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Explanation and more details on the Autosport.Com/Atlas F1 deal

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#1 bira

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Posted 07 January 2005 - 00:02

There is no easy way to present what is going to happen, without first revealing what has already happened and explaining why it has happened.

In early September 2004, Paul Kaizar and I decided to publish an advertisement in BusinessF1 magazine, calling for potential investors in Atlas F1. This came after it became obvious to us that there is no viable way that we could continue independently. Our business was on the brink of breaking even - as a matter of fact, in 2004 we broke even for the first time, matching our costs with our income. However, this was severely diminished by past years' debts and a complete lack of additional resources to sustain us and allow a normal cash flow.

People who worked with us have been effectively paid for their past work rather than their present. The total debt simply remained the same, and without reducing the budget - which was running on a shoestring anyway - there was no prospect of clearing these debts. It weighed heavily on us, and it was demoralising for all involved.

A handful of interested companies and individuals contacted us following the BusinessF1 ad, and with one individual we began serious negotiations that looked more than promising. On the brink of an agreement, and after giving our assurances and promises to everyone that they will be paid by January 2005, this investor withdrew from the negotiations due to unforeseen events in his life that changed his standings.

This was early December 2004 - a month to go before we were to pay back many of the debts - and to top it off we found out that some guy unfamiliar to us filed a defamation lawsuit - naming our company, Atlas F1 and Paul Kaizar among the defendants. The basis of the lawsuit were posts made in The Nostalgia Forum which criticised the accuracy of a book he wrote.

The lawsuit, by all accounts, is frivolous and a nuisance - it had nothing to do with us - we weren't acting as publishers on the BB - even if you accept for a single moment that criticism of published work is defamation. But frivolous as it may be, this highlighted our vulnerability as a small and privately owned website: we were suddenly not only in debts, but also in an urgent need of a lawyer - a multi-thousand dollar expense that could easily escalate.

With that in mind, Paul and I were ready to give up. It was frustrating: Atlas F1 by all accounts is a success story, both editorially and as a business model. But we cannot take it to the next step, and we could not find someone willing to do it.

So we explored the option of shutting down, with such a move leading to two primary issues that need resolving: compensation for the existing subscribers, and the clearing of debts. Filing for bankruptcy is an option, but not one we were willing to accept; Atlas F1 lived in dignity. If it were to die, it must die in dignity.

Therefore, as a last resort, I contacted Haymarket some 4 weeks ago. I hoped I could convince them to let Atlas F1 continue - hoped they would at least give me a chance to prove to them that it could be a viable business for them - but I was mentally (even if not emotionally) prepared for the possibility that the best case scenario is to shut down Atlas F1 with no loose ends. The worst case scenario, after all, was that Haymarket would turn us down and we'd be right back on square one.

I was invited to meet the senior directors at Haymarket in London just two days before Christmas. And I'll say this: no matter what happens now, no matter what will happen in the future, the two days I spent in London and the following two weeks have probably been the happiest of my life. Put simply: I don't think anyone has ever treated me with more kindness, appreciation and respect. If I thought I was going to face the enemy, I found instead real allies.

That said, reaching an agreement was not easy - I actually lost my voice (literally) after the second day! - and it's astonishing that we've managed to do it within two weeks, and during the holidays no less. That alone is a testament to how much both sides want this deal.

I'm not at liberty to discuss the financial details of the deal, obviously - but suffice it to say that like any other successful deal, we feel Haymarket got a real bargain and Haymarket feel they got ripped off, and yet both sides are willing to live with that. :)

And the agreement, let me tell you clearly, is absolutely sensational. I've spent two weeks analysing it with every single person on the Atlas F1 and Haymarket team, and with my friends and family. And I still fail to find a major flaw in it. It has instantly instilled new life, motivation and sheer happiness in everyone on board our team. The fact that we all get to do what we do now, and that we get to do even more, is fantastic.

In broad terms, the deal sees Haymarket acquiring the Atlas F1 website while hiring me to merge and lead my staff at Atlas F1 and the staff at Autosport.com in creating the absolute best motor racing online publication. This means Atlas F1 will come under the overall umbrella of Autosport.com - Atlas F1 is Formula One; Autosport.com has and will have much more than F1.

Haymarket are happy with Atlas F1 as it is - changes that will be made are primarily technical and graphical, and I'll comment more on that later. But Haymarket want me, with the newly merged team of people from both sites, to first finalise this merger and then go over every non-F1 section and, in their words, "give it the atlas treatment". The way I comprehend it, this means we are to build a quality online motor racing subscription service that is diversified, in depth, reliable, and financially successful. The way Haymarket present it, this is not something they believe I could do - it's something they believe I already did. In Atlas F1. And as such, they expect me and want me to be myself. They didn't bring me over to become anything other than what I am.

The same applies for Atlas F1. The people at Haymarket have been full of praise and compliments for Atlas F1, and it echoes a feeling we've had throughout the last year, that Atlas F1 has come of age and is now regarded by many in the industry and within F1 as a quality product. Again, if Haymarket thought this product is not worth keeping, they'd have shut it down. Remember: I already gave them that option.

Instead, Haymarket want to see the Atlas F1 brand name utilised to its fullest. We have in our hand now two very strong brands, but with different strengths. Autosport is a very, very, very strong brand regardless of whether each of you likes or dislikes the print magazine or the dot com. It's a brand with over 50 years of history, and with large prominence in motor racing. But Autosport is primarily strong in England and Europe; Atlas F1 is a very strong brand on the Internet, only among F1 followers, and has a strong visibility in the USA. Using both brands - not giving up on either - makes perfect sense. We should play to the strengths of each. And we have no reason not to use both.

So the Atlas F1 name, logo, URL and content are not going anywhere. And the people who make Atlas F1 are not going anywhere either. We simply moved to a new - and a much stronger - home.

Now a few specific points that have been raised (the ones I remember, anyway) :

* Users with Dual Paid Subscription (subscribed to both Atlas F1 and Autosport) : be assured that once the service is merged (in a short time), your subscription will too be merged and will be extended to reflect the total remaining time of both subscriptions.

* Website Design: some sections on Atlas F1 and on Autosport.com will have the same design as each does now, and some will have a completely new design that reflects the merger. This is a huge overhaul and will not happen overnight. But we have every intention to offer a clean design for the end product.

* Pop Up Ads: there is an understanding at Haymarket that paying readers should not be obstructed from reading and even before this deal came about, they had decided to phase out the pop up ads for subscribers. So this is definitely something we are very aware of and working on removing from Autosport.com with mutual consent.

* Content Quality: I have never been known to do anything that I am not proud of, and I have no reason to believe - despite the most ominous predictions here - that this is about to change. The ethics and journalistic standards that have been so important to me throughout my professional life will continue to be the standards I follow. The rumours, unconfirmed stories and speculations will continue to run in the Daily Grapevine. The news will remain the definitive and reliable source. And I must say it was one of the highlights of my initial visit to Haymarket, to hear them tell me that's exactly how they want me to proceed.

* Writers you Love or Hate: Atlas F1 subscribers have certain writers they love and expect to see, and so do Autosport.com subscribers. The end result will not be to choose between A or B, but rather to offer both A and B. Therefore, Rene, both Matt Bishop and David Cameron will be writing for us. I have always said this about Atlas F1: we aim to offer something for each one, even if not everything for everyone. This is allthemore true for an even broader service that has even more content on offer.

* The Atlas F1 Bulletin Board: this BB (and the chatroom) will not change (except for a software upgrade that was planned for the upcoming months even before this deal came into play). It continues to be a free and completely separate service. Haymarket have absolutely no wish to become involved in it - where it comes to the forums they are a computer service provider, like the ISP that provides the BB its server and bandwidth. The BB will continue to be moderated as it has been to date, i.e. by members of the BB itself. I myself will probably not have much time to be involved in the moderation of the BB, to be honest, but I am not going anywhere - I am still here and I will still be a part of this BB, as will the other Atlas F1 team members.

* What happens if this all goes wrong? The same that would have happened if the move to subscription would have failed; the same thing that would have happened if the deal with FORIX would have flopped; the same thing that would have happened if every plan we introduced didn't meet expectations: we either find a solution or we perish. Given that we survived much harder challenges, and seeing as we have a good track record of Doing The Right Thing, I'd like to think that the chances of it going wrong are smaller than the chances of it going well.

* What happens if this all goes well? Well, imagine a completely hypothetical situation where someone like, say, Michael Schumacher - along with some people like, say, Ross Brawn/Rory Byrne/etc - would decide to join a team like, say, Ferrari. In this completely hypothetical situation, what chances are there that this new team will become the most dominant and successful team Formula One has ever seen? :)

I hope this all gives you the answer.


#2 bira

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Posted 07 January 2005 - 00:03

For further comments, questions and discussion, please use this thread.