Talk about a revolution

http://www.motorsportmagazine.com/archive/article/april-2014/34/talk-about-revolution

Page 34, April 2014

Talk about a revolution

The future of Formula 1 has never been more uncertain. Here, Motor Sport presents its vision of how Grand Prix racing can be reborn. It’s radical – but echoes of the past are clear

Greed has damaged Formula 1, turned it from a vibrant, vivid, alive, unsettled and exciting environment, where anything might happen, into a predictable, codified template of commercial success, where everything is uniform and conforming to the consensus. But that era might be coming to an end; Bernie Ecclestone standing trial in a Munich court accused of bribery is possibly the beginning of the dismantling of the edifice that has applied the bland stick to the sport for the past few years. Here, we are going to consider how the punkish element that F1 once possessed – an environment of constant radical change, often rebellious and unbeholden to big business – could be reintroduced in a post-Bernie F1, but without being enslaved by the past.

Simply trying to recreate our favourite eras – whether that be the 1960s, ’70s or ’80s – would be contrived, retrograde and against everything that made those eras so appealing. But capturing that spirit within a thriving, constantly evolving modern entity is what we should be looking to do – and this is an outline of how that might be achieved in the future.

If we think back to the season often cited as the sport’s ‘electrification’, 1976, it had rebellion, human interest and big technical freedoms, even though the latter weren’t being fully exploited. Three years later they were, when Renault’s fascinating wrestle with turbo technology came good as Jean-Pierre Jabouille took victory at Dijon. Although that was one iconic moment, right behind him was another – as Gilles Villeneuve in his old-school, naturally aspirated Ferrari took on René Arnoux in the other Renault, rubbing wheels, locking up, driving off the track. Some thought they were insane. Whatever, what they gave us that day was insanely exciting.

F1 back then was cowboy territory with full rights yet to be established and no state of equilibrium. It was fascinating and its very volatility was a major part of its appeal. No one owned it really. It had grown organically, its circus moved from town to town across the globe. But there were very few rules and regulations, very little for the thrill to get snagged on. Then there was a fight for control, then came the money, the real money and the dirty games behind the scenes. Whenever something successfully makes big money, all those benefiting from it try to codify the success, the magic formula that keeps the dollars rolling in. Which loses its very essence and slowly strangles it. Everything from circuit design to money splits and on-track etiquette became bound up in rules – and the sport has become old, hidebound, inflexible. The money keeps the same people there, getting older and more conservative. Compared to that day at Dijon in ’79, F1 today is incredibly bland.

The new hybrid technical regulations for 2014 might force some unpredictability back into it – briefly, before the vast resources let loose on the problem makes everyone’s motors bulletproof once more. But it needs more than just that; there needs to be systematic change if F1 is to be poised for a world that is evolving faster than ever before. It needs to be an entity that embraces change, that benefits from unpredictability – and the ‘Black Swans’ of randomness. Every aspect of the sport – commercial, technical and human – needs to reflect this.

Commercial

F1 generates about $1.5 billion a year, but roughly 40 per cent of that leaves the sport and is taken by the owners. In the meantime all but the four best-funded teams are in a state of financial stress.

The sport should be owned by the participants, not a third party that essentially rapes it. Private equity firm CVC paid $2 billion for a majority share in the business late in 2005, has taken about $4 billion in revenue, sold about 30 per cent to other investors, raising a further $2.1 billion, and is left still as the leading shareholder with 35 per cent of a sport now valued at between $9-10 billion, potentially giving it another $3.5 billion when it sells. A potential $9.6 billion take on an initial investment of $2 billion; even in the private equity world, it’s one of the all-time great deals.

It has only been able to do this because the commercial rights were available to purchase. Through most of the 1980s these rights were leased (from the FIA) to the team body (FOCA as it was then) – and that essentially is where they should be returned. As the lease expired in 1992, and with Bernie’s long-time close associate Max Mosley now installed as FIA president, Ecclestone re-applied for them himself and not as head of FOCA. Technically, it was the teams’ fault that they lost the lease – for they had made a false assumption that Bernie would continue to lease as their representative. But there was no legal reason why he had to, only perhaps a moral one.

These rights were extended in 1998 to a 12-year deal that took them to the end of 2010. But just two years after that deal was signed, a new deal extending them from 2010 for another 100 years was concluded – in exchange for just $360 million, a similar sum to that paid for NASCAR’s commercial rights for one year.

Thereafter, the business these rights enabled ended up being owned by various commercial entities as Bernie sold on. Several went bust as a result of over-stretching themselves and eventually CVC became the majority shareholder.

At that time CVC was seen as taking a big risk – because no major legal firm could be found to state categorically that the commercial rights definitely belonged to Bernie to sell. That risk has paid off big time for CVC (as outlined above), but still there remains legal ambiguity about that 100-year deal because of its length. Its validity has not been legally challenged, but there might be grounds for doing so.

For the sport’s sake, if the deal can be unstitched it should be. Many of F1’s ills are just symptoms of the wrongness of that deal. Without it, teams would not be struggling for survival, there would have been no need for the technical sterilisation of the sport (engine freezes, control tyres etc) necessary for cost-cuts, pay drivers would not be forming an increasingly important role in teams’ revenue generation, many of the more gimmicky aspects of recent F1 – introduced in an attempt to pull in more casual viewers on TV – would not have been necessary. The sport would not be trivialised as just another form of TV entertainment and there’d be no talk of double points for the last (or last three) races.

Every one of those developments needs to be banished if the sport is to revert back to the sort of purist, irreverent, unpredictable entity it needs to be (and used to be) if it is to be robust enough to embrace the fast-changing world.

In place of the current commercial model we suggest the following:

* In the event of the 100-year deal being unstitched, commercial ownership switches to the teams. Each team takes a franchise, the TV/race hosting revenues are split as in NFL football so that every team at worst gets to break even – and then there are bonuses for success on top of the basic.

* If the 100-year deal remained in place, then the lions’ share of revenue should still go to the teams – making the sport self-sustaining. As an order-of-magnitude example: the sport currently generates about $1.5 billion per year. Give each of the current 11 teams $100 million of that. That still leaves change of about $400 million per year for the owners.

*Whichever of the above models is adopted, it should be hand-in-hand with a budget cap that equates to the income share (so $100 million using the above example). This should glide downwards by a set amount each year, creating greater profits for the teams in the long term, making them more recession-proof in the future and less reliant upon big money deals and big business. It would be impossible for the biggest teams to adapt downwards to the cost cap immediately because of their vast expansion during the boom years of car manufacturer money in the late ’90s-early 2000s – the tap cannot just be switched off – and in those cases their initial over-expenditure should be ‘taxed’. They could be allowed to go beyond the nominal cap, but a significant proportion of the extra expenditure above it would be taxed and spread equally to teams operating within the cost cap.

*Circuits that are deemed desirable for the sport’s fan base, but which do not enjoy government subsidy, should be allowed a significant chunk of the income (accepting the sport’s reduced takings), allowing them to make good profits even with relatively cheap tickets. Abolish the greedy ‘accelerator’ deals that increase the circuits’ race-hosting fee by a set percentage each year.

*A maximum of 15 grands prix per season (again accepting this would reduce the income generated). A core of traditional venues would be on the calendar every year, others would rotate.

Technical/Sporting

The massive budgets available to the top teams and highly prescriptive technical regulations – introduced as an attempt at controlling costs that were out of kilter with the income, largely as a result of the owner-biased and team-iniquitous financial structure – have resulted in long competitive cycles. A performance advantage, once gained, tends to last a long time. Optimisation of a basic theme rather than radical conceptual rethinking has become key. Those with the resources can optimise more fully. There was a time when a driver would not necessarily know which team would be most successful the following season, because the combination of technical freedom (but limited resources for everyone) meant game-changing technical meteorites could come from anywhere at any time. Opening up the technical possibilities while respecting very restrictive cost caps should open up the chances of re-introducing competitive randomness based on the merit of clever thinking.

*We would propose retaining the current hybrid engine formula and its associated fuel flow and fuel capacity limits. But we would remove many of the prescriptive limitations – probably including the V6 format – and freezes. While this would potentially increase the expense, the cost cap would still have to be respected, thereby putting greater emphasis on technical ingenuity outside that made possible only by unlimited research budgets. Opening out the technical possibilities in general would allow for greater competitive volatility. The prospects of the performance pendulum swinging would be enhanced.

*Creating a technically free formula with current standards of safety is not the work of a moment: it must not overpower human ability to remain conscious at the lateral cornering limits without a g-force suit and still has to allow the possibility of on-track overtaking. Total available downforce would have to be somehow limited, but not its efficiency. We’d recommend further study before regulating on this – looking first at the feasibility of generating all downforce from the underbody of the car and what sort of racing that might produce. Specifically, would the abolition of wings in itself allow cars to follow each other closely enough for genuinely feasible overtaking without resort to DRS wings or push-to-pass buttons? We would also like to examine further the likely effects on racing of increasing tyre grip while limiting downforce. But whatever answers simulation revealed, the technical regulations should allow for many different ways of chasing the limits. We want to create technical diversity, to have the possibility of radically different cars achieving similar lap times – and also for revolutionary ideas that could quickly change the competitive status quo. Prescriptive regulations are only there in an attempt to control costs. With proper cost control and an equitable commercial structure, their deadening hand would be rendered obsolete. However, stability control, traction control and ABS braking would remain on the banned list.

*Tyre wars would be welcomed. They are a part of the technical development and one of the most powerful ways ever discovered of altering the competitive status suddenly and comprehensively. It would also rid the sport of tyres that limit those capable of driving faster, harder and longer than their rivals. With full-on competition rubber, those skills would become more fully rewarded once more.

*The end of codified driver penalties. Calls would be made by the stewards on an ad-hoc basis, continuing to use the expertise of ex-drivers. But making set penalties for specific offences invariably results in the stewards being obliged to apply the regulation just because it’s there – even when it’s totally inappropriate. When Romain Grosjean put his wheels fractionally beyond the white line during his incredible around-the-outside pass on Felipe Massa at the Hungaroring last year, it guaranteed him a drive-through. That regulation was not written to deter such brilliant manoeuvres, but because it was there it was applied. Had those rules been in force at Dijon in 1979, the Arnoux/Villeneuve dice would have been broken up by drive-through penalties for gaining advantage – or not suffering a disadvantage – by leaving the track. The penalties should be available for use – but only for the most obviously cynical moves. Judging the distinction between cynicism and over-commitment should be left to the driver stewards.

*We’d propose a designated ‘new driver’ team that runs four cars – all for rookies selected by the FIA on merit from lower formulae.

*Graded feeder formulae with cost limits, standard engines, maybe control tyres but technical freedoms, to bring on new engineering blood. This would not include a standard chassis.

Human

At some point between the old days and now, F1 drivers have been tamed. They’ve been turned from adrenaline pirates beholden to no one, their choice of occupation a very clear rejection of any form of external control over their lives, into employees. Yes, they were always that on paper, but not in reality. Now, with their every move electronically recorded and scrutinised, they are answerable – and have to follow instructions even when out there on the track.

This is not an inspirational image.

*No pits-to-driver communication – not even by pit board. We want the driver to have to work out what he needs; we do not want him driving by numbers. Also, if he thinks ‘I want to race this guy now and to hell with the fuel usage or the tyres’ then we want him to be able to do that. He will have systems on the car giving him the required read-outs of fuel and electrical energy and he would have to use his own brain to process that information. We want him to have the freedom to be undisciplined. He should be the star, with the team trying to give him what he needs.

*Absolutely no team PR at the circuit. Drivers and team members would be allowed to say anything they want – penalties for any team found to be interfering in this would be swingeing. TV driver interviews would be conducted fresh out the car at the end of the race – in the pitlane – and not with a bland questioner. The top three would be interviewed together, adrenaline still coursing, before they have had any access or communication with their teams. The combination of participants free to speak their mind would create controversies that the sport thrives on, painting in the colours of the personalities and issues. Any off-track TV coverage would have to be much more reactive in style, with a more urgent hand-held camera approach. High-gloss would be out, immediacy and colour very much in.

In all, we believe the less formulaic environment following from the changes suggested above would be much more appealing to the hardcore purists and – importantly – to the new generation of potential fans. Current F1 viewership shows a worrying ageing of its fan base. The sport as currently configured is not grabbing the younger generation as it used to. From the outside, the reasons for that are obvious. Achieving the necessary controls on costs and configuring the right technical formula would be vastly complex and difficult, but with some lateral thinking is surely feasible. Difficulty should be seen as a challenge, not a barrier. The revolution is long overdue. What we have outlined above would be a cutting-edge sport for pure racers, perfectly configured for the 21st century. The leeches and con-men would have to look elsewhere.

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