Columns - Big Al

Feeling sorry for Mr. Kirch


Leo Kirch must be wondering where it all went wrong. The German media mogul has paid out $1.54 billion dollars so far, but he has not yet quite gained control of F1. And when he does it looks as though he might have to deal with the prospect of giving a larger share of its commercial revenues to the major car makers in a bid to prevent them starting their own independent series in direct competition to the present F1 Championship.

On the face of it, you might be forgiven for thinking he's got plenty of income to fund such outlay. In 1999 F1 gross television revenues were reportedly running at $350 million, of which the commercial rights holder took 53 per cent, while the fees payable by Grand Prix organizers, almost $200 million dollars last year, all accrue to the commercial rights holder. As Mr. Kirch owns 75 per cent of Bernie Ecclestone's SLEC empire, he should be in good shape.

Or perhaps not. With the Concorde Agreement expiring in 2007, time is not on his side. The mathematics suggest that Kirch might just cover his outlay if income streams continue at their current rate, or at least only fall just short of target. However, if a new Concorde Agreement is not negotiated, then Kirch might end up in 2008 with a valueless asset in the form of a majority stake in the commercial rights to a series which has no feasible economic future.

All of which brings one to the motor industry's involvement. As many people have pointed out on many occasions, the car industry's love affair with F1 has been cyclical. Moreover, if it depended purely on economic factors, the future involvement of those car makers would be easier to read and predict for the future. But it doesn't.

Historically F1 has been a political tool for various high profile motor industry magnates, a totem, if you like. Management structures change and so do marketing priorities. Even if you brush this argument aside and assume that F1 has such an overwhelming commercial attraction to such participants, you have to consider that it's unlikely one single senior executive currently numbered amongst the car industry's F1 driving forces will be around in 2008 when this so-called new series may, or may not, kick off.

Think about it. The highly regarded Jurgen Hubbert, driving force behind Mercedes-Benz's involvement at senior board level, is 62 this year. He will have retired by 2004. Over at Ford, Jaguar patron Jac Nasser is currently involved in a high profile competition with Bill Ford over the management of the famous Detroit motor giant. Another highly talented man, history tells us he will not survive in that role until 2008. You get my point?

More to the point, not all these car companies can win. Some car makers hint that "being there" is quite enough in such a high visibility arena. I wonder if they aren't whistling to keep their spirits up. Ironically, if they are, the prospects for Mr. Kirch recouping more of his investment could look brighter at the end of the day.

Just remember, seven years is an absolute eternity in F1 terms. Anybody who says they can definitely predict the state of the sport in 2008 is at best an optimist, at worst a dreamer.