain clauses in the Concorde Agreement. Finally, certain notified contracts appeared to contravene Article 81 and/or Article 82 of the EC Treaty in that they raised further the barriers to entry for a potential entrant: the promoters' contracts prevented circuits used for formula one from being used for races which could compete with formula one for a period of 10 years; the Concorde Agreement prevented the teams from racing in any other series comparable to formula one; the agreements with broadcasters placed a financial penalty on them if they showed motor sports that competed with F1 series. Certain agreements between FOA and broadcasters appeared to restrict competition within the meaning of Article 81 of the EC Treaty by granting the latter exclusivity in their territories for excessive periods of time.

[pdac]

You are begging the question. If the EU should not have accepted the FIA's proposals, what should the EU have done instead?

I don't know, but the upshot is that they did accept the FIA's proposals and so it is down to them that we have the situation that we have now - nobody else. They insisted that Formula 1 sort out their conflict of interest and they were the ones that accepted the proposals that lead to the current FIA/FOM setup that we have now.

[jonpollak]

Push that paper bitches.

Jp

[ensign14]

The FI was found to have abused a conflict of interest by interfering with the promotion of other FIA-sanctioned races that would have competed with Bernie's F1 whilst it (the FIA) benefited from its financial stake in F1.

And all of that applies to other sports as well (try using the word "Olympic" in any non-Games sporting context).  The ironic thing being that the sport was more open then than now.

[arrysen]

I'm relying on a Google translate of the original article, but although it does mention F1, the concern seems to be much more about Liberty also having commercial rights on F2, F3 & Moto GP and potential monopoly from that. Feels like the difficulty for a new team entering F1 is used as example. The translation could be a bit "off" though. 

[Wuzak]

We can only speculate but I think there could be other Car Manufacturer behind it. If for example BMW or Hyundai wanted to join, there would be no way to enter F1 since FOM would block a creation of a new Team. The only way is by buying a Team. A Team cost now more then 1 billion

 

Other manufacturers could entre F1 as a PU supplier.

 

How much money woudl it take to create a team from scratch?

[JimmyClark]

Liberty might flip it's lid and pull out of the EU altogether. Imagine the only race in this part of the world being Silverstone, and six races in desert blanddromes and another six in US street races to compensate...

[New Britain]

Nothing.  When did the EU take the same measures against UEFA or FIFA or the IOC?

 

And all of that applies to other sports as well (try using the word "Olympic" in any non-Games sporting context).  The ironic thing being that the sport was more open then than now.

 

AFAIK, issues over use of the word 'Olympic' and the five-ring logo relate to copyright and trademark law, not to anti-competitive behaviour.

 

As regards UEFA/FIFA, in the last year at least two courts in Europe have ruled that football regulators may not prevent clubs within their authority from participating in the proposed independent 'Super League'. (Dan Gosling has yet to make public his view on the matter.)
 

[absinthedude]

Good.

 

IF MBS doesn't have the balls hopefully the EU and relevant US authorities will.

 

I'm team "burn the house of cards down and start afresh" but this can be a positive sign that the teams/FOM/Liberty might be soundly put in their place. 

[sterlingfan2000]

Liberty might flip it's lid and pull out of the EU altogether. Imagine the only race in this part of the world being Silverstone, and six races in desert blanddromes and another six in US street races to compensate...

US is investigating them too so replace US street races with Africa street races lol

[pdac]

Good.

 

IF MBS doesn't have the balls hopefully the EU and relevant US authorities will.

 

I'm team "burn the house of cards down and start afresh" but this can be a positive sign that the teams/FOM/Liberty might be soundly put in their place. 

 

But will they?

[FLB]

For reference, this was the 2001 resolution: ec.europa.eu/commission/presscorner/detail/en/ip_01_1523

 

 

What the hell happened to that idea?

 

 

 

The effective separation of the FIA's commercial and regulatory roles will during this time be ensured by the fact that FIA's interests will be represented by an independent third party. The role of this third party will be solely to safeguard this reversionary interest, and the third party will not be involved in the commercial exploitation of Formula One.

[ensign14]

As regards UEFA/FIFA, in the last year at least two courts in Europe have ruled that football regulators may not prevent clubs within their authority from participating in the proposed independent 'Super League'. (Dan Gosling has yet to make public his view on the matter.)

 

Which again is an insane ruling that encourages monopolistic behaviour, but look who is paying whom for that.
 

[New Britain]

Which again is an insane ruling that encourages monopolistic behaviour, but look who is paying whom for that.
 

If the ruling would potentially give football clubs scope to participate in a new competition whilst continuing in their domestic leagues and Champions League, how does it encourage monopolistic behaviour? On the surface it would appear to do the opposite.

Is the issue in your mind that the Super League itself would be an exclusive oligopoly?

[New Britain]

For reference, this was the 2001 resolution: ec.europa.eu/commission/presscorner/detail/en/ip_01_1523

 

 

What the hell happened to that idea?

That was supposed to continue for the entire 100-year duration of the Commercial Rights lease.

[Nathan]

What the hell happened to that idea?

 

What have been the FIAs commercial interests in Formula 1?

Edited by Nathan, 13 October 2024 - 16:50.

[pdac]

For reference, this was the 2001 resolution: ec.europa.eu/commission/presscorner/detail/en/ip_01_1523

 

 

What the hell happened to that idea?

 

Isn't that just a reference to what we now refer to as the commercial rights holder - i.e. a third party that is independent of the FIA and looks after the FIA's commercial interests.

[ensign14]

If the ruling would potentially give football clubs scope to participate in a new competition whilst continuing in their domestic leagues and Champions League, how does it encourage monopolistic behaviour? On the surface it would appear to do the opposite.

Is the issue in your mind that the Super League itself would be an exclusive oligopoly?

 

In essence, the second leads to the first.  Money will arrogate to the clubs in those self-chosen competitions.  Driving the others out of business.  This happened with the formation of the Football League in 1888.  The only reason why any other clubs survive is because the League kept expanding to squish any possible threat.  But a lot of the big names in the 1880s (Darwen, Blackburn Olympic, the Swifts and so on) were gone in the 1890s.

 

It's the classic thing of forgetting that, despite claiming it is a business, sport is not a business.  Not in the conventional sense.  It does not provide a free choice for the consumer.  Yet the EU and ECJ blithely ignore illegal funding and state aid and so on, let alone consumer fairness.

[pdac]

The moment sporting events obtain paying observers, they cease to be sporting events and become entertainment events. That is the reality that everyone ignores.

[New Britain]

Isn't that just a reference to what we now refer to as the commercial rights holder - i.e. a third party that is independent of the FIA and looks after the FIA's commercial interests.

No. The complete paragraph is:

 

The agreement between the FIA and FOA for the sale of any rights that the FIA may have in Formula One has been concluded for a period of 100 years. On the expiry of this period, the rights will revert to the FIA. The effective separation of the FIA’s commercial and regulatory roles will during this time be ensured by the fact that FIA’s interests will be represented by an independent third party. The role of this third party will be solely to safeguard this reversionary interest, and the third party will not be involved in the commercial exploitation of Formula One.

[New Britain]

In essence, the second leads to the first.  Money will arrogate to the clubs in those self-chosen competitions.  Driving the others out of business.  This happened with the formation of the Football League in 1888.  The only reason why any other clubs survive is because the League kept expanding to squish any possible threat.  But a lot of the big names in the 1880s (Darwen, Blackburn Olympic, the Swifts and so on) were gone in the 1890s.

 

It's the classic thing of forgetting that, despite claiming it is a business, sport is not a business.  Not in the conventional sense.  It does not provide a free choice for the consumer.  Yet the EU and ECJ blithely ignore illegal funding and state aid and so on, let alone consumer fairness.

You're broadening the subject. I'd agree with you that most of those things have been regrettable, but they are not all the result of anti-competitive or unfair behaviour. Indeed the demise of Darwen, et al. was (AFAIK) the result of genuine competition.

The Super League proposal (which, as I presume you do, I disdain) has been modified to turn the project from a closed league into one with complete relegation and promotion, similar to the Champions and Europa Leagues.

If I understand where you're coming from, the problem with the Super League would be that naturally the big clubs would tend to win the most, by winning the most they would amass yet more riches, and they would use those riches further to cement their status as the teams that can spend the most to acquire the best players, dominate their domestic leagues, and so the vicious circle would continue.

[ensign14]

You're broadening the subject. I'd agree with you that most of those things have been regrettable, but they are not all the result of anti-competitive or unfair behaviour. Indeed the demise of Darwen, et al. was (AFAIK) the result of genuine competition.

The Super League proposal (which, as I presume you do, I disdain) has been modified to turn the project from a closed league into one with complete relegation and promotion, similar to the Champions and Europa Leagues.

If I understand where you're coming from, the problem with the Super League would be that naturally the big clubs would tend to win the most, by winning the most they would amass yet more riches, and they would use those riches further to cement their status as the teams that can spend the most to acquire the best players, dominate their domestic leagues, and so the vicious circle would continue.

The Football League was not genuine competition as the member teams locked up most of the available Saturdays with their self-selected cartel.  The first 12 clubs were NOT the best 12 clubs in England - 4 of the clubs (Stoke, Notts Co, Derby Co, Everton) would have struggled to be in the top 30 (weren't even the biggest clubs in their respective towns), but they had big grounds near railway stations, and Accrington got in because other Lancashire sides wanted another derby.

 

The Euroleague would eventually have deracinated from the rest of football.  Look at the multiclub model.  That should have been banned long long long ago but some **** would say it was anti-competitive and the ECJ would have done its usual wank job.

[New Britain]

The Football League was not genuine competition as the member teams locked up most of the available Saturdays with their self-selected cartel.  The first 12 clubs were NOT the best 12 clubs in England - 4 of the clubs (Stoke, Notts Co, Derby Co, Everton) would have struggled to be in the top 30 (weren't even the biggest clubs in their respective towns), but they had big grounds near railway stations, and Accrington got in because other Lancashire sides wanted another derby.

 

The Euroleague would eventually have deracinated from the rest of football.  Look at the multiclub model.  That should have been banned long long long ago but some **** would say it was anti-competitive and the ECJ would have done its usual wank job.

 

I am happy to defer to your knowledge of 19th century English football.

 

You won't find me sympathetic to UEFA or FIFA. The multi-club model is problematical, although not as bad as Red Bull's owning two F1 teams that ought to be competing directly against each other in every single race and ought not to be sharing technical information.

 

Re the Super League, I'm not sure how you are applying 'deracinated'. If it is that, via the Super League, eventually the biggest teams would leave their own domestic leagues and compete exclusively in the SL, would that be altogether bad? Yes, the domestic leagues would lose many of their local derbys, and we would no longer have those delicious moments when a small underdog club beats one of the big, rich ones. At the same time, however, competition in the domestic leagues would be less unfair and more uncertain (i.e., more competitive), and in the SL there would be a new parallel competition with its own dramas. The real problem with professional football is the huge imbalance of wealth amongst the teams, not the present or proposed league structure.

 

In any case, I don't think the fact that football is badly governed is justification for motor sport to be badly governed. Football is called the 'people's sport', a recognition that, although the clubs may in some countries be privately owned, the sport overall is an integral part of those countries' cultural lifeblood and as such is a public good, not exclusively private property. Motor sport, and especially Formula One, has a similar quality, albeit to a less extreme extent.

 

It very much appears that the Commercial Rights Holder has usurped or been handed over powers that rightfully belong to the non-commercial governing body. To put it another way, the Commercial Rights Holder should not be the governing body. Teams are private property and broadcasting rights are private property, but sport is not private property.

[ensign14]

If it is that, via the Super League, eventually the biggest teams would leave their own domestic leagues and compete exclusively in the SL, would that be altogether bad?

 
I'm not entirely sure it would be, especially given that, at some point, the stars attracting the gloryhunters now will need replacing - and who is going to gloryhunt at e.g. Juve if they're constantly fighting for 14th in a Euroleague? 

 

Plus, somewhat bizarrely, Instagram and youtube are proving to be accidental saviours of the game at a lower standard, with every blogger worth their salt trying to cover San Marino or Stourbridge Standard for a global audience.  Risk is pulling the World Cup apart if there is a rival quasi-international competition as well.  Half of the third tier in England this season are averaging 9,500 or more.  Up on the last few seasons.

[pdac]

Isn't it just standard business practice that if there are two or more entities competing in the same market, the aim of every one of them is to capture 100% of that market and either take over thier competitors or put them out of business? Any attempt to stop that through regulation is extremely difficult, if not impossible.

[BRG]

Isn't it just standard business practice that if there are two or more entities competing in the same market, the aim of every one of them is to capture 100% of that market and either take over thier competitors or put them out of business? Any attempt to stop that through regulation is extremely difficult, if not impossible.

Obviously in the mythical perfect market of theoretical economics, that is exactly what will happen.  Indeed, it is how you win (or lose) the board game Monopoly.  That is why every democratic state (and many undemocratic ones) have regulatory bodies that prevent it happening.  In the UK, the Monopolies and Mergers Commission does that job, along with the Department of Trade and the Courts and is empowered to stop monopolistic mergers, and even break up companies to maintain an open market.  As you can see from the UK's economy, they have been pretty successful in preventing monopolies forming.  

[ensign14]

On top of which it's impossible to do that in a free market because taxation or undercutting will always get in the way.  The main issue from a regulatory perspective is that if there are too many barriers then the market stops being free.  Regulation ought only do what the common law would eventually do anyway.

 

  In the UK, the Monopolies and Mergers Commission does that job 

 

Funny that they have a monopoly on it.

[pdac]

Obviously in the mythical perfect market of theoretical economics, that is exactly what will happen.  Indeed, it is how you win (or lose) the board game Monopoly.  That is why every democratic state (and many undemocratic ones) have regulatory bodies that prevent it happening.  In the UK, the Monopolies and Mergers Commission does that job, along with the Department of Trade and the Courts and is empowered to stop monopolistic mergers, and even break up companies to maintain an open market.  As you can see from the UK's economy, they have been pretty successful in preventing monopolies forming.  

 

Of course, governments do intervene and set up things like the Monopolies and Mergers Commission. But they are generally averse to market interference and only wield their power in the most obvious cases. They certainly are very happy for, say, 20 competitors to be compacted down to 2 or 3 by the actions I mentioned earlier. They will happily let things compact down to 1 (monopoly) if it's a market that they don't deem to be of serious interest.

 

Edit:

They will also decide what is a market. For example, When Sky TV faced competition from another Satellite broadcaster, they let Sky buy them out and become the only Satellite TV broadcaster in the UK - because they saw the market as "broadcasting" and not "broadcasting via satellite".

Edited by pdac, 14 October 2024 - 15:46.

[New Britain]

Isn't it just standard business practice that if there are two or more entities competing in the same market, the aim of every one of them is to capture 100% of that market and either take over thier competitors or put them out of business? Any attempt to stop that through regulation is extremely difficult, if not impossible.

Actually that does not apply to professional sports teams.

In 1965 W. C. Neale published a seminal article, 'The Peculiar Economics of Professional Sports'. One of his observations was that - unlike in almost all other kinds of business - the owner of a professional sports teams wants his(/her) competitors to do well, as that will create the drama and fan interest that generate media coverage and ticket sales. The owner just wants his team to do slightly better than the rest.

[pdac]

Actually that does not apply to professional sports teams.

In 1965 W. C. Neale published a seminal article, 'The Peculiar Economics of Professional Sports'. One of his observations was that - unlike in almost all other kinds of business - the owner of a professional sports teams wants his(/her) competitors to do well, as that will create the drama and fan interest that generate media coverage and ticket sales. The owner just wants his team to do slightly better than the rest.

 

I do not feel that an article published in 1965 regarding professional sport has much relevance in 2024. I'm old enough to have vague memories of what professional sport was like in the 60's

Edited by pdac, 14 October 2024 - 17:12.

[New Britain]

I do not feel that an article published in 1965 regarding professional sport has much relevance in 2024. I'm old enough to have vague memories of what professional sport was like in the 60's

So you reckon that economics and human behaviour did not exist before everyone had a smart phone?

[Nathan]

Most North American sports leagues near unanimously pass things like salary caps and revenue sharing agreements, and these typically have come about when small markets can no longer compete.  I think sports team owners do recognize you can't just have a few teams winning everything.  Their possessiveness of territory and monopolies is usually left to how close another owner can have a team.

[pdac]

So you reckon that economics and human behaviour did not exist before everyone had a smart phone?

 

Huh? I don't even use a smart phone. I do know that professional sport is much much much more about making money than it was in the 60's. The people involved are much more clued up.

Edited by pdac, 14 October 2024 - 20:36.

[New Britain]

Huh? I don't even use a smart phone. I do know that professional sport is much much much more about making money than it was in the 60's. The people involved are much more clued up.

Much more clued up than whom?

 

Circumstances and details change every day; economic principles and human behaviour change rarely if ever.

You are free to dismiss an important economic analysis that happens to be directly relevant to this and the Andretti threads as being outdated, but it is your loss.

[pdac]

Much more clued up than whom?

 

Circumstances and details change every day; economic principles and human behaviour change rarely if ever.

You are free to dismiss an important economic analysis that happens to be directly relevant to this and the Andretti threads as being outdated, but it is your loss.

 

 ... then their counterparts in an earlier era, of course. I would sort of go along with the idea that the behaviour of individuals, in general, does not change. But in specific areas, human behaviour most certainly changes over time - one reason using slave labour on plantations is not so widespread as it used to be. And corporate behaviour most certainly changes over time too.

 

So, yes, I dismiss that as irrelevant to today.

Edited by pdac, 14 October 2024 - 21:42.

[New Britain]

 ... then their counterparts in an earlier era, of course. I would sort of go along with the idea that the behaviour of individuals, in general, does not change. But in specific areas, human behaviour most certainly changes over time - one reason using slave labour on plantations is not so widespread as it used to be. And corporate behaviour most certainly changes over time too.

 

So, yes, I dismiss that as irrelevant to today.

 

I'm not going to divert the thread by rebutting your examples. As I said, if you choose to dismiss an important and path-breaking economic analysis without even having read it, that is your loss.

I have learnt a great deal from the work of people who preceded me. If you know everything already, good for you.