MAY 25, 2005
A wasted opportunity
The announcement that the Long Beach Grand Prix has been sold to a subsidiary of the Champ Car World Series for $15m is a wasted opportunity for Formula 1. A deal to buy the event would have given the sport access to the biggest open-wheeler road racing event in the United States - and at a venue where Formula 1 first made an impact on the West Coast in the 1970s and 1980s. The failure of the sport to grab the opportunity says all that needs to be said about the way things are currently being run. The emphasis now is firmly on taking money out of the business - and no investment is being made for the future. The United States market is the world's most important consumer market and the logical place for F1 to want to have a higher profile. There are great opportunities for the sport to take advantage of the mess that exists in US open-wheeler racing and to try to get access to some of the vast income that is available from US TV networks. It is worth noting that while F1 television revenues of $400-500m a year look pretty good, they pale into insignificance when one looks at the deals now being negotiated by sports in the United States. USA Today recently reported that the National Football League will earn $3.7bn a year from TV revenues in the years ahead and NASCAR's new contract is expected to boost income to similar levels, up from the current $2.4bn a year.
The car companies and sponsors in F1 want more US coverage to back up the United States Grand Prix at Indianapolis and there are vague plans to shift more races into the US time zones, with a race on the cards in Mexico, to be added to the events in Canada, Brazil and at Indianapolis. The problem, however, is that F1 wants others to pay before it will do anything and the concept of actually investing money for the good of the sport is not even considered, or at least that is how it appears. Considering the huge sums of money that the sport does generate and the potential gains from getting a higher profile in the United States, a bid for Long Beach would have been a sensible move.
It may be clever to make others pay for you to become richer but the missed opportunity at Long Beach is a sign that Formula 1 needs to change its attitudes if it is to prosper in the years ahead. In recent years the Formula One group seems to have become a machine for making money for trust funds and bankers rather than doing what is best for the sport. There are plenty of opportunities for improving F1. The car by car qualifying, for example, would benefit hugely from the technology used by the World Rally Championship in which rival competitors appear in "virtual" form alongside the car which is running on a rally stage, this illustrates how the driver is doing in comparison to his rivals and turns the coverage into a race against another car rather than against the clock. This makes for much more visually exciting viewing. That technology could be used by F1 but no-one is willing to pay what it would cost.
Selling F1 is now a business where it seems the deal always goes to the highest bidder rather than to those who have the longer term development of the sport in mind. There is not enough strategic thinking going on and that is one of the reasons why the current discussions between the teams and the automobile manufacturers about the future are attractive because they seem to offer a better route for the future than does the existing structure. If those in power began thinking (and acting) along similar lines they might find that they would get more support from within the sport.
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