Bernard

[markfarrell9572]

We follow a sport with a huge worldwide audience, the people who do well out of it seem to do very well indeed, but one man has done better than anyone else.  Bernie has become hugely wealthy while from 1991 only 3 teams survive today in their original guise.  Among those gone are world championship winning teams such as Lotus (Colin's Lotus, the real Lotus), Brabham, and Tyrrell. We have lost engine manufacturers such as Honda, Toyota, Ford, Lamborghini, Peugeot, Yamaha and BMW as well as privateer engine maufacturers such as Hart and Judd.  Williams, a super successful team in the 80's and 90's is (lets be honest) struggling for survival.  We have seen great teams from lower formula struggle and fail, Coloni, Pacific and Forte to name but a few.  Last year we welcomed three new teams to the grid, but they have little or no chance of ever becoming successful.  Virgin is made up of Manor Racing staff, hardcore racers to a man, and yet damned due to finances.  Finances which all being fair and right should be divided out among the teams and not CVC partners and Bernie Ecclestone.

I am the first to recognise what Bernie has done for the sport, but ultimately has he taken to much from F1?  Is Bernie not ultimately damaging the sport?


Just as an aside, the teams from 1991 and engine suppliers.  How many still there?
McLaren Honda
Tyrrell Honda
Williams Renault
Brabham Yamaha
Footwork Porsche
Lotus Judd
Fondmetal Cosworth
Leyton House Ilmor
AGS Cosworth
Benetton Ford
Scuderia Italia Dallara Judd
Minardi Ford
Ligier Lamborghini
Ferrari
Larrousse Cosworth
Coloni Cosworth
Jordan Ford
Lamborghini

[Scott]

I agree - Bernie and CVC are little more than the 'managers' of F1, and should therefor get a take more like 20%, not 47, or 53% or whatever it is.  The waters get murkier when you throw in the track advertising, Paddock club and the rest. 

[Jericoke]

I agree that Bernie is keeping a big enough piece of the pie that the rest is not enough to go around.

The top F1 teams are making their money from other sources, not FOM.  I'm sure Ferrari would love an extra 100 million, but they wouldn't be any better because of it.  Indeed, McLaren was excluded from the 2007 championship (and money, on top of a fine bigger than most team budgets) and seem to be doing just fine.

So the problem isn't really that Bernie keeps too much... but rather the small teams don't really have an avenue to get the money that they need.  If Ferrari, McLaren and RBR gave up their share, I'm sure they'd be fine, and Lotus/Virgin/HRT would find themselves suddenly competitive, and gaining the strength they need to survive.

I'm not suggesting that the big teams should give anything up.  They've earned it.

I think there is room to improve the sport so the cost of entry is lower, that the possibility of moving to the top exists, and that the sport is greater than ever... all the while Bernie gets to keep his obscene pile of money (earned or not.)

For example:  RBR has run a 'sister team' for years.  STR even beat them to a win!  There is room for McLaren and Ferrari to share with smaller teams, to benefit, and still be the top names in the sport.

[cosworth151]

You don't need to all the way back to 91, Mark. Only 4 teams from the 2000 season are still around in the same form. One of those, Sauber, went through the BMW buyout and then barely survived to return to its previous ownership. Small privateer fan favorites, like Minardi, Jordan and Super Aguri, don't stand a chance of survival.

We also have lost, and will continue to loose, great venues. Private promoters can't make a profit, so only dictatorships willing to hand over truckloads of cash will have races.

[Jericoke]

You don't need to all the way back to 91, Mark. Only 4 teams from the 2000 season are still around in the same form. One of those, Sauber, went through the BMW buyout and then barely survived to return to its previous ownership. Small privateer fan favorites, like Minardi, Jordan and Super Aguri, don't stand a chance of survival.

We also have lost, and will continue to loose, great venues. Private promoters can't make a profit, so only dictatorships willing to hand over truckloads of cash will have races.

The number of F1 teams that survive their original owner is fairly small.  McLaren only survives because the named merged with Project4, which still has its original owner.

Ferrari survives because Enzo managed to turn it into a massive company outside of F1.

I'd love to see more teams have an ongoing legacy, but in 60 years that is hardly the norm.  Sauber and Williams are certainly longer lived than average, and without going into the stats, I'd say that RBR and STR are probably 'old men' in the age of F1 teams.

Most of the current teams do have a lineage to previous teams, in terms of facilities and staff.  It's nice that when a team flames out, they do come back phoenix style.

[lkjohnson1950]

Enzo did not turn Ferrari into a massive company. He wanted to race in F1, to finance that he built high performance road cars for wealthy Gentleman Racers and those who wanted to appear to be Sportsmen. His company was never large. When he was on the verge of bankruptcy in '69 he sold a huge share to FIAT with the understanding that he would continue to run the company as he saw fit. FIAT has turned the company into a marketing colossus, though it is a tiny manufacturer, never producing more than 7K cars in a year.

[markfarrell9572]

I know its probably simplistic, but taking CVC out of the equation would be ideal.  If the teams through FOTA could employ Bernie and his knowledge to deals.  Surely Bernie is only an employee (albeit a highly paid one) of CVC, so why not do the same job for FOTA.  More money would filter through to teams, and hopefully mean that we could also retain great venues and maybe even revisit countries such as France. 

The guardian today reports that Red Bull's F1 operation made a pre tax profit last year of £2.8m.  For a team that won the drivers and constructor's championships, and the prize money (for lack of better word) that went with those positions, that seems very little.


 

[Scott]

I wonder if that is net after combining RBR and STR's books.

CVC should be taken out of F1, but Bernie should be pushed out right behind them.  It would have been so easy if FOTA just had the balls a few years ago when they were on the verge of splitting off from the FIA and FOM.  If the teams want more money, they simply have to negotiate as one complete entity.  Last time it was Frank who wouldn't join the club, next time it will be someone else (or maybe Frank again).  For the big teams it's about greed, for the little teams it's about survival, and Bernie holds the reigns for everyone.

Bill Gates brilliance was the unheard of idea of licensing his software instead of selling it.  Bernie's brilliance was the idea to funnel every penny of money in F1 through himself.  They're both very rich men because of simple but ingenious ideas.

[Jericoke]

It would have been so easy if FOTA just had the balls a few years ago when they were on the verge of splitting off from the FIA and FOM.  If the teams want more money, they simply have to negotiate as one complete entity.  Last time it was Frank who wouldn't join the club, next time it will be someone else (or maybe Frank again).  For the big teams it's about greed, for the little teams it's about survival, and Bernie holds the reigns for everyone.

From what I've read, FOM was basically the 70s/80s version for FOTA... all the teams banding together to get a fair share of Formula One.  I've said that FOM needs FOTA more than FOTA needs FOM, and it's tough to see what's holding this together.

My guess is that anytime someone talks split, Bernie shows them the laundry list of EVERYTHING FOM does.  The TV contracts, the race promotions and merchandising are the easy parts to see.  I know FOM handles international shipping.  I wonder if there aren't a million little contracts spread across the various venues and international rights.  FOTA might be able to handle the big stuff that brings in the cash, but can they handle the little things that FOM does that holds it all together?

[John S]

CVC should be taken out of F1, but Bernie should be pushed out right behind them. 

Pretty difficult for that to happen as the FIA headed by Max Mosley sold the rights for a long period of time for about $300 million.

As Jeri points out FOM provides a lot more than just a grid slot for each team throughout the season and probably has quite a high operating budget. The trouble is as a private and not public company CVC the owners of FOM do not have to give us all the details.

I think this new round of Concorde agreement talks is a lot tougher and the teams will end up with more of the pot. For me it's not so much about how much the pot is but how the monies are divided up, how can teams like HRT ever get on terms with Ferrari if they get almost nothing from the huge FI pot.

It's also time some of the more stupid rules that stop teams getting money were scrapped, take for instance the naming rule; why can't constructors simply change their name (and owners if they wish) at the start of a new season without loss of prize money? Obviosly there should be a test for the integrity of the new owners. After all FOM is able to change owners as and when it pleases. 

 

[markfarrell9572]

I know when I made the point in the beginning I focused on the teams, and how badly they are doing from the current concorde agreement, and CVC's involvement in the sport, but I also think the tracks, trackside fans, tv viewers, and broadcasters are all being screwed.  And its basically all to service CVC's debt from buying F1

[John S]

I know when I made the point in the beginning I focused on the teams, and how badly they are doing from the current concorde agreement, and CVC's involvement in the sport, but I also think the tracks, trackside fans, tv viewers, and broadcasters are all being screwed.  And its basically all to service CVC's debt from buying F1

The tickets for races and the TV coverage would be the same whether or not CVC owned the rights, the high charges were established long before they bought the rights from the Banks that had taken it by default from the German media company.

As a point of interest CVC is a good way towards paying down the debt of purchasing F1, won't make any difference though as they will still value the asset high on their books. There are suggestions that the CVC fund that owns F1 will be wound up in a few years, these sort of funds are usually limited term investments for the people who capitalise them, so another owner is probably inevitable.

[Scott]

The ticket prices are high because Bernie (aka FOM/CVC) doesn't share a nickel with the promoters from any advertising (TV or on-track) or paddock club profits with the local promoter while charging millions per year for fees.  The only way the local promoter can get anywhere near their expenses is to charge such high ticket prices, be subsidized, or like the case of Indy, have a huge number of seats available.   

[lkjohnson1950]

The idea of allotting money according to how you finish in the WCC sounds like a good reward for hard work, but it helps keep the top teams at the top and the poorer teams at the bottom. I feel for the new guys, but it is the venues that really suffer. They pay an outrageous fee and get nothing but the cars. No advertising, no naming rights. not even signage. This is why we are losing the classic venues, they simply cannot even break even on the expense. The old European countries cannot or will not provide government backing, so the races go where the money is, the people who can afford to build Tilkedromes. Amazing facilities, crappy tracks.

[John S]

I also follow MotoGP, this year the numbers on the grid has been very low, around 16 for most races, and it makes the races look like a poor shadow of the well filled grids of a few years ago. It also makes for poor viewing on TV, it's much more fun now watching Moto2 with it's packed grid and close racing.

F1 with it's 24 runners looks positively radiant in comparison, however constantly starving the tail end teams in the share out of funds leaves a very real slippery slope for the sport. Teams like HRT and Virgin can't stay indefinitely if they see no prospect of improvement in their grid positions or budgets, and who knows how long Sauber, Williams and Renault GP can scrape along. 

I think the teams share out from F1 is a much more pressing problem, which the new Concorde will set in stone for a number of years, where as the dilemma of tracks poor financial health can be resolved anytime the rights holder chooses.