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Feature

What you need to know about F1, Mr Carey

Liberty Media and Formula 1's new chairman Chase Carey have a lot to learn about its latest acquisition. But while many pitfalls loom large, the biggest possible gain could prove surprisingly simple

Dear Mr Carey,

We have not met formally, but did speak briefly in Singapore. I'm the journalist who asked you on the grid whether you had attended grands prix before, to which you replied "yes". Asked "how many?" you responded "a couple", before being whisked away by Donald Mackenzie, under the pretext of "we have to go", as I asked "which ones?"

It was no great surprise that CVC's honcho intervened, for it was he who accused me of "writing bullshit", which I viewed as a double compliment. Not only did this busy man devote time to reading what he considers to be bovine manure, but I equally interpreted the comment as CVC-speak for "You tell the truth, if inconveniently so".

But I digress, for this letter is addressed to you, not Donald.

The definition of "a couple" is, according to my Oxford Dictionary, ambiguous, for it refers to a couple in the biblical sense, as in "two [entities] of the same sort considered together", or to an "indefinite small number". Either way, it is clear you are essentially new to this lark called Formula 1.

That said, I was gratified to have half a word with you, for apart from the odd (brief) TV interview and anodyne-but-obligatory Q&A with F1's official website, you made yourself exceptionally scarce to the media in Singapore. Any hope we had of catching up with you in Malaysia was, of course, dashed by your absence, but in future we hope to see you in sultry Sepang as often as in sophisticated Singapore.

The word in Singapore was that you evaded us simply because Liberty Media does not know (yet) precisely what it is the company bought into. There must have been a very good reason for a man of your calibre to sidestep the media, particularly after striking a deal that values F1's commercial rights at $8billion. True, I don't buy that "enterprise valuation" for reasons that will become clear, but you obviously do.

Whatever, an onerous task surely awaits you. Folk with over 500 grands prix notched on their bed posts readily admit to bewilderment over some of the decisions taken, or not, as the case may be. Discovering who to trust (or not) can be equally perplexing, for it is a truism that in F1 your enemy's enemy is your friend. Please believe me: such is the paddock that most F1 folk have more enemies than true friends.

The number of different agendas surrounding a particular topic is dictated by a simple arithmetic formula. Simply double the number of people and/or teams affected by any one issue, for virtually every participant in a debate is subsequently dictated to by a superior who will surely disagree vehemently with whatever decision was taken, then seek to overturn democratically-taken resolutions at every opportunity.

The farcical 2017 pre-season testing situation provides a perfect example. All sporting directors agreed on late-February/early-March dates three months ago, with Barcelona the chosen venue. Then, at Monza, Pirelli's CEO repeated his call for hot-weather tests in Bahrain, despite Spain having average daytime temperatures just 7C shy of those experienced in the desert isle at that time of year.

Niki Lauda took it upon himself to persuade the teams to head for the Middle East, finding ready allies in McLaren - Mumtalakat, Bahrain's sovereign wealth fund and the team's major shareholder, owns the Sakhir circuit - and Ferrari, allegedly desperate to test cooling systems. And so the majority of independents have been pressured into heading south, despite on-cost estimates of between half-a-million and a million dollars.

Clause 10.6(g) of 2017's sporting regulations states "...two team tests of no more than four consecutive days duration, [can be] carried out on sites within Europe (note) and approved by the FIA for Formula 1 cars". The notion of testing in Bahrain is in conflict with clause 10.6(d), which permits testing outside Europe by majority agreement of teams and the FIA. And although a final decision has yet to be taken, it is the manner in which teams were coerced by their engine suppliers that provides illuminating lessons in paddock politics.

I realise such minutiae may be of little fundamental interest to a broad-brush man - and I refer not to your signature moustache - but it represents a microcosm of the sort of issues that have all but paralysed F1. True, in the greater scheme of things a squabble over whether (or not) teams agree to test in Bahrain is insignificant, but the issue serves to highlight what F1 excels in: alienating all and sundry.

In this case, F1 risks estranging its primary customer base, namely hardcore fans (many of whom attend Spanish tests due to their proximity to F1's heartland), team and FOM sponsors (who invite guests to an exceptionally convenient location just as winter winds down), the cash-strapped independent teams and personnel and media, of whom many would be based in Bahrain for a two-week stretch.

Much has been made of F1's many shortcomings and its ongoing failures to exploit potential revenue streams such as social media, digital platforms, gaming and augmented/virtual reality technologies, and the untapped USA and Asian markets. Of course, F1 must explore each opportunity, for not doing so does tens (hundreds?) of millions of potential fans a grave disservice by excluding them.

The way I understand it, your hands are somewhat tied by various FIA, broadcaster, promoter, team and sponsor contracts, many of which run to 2020, and some to '24. Therefore the trick will be to balance existing obligations while expanding F1's reach. All while retaining the hardcores, who have been exceptionally loyal to F1 through thick and thin, before they desert the series. No mean challenge, that...

Which brings me back to my earlier point. Over the past 30 years or so, indeed, since Bernie Ecclestone assumed control of F1, initially via FOCA and then through his acquisition of the championship's rights for a relative pittance from an FIA then-presided over by his long-standing friend Max Mosley, F1 has made an art form of alienating not only its fans, but virtually every player and stakeholder. For an open letter written to Bernie earlier this year, see here.

After CVC bought (make that 'borrowed') into F1's commercial rights, that alienation was honed to absolute perfection, so much so that the costs of following or competing rose out of all proportion with the offerings. That explains why the likes of BMW and Toyota exited F1 - yet embraced Formula E and/or the World Endurance Championship with vigour; why fans switch off; why five of 10 recent additions to F1's calendar no longer host grands prix.

You may have noticed that the current manufacturer count - it's the car companies that were F1's biggest marketing and hospitality spenders after the tobacco ban was invoked - is precisely four. One is a luxury car manufacturer arguably only in F1 by virtue of its preferential treatment. Of the remaining three, two are team owners while Honda supplies engines to a single team.

Ask yourself why this situation exists, Mr Carey, particularly as F1 feted no fewer than seven auto brands when CVC came in. Then contrast this with Liberty's other motorsport property, Formula E. You surely know that Citroen, Audi and Renault (plus others) are already represented, that Jaguar committed late last year, BMW last month and that Mercedes announced it had secured an option to join them in 2018/19 this week.

Due to its compact size, Singapore generally boasts an artificially full paddock. However, as you may have noticed during your visits to "a couple" of other venues, those paddocks display fewer signs of activity than a pauper's funeral. A decade ago that did not hold true, nor is it the case with other mainstream motorsport categories. There surely is a reason for this lamentable situation, and it should start with a capital 'A': Access.

Kindly rewind a decade, Mr Carey, and compare the number of commercial partners - particularly title sponsors - boasted by teams then and now. Where 10 years ago sponsors vied with each other for the honour of backing F1 teams, today the drivers sport more tattoos than their vehicles have stickers.

Again, there is a reason why global brands have forsaken this global championship, and these are not unrelated to their treatment by F1 and its commercial rights holders. Imagine Liberty wished to sponsor a team - would you accept having to beg for access for yourself and VIPs on race day?

Equally, the migration to subscription TV has filled FOM's coffers, but to the detriment of eyeballs, which has in turn impacted on teams' abilities to acquire sponsors. And where they do court brands, they face competition from FOM, which is able to poach them via offers of the guaranteed exposure facilitated by the vertically-integrated nature of its television coverage.

Is it any wonder teams are struggling? Any wonder the EU Commission is investigating allegations of abuse of power and monopolistic practices in addition to complaints about revenue and governance structures that effectively disenfranchise half the grid?

The impact on a championship in which a linear relationship exists between money and performance is evident. Every one of the 70-odd grands prix staged since the financial structures were introduced in 2013 has been won by a team enjoying premium bonuses. Any wonder TV viewers have switched off in droves?

On the plus side, though, I believe you have initiated discussion with one (or more) of the beneficiaries of such bonuses, and, for F1's sake, one can only hope that these are scrapped at the soonest opportunity, or further alienation will result.

You may recall that a day after Liberty's intent to acquire a controlling interest in F1's commercial rights was announced, the FIA - the recognised owner of the championship - issued a media release stating it "awaits further information regarding the proposed terms of the transaction and welcomes the opportunity to discuss with all parties the possible consequences of this agreement on the promotion of the FIA's flagship championship."

Did it not strike you as strange that a lessee - effectively the commercial rights holder's status - did not keep the owner and regulator of the championship informed of developments? This serves as yet another example of the manner in which F1 stakeholders, in this case the governing body, were alienated.

Over the years, the constant politicking between the FIA and FOM became, frankly, tedious. Fans across the globe can only hope that under your watch this situation improves markedly, to the overall benefit of F1.

Which brings me to the thrust of this letter. A little tender loving care - a touchy-feely approach, if you like - is likely to pay greater dividends in the short-term than any number of grandiose plans to embrace a generation of millennials or gamers. More than all the tweeting and instagramming could achieve in the same time frame.

There are hordes of fans dying to be recognised, itching to feel loved and embraced by a championship many of them have dedicated their lives to, only to be constantly kicked in the teeth by exorbitant ticket prices, restricted access and spiralling TV costs. There are sponsors out there, who, with a bit of encouragement and recognition, would willingly throw entire marketing budgets at F1.

All it requires is a wholesale change of attitude from top down - and little else. You, Mr Carey, are at the top, and as such you have the power to instill a culture of Care. Care for fans; Care for sponsors; Care for broadcasters; Care for race promoters; Care for partners; above all, Care for F1. In short, exchanging a capital A for capital C.

Given the billions Liberty has committed to F1, would it not be great to have an enormous ROI in exchange for none other than a wholesale change of attitude?

Yours in F1,
Dieter Rencken

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