Follow the money
JANUARY 18, 2002
In recent days worthy motor racing reporters have been writing lots of complicated stories (which they do not quite understand) about a mysterious man in Bavaria called Leo Kirch.
Kirch is what in the 1930s they used to call a media mogul. The problem is he has been borrowing so much money from banks that he is now in trouble paying it all back. One can forgive most people for having an overdraft but it has to be said that Herr Kirch has gone rather beyond what is acceptable to the manager of the Abbey Branch of Barclays Bank. He has somehow amassed debts of such magnitude that even Finance Ministers would be vaguely impressed by the sums involved. He has also involved himself is dangerous things called "put" options (which for some reason always have to have inverted commas when written by motor racing reporters).
Last week The Mole decided it was time for an emergency meeting to establish whether the sport was in any danger. The meeting lasted several hours and the debate was lively but the conclusion reached was that the entire question was irrelevant. Motor racing will go on forever in some form or other whether there is money involved or not. The only people think there is a crisis are those who love money more than they love the sport.
Formula 1 teams will build bath-tubs on wheels if that is all that they can afford to do.
Some already have.
Consequently there is no point in worrying about the loss of tobacco revenues and whether there will be any money from the sale of television rights in the future. Big companies will continue to sponsor the F1 teams as long as the sport is shown on normal television (or whatever will one day replace it) as long as people keep watching. It is the simple numbers which make the business work. The sale of TV rights and such things as pay-TV are simply ways in which middle men have been making extra money from the sport, throwing a little at the teams to keep them quiet. The teams say that they wish to control this revenue but at the same time it is drying up rapidly as pay-TV does not seem to be very profitable and the price of TV rights for sports is coming down.
There are still the automobile manufacturers wanting to use racing to their advantage. They will pay the bills demanded by Formula 1 teams. To automobile executives a Formula 1 project is no more costly than changing the design of a bumper or a windscreen wiper fitting on a model range. It is a fraction of what it costs to produce a completely new model.
And if the manufacturers disappear there will still be someone who will cobble together an engine design and sell it to the teams. The teams will compete at whatever level they can sustain. A lot of the team principals, the motorhomes, private jets, expensive platinum watches, PR people and personal managers may disappear and mechanics will eat sandwiches and cold pizza as they did before their luncheons were prepared by people who were trained in kitchens with lots of Michelin stars, but the sport will go on.
The Mole is not one of those people who complains about the sport having been ruined by cash. It has certainly been changed but it is always worth remembering the words which The Mole found the other day while reading the library (the one at home not the public one).
"The curse of commercialism is the ruin of every sport and the degeneracy of motor racing as a sport is due to the financial issues now involved in each race - the immense value of victory and the commercial disaster of defeat."
You might think that this was written just yesterday but in fact this assessment of motor racing was published in a book by a man called Charles Jarrott in 1906.
Jarrott seems to have known what he was talking about as he had been a racing driver in international events, a founder of the Automobile Association (and later its chairman) and also a leading light in the establishment of the London Motor Show.
As long as there is money in the sport the dollars will be a powerful force and so The Mole's organisation must keep track of them. As a result The Mole does not spend much of his time reading the motor racing comics. The only decent specialist publications dealing with Formula 1 these days are The Financial Times, The Wall Street Journal, Les Echos and Nihon Keizai Shimbun. One or two of the German papers are worth a look as well.
The average race fan may ask what these journals have to do with F1 but the answer is very simple: money. News is made by money. So, as they say in FBI circles, one should always follow the money. After that the news is simply a question of logic and knowing how the characters involved in F1 will react in certain circumstances.
Knowing how people will react is a complicated business but The Mole's team has extensive files on all the major players in Formula 1 (which are stored in a bomb-proof room in the bowels of SIS Headquarters) and whenever necessary, reports are created to anticipate what will happen in a given situation. There are even computer people who are working on simulation software based on studies of parentage, unhappy childhoods, size, weight, IQ, previous relationships and business dealings of the big names so that The Mole will soon be able to type in a name and a circumstance and the computer will reveal what is going to happen.
The first tests were carried out last week when the words "Kirch" and "banks" were fed into the computer.
Unfortunately the device exploded.
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