The signs that F1 must not ignore in its post-pandemic transformation

Formula 1 is caught in a cliche. A major crisis, which at the same time is providing opportunity.

Make no mistake, the coronavirus pandemic is a very serious threat to the championship - whether that's in terms of its modern nature or its very existence - and its tragic impact on so many people and our societies in general must not be downplayed when discussing comparatively trivial topics such as sport.

The sudden upending of normality has forced us to completely rethink how we operate - and F1 is no different. The current negotiations between the championship's stakeholders are critical. McLaren boss Zak Brown warned of "four teams" potentially going bust. FIA president Jean Todt told Autosport that F1 needs a "new deal". Thrown into stark relief by the threat to humanity, F1 is in the grips of an existential crisis.

These talks are the chance to change what was wrong before and build a new future that not only safeguards against threats such as the current pandemic, but also leaves the whole eco-system healthier overall.

There was positive news last week when Liberty Media shuffled its deck and transferred $1.4billion cash - part of a wide-ranging transaction between the F1 Group to Liberty SiriusXM - that meant F1's owner could give advanced payments to those teams in desperate need.

The plan to try and start the 2020 season with potentially two closed-door races in Austria, and then possibly two more at Silverstone, must also be welcomed - even if there are still major hurdles to overcome before any F1 or team staff can even travel to those locations.

F1 needs a 2020 season if it is to survive.

TV-only races will help but they will mean reduced income overall as race promoter fees will have to be lowered - Silverstone surely couldn't even consider a spectator-less race without this - and some races won't take place at all given F1 is aiming for 15-18 and there were supposed to be 22. There is also the possibility of sponsors seeking refunds or reductions from their deals and the looming threat of manufacturer withdrawal.

Audi's DTM exit could easily be a sign of things to come for other road car companies with motorsport marketing programmes.

Back to the opportunity. As many countries begin the arduous process of restarting their economies while minimising the risk of a second massive wave of coronavirus infections, businesses will be looking to the future with greater imperative. And F1 must look to capitalise on that through positive transformation.

"The teams are going to have to be more entrepreneurial - as is Formula 1" Richard Cohen

"Change was required in any event," says Richard Cohen, global head of motorsports partnership development at marketing giant CSM, which has recently brought brands including Dupont and DP World to the Renault team.

"Marketing has developed almost beyond recognition over the past 20 years. But motorsport sponsorship didn't necessarily keep pace - in that it was mainly still stickers on cars and hospitality. Now, clearly, it's gone beyond - there are additional assets. But if you look at what people were really selling, and what brands were paying for, it was still anchored in the old world."

When they can get back to a state of normality, F1 and the teams will have to change the way they do business. Whether that's by approaching different types of backers - some companies, such as those that facilitate homeworking (Zoom, BlueJeans etc), are doing well out of the current lockdowns, which may even change the way we work forever - or reassessing what they offer in return for any sponsorship.

"Sport tends to bounce back more quickly than many others areas after an economic crisis - because it's such a strong passion point," says Cohen. "And if you want to engage with fans/consumers who are in a positive frame of mind, there's actually few if any better ways to do so than through sport. Ultimately this is going to remain a priority and an imperative for the brands - they have to engage with their consumers."

Cohen reckons that first party data "is going to be at the core of the revenue models to come". After all, even if F1 and the teams can boast millions of followers on social media, it is still the tech giants that own the key data.

So, by operating slightly differently - offering their fans exclusive offers, for example - teams can take this information on to potential sponsors to create an improved return on investment.

Entrepreneurial endeavours such as the Mercedes squad has employed under Toto Wolff will also be key. As Mark Gallagher explained in this month's GP Racing magazine, Wolff's set up at Mercedes has completely flipped the way manufacturers can go racing. As the team is able to command so much income in terms of prize money and big sponsorship deals, Mercedes contributes to just 15% [in 2018, at least] of the team's budget, which is completely dwarfed by its return on investment in terms of marketing thanks to the team's continued success.

"The teams are going to have to be more entrepreneurial - as is Formula 1," says Cohen. "We're all going to have to accept that it's not stickers on cars and hospitality.

"And if we can do things as an agency to differentiate ourselves, and show that we've got the tools with which to build first party data, I'm going to provide a strong return on investment for brands coming into the sport. Then not only should it not diminish, there's all the reason in the world that this will grow.

"Fans aren't going away. If you can make racing closer because of the budget caps and you ensure that that's sustained, we've got hundreds of millions of fans that if we engage them in the right way, cleverly with brand money. And without the brands having to necessarily take all of the risk upfront, everybody will be focused on making it successful. And that creates a virtuous circle."

As a manufacturer under its own pandemic pressures, Mercedes' continued F1 participation is far from guaranteed - although seeing as no new Concorde Agreement has been agreed, no other players are yet, either. But the entrepreneurial way of operating surely safeguards the reigning champion squad to a certain extent - and explains Wolff's late-2019 words that the team is "in a transition phase".

But before anything can really change, the negotiations over the cost cap are critical.

F1 simply must find a way to bring its costs down and make it more accessible to everyone - fans, through new broadcast rights deals ("We now need for social platforms and broadcasters to co-exist," says Cohen) that don't lock the action away, and businesses looking to invest in a series that offers key performance-marketing chances and does have a positive message to tell the world. Bernie Ecclestone's remarks in 2014 about the then-new hybrid engines, which are simply technological marvels - "They should do it in touring cars or something - not in F1" - look worse every day...

There is a chance to make F1 fairer, healthy and better overall - in both business and sporting terms

The cost cap can level the competition imbalance that has hurt F1 for years. But to get there, all stakeholders - and this applies across motorsport - must work together.

"Putting health as the absolute priority, when we recognise that we still need to get on with it, I think there's a lot to be very positive about," says Cohen. "And I think that the business will ultimately get to a much stronger, healthier place much more quickly than would have otherwise.

"Strangely, in the medium to long term this will prove to have been a turning point. And it will ultimately end - I'm fairly confident, very positive. And we see this now - we work [at CSM] across the Dakar Rally, Formula E, Extreme E - people are just that much more focused on building return on investment for their partners, which creates sustainable partnerships. They're anchored in cause or sustainable B2B.

"There's a community angle, there's a content and storytelling, there's a narrative kind of piece to it. I think the partnerships are going to evolve and become infinitely more appealing and more compelling."

There are no guarantees - and the chance to improve F1 may even be unobtainable (quite how travel to any summer races will be possible remains unexplained right now).

Plus, motorsport remains niche, so squaring the need to take the big money offered by TV companies - which, let's not forget, will surely play a role in keeping F1 alive in 2020 - while further expanding into new platforms will be problematic.

Then there's the over-arching issue of self-interest, which has long-plagued F1's governance structure (although moves such the FIA as accepting majority decisions on votes in exceptional circumstances should help here).

But there is a chance to make F1 fairer, healthy and better overall - in both business and sporting terms. If any good can come from the current nightmare, F1 as a whole must not miss its chance.