O Opinions & Commentary

George’s News and Notes – February 2, 2019

George’s News and Notes – February 2, 2019

Liberty Media, the current owners of Formula One are getting warning signals from a group of the promoters of the Grands Prix which form the heart of the sport. The Formula One Promoters’ Association met recently and issued a statement criticising some of the Liberty’s initiatives. Their concerns might be considered as bargaining positions given that contracts with several key venues – Britain, Italy, Spain, Germany and Mexico – expire at the end of this year – and without them the Formula One calendar would have lost many of its most prestigious and traditional event.

Promoters of some of the less traditional events such as Russia, Bahrain, Abu Dhabi and China did not join this protest. It would be a strange Formula One if these events became the keystone of the championship series – a series as much grounded in Europe as baseball is in America.

Apparently they were most concerned about the spectre of F1 moving to a pay TV model in place of a direct to air free TV model. Without question, the more countries that accept the pay TV model, the smaller the TV audience by a huge margin. And, without the big TV audience being exposed to F1 to build and maintain the fan base, the promoters worry that interest in the sport will tank and, with it, their ticket sales.

They are also concerned about the report that Liberty had offered the Miami group a profit-share arrangement in place of the standard fee deal. The promoters now pay huge sanctioning fees and hand over most of the potential sources of revenue to Liberty, making it difficult for them to make any profit from promoting their Grand Prix. Bernie Ecclestone pushed the idea of signing contracts with the promoters with huge sanctioning fees, fees that escalated year over year. He also promoted the idea that all the promoters should make up their shortfall by getting government subsidies for their events. Even the Olympics is having problems with this government subsidy model for their games, and some countries, like the US, are generally opposed to the idea of government subsidies.

The failure of the Indianapolis Grand Prix is a case in point, left with only ticket sales as a source of revenue, Tony George had to face the reality that this event could never turn a profit – expect for the Formula One management.

It seems that, in the case of Silverstone and Monza – and probably the others whose contracts expire at the end of this year, unless Liberty is prepared to offer them more favourable terms for the future, these events will be lost from the calendar. In the case of Silverstone at least, there is no alternative venue available to host the British Grand Prix.

In addition there were concerns about the fact that some venues were being expected to pay significantly higher sanctioning fees than others.

Meanwhile, Liberty will be adding Viet Nam to the calendar in 2020 and they are talking about other countries as well. Why would they be courting these new locations. It is not because this country is a hot bed of F1 fans. An analysis of the audience figures recently released by Liberty tells us that the fan base is firmly rooted in the old familiar countries.

"As we enter a new season of the sport that we have promoted for many decades, the promoters seek a more collaborative approach to the development of the championship and the opportunity to offer their experience and expertise in a spirit of partnership with Formula 1 and the FIA."

The president of the Italian automobile club (ACI), Sticchi Damiani, said that Monza is among the 16 F1 circuits protesting current race fees charged by Liberty Media. "The ACI will do its part, as we are perfectly aware of the importance of the role it plays. But we must have a chance of economic sustainability. We have to convince Liberty Media that Monza has an irreplaceable value to the world championship and we want that to be recognized."

Liberty Media would be well advised to heed this advice. If they lose a block of their traditional European-based events because they refuse to sign contracts that give these promoters a fighting chance to make a profit, they risk sending the popularity of F1 into a downward spiral.

Meanwhile, the F1 teams are getting ready of the 2019 season. Mercedes has said that they will run their new car at Silverstone on February 13. Despite this being a closed event with no media present, by issuing images of the new car this will , in effect, be the debut of the new car. It seems odd that they have picked this particular day, given that Racing Point (the former Force India) has previously announced that they will be unveiling their 2019 verison (with a new team name to be revealed at the same time) on that very same day at a media event in Toronto prior to the annual auto show there.

Last year, the Sauber F1 team carried sponsorship from Alfa-Romeo on their cars. Even though Alfa-Romeo does not actually produce an F1 engine, this is not as far-fetched as it might seem. They use a Ferrari engine and both Ferrari and Alfa-Romeo are part of the Chrysler Fiat organization. This year, they will be running under the name of Alfa-Romeo, with the Sauber name forgotten. Same team, new name.

Connor Daly, the son of Derek Daly and an experienced IndyCar driver, has been signed by Andretti Autosport to drive a car for them in this year’s Indy 500. This will give the Andretti team five American drivers contesting the Indy 500 – the other four being Alexander Rossi, Ryan Hunter-Reay, Marco Andretti and Zach Veach. This will be Daly’s sixth Indy 500 qualifying attempt. He has started in 43 IndyCar races I his career. Of course, this begs the question of whether Daly will have any other opportunities to compete in any of the other IndyCar races this year.

Dale Earnhardt Junior continues to be a popular figure. Despite his decision to retire from NASCAR Cup racing, he is still cherry-picking a few races to run. Now, in addition to his musing about racing in the Daytona 24-hour some day I the future, he has said that he plans to drive in the Xfinity race at Darlington this year, on August 31st.





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