This is an interesting analysis. I think it also explains why Bernie has to go too. http://news.bbc.co.uk/2/hi/business/8109670.stm Why F1 future may spin out of control Analysis By Theo Leggett Business reporter, BBC News Lewis Hamilton's McLaren team is among those that may break away On the eve of the British Grand Prix, one of the oldest and best loved events on its calendar, the glamorous world of Formula One motor racing is in turmoil. Eight of the ten teams, including Ferrari and the Brawn GP team of championship leader Jenson Button have announced plans to set up a rival championship. Yet Formula One is as popular as it is ever been, attracting a huge television audience. So what has gone wrong? Well, fundamentally, it is about business, not sport. The catalyst has certainly been the global economic downturn with the Honda team's decision to leave Formula One last year sending shivers through the series. It pulled out because its sales had fallen dramatically and it could no longer justify spending hundreds of millions of dollars a year on racing. The threat is a potentially expensive headache for Bernie Ecclestone That prompted fears other carmakers could follow - leaving millions of television viewers watching just a handful of cars. Revenue row Motor racing's governing body, the FIA, responded with a package of proposals to cut costs dramatically. It included plans to limit F1 budgets to $60m (£36.6m). This went down badly with teams who until recently were spending close to $500m a season. They also objected to plans to limit their technical freedom. But while the row over how far costs need to be cut and how to do it may have triggered off the dispute, it is emphatically not the main issue. Both parties will be weakened if this happens and someone else will gain Chris Aylett Motorsports Industry Association The real argument, which has been simmering for years, is about how the sport is run and what happens to its commercial revenues. While the teams compete in F1, and the governing body makes the rules, the commercial side is looked after by the Formula One Group. These companies are run by Bernie Ecclestone and are majority owned by private equity group CVC Capital Partners. The group makes close to $1bn a year from television rights, trackside advertising, and the large fees it charges racetracks for the right to host Grands Prix. But only half of this money comes back into the sport as payments to the teams; the rest goes into the coffers of the F1 Group. According to the independent F1 financial guide Formula Money, much of it is used to repay debts run up by CVC when it bought its stake in F1. Will the drivers be celebrating a breakaway group? The teams are privately questioning why they are being asked to cut costs so dramatically when a great deal of revenue is going out of the sport. They are also concerned at the way in which they say the FIA is trying to impose its will on them and ignoring their wishes. Fan split The FIA insists it has to act tough to prevent F1 turning into a "financial arms race". So does their threat to create a new series hold water? Yes it does, according to Chris Aylett, chief executive of the Motorsports Industry Association. "These are companies of high repute. Some of them are large multinational organisations. And this is a pretty big card to play". This is bad news for the debt holders. In fact it doesn't get any worse If the teams do carry out their threat, viewers would be left to choose between two rival series - something that could prove highly damaging. A similar situation arose in American Indycar racing - a close cousin of Formula One - which split in two in the mid 1990s. The result was that neither series proved truly successful - as fans voted with their remote controls, and migrated to other sports. "Both parties will be weakened if this happens" says Chris Aylett, "And someone else will gain". Distraction Christian Sylt of Formula Money says it's a prospect which terrifies key investors in F1 - the banks who hold the Formula One Group's debt. "This is bad news for the debt holders. In fact it doesn't get any worse", he says. So those influential investors could yet have a role to play. In the weird, wonderful and highly political world of Formula One, of course, things can change very quickly. It is far from certain that F1 will split. But insiders say the prospect is becoming alarmingly real. A distraction, to say the least, as the teams build up for the British Grand Prix.
Back to money (did we ever leave it?). Common sense would have had the FIA negotiate in good faith (no sign first BS). The question is if those with the most to lose can get Max off the dime. In that his control over the FIA seems absolute (surviving Hooker-Gate made him stronger) and that at this point everyone is out for his scalp I don't see that happening. If his hand can't be forced the best outcome may be that Bernie and his money-men follow the profits and support FOTA. IMO all the talk about suits and counter-suits are a last resort that no one wants to persue.
David, I would not go so far as to say HookerGate made Mosley stronger, but Bernie's support of Max at that time certainly helped. But that support seems to show that Max will be Bernie's bad guy to Bernie's saving grace role. Can't do anything about the CVC loans, so its up to Bernie to fix this mess, his easiest path with the least legal resistance will include the FIA. And he will find a way to end Mosley's reign in October, that's how Bernie will win.
I think it made him stronger in his (now certifiably crazy) head - "Hey, I can survive this, I can get away with *anything*!...... We know he basically bribed a bunch of delegates in order to win the vote and it empowered him even more. A truly disgusting man who has lost touch IMHO. As I said before, I may even feel sorry for anyone else. JMB went down in a similar fashion IIRC. Also, IIRC, Bernie did another of his teflon moves at the time - He initially said MM had to go and didn't flip-flop until after the vote....[Or at least when he saw the writing on the wall.] Cheers, Ian
Maybe running the planets largest sport sends 'em crazy...... Too many people sucking their proverbial dicks, maybe?
YUK!! Thanks Ian! Now I'm trying to get that disgusting image out of my head! I feel almost as dirty as Ron looked in his photo of himself.
Sorry dude! I just couldn't find a better analogy, didn't mean to create any images...... I'm not even going to comment on Rons pic - double YUK! Again, sorry!
CVC; Too bad, So Sad. And Greedy Bernie that sold out. They are the parasites draining the financial blood from the teams who deserve and work for it. 50% return ? I call that high risk. Their rate of return caused the risk. The Chickens have come home to roost. This is where the teams have their biggest beef. Their job and passion is to win the WDC and/or WCC. Money is no object and the more the better. Outspend the competition works in all forms of motor sport. However the parent companies who pay the bill dont see quite the glorious rosy picture when meeting with their board of directors presented with that bill. They then in turn having to explain in turn to the stockholders whose only concern is the bottom line. The madness really did have to end. Especially in this economic climate. If some of the teams, Ferrari in particular, are angered by the cap and want to join FOTA because of it. Thats OK with me. Caps are coming to all forms of sport. Get used to it. This is good news to me. Let them rot.
Do Max and Bernie "own the show"? I know they own F1 but is that the show? FOTA seems to think not...
Maybe if you have no backbone. Like slaves and their dictating abusive masters. The slaves should just "work" with their dictating abusive masters...right Ron?
By definition the king owns the show But you get my point. It's the converse to "that which doesn't kill me makes me stronger".
I wonder why the teams aren't more vocal about getting rid of Max? Seems like they strongly hint at it but aren't flatly stating it collectively. Do they know that Bernie will just use his ouster as a trade off to get more of what he wants anyway so they don't want to give him the satisfaction? Or, do they know the guy is probably out of there anyway so why make it a condition?
I'm sick of the Max/Bernie side show. It is long past the time for them to go. It's time for the stupid drama and lack of fan concern to be put aside. I mean hell, if they even cared about the easy things have broadcast the races in HD. How hard can that be? And they don't even do that. Hopefully FOTA will leave F1 and start a new series, a series focused on good races based on great drivers, great cars and great venues!
