Opinion : Social Media and Formula One

Japanstart

Barely a day goes by went I don’t see someone commenting on the need for Formula One to embrace social media.  The latest coming Daimler CEO Dieter Zetsche

Dieiter-Zetsche-Annual-North-American-Auto

“F1 must instead embrace the digital world and develop interactive strategies”

There can be no denying Formula One Management, FOM,  have taken a very cautious approach to social media, on the face of it this is born out of concern around damaging the cash cow that has been national broadcasting rights and the lack of clarity around how to monetise social media. Both concerns are valid. Social Media in its current form is great for increasing brand awareness, but Formula One is established. So how will social media improve Formula One as a product?

2015 has seen significant investment from FOM in improving content available through social media and developing a vehicle to deliver this content seen in the much improved F1 app.  Charges exist around elements of the content available but a surprising amount of exclusive insight has been made available with no restrictions or charges.

This is just the start. The folk at FOM are a bunch of clever people, they haven’t let go of the challenge to monetise a social media following. Mindful of developments in other sports, they have identified a commercial opportunity. Rather than simply launching a service, in the true spirit of social media, they plan to make their followers believe they’ve devised the opportunity themselves. What is this opportunity? In race gambling. A long established gambling model in Football, Rugby, Horse Racing, In play gambling seems to be such a great fit for Formula One it’s amazing no one has thought about it already!

Working with Tata Communications FOM launched a fan competition earlier this year asking entrants to propose technical solutions to enable fans to make and communicate predictions on race outcomes during the race itself. The only element not called out in the project brief was suggesting fans ability to monetise successful predictions. Whilst the winning entries refer to awards for success in points, turning points money is not a huge step.

Armed with fan support FOM have potentially unlocked an entire new sector for the sport. FOM could integrate live odds into social media feed and develop gambling platform through their own service, or more likely demonstrate proof of concept and sell in race gambling rights to the highest bidder.

skysports

skybet

Imagine if Sky Sports Commentary included live odds available only through Sky Bet on events taking place during the race.

You may wonder what a fan could bet on during a race; the more appropriate question is what couldn’t they bet on, 1st pitstop for car 44, lap on which fastest lap would be set, the list is endless.

You may also wonder how the odds for such events would be calculated. Well the data is already in place, teams have predictive software running throughout a race weekend to optimise performance and results, the data collection used for this could adapted with minimal investment to develop live odds.

FOM have, through PayTV agreements, confirmed there is an audience prepared to pay for the sport. This audience is likely to have a high confidence around their appreciation for the sport and highly likely to be willing to put their money where their mouth is. Especially is there is a feeling of being able to outsmart the management!

So FOM use their social media platform to launch in race gambling. They prove the concept, sell the rights or allow teams to generate income through agreements with gambling sites (for a fee of course) and then what?  Formula One Management move on, on to the next project to further add value to the product that is Formula One.

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Formula One – OPINION: Red Bull Racing to enter 2016 F1 season with Ilmor Engineering.

RBR

Disclaimer. Views expressed in this blog are my own. They represent a rational pragmatic view of a situation.

I’ll kick off with the headline. Red Bull Racing will enter the 2016 F1 season with a self-funded engine program supported by Ilmor. Now I realise this view flies in the face of 90% of what the team and media are reporting, but hear me out. Why wouldn’t they?

In 1997, Dietrich Mateschitz purchased a majority shareholding in the Sauber F1 team; this investment came only 3 years after Red Bull launched globally. Dietrich Mateschitz is a self-made billionaire who only a few years prior to his F1 involvement invested his entire life savings on buying a 49% share in Taiwanese Beverage Company bought to his attention by chance when travelling on business suffering with jetlag. It can be safe to say that the first significant investment Dietrich Mateschitz made with his new found wealth was into Formula One. The cynic could say it was simply because he saw the marketing potential of the sport for his brand; my personal belief is he has a passion for motorsport. Either way, passion and marketing potential do not disappear overnight. Walking away from the sport, I believe, is not an option.

Take a second to consider the success of Red Bull. This did not happen by mistake, the growth and development of the business has been carefully structured and strategically managed. This approach to business would not allow itself to be reliant on the goodwill of its peers to allow it to stay in the market. We cannot be expected to believe that Red Bull Racing truly expect Ferrari or Mercedes to supply them with engines, media coverage around these talks has been managed as a distraction technique. Something those with experience of Formula One Management will be well versed in.

The struggles Renault & Red Bull Racing have experienced in the hybrid era of the sport did not come as a surprise to the team. In 2013 the team, despite clinching their fourth consecutive constructor’s championship were making moves to streamline the operation. In the knowledge of a drop in competitiveness the team discontinued the contracts of a number of employees working on temporary contracts. With the knowledge that performances were unlikely to meet those of their competitors it could be argued that the team began considering the long term future of their relationship with Renault at this point already.

In the first half of the 2014 season the Red Bull Racing Renault relationship rapidly deteriorated. Before the first lap of the Melbourne GP Red Bull Technologies had already seemingly taken on some responsibility of engine development entering into an agreement with AVL, the world´s largest privately owned and independent company for the development of powertrain systems with internal combustion engines, to resolve immediate performance issues and use the company rolling road facilities. At this time there was a rumour Red Bull Technologies signed off investment in their own in house rolling road.

Later in 2014 Helmut Marko publically earmarked the Austrian GP as a milestone date by which time Red Bull Racing expected Renault to have resolved performance issues. There was no public statement around the consequence of failing to meeting this milestone, but it is my opinion that this was this point at which Red Bull Technologies green lit their engine development partnership evaluation between AVL and Ilmor. Renault, in my opinion, had full awareness of this project and the likely end point.

Moving further forward consultation between Red Bull Technologies, Renault and Ilmor was made public; the details of the agreement remained unclear, but Mario Illien (Ilmor co-founder) was present as a guest of Red Bull Racing  at a number of races in 2014. It was stated that Mario Illen acted advisory capacity providing direction on possible development routes for the Renault power unit, earlier this year it was announced that Renault had elected not to take the development path outlined through the Ilmor partnership. In my opinion this represented Renault allowing a contractual option defined by Red Bull Technology to expire.

It is my belief that the ‘messy divorce’ between Red Bull Racing and Renault is around the Ilmor engine development program. The Ilmor program uses Renault developed technology as a baseline. Red Bull will argue they have been involved and invested in the development since the beginning and as such lay claim to the rights to the engine. Renault of course will disagree. This disagreement will be concluded through a financial settlement, and the basis for future Red Bull Racing engine supply will remain the original Renault power unit with development direction becoming Ilmor’s domain. The project may latterly be badged by another manufacturer.

When I have discussed this option in the past I have lambasted on two key points. Firstly, the time it take s to develop an engine, and secondly Red Bull can’t afford an engine program. I don’t see either of these arguments as valid.  To support this I contacted a Cosworth representative some weeks ago to understand the time they believe it would take to develop a power unit compliant with current regulations, their response; 10 months. Red Bull Technologies and Ilmor by the start of preseason testing for the 2016 season may have had as much as 18 months (Since the 2014 Austrian GP), and will have been using an existing engine to base the concept on  which would serve to further reduce the development  time required.  To address financing, how much do we believe it costs to develop an engine? If we consider Red Bull Racing have been awarded $200M in prize funds over the past two years alone, and have an extremely healthy sponsorship portfolio minimising the investment Red Bull have to make into their own racing team, despite operating as a private company and as such not reporting profits, we can be confident Red Bull is a highly profitable organisation. Red Bull has the money. It should also be noted the cost of engine development may not be paid up front. The cost of capital could be shared over future years performances, with FOM heritage payment assured Red Bull could borrow money against his assurance to fund an engine program if necessary. So in summary, they’ve had the time and they can afford it!

If Red Bull pulled out of F1 they face significant penalties from FOM and will be left with extensive racing infrastructure on their books. The cost of leaving the sport is greater the than the cost of a self-funded engine development route.

So, to 2016 and the prospects for Red Bull Racing & Toro Rosso, it is my view that the current ‘negotiations’ or lack thereof with Mercedes and Ferrari are somewhat of a front. Red Bull wants to position themselves as the injured party with no other option than a self-funded program. This will go some way to once again endear the team to fans of the sport. Success with the Ilmor project will not come overnight, but that is fine. The teams can spend 2-3 seasons as a capable mid field entrants, focusing on restoring their reputation as a fun team with the fans, whilst using their clout with FOM and the FIA to restore an emphasis on aerodynamics in future technical regulations.  Success in Formula One is cyclical. Red Bull, despite what we see through the media appreciates this and remains fully committed to the sport.

Formula E – Jaime Alguersuari retires from racing

Jaime Alguersuari

Aged 25, Jaime Alguersuari has earlier today announced his retirement from racing. In a roughly translated statement to  Spanish media,  Jaime confirmed there was no underlying media reason for his retirement rather that he fell out of love with racing. After a spell with Toro Rosso in Formula One as part of the Red Bull Driver development programme Jaime spent time as a development driver in a series of categories and team before participating in the inaugural Formula E season with the Virgin Racing team. Following an unexplained fainting incident during the Russian round of the series the FIA suspended his racing license pending medical tests. No explanation for this incident has been provided but Jaime has confirmed this is not the sole motivation behind his retirement.

Formula One – Manor to race with Current Year Mercedes Hybrid power from 2016

Merc

Following the conclusion of a multi-year supply agreement, Manor Marussia F1 Team will race with Mercedes-Benz Hybrid power from the 2016 season onwards. Since the introduction of the new Power Unit generation in 2014, the Mercedes-Benz Hybrid has set the competitive benchmark in the sport, claiming to date a total of 27 wins and 2,208 world championship points.

Under the terms of the agreement, Manor Marussia F1 Team will be supplied with Mercedes-Benz Power Units by Mercedes AMG High Performance Powertrains (HPP) based in Brixworth, UK. The Power Unit will use Fluid Technology Solutions developed by PETRONAS, the technology partner of Mercedes-Benz. Under the agreement, Manor Marussia F1 Team will be supplied with current-year Power Units throughout the term.

John Booth, Team Principal, Manor Marussia F1 Team
“I am delighted to announce our new Power Unit partnership with Mercedes-Benz for the 2016 season and beyond. Although there were many factors governing our selection of an engine partner to help power us towards our long-term ambitions, ultimately the strength of the Mercedes-Benz package speaks for itself.

“2015 has been a rebuilding year in every aspect of our operation. Although we have not been able to make the incremental strides in competitiveness that the team has enjoyed in previous seasons, we have put in place a strong foundation from which to progress. Together with the potential we are seeing with our 2016 car in the wind tunnel, the Mercedes-Benz Power Unit will assist our return to aggressive performance development with effect from next season.

“I would like to take this opportunity to thank Scuderia Ferrari for their support for our team over the past two seasons. In 2014, together we shared in the momentous occasion of the team’s first points and in 2015 Ferrari supported us to a degree that was above and beyond the requirements of our partnership agreement. Quite simply, we could not have returned to the grid without them pushing extremely hard to support the MR03B, at the same time as focusing on their own 2015 package.

“I am also pleased to announce that we will resume our prior technical partnership with Williams Advanced Engineering, from whom we will receive the supply of transmission and suspension components. Combined with Mercedes-Benz Power Units, we are very excited about the strength of our new powertrain package and what it means for the long-term future of our team.”

Andy Cowell, Managing Director of Mercedes AMG HPP:
“It is a great pleasure to welcome the Manor Marussia F1 Team to our stable of customers at Mercedes AMG High Performance Powertrains. They are a team of real racers with great spirit and impressive determination to succeed. We enjoy strong relationships with all our customer teams, and take pride in delivering a standard of hardware and service that reflects the high standards that Mercedes-Benz stands for. Furthermore, this new agreement should enable us to keep our supply roster at three customer teams for 2016, which is our ideal level in terms of technical and logistical capacity. We will be targeting gains in both performance and reliability for the 2016 Power Unit and look forward to delivering those to our new customers at Manor Marussia F1 Team.”

Toto Wolff, Head of Mercedes-Benz Motorsport:
“Mercedes-Benz has a clear Formula One philosophy based around our works Silver Arrows team and supplying benchmark Power Units to independent customer teams. We believe this approach provides Formula One with greater strength in depth and ensures a deeper level of competitiveness throughout the field. In anticipation of Renault’s takeover of the Lotus F1 Team, we are pleased to announce Manor Marussia as a new customer of Mercedes-Benz. It is a tenacious team with a fantastic competitive spirit, and we are all excited to see what step forward they can make next year with their new car coupled with the Mercedes-Benz Hybrid Power Unit.”

Opinion – The widely expected Manor Mercedes Benz agreement has finally been confirmed, in what can only be described as a fantastic development for the team.  It can be assumed that Manor will look to secure a Mercedes Development driver within their 2016 lineup. With Manor taking on an informal role of junior or development team for Mercedes Benz. The key message to take away from this announcement is that Manor will run current year power units for the term of the agreement, this is guaranteed to bring the team up the grid and will strengthen their position against the incoming Haas F1 Team. Supply of Manor from Mercedes Benz will take current production facilities to capacity effectively closing the door to possible additional team supply.  

Formula One – Mclaren confirm Jenson Button for 2016

JB2016

McLaren-Honda is happy to confirm that Jenson Button will race for the team in 2016.

Ron Dennis (Chairman & Chief Executive Officer) said: 

“Jenson and I have been discussing his plans in private for the past few weeks, and the fact that our talks have led to today’s announcement is very pleasing to both of us and will delight and motivate all at McLaren-Honda.

“As I have made clear whenever I have been asked about the subject, Jenson’s current contract is of two years’ duration [2015 and 2016]. There is a ‘terminate after year one’ option that McLaren could have triggered if we had wished to do so, but, once it became clear from my many conversations with Jenson that he remained as enthusiastic and as committed and as focused as ever, that option immediately became an irrelevance. That being the case, Jenson will race for McLaren-Honda next year, under the terms and conditions as set out in the two-year contract that both parties entered into a year ago.

“As I say, I am extremely pleased. Jenson is the most experienced driver currently racing in Formula 1, and next season he is due to become only the third driver [after Rubens Barrichello and Michael Schumacher] in Formula 1 history to pass the milestone of 300 Grands Prix. But, although that wealth of experience makes him a massively valuable asset to our team, hugely expert in all aspects of the 21st-century Formula 1 driver’s craft, he is also supremely fit and as super-fast as ever.”

Jenson Button said:

“Over the past month or so I have done quite a lot of thinking, and it is no secret that I was at one point in two minds about my future.

“But I have been a McLaren driver for six seasons now [2010-2015], and in that time I have got to know Ron very well. He and I have had some very good chats these past few weeks, and during those chats it has become clear to me that Ron is both utterly determined and uniquely equipped to lead our team through its current difficulties to great successes in the future. That gives me great confidence, and it is for that reason that, together, he and I have decided to continue our partnership; and, as soon as I had made that decision, straight away I realised it was the correct one.

“Okay, granted, this year has not been an easy one for us, but we know what we need to do to improve things and, in collaboration with Honda, we will work extremely hard over the next weeks and months in order to make sure that 2016 will be a much better season than 2015 has been.

“I can’t wait!”

Opinion – After what appeared to be increasingly public contact continuation talks it is great to see Jenson Button continuing with Mclaren into 2016. Jenson is a huge asset to Mclaren, his amiable character is appealing to sponsors and media alike, an attribute a team like Mclaren truly values in their drivers. It will be interesting to see if the team feel is necessary to make a similar reconfirmation of contact announcement for Fernando Alonso in the coming days. In this challenging period for the team driver and management stability will be key. 

Formula E – Michelin confirmed as sole tyre supplier through to season 5

Michelin

The World MotorSport Council (WMSC) confirmed Michelin as the single tyre supplier for the FIA Formula E Championship. The contracts will cover Seasons 3 (2016-2017), 4 (2017-2018) and 5 (2018-2019), subject to the finalisation of the corresponding agreements.

Full report here.

Opinion: A contract extension that was never really in doubt. Michelin’s supply to Formula E demonstrates long lasting tyres don’t negatively impact racing. Quite the opposite in fact. Other racing categories would do well to pay attention. Also interesting that the FIA announce tyre supply for this series and yet don’t appear to be the decision makers in other categories.

Formula Two – Significant Progress made towards GP2 morphing into the final step of the FIA Single Seater Ladder

FIA

FIA Formula 2 Championship

Significant progress has been made in negotiations with the promoter of GP2 regarding the establishment of the final step in the FIA’s single-seater ladder; the FIA Formula 2 Championship.

Discussions remain ongoing with the intention of finalising an agreement.

Full Press Release

Opinion: In amongst the F1 2016 calendar confirmation the FIA have publicly commented for the first time on progress around the progress of GP2 morphing into F2.  GP2 organisers have commented on the prospect but in recent months talks appeared to have stalled. It’s fantastic to see logic being applied to the development of the FIA single seater ladder. It will be interesting to see the timing around the transition and the FIA drivers license points requirements to enter the series.

Formula One – Chandon becomes new official partner of McLaren Honda

Mclaren Chandon

McLaren Honda Formula 1 Team announces an exciting new partnership with Chandon, signed today.

As one of the most successful teams in Formula 1 history, McLaren meets Chandon, the vibrant sparkling wine with a boundless conquering spirit. The partnership perfectly highlights Chandon’s open spirit, ‘joie de vivre’ and spontaneous approach to life.

The partnership is a long-term, global collaboration that will bring Chandon’s sparkling attitude to the famous McLaren Honda Formula 1 Team.

The partnership was made official today at the McLaren Technology Centre in Woking, Surrey, England. It was signed by Christophe Navarre, Chairman and CEO of Moët Hennessy, and Ron Dennis, McLaren Technology Group Chairman and CEO.

For more information on the announcement please click here.

To visit the Chandon website please click here.

Opinion – Fantastic to see Mclaren bringing another new partner to the world of Formula One.  In what has been a challenging year for the team, this announcement hopefully marks an upturn in fortunes. Jenson Button was present at the sponsor presentation with significant Chandon branding across the chest of his overalls, this along with the sizable on car branding suggest the team is of significant value to the team. The press release suggests the branding will commence from 2016 onwards although it may appear as early as the Russian Grand Prix.

The announcement of this agreement serves to cement the credibility of the Mclaren brand demonstrating commercial partners are taking a long term view on the success of the team. Chandon joining the team should encourage other partners to do the same.

Formula One – Mclaren Honda – #TurboHeros Campaign

#TurboHeros

Over the last 24-hours, you may have noticed McLaren-Honda’s social channels sharing some rather unusual posts…

Introducing the #TurboHeroes campaign.

Join the mighty Turbo Heroes, McLaren-Honda’s Fernando Alonso and Jenson Button, as they battle the evil racer Exhaustus. Follow the thrilling journey across the globe in a tense battle to return mythical artefact – the Jade Dragon of Suzuka – to its spiritual home in Japan.

Turbo Heroes evokes the classic 8-bit gaming era of the 1980s with a series of innovative and unique gaming scenarios involving McLaren-Honda’s two racing heroes.

Watch Now

Opinion – Keen to move on from what must be one of the most challenging racing weekends in the history of the team, Mclaren have started the week well with the announcement of new sponsorship agreement with Chandon this morning, alongside kicking off this #TurboHeros campaign. This, hopefully first of many, films plays on the 80’s style games console memories, similar to the short film the team released prior to the car launch at the beginning of the year. The team successfully bring some much needed humour back to the sport in general and for themselves. These kind of Japanese themed campaigns will hopefully put to bed the continued rumours of unrest between Mclaren and Honda. They may also hint towards future additional Japanese partners….

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