Why F1's future is in jeopardy

With due deference to Professor Stephen Hawking, it's time, I think, for a Brief History of Formula 1.

Imagine an F1 world in which the teams dealt race-by-race with the circuit organisers - individually and on their own terms. Enzo Ferrari would tease the organisers of, say, the US GP into paying him x-amount in starting money for two or three cars and would race - or not - depending on the loot. Nothing was certain - particularly when it came to the presence of the Prancing Horse. Maranello quickly evolved into a sort of James Dean-ish here today/gone tomorrow race team of legendary stature. The spell was cast.

And picture an F1 in which you could buy just about any racing car you like - from an old BRM to a new Lotus, Brabham or Ferrari - and go racing when and as you choose. Three races only? No problem. One-car team? Go ahead: enter five cars if you like (as BRM did in 1972).

Bernard Ecclestone changed all of that. Quickly flushing down the toilet the remnants of the old FIA (in the form of Jean-Marie Balestre, whom he hung out to dry during the 1982 Kyalami drivers' strike) and replacing it/him with his buddy, Maximilian Mosley, Bernie flashed a few fivers and persuaded the wide-eyed F1 team owners, including Ferrari, to form a club and to let him negotiate with the circuit owners on their behalf. The F1 Union was born.

F1 being capital-intensive, in that it demands all the money to be paid up front (as in January 1, 9:00am and the first of every month thereafter), Ecclestone found himself dealing with a bunch of guys who lived hand-to-mouth, race-by-race. What money they had they spent on racing. The profits were negligible; "sponsorship" in those days was something to do with charity runs. Brilliant entrepreneurs like Ferrari and Colin Chapman built road-car empires to fund their racing; others - like Brabham and Cooper - sold lower-rung race cars in order to pay the bills. Sometimes they were in the black, most times the numbers were in the red. Bankruptcies were common.

Being smarter than the rest, and considerably richer, Ecclestone began to supply more money to the team owners than they'd ever known before. He also convinced them, while they were counting their dosh, to sign over to him such novelties as "TV rights", "hospitality rights", "circuit signage" and "travel/freight rights". Ferrari and Chapman and Ken Tyrrell and Ron Dennis never complained: they were also taking a percentage. The size of that percentage - or whether one was receiving more than another - was never questioned: without Bernie, the rights would never have existed.

To cement things, Bernie also persuaded the Union to build walls around its city - to make it impossible for anyone new to enter F1 and to keep the cake slices big.

Hence they agreed that each team owner would have to design and build its own F1 car and to enter two of these prototypes in every race. There was no talk about technology being F1's DNA back then; it was about protectionism, pure and simple. In time, Bernie also produced his own TV feed, thereby controlling the air time apportioned to the team and track sponsors, and printed his own paddock and media passes. He had a currency.

And they all became millionaires.

Forget about the profit side of F1 - that disappeared when Liberty said goodbye to Ecclestone

It all began to crumble in 2000, as Ecclestone sold his F1 rights for €2billion. The initial cracks were small because the deal still allowed Ecclestone to maintain overall control. Likewise the re-sale to CVC.

Then Mosley made the front cover of Private Eye. Ecclestone touted Jean Todt as a replacement but Todt, once ordained, wouldn't play. His eye off the ball a little, Ecclestone compounded things by failing to adapt to the digital era - and failing even to spend money on PR and marketing divisions.

"The teams will sell F1 on their own," he used to say. "The internet [and presumably, he believed, electric race cars] will never happen." The spat produced two major disasters - the current, crazy-expensive F1 engine rules and a Formula E category that runs independently of F1. Everyone with a brain knew, and knows, that FE should have been F1's from the start.

Media empires smelled blood.

The Liberty deal of 2017 ultimately meant that Ecclestone lost his executive power. Yes, F1 can "unleash" global marketing campaigns and grid kids and agencies in China, but the big news is that the F1 Union meetings - basically unchanged for over 40 years - are now being chaired by a media guy with no history with the teams, no history with the FIA and a genuine, worrying desire "to do what's best for the F1 brand".

Thus the noises we hear from the big meeting rooms: "Ferrari is going to quit!"; "F1 can survive without Ferrari!"; "Equal pay for all!"; "Don't tempt Marchionne!"; "Keep engines as they are!"; "Engine regs must be changed!"; "Budget caps are crucial!"; "Spend what it takes!" And so on.

It's 1981 all over again, except that there are now six noughts attached to every digit.

To be fair, no auditing firm was ever going to be able to tell Liberty what it had bought. Audits by definition are visible. F1 by definition is not. The best auditors would have been Bernie himself (yeah, right!) and the real Formula 1 people on the ground.

F1's P&Ls [profit and loss statements] no doubt made good reading - but beneath the surface there are too many imbalances. To fund the PR and the growth of the F1 show, you tighten the money-flow to the teams and expose the inequalities between them. Tighten the money-flow to the teams and you kill the show.

Bernie's business model, all those years ago, was that fragile. Ferrari-fragile.

Liberty's only solution today: pay much more money to the teams and a huge, annual bonus to Ferrari; get the new Agreement signed. Continue to spend big on F1 city demos and the F1 brand. Pour funds into the development of young drivers in countries like China, India, South Korea and the UAE. And underwrite two additional F1 races in the USA, return races in South Korea and India, and pay subsidies to ensure the future of the British GP at Silverstone.

Oh yes: and forget about the profit side of the F1 books. That disappeared when it said goodbye to Bernie Ecclestone.