Tag Archives: FOM

Formula One: Arm the Sprinklers!

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Formula One returns to Paul Ricard this weekend for the first French Grand Prix in twenty years. The legendary circuit redeveloped in the early 2000’s under the guidance of former CEO Phillipe Gurdjian, has in recent years become a venue of choice for Formula One tyre development testing and was the logical home for the return of Formula One to its spiritual home of France.

Redevelopment of the Paul Ricard circuit was initially focused on the venue hosting racing testing and development programmes. Succesful completion of this objective came in the form of the FIA awarded the circuit as First Centre of Excellence for Motor Sport Safety. This recognition comes in part due to the layout of the circuit, it’s approach to run off areas and ability to sustainably simulate dynamic weather situations. As mentioned in an early article here on JWGP available here.

Whilst the venue’s approach to vehicle safety, through large tarmac covered run-off areas, perfectly lends itself to performance testing, minimising the risk of a driver being penalised for on-track errors and will likely lead to teams pushing the boundaries of track limits throughout the Grand Prix weekend. Coupled with this, the current philosophy surrounding Formula One aerodynamics have left many well informed observers to suggest overtaking will be somewhat of a challenge through the race:

With this in mind Formula One is at risk of a fourth successive event in which on track excitement looks set to be minimal. But worry not, there is a solution! As mentioned the Paul Ricard HTTT (High Tech Test Track) has a visionary trick up its sleeve, under the guidance of previous circuit owner Bernie Ecclestone and more recently his ex-wife Slavica, the circuit has an inbuilt sprinkler system.

The system is capable of simulating a multitude of wet weather scenarios at the touch of a button. Formula One returning to France and Paul Ricard offers owners Liberty Media the ability to bring to life the long-promised proposal from Mr Ecclestone to spice up Formula One through the use of sprinklers! (check out some of  his other proposals here)

Of course, with no announcement of such trial being made prior to the race weekend, Liberty Media will have to manufacture a scenario in which the magic sprinkler system can be activated by mistake thus creating global media coverage for an otherwise uninspiring event.  Winne Harlow, what are you up to this weekend? 😉

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Formula One: “Grand Prix Driver” – The Conflicted Review

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I’m conflicted. Last week I was sent an advance copy of the Amazon Prime documentary series Grand Prix Driver. This fantastic series offers previously unimaginable of levels of access to the McLaren F1 team as they prepare for the 2017 Formula One Season. Recorded over a period of four and a half months, Manish Pandey, Chris Connell, and Anwar Nuseibeh have produced an in-depth study into the life of a Formula One team with seemingly no topic being off limits. All of which, for a lifelong F1 fan such as myself, sounds incredible. So why am I conflicted?

It is said you should never meet your heroes. After watching Grand Prix Driver, I think this phase should be modified to ‘never watch a documentary about your heroes. I want to make it clear, the production values of the documentary are second to none. To gain the level of trust required to film some of the scenes depicted through the episodes is a testament to the passion, dedication and commitment of Manish Pandey and the team surrounding him. This series is a must-see for any fan of motorsport. Unfortunately, however, it’s also a must-see for anyone studying business management looking for examples of how not to run a successful business, and perhaps most importantly, for Toro Rosso and Red Bull Racing on how not to work with a Power Unit Partner.

If you have seen a trailer for the documentary, it will be clear the series charts the breakdown of the relationship between McLaren and Honda on the eve of the 2017 season.

 

Analysing the series and reflecting on narrative documented, I have tried to break down my assessment of the team into a few key sections.

Partnerships

The key rationale for the McLaren Honda partnership was that Ron Dennis and/ or the team felt it would not be possible for McLaren to challenge for world championships as a customer team. Logic and recent history suggest this assessment is absolutely correct. The mantra throughout the McLaren Honda partnership and throughout this series is that of “One Team” and “We win as a team; we lose as a team”. The documentary shows those words to be largely empty. Relations between McLaren and Honda employees at every level of the business seemed strained at all times. There is a constant feeling of us and them.

An interesting insight into teams using customer power units in Formula One is when the customer receives the power unit. As a customer team, power units very rarely enter the team facility. One unit will be made available for the first time the car is fired up ahead of the season. After this, Power Units will be delivered to the circuit by the supplier and taken away again at the end of a test or race weekend. The benefit of direct / works relationship with a power unit manufacturer should be these limitations are removed. Team and Power unit manufacturer work as one in parallel. Based on the Grand Prix Driver documentary, this unity was never achieved between McLaren and Honda.

The first time McLaren physically saw the 2017 power unit was in the days preceding the first fire up of the unit. This is not an integrated partnership. Heading into 2017, Honda were playing catch up, they decided to overhaul their design philosophy. This decision, it is implied, was one McLaren did not have a say in. After taking such a decision, communication between McLaren and Honda should have been continuous, when it came to installing the power unit there should have been no surprises. As the documentary will show, this was not the case, with components having to be re-engineered on the fly.

The relationship between McLaren and Honda was not a partnership. It was barely more than a customer relationship, where the supplier happened to be supplying power units free of charge.

Humility

In speaking to Manish Pandey about the documentary, the topic of humility came up. Manish’s view of humility was interesting. His perspective was that both Honda and McLaren demonstrated great humility as they prepared for the documentary. He and his team made several attempts to get the team to discuss ambitions for the season. Looking for the soundbite of ‘returning to the top step’ or ‘challenging for the championship’. No one offered such remarks. Manish’s view was that this demonstrates the team were realistic in their approach to the season, and on this, I agree.

However, as the McLaren Honda relationship fell apart around them, it was the team’s complete lack of humility that struck me. Throughout the entire series, no McLaren representative takes any level of accountability for the partnership failing. Honda is made entirely responsible for the shortcomings of the team performance. This is wrong. We’ve all had relationships that haven’t worked out, at no time is one party solely responsible for a relationship failing. It comes across as hugely arrogant of McLaren to place all the blame for their performance through the Honda partnership at the foot of the power unit manufacturer.

Honestly, I am amazed McLaren are happy for this lack of humility to be made public. At times I wasn’t sure if I was watching a documentary series set in Woking or a Mockumentary series from Slough.

Communication

In the opening episodes, meetings are filmed from outside rooms giving the viewer a feel for events taking place without the content being made public, by the final episode cameras have been invited into meeting with no talking points edited or removed. Whilst again, this is great access, being part of these meetings will be quite distressing for any fan of the sport. Time after time the viewer is shown milestone dates on timelines being missed or management interactions in which it seems almost impossible to offer a clear answer to basic questions. To me this again comes down to accountability, no one in the organisation seems willing to accept their role in the failure.

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Sponsorship

The topic of sponsorship or partners is something frequently addressed through the series. In a bid to highlight a new beginning for the McLaren team, it was decided that a departure from silver, grey and black tones in the car livery and team environment was required. The origins of this decision and influencing factors are a little conflicted in the series, but the message for change was clear. The ambition being a new livery concept will entice new sponsors to join a new McLaren.

For me, the professionalism around this decision is diminished somewhat by branding being applied on the eve of the launch in what appears to be a corridor. Nevertheless, the ambition is clearly communicated. This desire to rebrand after a challenging period also explains why McLaren are expected to reveal another new livery concept for the 2018 season.

The McLaren team has developed a strong reputation within the technologies sector for its work outside of Formula One in recent years. Major FMCG’s consult with the group on numerous challenges. The McLaren Formula One Team depicted in this documentary is not one many FMCG’s would look favourably upon. I do not believe the McLaren commercial team will look favourably on the way in which the team is portrayed.

Even Handed Approach

In my discussion with Manish Pandey, in an interview for Paddock Magazine (click here to head to the interview) I raised the question of the way in which McLaren and Honda were depicted within the series, highlighting my concern that Honda did not have the opportunity to offer their side of the story.

Understandably Manish did not hold my opinion. The narrative of a documentary is often defined by the events it covers from the perspective of the lead. This is not a Honda documentary. It is a McLaren documentary and the views within it are communicated as such. Again this is not a criticism of the documentary, more a reflection of the brief and the client.

 

I sincerely hope my interpretation of the McLaren team based on the series is not an accurate reflection of the way in which the business operates. 12 months have passed since this documentary was filmed. With new management structures in place, much-needed process and accountability may have been successfully implemented. I, like many other F1 fans, hope to see McLaren back at the front of the grid challenging for race wins.  With The McLaren Team seen through this 2017 documentary, I doubt this would have been possible. Whatever the power unit.

Grand Prix Driver is available on Amazon Prime from February 10thClick here for more.

 

Formula One: Can F1 afford to wait until 2021?

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Barely a day goes by without one of the leading motorsport websites publishing comments around the future plans for F1. From louder engines to racing game inspired car designs, 2021 will amaze and inspire a new generation of fans. All of which sounds great, but it’s 2018. There are 3 seasons of Formula One between now and the promised fantastical future. The landscape of the motorsport industry can and will change dramatically in 3 years. Can Formula One really afford to wait?

2017 saw the introduction of the current set of technical regulations guiding the sport. Whilst cars are visually more impressive than there predecessors with the dimensions of the cars and tyres increasing. An overall increased emphasis on aerodynamics has had a dramatic impact on drivers ability to overtake with the 2017 season seeing less than half the number of overtakes of 2016.  At present, there appears to be no plan to address this issue, with the 2018 regulations seeing no modifications around aerodynamic regulations.

Mindful of a likely closer battle for wins, Mercedes, Ferrari and Red Bull Racing, may have focused the aerodynamic philosophies of their 2018 challengers around an ability to more closely follow a competitor, but without regulation changes a significant increase in overtaking from 2017 to 2018 is unlikely.

All this comes at a time the commercial positions of Formula One are coming under threat. Longstanding partners involved in the championship are defecting to the likes of Formula E or other sports, and at this time, prospects for new partnerships appear limited. With the Formula One business focusing their attentions towards 2021 why would a partner commit to the championship ahead of the ‘revolution’? The Formula One product from 2018 -2020 may be a difficult product to sell.

It is possible, Formula One management are focusing taking a strategy of focusing to the future with the view and expectation of teams demanding an earlier introduction of new regulations. With the Season 5 Formula E car set to make its public debut in the coming weeks, and Indycar looking strong with a new car concept, competition between championships is ever growing. Can Formula One and the teams committed to its success afford to wait another 3 years for change?

Formula One: Preparing for the budget cap

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The Liberty Media vision for the future of Formula One Teams is clear. The owners expect 12 commercially viable, profitable, franchises all capable of challenging for race victories. In his role as Managing Director of Motorsports, Ross Brawn, has been mandated with the task of delivering a strategy to ensure this vision is achieved.

12 commercially viable & profitable teams, on paper, sounds fantastic. With the variable of available finances removed, the resourceful nature of F1 teams will truly be put to the test. Outwardly it seems as though there is widespread support from the teams for such a move. Afterall, what business wants to spend more money? With representatives from leading teams including Red Bull Racing emploring Liberty Media to ‘ Save F1 Teams from themselves’ the route to implementing a budget cap should, in theory, be straightforward.

However, As with any commercial decision in Formula One nothing is straightforward. The first major hurdle to overcome is the existing structure around payments and the legacy of disparity. In 2017 Joe Saward explained the complexities around the current structure in this article. The existing structure rewards success and longevity, a something which is not overly inviting to a new team, nor geared towards a midfield team ever being in a position to surprise. In an estimated payment fund of $900M per season, the top 3 teams receive approximately 60% of the revenue, leaving the remaining, currently 7, teams to compete for 40% ($360M) between them. It is estimated that the smallest operational budget in F1 today is in the region of $100M, with only $50M coming from the championship, teams have a significant shortfall to cover.

A more appropriate payment structure would be equal distribution amongst all teams, with a proportional bonus for constructors championship position, similar to that seen in the Premier league as detailed here.  Unfortunately, in order to reach this point, the largest teams, with operational budgets believed to be in excess of $400M per season must agree to a cut in support from the system under which their team structure has been developed. What business would agree to lose as much as 50% of its funding without a clear view of how it will cut costs or increase revenue through other ventures.

Convincing; Red Bull Racing, Scuderia Ferrari, and Mercedes Grand Prix to agree to this change will be one of the key tasks ahead of Ross Brawn through 2018 and 2019 if a new system is to be introduced under the new commercial vision for the sport in 2020.

The task is far from simple, the infrastructure of the top teams has been built around a mindset of a limitless budget. If a budget cap of $150m per season were to be introduced in 2020 with no consultation from the teams, it would be almost impossible for the top teams to comply. From a personnel headcount perspective alone a team such a Mercedes Grand Prix, with in excess of 1400 employees, if an average salary of $50,000 is applied, the team commit 46% of its budget to salaries before considering building a car. Without modifying the current team structure, introducing a budget cap within the next 3 seasons, unless Liberty Media expect teams to make more than 50% of their workforce redundant, is not feasible.

On a more positive note, there are indications that the top teams in question are preparing for the change. A budget cap in Formula One will not mean that the likes of operating entity such as Mercedes Grand Prix or Red Bull Racing will be limited to an expenditure of $150M per season, rather their allocation of resources to F1 will see this limit applied.

As a result, it is highly likely that diversification will be a key element to the future of F1 Teams. Over the past decade, McLaren and Williams have established an industry-leading position in the application of engineering solutions developed to improve performance in motorsport being incorporated into manufacturing processes and commercial entities.  For these teams, this third-party business will likely continue to grow. it is, however,  unlikely Ferrari or Red Bull Racing will view this as an appropriate use of resources or brand credibility.

Instead, expect the very top teams to move towards expanding their foothold in other forms of motorsport.

  • Mercedes Grand Prix has already made steps in this direction with the announcement of a commitment to Formula E team from season 6 of the championship. This alongside the development of the Mercedes Project One, which to many is a clear indication of Mercedes ambitions to return to Endurance Racing. A return which with LMP1 regulations under review and the prospect of the reinvigoration of the FIA Global Engine strategy, Mercedes are well positioned to find success.

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Credit to Sean Bull Design for the concept Mercedes Formula E livery 

  • Similarly, Red Bull Racing through their partnership with Aston Martin has acknowledged an interest in taking the Valkyrie racing, and under guidance from Ross Brawn will no doubt be seeking to bring the Toro Rosso team entirely in-house.

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  • McLaren has taken the decision to take control of their GT programme, and have already explored further engagements in championships including Indycar following the positive coverage generated through the one-off partnership with Andretti Autosport at the Indy 500 in 2017.

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  • Ferrari continually talks of a return to Endurance Racing, and could, similar to Red Bull Racing consider a strategy of an in-house B-team with which budget cap compliance could be achieved.

In conclusion, political posturing between the top teams in Formula One, Ross Brawn, and Liberty Media throughout the 2018-19 seasons will likely overshadow on-track performances. Fans of the sport should take any empty threats from top teams to walk away from the sport as just that. Empty threats. The financial implications of such a move make the option unviable. Instead, teams will double down on motorsport, getting involved with more championships, with the eventual winner being the fans.

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Formula One : The Future of Pirelli in F1

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Pirelli returned to Formula One in 2011 as the sole tyre supplier and official championship partner. Pirelli, founded in Italy, recently acquired by ChemChina, joined the championship with a clear mandate from Formula One Management to ‘spice up the racing’ through the development of a range of tyre compounds with significant performance variables and accelerated levels of degradation. Initially, this new philosophy around tyre performance at the pinnacle of motorsports was well received with a positive response from fans and media around a new element of unpredictability surrounding an F1 weekend.

However, as teams and drivers adapted to the Pirelli approach to tyre compound chemistry, car set up and driving techniques evolved to minimise the challenges the tyres presented. This led to increasingly aggressive approaches to performance and degradation levels in tyre development culminating in the “challenging” 2013 British Grand Prix in which teams were supplied with tyres which were not capable of performing at the levels required. The result of which was a race which saw numerous failures throughout the field and a strategic re-evaluation from Pirelli.

In the seasons since 2013, Pirelli has maintained the vision of producing a range of compounds with varying levels of performance and high levels of degradation but with a more conservative approach. The result of this restraint has been races in which teams and drivers focus on tyre management over performance, understanding the optimal approach to a race has often been to extend the life of a tyre rather than push it to its limit. As such, in recent seasons, drivers have rarely complimented the performance of Pirelli’s efforts over a Grand Prix weekend.

Creating positive media coverage in a sole supply situation will always be a challenge. Since there is no competitor to beat, victory becomes the default leaving the only newsworthy coverage that of failure.  In such an environment it can be a challenge to understand how Pirelli quantify benefits from its sponsorship of Formula One. Over seven seasons they have developed a reputation for producing tyres with excessive degradation and minimal differentiation beyond coloured side walls. Would an F1 fan seriously consider buying Pirelli tyres for their own car based on how they perform in Formula One?

So where does this leave Pirelli?

At the end of each season, Pirelli produce an end of year summary detailing all every fact and figure imaginable around; corning speeds, top speeds, lap times, number of overtakes, number of compounds used by each driver and the figure which stood out to me the most, the number of sets of tyres produced in a season.

In 2017 Pirelli produced 38,788 sets of F1 tyres, which equates to approximately 3,258 tons of tyres. Of these, only 12,920 sets (1,085 tons of tyres) were actually used. This means two-thirds of F1 tyres produced in 2017 were never raced and simply destroyed. Whilst Pirelli makes it clear all tyres were recovered, a system in which such a vast number of tyres are produced and shipped around the globe and never used is hugely wasteful and frankly embarrassing for both the manufacturer and the sport. The strategy of an ever-increasing range of tyres being made available for a Grand Prix weekend has resulted in the requirement of an inefficient and cumbersome supply chain. Something which will only increase in 2018 with further tyre compounds and team selection freedoms being added to the Pirelli ‘menu’.

In recent years Michelin, a leading industry competitor, have repeated statements that the current philosophy of Formula One around the use of tyre degradation as a key variable in racing, is of limited strategic merit and is not in keeping with how they believe tyre technology should be presented in motorsport. Instead, Michelin has focused their efforts in Formula E and the World Endurance Championship, showcasing innovations around all-weather tyres, low profile tyres (18-inches, compared to the 13-inch profile used in Formula One), and minimal degradation allowing competitors to push the performance of a tyre throughout an event.

Increasingly Formula One and its regulations are focused on reducing unnecessary waste. limiting fuel use through a race, and limiting the number of power units available to a team through a season. This focus on efficiency appeals to existing OEM’s in the sport including Mercedes, Renault, and Honda, and again sits in contrast to the wasteful and confusing approach mandated to Pirelli. For the 2018 season there is no longer any opportunity for Pirelli to change their approach to racing, but with minimal technical regulation changes set for 2019, perhaps the management of Formula One should look to change the conversation around Pirelli’s role in F1 and encourage the manufacturer to innovate relevant style.

For 2019, perhaps Pirelli should look to consider a simplified approach to tyre compounds, produce tyres with increased variance in performance yet minimised levels of degradation, and adopt 18-inch low profile tyres, enabling the end user to better relate to the product they see racing on a Sunday.

It is understood 2019 is the final season of Pirelli’s current agreement with Formula One. Without change, will it be their last?

Formula One: Turning the Red Bull Racing Aston Martin story on its head

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Amongst the #ToroHondaRenaultMcLarenRosso hype during the Singapore Grand Prix weekend, news of around Aston Martin increasing its involvement in Formula One with Red Bull Racing has started to solidify. Andy Palmer, Aston Martin CEO, when quizzed on the grid by Sky Sports F1’s Martin Brundle confirmed the business is keeping a watching brief on 2021 engine regulations, which should they fall favourably towards independent manufacturers, could lead to increased involvement of the brand. Should this be the case Palmer confirmed Aston Martin may seek to preemptt the regulation change by enhancing their visibility with Red Bull Racing possibly from as early as 2018.

This news comes at a time in which the media are speculating Red Bull’s long-term interest in Formula One may be dwindling, which has lead some observers to suggest a change of ownership of Red Bull Racing under the guise of Aston Martin. Whilst this is entirely possible, there are, in my opinion, a few to many creative leaps being taken for this outcome to be viable.

Firstly, lets address Red Bull or more specifically Dietrich Mateschitz’s diminished interest in Formula One. Red Bull entered F1 to sell a product, this objective is the same today as it was 30 years ago. In 2016 the Red Bull achieved more than $1,000M in media coverage from through Formula One. This far exceeds any investment the brand makes into the sport. With budget caps on the horizon, the business rationale for a marketing focused business to be involved with F1 will only increase. Should a $150M budget cap be achieved, Red Bull Racing can be assured of achieving this investment through existing sponsors, and prize funds. Red Bull stand to benefit from $1000M in free advertising.

2017 saw Aston Martin return to profit for the first time in over a decade. The business has stated ambitions around going public in the coming 5 years and are focused on expanding their automotive range to increase revenues. At this time, and in the mid term they are not a business capable of sustaining any form of Formula One engine development plan. Aston Martin Racing is a completely separate business to the Aston Martin which sponsors Red Bull Racing.

Returning to Dietrich Mateschitz. A serial entrepreneurr and self made billionaire. In recent years, he has seen the likes of McLaren diversify into the production of cars, and Williams create successful businesses in the application of their technology within a commercial environment. He is aware that the technical capability of the Red Bull Racing group is under utilised, something which will only increase under a F1 budget cap.  Projects such as Newey’s America’s Cup Project and the Aston Martin Valkyrie Hypercar project show an evaluation of ways in which the team can direct resources to other projects. Could this lead to an alternative direction for Red Bull Racing?

Rather than Aston Martin becoming title sponsor of Red Bull Racing, with a view to producing a power unit under the 2021 regulations. Could Red Bull be considering buying Aston Martin, supporting them in the acceleration of their automotive expansion plans, facilitating F1 power unit development, through their partnership with AVL, and using the proven brand power of Formula One allow Dietrich Mateschitz to evolve Aston Martin into a genuine competitor to the entire Ferrari Group.

Dietrich Mateschitz acquiring Aston Martin and reshaping his position in Formula One towards a Red Bull owned Aston Martin F1 Team, from a business perspective appears entirely more feasible than a company reporting $16M profit, having committed $550M to new road cars, suddenly investing $20M per annum in title sponsorship then paying to develop  an F1 engine.

All that being said, Red Bull, through offering half stories and snippets of information continue to dominate F1 news despite being unable to challenge for a world championship. The business continues to offer a master class in media manipulation. As in 2014, when F1 news was dominated by stories of Red Bull looking set to quit Formula One, Red Bull have an ability to create their own news to ensure they dominate the F1 headlines between the races.

Finally, despite quotes to the contrary, Red Bull Racing are very well aware that the best chance they have of securing a return to a championship challenging position is with a fully funded manufacturer. Talk of Aston Martin, in my opinion, is nothing more than a negotiating tactic around the terms under which the Volkswagen Group will enter Formula One.

Credit to Sean Bull for the fantastic livery creation supporting this article. 

The three P’s of Formula One: Points, Penalties and Prizes – Paddock Magazine

The 2017 Italian Grand Prix served to highlight once again that current Formula 1 regulations around grid penalties for exceeding…

Source: The three P’s of Formula 1: Points, Penalties and Prizes – Paddock Magazine

Formula One: Could F1 consider cloud seeding to ensure Sunday’s race?

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Friday free practice running for the 2017 Chinese Grand Prix was all but a complete washout. With conditions at the circuit and the neighbouring city, in which the hospital on call for medical emergencies from the race weekend, too poor for helicopters to operate in, the FIA delayed and eventually cancelled most of the days running.

Current weather forecasts suggest conditions will improve for tomorrow, but are likely to return on Sunday. Should forecasts prove to be accurate there is a real possibility that it will not be possible for the race to take place on Sunday as scheduled. With only a one week turnaround between the Chinese and Bahrain Grand Prix it will not be possible to hold the race on Monday or at a later date. As such FOM, the FIA, teams, drivers, and broadcasters are apparently in talks to host the entire race weekend activities tomorrow.

Within Formula One, there is no prescient for a race taking place a day earlier than scheduled, and in reality with the highly complex global broadcast agreements in place, it is highly unlikely that terms for running the race a day early can be agreed. Sponsors, Broadcasters, race attending fans, teams, will all seek compensation. As such at this point in time the most likely outcome, if the poor weather returns, is that fans will be treated to a four hour broadcast of no track action at all on Sunday.

This will significantly damage the reputation of Formula One globally and most specifically in Asia, a market in which the sport is struggling (note the discontinuation of the Malaysian Grand Prix agreement from 2018 announced earlier today). To avoid such an outcome it is time for Formula One Management to get creative? Could they look towards a solution involving Cloud Seeding?

Cloud seeding is a form of weather modification, a way of changing the amount or type of precipitation that falls from clouds, by dispersing substances into the air that serve as cloud condensation or ice nuclei, which alter the microphysical processes within the cloud. The usual intent is to increase precipitation (rain or snow), but hail and fog suppression are also widely practiced in airports. (thank you Wikipedia). The process could be applied in areas away from the circuit and the route to the hospital supporting the race.

It is understood organisers of the Singapore Grand Prix, have long used this technology to ensure a dry race weekend during the rain season for the region.

The process was used during the 2008 Beijing Olympics to ensure a dry Olympics.

No doubt, as the weekend processes, the weather forecast will evolve and fans concerns will evaporate!

Formula One: Heineken F1 – More than a race

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The Italian Grand Prix saw Heineken formally launch its Formula One partnership. Whilst the Dutch brewer took title sponsorship at the Canadian Grand Prix earlier in the year, Monza was always set to be the event in which the campaign shifted into high gear.

In the weeks preceding the Italian Grand Prix at the Black Book Motorsport Forum, Heineken executives spoke of strategy to bring Formula One to the fans, to improve the race going experience and seek ways in which to engage a millennial audience. If I am entirely honest I was somewhat sceptical. Brands all to often focus Formula One activation strategies around corporate entertainment and business to business network development.

With this in mind, upon arriving in Monza on the Thursday ahead of the Grand Prix the first thing I did was head to the fan village. In recent years the fan village, an area surrounding the circuit open to all ticket holders, has become little more than a few merchandising stands. It can feel as though the interests of the fan have been overlooked. Heineken have gone to great lengths to address this issue erecting a huge pop bar and entertainment space for fans, as pictured below. Whilst the beer isn’t free, prices are reasonable and they have created a communal space for fans away from the circuit.

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Building on this, Heineken have addressed another common frustration amongst race going fans. How do you fill your time outside of track action? On Thursday evening, Heineken installed a temporary five a side football pitch on the start finish straight challenging Champions League stars to a game against Fernando Alonso, Daniel Ricciardo, Max Verstappen, Sergio Perez and Jolyon Palmer. Whilst it soon became clear the F1 drivers’ talents did not extend to the football pitch, it was fantastic to see Heineken hosting an event for the public outside of the regular F1 weekend schedule. More than 2000 fans filled the main grandstand to watch the game.

Of course Heineken must also use their partnership within F1 to address the fans at home and it would be naive to think there are no business to business expectations around the agreement. On Friday evening, Heineken set about explaining how these would be addressed. At the core of this session was the launch of the two advertisements Heineken have developed featuring Sir Jackie Stewart and David Coulthard. The production values of both films are incredible, and both have been extremely positively received. So much so, that Freddie Hunt, son of the late James Hunt has suggested Heineken use footage of his father in their next campaign.

To see the Heineken F1 adverts in full click here

What struck me about the Jackie Stewart film in particular was the core of the message. If You Drive, Never Drink.  Whilst anti drink drive campaigns are nothing new, making this the fundamental message of a campaign for a beer company is a bold strategy. One unimaginable in other sectors. Heineken should be commended for this approach. They have acknowledged the challenges of associating alcohol with motorsport and addressed it head on.  More over they are seeking to evolve an F1 weekend, from 2 hours of racing on Sunday into something much more significant. This is neatly tied up in the tagline ‘more than a race’.

I am hopeful that Heineken’s approach to fan engagement within Formula One, alongside a fresh approach from the sport’s new owners Liberty Media, will apply pressure to existing brands in the sport to do more with fans. In the beverage sector brand loyalty is fundamental to success and if Heineken can demonstrate new customer loyalty through Formula One and through engaging with fans you can be sure more brands will follow and the Formula One experience will only improve.

To read my interview with Heineken ambassador David Coulthard follow this link

Formula One: Liberty Media Corporation Agrees to Acquire Formula One – Press Release in Full

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Liberty Media Corporation earlier today confirmed the agreement to acquire Formula One. The Liberty Media press release can be found in full here:

Liberty Media Corporation  and CVC Capital Partners (“CVC”) announced today that Liberty Media has agreed to acquire Formula One, the iconic global motorsports business, from a consortium of sellers led by CVC.

Liberty Media owns interests in a broad range of media, communications and entertainment businesses. Those interests are attributed to three tracking stock groups: the Liberty SiriusXM Group, the Liberty Braves Group, and the Liberty Media Group.

The consideration comprises cash and newly issued shares in the Liberty Media Group tracking stock (LMCK) and a debt instrument exchangeable into shares of LMCK. The transaction price represents an enterprise value for Formula One of $8.0 billion and an equity value of $4.4 billion(1).

The acquisition will be effected by Liberty Media acquiring 100% of the shares of Delta Topco, the parent company of Formula One (Delta Topco herein referred to as “Formula One”)(2). The acquisition is subject to the satisfaction of certain conditions and is described in more detail below.

Concurrent with the execution of the agreement to effect the acquisition, Liberty Media has completed the acquisition of an 18.7% minority stake in Formula One for $746 million, funded entirely in cash (which is equal to $821 million in consideration less a $75 million discount to be repaid by Liberty Media to selling stockholders upon completion of the acquisition). Prior to completion, CVC Funds will continue to be the controlling shareholder of Formula One.

After completion of the acquisition, Liberty Media will own Formula One and it will be attributed to the Liberty Media Group which will be renamed the Formula One Group. The consortium of sellers led by CVC will own approximately 65%(1)(3) of the Formula One Group’s equity and will have board representation at Formula One to support Liberty Media in continuing to develop the full potential of the sport. In addition, a CVC representative will be joining the Liberty Media Board of Directors.

Chase Carey has been appointed by Delta Topco and will serve as the new Chairman of Formula One, succeeding Peter Brabeck-Letmathe, who will remain on Formula One’s board as a non-executive director. Bernie Ecclestone will remain Formula One’s CEO.

Greg Maffei, President and Chief Executive Officer of Liberty Media, said: “We are excited to become part of Formula One. We think our long-term perspective and expertise with media and sports assets will allow us to be good stewards of Formula One and benefit fans, teams and our shareholders. We look forward to working closely with Chase Carey and Bernie Ecclestone to support the next phase of growth for this hugely popular global sport.”

Chase Carey, Chairman of Formula One, said: “I am thrilled to take up the role of Chairman of Formula One and have the opportunity to work alongside Bernie Ecclestone, CVC, and the Liberty Media team. I greatly admire Formula One as a unique global sports entertainment franchise attracting hundreds of millions of fans each season from all around the world. I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike.”

Bernie Ecclestone, Chief Executive Officer of Formula One, said: “I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them.”

Donald Mackenzie, Co-Chairman of CVC, commented: “We are delighted Chase Carey is joining Formula One as its new Chairman and that he will be working alongside Bernie Ecclestone. Chase’s experience and knowledge of sport, media and entertainment is as good as it gets and we are very pleased to secure his services. Bernie has been a wonderful CEO for us over the last 10 years. There have been many successes and the occasional challenge but there has never been a dull moment and we have had a lot of fun. The combined skills of Chase and Bernie mean that the successes should continue and we wish them well. We would like to thank Peter Brabeck-Letmathe for his outstanding contribution during his tenure as Chairman. His leadership has served the company well, and we are pleased that he will remain on the board as a non-executive director.”

In the acquisition the selling stockholders will receive a mix of consideration comprising: $1.1 billion in cash, 138 million newly issued shares of LMCK and a $351 million exchangeable debt instrument to be issued by Formula One and exchangeable into shares of LMCK. Funding for the cash component of the acquisition is expected to come from cash on hand at the Liberty Media Group. The newly issued LMCK shares will be subject to market co-ordination and lock-up agreements.

The Teams will be given the opportunity to participate in the investment in Formula One, and the detailed terms of that investment will be agreed in due course. Certain teams have already expressed an interest in investing after completion of the acquisition.

The interest in Formula One already acquired by Liberty Media, and the remaining interest to be acquired upon the closing of the acquisition, along with $4.1 billion of existing Formula One debt (which will be non-recourse to Liberty Media) and $0.7 billion in Formula One cash, is being attributed to the Liberty Media Group tracking stock.

Upon completion of the acquisition, the Liberty Media Group will be renamed the Formula One Group and the ticker symbols for the Series A, Series B and Series C Liberty Media Group tracking stocks will be changed from LMC (A/B/K), respectively, to FWON (A/B/K), respectively. Formula One will remain based in London.

The completion of the acquisition is subject to certain conditions, including the receipt of: (i) certain clearances and approvals by antitrust and competition law authorities in various countries, (ii) certain third-party consents and approvals, including that of the Fédération Internationale de l’Automobile, the governing body of Formula One, and (iii) the approval of Liberty Media’s stockholders of the issuance of LMCK shares in connection with the acquisition and the name change of the Liberty Media Group to the Formula One Group, and is expected to close by the first quarter of 2017. Additional information regarding the acquisition and Formula One will be included in a proxy statement to be filed by Liberty Media with the Securities and Exchange Commission relating to the matters to be voted upon by Liberty Media’s stockholders described above.