F1 is currently in a state of transition, as the demise of the Marussia and the struggles for the Caterham team after the Russian Grand prix have highlighted the severe financial problem that is currently afflicting Formula One. The lower funded teams such as Sahara Force-India, Lotus and Sauber are all campaigning for a reduction in costs, or an increase in their share of the money produced by F1.
The recent comments by Bernie Ecclestone suggest F1 will instead turn to extra customer cars provided by the bigger teams such as Red Bull, Ferrari, AMG Mercedes and McLaren and run by the likes of Sauber and Lotus. The other option is a super GP2 car where the feeder GP2 series cars are uprated and ran by the smaller teams instead. Other comments by Ecclestone on issues such as F1 and social media have led some to suggest that Ecclestone has lost touch with modern F1 and the needs of it’s changing audience.
The issue relating to the wealth distribution has become a critical issue within Formula One, with the likes of Sahara-Force India deputy team principal Bob Fernley threatening briefly that the team would boycott the recent United States Grand Prix as cost cutting and distribution of revenue talks both broke down. The current situation is precarious with Marussia already folding as a team, and Caterham announcing recently 230 of their staff were being made redundant as they struggle on this weekend in Abu Dhabi, after missing the last two Grand Prix’s. Even the more established teams such as Sahara-Force India are struggling to compete with the rest of the grid as they do not have the vast wealth of manufacter or sponsor funding behind them. Sauber are also seriously struggling and were forced to take the vast sponsor funding from drivers Marcus Ericsson and Felipe Nasr to continue racing in 2015.
It seems that the bigger teams and Bernie Ecclestone have shown little empathy with those lower down the grid, with persistent talks of cost cutting being rejected as the teams are unable to come to an agreement to serious cost cutting in Formula One. Now it appears talks for a fairer distribution of the revenue generated from F1 shared between the teams appear to be stalling also as the midfield teams have demanded emergency talks with Ecclestone this weekend in Abu Dhabi. The smaller teams are aiming to thrash out a deal that would prevent the mooted two-tier system, whereby the current F1 regulations are retained whilst the smaller teams compete with a super GP2 concept based around an uprated GP2 race car.
The letter written by Sahara-Force India deputy team principal Bob Fernley is quoted as stating “From our meetings we noted positively that our concerns were acknowledged and there was a basis for a constructive dialogue, However, after our meeting in Brazil we clearly see the direction of Formula 1 towards customer cars/super GP2. It is equally clear that the strategy group has no intention at all to reduce cost. We would like to highlight that we came to you primarily with the request to reduce costs. Due to the lack of interest in pursuing this target we then addressed the distribution of income as a way to absorb the higher costs.”
It does appear there is some truth to these comments with Bernie Ecclestone admitting during the US GP weekend that he had got the distribution of wealth in F1 wrong. He stated when asked “The problem is there is too much money probably being distributed badly – probably my fault. But like lots of agreements people make, they seemed a good idea at the time. Why not just bypass team bosses and go to heads of board? I think it’s probably what will have to happen.” Ecclestone would also admit during that weekend that “We should tear all of the current contracts up, Tear them all up and start again.” Formula One appears to have been heading towards this crisis for a long time now, with the vast increase in budgets caused by the highly complicated and innovative turbo V6 power plants providing the spark that ignited this current financial problem within F1.
Another cause for concern currently in F1 is the drop in worldwide TV audiences, with some calling now for F1 to embrace social media to appeal to a new generation of potential F1 fans. This is another knock on Ecclestone as quotes from a recent interview suggest Ecclestone has no interest in embracing social media and therefore promoting F1 to a broader, younger generation for the future. Ecclestone’s recent comments made to the Campaign Asia-Pacific magazine show is lack of interest in encouraging younger fans into F1.
Ecclestone commented when asked “I’m not interested in tweeting, Facebook and whatever this nonsense is,I tried to find out but in any case I’m too old-fashioned. I couldn’t see any value in it. And, I don’t know what the so-called ‘young generation’ of today really wants. What is it?” Ecclestone was then asked to further comment on if he felt attempting to attract a younger audience to F1 had any value Ecclestone went on to say “If you have a brand that you want to put in front of a few hundred million people, I can do that easily for you on television.Now, you’re telling me I need to find a channel to get this 15-year-old to watch Formula 1 because somebody wants to put out a new brand in front of them? They are not going to be interested in the slightest bit.Young kids will see the Rolex brand, but are they going to go and buy one? They can’t afford it. Or our other sponsor, UBS — these kids don’t care about banking. They haven’t got enough money to put in the bloody banks anyway.”
From here Ecclestone elaborated on the same point “That’s what I think. I don’t know why people want to get to the so-called ‘young generation’. Why do they want to do that? Is it to sell them something? Most of these kids haven’t got any money.I’d rather get to the 70-year-old guy who’s got plenty of cash. So, there’s no point trying to reach these kids because they won’t buy any of the products here and if marketers are aiming at this audience, then maybe they should advertise with Disney.” These comments seems a pretty clear indicator Ecclestone is very much someone who is thinking about the current time, and not planning for the future of F1, especially once he has gone. This shows that when Ecclestone does leave F1 it will be a much poorer state, although whilst a majority of this will stem from his influence and the incredible he has had on the sport he loves, it will also come from a lack of a succession plan that he would put in place.
In summary, for whilst Ecclestone has been without doubt the most influential man ever to Formula One as he evolved the sport from a niche one dominated by hardcore enthusiasts, to a sport recognisable worldwide with a huge queue of moving billboards racing round the circuit in far flung places of the globe. It does increasingly so recently that since Ecclestone effectively became an employee to F1’s owners CVC Capital, albeit a high ranking employee, his influence on F1 and therefore his relevance to modern F1 has diminished considerably. Although this article is not calling for Ecclestone to resign, I am simply stating it might well be time for Ecclestone to consider relinquishing some of his power in F1 in favor of a different direction, that is all.