MMR Blog

Last Week We Wrote…

Posted on November 19, 2014 Comments (2)

Last week we wrote a piece about the troubles within F1. Alain de Cadenet chimed in with his thoughts about the genesis of today’s issues. We follow up this week with a few suggestions. What do you think?

Money in Formula 1

F1 has two issues but they both boil down to the same thing. Money. The cost of running a team in F1 is too high but for a few. Initially supported by racecar manufacturers, wealthy businessmen and sportsmen, the advent of tobacco company money and big advertising changed all that. Today there remain two self-funding car company teams, one is rich and the other is struggling. The remainder of the teams is dependent on sponsorship to survive. That brings us to the second issue. The price of staging a race is prohibitive. Organizers depend on ticket sales for the major portion of their revenue. It is judged that attendance was down 50% in Brazil and the numbers for Russia were not good and not publicly available. These are not the only places where the gate is down. All is not well in paradise.

Alain de Cadenet added…

Peter… take a look back into the history of all motorsport and you'll see that just as soon as additional funds became available through so called sponsorship, the whole aspect of that formula became contaminated. Everyone putting in wants something to take out. Traditionally it was a sportsman obtaining joy. Drivers obtaining glory. Spectators obtaining thrills and experiencing danger second hand. All real, tangible activities. Rather analogous to traditional investments in tangible substances like gold, silver, platinum, iron, corn, wheat etc. even pork bellies. Lo and behold along came derivatives, bank products, .com and other surreal ways to profit. And lose plenty when it goes wrong.

Isn't this the path that motorsport has followed? The show-business factor excels way more than the racing. When you have to invent ways to overtake and ways to conserve fuel then that's not really racing. Gold bars or certificates? No wonder the vintage-classic car market has gone ballistic. It's all gone wrong and we've lost plenty. Unless you still own the old banger you bought years ago.

Alain

What do you think?

In a few lines we have identified a few of the issues and some history; question is, what to do?

A quick view of open wheel racing would show that F1 eats money. The team that just collapsed had 200 employees. And they bought engines and transmissions. How many do you think Ferrari and Mercedes employ for their F1 effort? Competitive IndyCar teams consist of as few as 20 people. How about taking the best of both and making a 20 race series on both sides of the pond.

Who’s in?

IndyCar had 11 different winners. F1 had 3. The F1 engine manufacturers have made it plain that if the formula goes back to the previous V8 models preferred by fans, they are out. Say goodbye. Chevy and Honda are competitive and their engines don’t cost 10% of an F1 engine. Do you care who builds the engine? Do you care who builds the chassis?

Changes: IndyCar needs to stop racing in parking lots and get back to racetracks, even if they aren’t near a major shopping mall. F1 has to race where people who give a damn can see the race. And ovals can be part of the deal. Ten races in Europe and ten in America. Bernie and his greedy buddies have to be out. 

What do you think? Leave a comment below and let us know.


Bernie Debates Going to Hell…
the Green One

Posted on January 23, 2014 Comments (0)

Nurburgring

There was a time in the sixties when the original Nurburgring was 17.6 miles long and still on the F1 calendar. That is when the iconic image of Jim Clark cresting one of its many steep hills and flying his Lotus a foot off the ground was taken. The place was tough on cars and on drivers and, considering the safety standards of the day, exceptionally dangerous. Niki Lauda’s accident, as recently recreated in the film RUSH, put an end to F1 on that circuit.

Jim Clark

Map

Jackie Stewart gave the circuit the name that stuck. The track was bankrupt in 2012. Locals were divided over rescue plans; the amusement park and shopping mall built to revitalize the area failed miserably. In 2013, it was put up for sale and last week Bernie Ecclestone was reportedly negotiating to buy it. This is not his first attempt to purchase the Nurburgring. Tough to negotiate with a man who has the time to wait, the power to make it successful, and the money to make it all happen. Time will tell if they can come to an agreement but either way, the thought of Bernie Ecclestone being in a position to own his own hell, green or otherwise, is amusing.

Nurburgring 600

Nurburgring-nordschleife

We’ll follow that. Meanwhile, this week’s video is a promotional piece by McLaren Cars. It is another in a long line of manufacturer made in-car and overhead shots of their cars breaking mythical lap records. This one, as you might expect from McLaren, is both high quality and slightly different. Tell us what you think.


2014 Predictions - Confusion Reigns

Posted on January 9, 2014 Comments (3)

As 2014 begins, F1 is praying that the decisions it made regarding engine and chassis will allow more teams to be competitive. Sports cars are struggling to find a formula that will be entertaining and also doesn’t exclude good racecars, and IndyCar is timorously emerging from its own stretch in the wilderness.

The business of racing is business. The public, that’s us, seeks entertainment. The racers, that’s them, seek fair competition and money. Between us and them is each series management. If management can satisfy both camps, everyone will be happy and they also will make money. History tells us that the only management style that has thus far satisfied both camps is one that is intelligent and autocratic with the ability to withstand pressure from teams, advertisers, suppliers, broadcasters and fans. No mean feat.

Bill France

Bernie Ecclestone

Only two people have managed to do that for a prolonged period and only one is alive. Big Bill France and Small Bernie Ecclestone ran/run their operations to suit their visions and the bottom line. Like them or not, both have made wealthy men of themselves and those who chose to follow them.

Here are some thoughts about three major series for 2014.

F1 – Difficult to Predict

If you believe that the four major components of a race team are engine, chassis, driver and management, the fact that two of them are in flux for everyone this year has created a level of excitement and anticipation for followers of F1. The advent of new engine and aero packages could wreak havoc with the current order. As we left them, Renault had the top engines and Red Bull had the top chassis.

Beginning with a clean sheet, it is theoretically anyone’s game. But if you believe that people win because they are experienced winners and appear to have the most talent, you have to give the nod to the Renault-Red Bull package. The fight for second could favor the Renault- Lotus package. Lotus arguably had the second best chassis last year and the same winning engine as Red Bull. But in the driver department, Grosjean has yet to mature to the Vettel/Alonso/Raikkonen/Hamilton level. Maldonado, despite his experience, is an unknown factor at this level.

The most solid one-two driver line-up belongs to Ferrari. Like their drivers, their management is solid and experienced. The engine-chassis portion of their package, we will learn about at the first race. And so will they.

McLaren, considered the engineering team, have proven to be weak in engineering. Plus, half their driver line-up is on a learning curve and their engine fate will be in the hands of Mercedes until next year.

Mercedes are the enigma and the enigma is fascinating. They have two strong drivers, and like everyone else, an unknown chassis/engine package. What makes them particularly interesting to follow is their management structure. Having recently fired Ross Brawn, the canniest racer in the paddock, they have new management which is unproven at this level. At the top sits Niki Lauda, the non-executive Chairman of the Mercedes AMG Petronas F1 Team, and who, undoubtedly, at the very least, agreed to the Brawn dismissal. Totto Wolff, who has a racing history with Mercedes in the DTM series, is the Business Manager and Paddy Lowe, formerly Technical Director for McLaren will, be Sporting Director with responsibility for building the cars and running the team. They all report to the board.

Time will tell if firing Ross Brawn was a bright move. Last year when Mercedes appeared to be having a high level of tire degradation, it was Ross Braun who engineered a secret tire test that solved the problem and also contravened what many considered to be strict rules against such actions. Not many people in F1 could have done that. Fewer still could have come out of it with so few negative consequences. New Mercedes Business Director Toto Wolff will be benefitting from Brawn’s 2014 planning and efforts for the first part of this year but after that Toto will discover that, as Dorothy said, he is not in Kansas anymore.

Brawn has said he will take six months to review his options. Here’s a prediction: Don’t be too surprised if someone has suggested he not commit to anyone until the board sees how the new management team does. His track record in F1 management is considerably better than Niki’s, Toto’s, and Paddy’s put together. At the very least Mercedes should keep Brawn on retainer not simply for what he can add but to keep him from adding it to someone else’s pit box.

Toto Wolff’s interview with Fox sports regarding Lotus Renault’s delayed payment of their drivers was at best tactless and equally ill informed historically. If this is accurate reporting, it would indicate that Mr. Wolff will be exciting to watch, if only briefly.

Sadly, the remainder of the F1 field will continue to soldier on at the back of the grid.

Tudor Sports Car Series  A Shotgun Marriage

Two series, ALMS (American Le Mans Series) and Rolex Grand-Am, have struggled with confusing classes, hopeless schedules, and lack of the necessary funding to properly establish distinct products. They have now merged to form a new series, the Tudor Sports Car Series, that will allow cars from both series to be competitive.

Tudor, I recently was informed by a watch aficionado, is Rolex’s second line, just as Tissot is Omega’s. A fine watch, to be sure, but still an acknowledged cut below the top level. And it does pose a simple question: Why a second level product?

They face challenges. Merging at the second level will be difficult but made easier because major car manufacturers are involved. They see a link with sales in showrooms and they will find a way, with time, to accommodate the new rules. The Ferrari, Corvette, Porsche, and Viper people all want a system that will allow them to be competitive. They want the series to have value in the eyes of the consumers and if it does that, they can afford to build the cars and the teams to make it work.

The biggest problem is at the top of the ticket. The Grand Am Daytona Prototype was initially a France family product designed to impose on sports car racing what they imposed on NASCAR. They introduced it as the Car of Tomorrow (COTA). The fans didn’t buy the homogenization and it is now, happily, the Car of Yesterday. The initial Daytona Prototypes were ugly slugs and still remain hugely different from the ALMS FIA derived Prototypes that run at Le Mans and in the remainder of Europe. The difficulty is that both sides have huge investments in these cars and nobody wants to, and many can’t, make obsolete their equipment and start from scratch. Management is struggling to find a way to make them even without destroying the cars or the racing.

Now is the time for IndyCar to anoint a strong leader and to find either a much higher profile title sponsor or co-sponsor who can invest the needed funds to help the teams through the expensive transition they will need to make to stay in the game. Like NASCAR, their biggest event is also their first. The Daytona 24 hours will be held at the end of this month and we will learn then what progress has been made.

IndyCar: Chasing the Carrot – Getting the Stick

The four major components required for a successful IndyCar program differ somewhat from the four determined for F1. These are IndyCar's requirements for a strong series: Strong teams, affordable car/engine packages, decent venues, and strong visionary leadership.

They have the first two. Randy Barnard rescued open wheel racing in America from the inept stewardship of the Hulman family and in the process learned that no matter how bright or right you are, when you are beholding to the folks who created the mess you are cleaning up, the likelihood of them being clever enough to let you take a bow and a buck, is highly unlikely.

IndyCar management believe their destiny is bringing their races to downtown streets all over downtown America and obscure racetracks in the hinterlands. F1, by contrast, have enough confidence in their product to believe that people will pay a lot of money to see good racing on real race tracks no matter where in hell they are. Their problem is supplying a consistently good race.

IndyCar finally has good racing and a deep field of driver talent, but their venue lineup is a joke. Other than the Indy 500, Birmingham and Mid-Ohio, the remainder are second rate and hard to watch. Long Beach, the most celebrated, tries hard, but it isn’t Monaco. Monaco has movie stars, Long Beach has TV stars. Bumpy city streets between ugly cement walls and 20’ catch fences is hardly glamorous. Inexplicably, they persist in believing that Laguna Seca, Elkhart Lake, Lime Rock Park, and countless other interesting tracks couldn’t fill their coffers.

They have a great product that has the potential of someday rivaling F1 as they once almost did. But history has demonstrated that as long as the France family control the major venue and the series, it will continue to fumble on!


Pointy Heads and Pointy Boots or Who’s Nervous Now Nellie?

Posted on September 30, 2010 Comments (0)

The boffins* of F1 race engineering will take their skinny little cars and their trailer loads of fashionably thin entourages to Austin beginning in 2012. Will the rich and clamorous follow them to the land of big hats and big egos?

Austin, TX: Tilke
United States Grand Prix (USGP) Track design

Austin, TX: Tilke United States Grand Prix (USGP) Track design

Bernie’s buddies and the Texas Gov bet they will but Bernie won’t rule out a second location in the US!

In 2007 Tony George explained to Bernie that in the USA the government won’t write checks to support F1 races and that the Speedway was not a charity. He was at least half right and that was the last F1 race held in the USA. F1 outgrew the independent entrepreneur’s ability to organize and fund a race many years ago. From time to time even governments in France, Canada, Belgium and the UK have balked at the financial commitments required to support “their” national F1 race.

As American F1 fans have learned, the stars ALL must be aligned for a successful F1 USGP. The major keys appear to be: a safe smooth track, a large amount of hotel rooms, a huge nearby population and the ability to throw a great party. And, oh yes, the reported $12M upfront cost of a date.

Austin United States Grand Prix (USGP)

Austin United States Grand Prix (USGP)

Now Bernie has an agreement with Tavo Hellmund, whose has family history with Mr. E and his respect and support. They apparently have $200M now and $25M annually from the great State of Texas to pull it off. They have purchased 800 acres and a track designed by the ubiquitous Herman Tilke.

This sounds a little like the Field of Dreams theme of “build it and they will come”. But the ingredients are there: Knowledge of F1, access to Bernie and the Texas treasury, land near the Austin airport that could be developed as a race track and industrial testing facility. Sounds easy and Austin has been told that the glamour of the FIA circus will put their city on a world map and also bring in $25M in cash.

I’m skeptical because I’m not convinced that there are enough people in the “huge nearby population” portion that care enough about F1 to spend the price of a ticket to see this type of racing. I further doubt that F1 fans will spend the money to fly from all over America and the remainder of the world to be seen in a Texas town famous for being the “Live Music Capital of the World”. And as they will learn when they get there, that’s not the only area Texans believe is either the biggest or the best in the world.

The F1 circus will go, because that is their business. I doubt anyone else will, twice. And I don’t think Bernie does either. That is why he has left the option of another race in America open. That would be fabulous for F1 but probably not so fabulous for either event organizer. Should the folks in Austin be nervous? Would you be?

*Boffin is a British term for “nerds”