How teams lost patience with F1's new era

In many ways the 2017 year marked a watershed in Formula 1's future: not only was its former tsar Bernie Ecclestone, who shaped the championship unto his own image for three decades, deposed and "booted upstairs" by incoming commercial rights holder Liberty Media, but the new owner (at last) ridded F1 of its leech-like former managers, the venture vulture house CVC Capital Partners.

Although the takeover was confirmed in September 2016, change of control was effected on January 24 this year. When F1 decamped in Melbourne eight weeks later, it was clear fresh winds were gusting through the F1 from various directions - albeit mainly from across the Atlantic - as much on-track as within the paddock.

For starters the atmosphere was more relaxed and less restricted, with a 'can-do' attitude prevailing within Formula One Management, the Liberty subsidiary charged with pointing F1 towards the 21st century. Details such as freed up social media activities and increased paddock pass allocations made the teams bullish about a future under Liberty; yet, to many, this was simply a public tummy tickling show.

F1's root evils - its inequitable revenue structure and unequal governance process - are, after all, cast in contracts through to the end of 2020, while the rich-to-poor gap is wider than at any point in recent history. Forget not that Manor had recently folded, with the difference between success and failure being a single point (not) scored in the penultimate 2016 round.

At a media briefing in Melbourne, Liberty frontmen (Ross Brawn, its sporting managing director, and Sean Bratches, his marketing counterpart) presented their visions. Legendary F1 team manager Brawn talked about "getting a team within FOM together, the way of working together with teams and the FIA", while Bratches waxed on about "engaging fans in new ways, creating experiences, opportunities and emotions that continue to drive this great sport".

Come the last race, the teams were irate after being hit by a third-quarter cut of 13% in FOM earnings - the first drop in over a decade, driven mainly by a raft of marketing/media recruits, plus the cost of operating Brawn's team - while fans raged against F1's new logo, a replacement for the iconic 'Flying F' that many saw as little more than a (costly) attempt at expunging the last vestiges of Bernie.

Liberty learned that the governance process devised by CVC is stacked against it

Were F1's revenues equitably shared, then the reduction would not be as drastic. But the 'haves' receive substantial bonuses, while the 'have-nots' are, as always, worst hit. True, Liberty voluntarily offered bridging loans, but these need to be repaid when (or if?) revenues rise.

The question is, though, whether teams should be funding F1's plans in the first place. They are suppliers, not equity partners, and as such should be fairly remunerated for services they supply through entering the championship. Liberty is, by definition, F1's investor, not the teams - who are stakeholders.

During the course of those 20 grands prix Liberty learned an awful lot, not least that Ecclestone, unsurprisingly, refused to accept he had lost control of his life's work. Despite his (and his family trust) being minority shareholders in FWONK (Liberty's NASDAQ stock exchange 'ticker'), the octogenarian waged war against those who dared to "promote" him to the position of "chairman emeritus".

Among his first moves - apart from granting scathing interviews - was to permit Malaysia to cancel its F1 contract without penalty, costing Liberty an estimated £15million, plus, crucially, enormous loss of face. His suggestion that "we charged [promoters] too much for what we provided" further compounded the situation. Any wonder Malaysia's promoter felt "ripped off", or that Singapore pushed for reduced fees?

This cancellation of Sepang could not have come at a worse time: just when Liberty planned to grow F1 in Asia and USA, it lost its oldest 'new world' event in the most public fashion possible; by the year's end, talk of future 25-race calendars and three USA events had been replaced by speculation about a race in Vietnam, and possibly a round in Miami - if, that is, environmental protesters don't manage to get in the way.

True, 2018 lists 21 rounds, but Hockenheim is out of contract thereafter, while Interlagos is endangered after teams were subjected to utterly unacceptable security risks, so where to then? As things stand now, 2019 marks the last British Grand Prix after Silverstone gave notice, so F1 is unlikely to hit 21 again unless Liberty converts two (or three) of its "over 40 expressions of interests [for races]" into reality.

Then, Liberty learned that the governance process devised by CVC is stacked against the rights-holder for the foreseeable future. Example: no sooner had Brawn unveiled a concept for cheaper, less complex post-2020 engines attractive to independents and prospective motor manufacturers, than Renault and Mercedes vehemently opposed the concept, while Ferrari threatened to exercise its veto, or even exit F1.

Another tinderbox was Liberty's determination to introduce a cap on spending, with a figure of $150m (excluding driver/management salaries; engines, as costs are already controlled; and marketing expenditure) being popularly bandied about. Red Bull does not believe that such a cap is workable, while the likes of Ferrari and Mercedes would need to lose hundreds of long-standing personnel each.

So the majors have pushed back against budget caps, with Ferrari repeating its threat to exit. At that point the honeymoon period between teams and Liberty was clearly over, which visibly shocked Bratches, and his immediate boss, FOM CEO/chairman Chase Carey. To Brawn, though, it was just another day in F1.

Whether or not the Scuderia eventually walks is not the point - the point is these public spats damage the F1 brand, in turn affecting FWONK's price, which dipped almost 10% in a month. Where CVC operated behind a veil of secrecy as it greedily milked F1, Liberty's performance is audited daily by the markets, and thus its executives seem overly obsessed with investor sentiments.

Liberty's frustrations are further illustrated by F1's daft penalty system: all realise the idiocy of imposing 35-place grid penalties (on 20-car grids...) for engine reliability infringements, yet rules are rules, and unless Brawn finds unanimity - a commodity is short supply in arguably the most self-centred sporting series on earth - this situation is unlikely to change. Then 2018 brings a further reduction, to three engines per season.

Talking of engines, a major mid-season bone of contention - one that possibly cost Ferrari its competitive edge from Monza onwards - was the topic of "oil burn". In order to reduce pre-detonation and boost calorific energy both engine suppliers injected oil - 1.2 litres per 100km - into engines. In July the FIA imposed limits of 0.9 litres on units introduced from Monza. This benefited Mercedes, running to different duty cycles.

Renault and Honda were not in on such technology, and therefore squealed loudly, although Honda was hardly in a position to object given its woeful performance and unreliability, triggering not only a painful divorce from McLaren, but an embarrassing pre-emptive split from Sauber, which had intended switching to Japanese engines for 2018.

Possibly the hardest lesson for Liberty to take on board during 2018 was that there exists massive resistance to change among fans

This convoluted saga was eventually resolved in typical F1 fashion, and just in time: Toro Rosso loses Renault in favour of Honda, McLaren takes Renault, and Sauber remains with Ferrari (albeit partnered by Alfa Romeo) - with the ultimate winner being Carlos Sainz Jr, released by Toro Rosso and 'loaned' to Renault as part of a severance package. Win, win, win, yes - but only after negotiations were conducted in the media.

Talking of Renault: in October the team severely ruffled some feathers when it was revealed that Marcin Budkowski, a senior FIA technical/sporting co-ordinator, had been recruited by Renault F1 as executive director and would be starting after his statutory three-month 'gardening leave' period ended.

The FIA's hands were tied by Swiss law, under which Budkowski had been appointed, but after the majority of teams, who had been open with the FIA man about their future designs, complained, both parties agreed on a six-month spell. Still, some sort of restriction needs to be formalised to prevent re-occurrences - with Todt suggesting a "gentleman's agreement" between teams.

If the relationship between the FIA and the 'old' FOM had at times been fractious, that prevailing between the governing body and new rights-holder could hardly be rosier - in part as Brawn was one of FIA president Jean Todt's lieutenants during his Ferrari tenure, when the Scuderia swept all before in a show of hegemony only now being edged towards by Mercedes. Such winning experiences tend to cement relationships.

The two men seem aligned on most areas of importance, and when asked whether he was afraid that Brawn's team could usurp the federation's regulatory powers by taking the lead on technical and sporting issues, Todt, now heading for his third presidential term unopposed, was sanguine.

"Now we have a strong team, technical, sporting, inside of Liberty Media," he said. "So, their responsibility is to give us the outcome of their research and then, as the regulator, with the governance, we will deal with that." One simply could not imagine such confidence being so openly expressed during the Bernie days, with the word "now" saying it all.

Possibly the hardest lesson for Liberty to take on board during 2018 was, though, that there exists massive resistance to change among fans, and that their loyalty runs but one race deep. True, the racing improved year-on-year, but that was hardly thanks to Liberty, which came aboard only after the regulations were finalised and Ferrari had regrouped.

Paying lip service to F1 and its fanbase does not engender loyalty, and there exist suspicions of American business methods being applied to a quintessentially European sport - consider how the boxing-style United States Grand Prix build-up, complete with red carpets and announcer, was panned, by Ferrari president Sergio Marchionne, of all people given his company's reliance on the North American market.

Regardless of social media initiatives, activities such as the Regents Park demo and 'Super Bowl' hype, fans judge Liberty by on-track action and deeds, not the sort of fancy phrases used by Bratches.

These things said, Liberty is learning, and fast. While there is no denying that F1 2017-style was at its most harmonious for 30 years (at least), there remains much grist for its (rumour) mill.

Until current contracts expire or run their course in 2020, political undercurrents will continue to ebb and flow, driven as they are by the competitive nature of F1's stakeholders, whether regulator, money or media men, team bosses or drivers.

Politics are as vital to F1's success as its petrol or personalities; its constant power struggles vibrantly keep the championship in the global spotlight and public eye, in turn attracting media attention and, crucially, feeding fans and sponsors. In 2017 F1 seemed to have found its optimum balance.