Far from heavenly, the F1 marketing role sounds like the brief from hell

September 7, 2010

I was intrigued to hear that the search is on for a Formula One marketing director. Given F1’s global reach, and the colossal sums of money from sponsorship, TV rights and attendance fees supporting the brand, it sounds the CMO job from heaven. Why ever had no one thought of creating it before? For very good reason, as it happens.

First things first, however. The proposal has come out of the inaugural meeting of something called the F100 alliance, which is a new organisation designed to represent the commercial sponsors of the sport. F1 is composed of so many self-interested “guilds” that it’s a surprise the sponsors haven’t cottoned on to this idea earlier. There is, for example, one for determining the governing rules (FIA); another for the Grand Prix manufacturers; yet another for the drivers; one for the mechanics; and even one called the Overtaking Working Group. By contrast, the 175 sponsors who contributed £458m in 2010 (according to industry monitor Formula Money) – more than the £352m provided by the team owners and the £156m by the car manufacturers – have until now been unprovided for.

The immediate back-drop to the creation of the F100 alliance is the recession, and a change in the relative importance of the contributing revenue streams – which has sharpened the sponsors’ appetite for power. The idea, not unreasonably, is to make their money work harder for them by creating a ginger group. The kind of thing which they might wish to influence would be the timing of grand prix, their geographical location and the multiplication of opportunities to entertain – all of course in the cause of maximising sponsorship return. Finding a marketing director to front and shape their interests, where commonality can be found, is a natural extension of this platform.

But who would be the ideal candidate, and how much power would he or she actually have? Although discussions – about the brief, let alone the candidate – are at any early stage, the name of David Wheldon has already emerged from the pack. I have no idea whether Wheldon really is interested, but he certainly has persuasive credentials as the former global brand chief of a major F1 sponsor, Vodafone. And there’s something else he has that any F1 marketing director will need by the bucket load: emollient charm and a considerable reserve of patience.

F100 and its marketing director will be able to beg, but they won’t be able to bully. The Mediaeval jumble of competing guilds that makes up F1 disguises an important reality about its underlying constitution. It is an autocracy where only one man’s opinion – certainly on the matter of grand prix venues – actually counts. That of ringmaster Bernie Ecclestone. Ecclestone has very graciously condescended to read the minutes of F100’s inaugural meeting, rather in the way that a monarch might glance at his subjects’ charters. He is committed to doing precisely nothing. Indeed, not very privately, he has described the whole idea of F100 as “silly.”


ING Renault F1 Team gets last-minute reprieve, but is it too late?

September 21, 2009

ING RenaultThere was an air of hushed expectation at Place de la Concorde in central Paris yesterday. The first public execution for 200 years – since the time of the French Revolution – was about to take place. Formula One was bringing back the time-honoured custom for one day only. F1’s presiding body, the FIA (based in Place de la Concorde), was to be judge and jury and Renault F1 Team the victim.  At least, that was the widespread expectation. As it happened, Renault got a last-minute reprieve. The guillotine has been left on standby for two years.

Renault, it will be recalled, is at the centre of probably the worst example of sports chicanery ever exposed – which is saying quite something where Formula One and its track-record of multiple scandals is concerned. Briefly, Renault has admitted it manipulated the outcome of a Grand Prix race by causing one of its drivers, Nelson Piquet Jnr, to crash his vehicle in order that team mate Fernando Alonso might win the race. Renault F1 Team supremo Flavio Briatore, the principal conspirator, has already got the chop, as has his number two, Pat Symonds, director of engineering.

Some might argue that the FIA penalty was not enough; it could never be enough. After all Briatore & Co were knowingly risking the lives not only of their own driver but those of others on the track. Shouldn’t criminal charges also be in the offing?

Whichever way you look at it, Crashgate could not have come at a worse time. The horrendously expensive sport is strapped for cash as never before. It is struggling to fill the grid now that the likes of BMW have withdrawn. With Renault’s F1 reputation so badly damaged, who else is going to bother pouring billions of dollars into this discredited sport?

Come to think of it, current sponsors must be feeling pretty sick, and none more so than ING, the financial services conglomerate whose moniker presently prefixes “Renault F1 Team”  in all the headlines.

Now what was the logic of ING’s unconscionably large financial involvement again? Ah yes, I have ING’s then ceo, Michel Tilmant, on the record on June 27, 2007 – just after he first signed his company up. Here are some extracts:

“We believe our brand recognition does not quite match the scope and size of our business…We believe Formula One can help raise ING’s brand awareness, and ensure that we are known as one of the leading global financial institutions. …We see our F1 sponsorship as complementary to our other sponsorship, but very much in the lead to position our business globally.”

Apparently, Tilmant and his top team “conducted extensive research” into which sports would best offer ING a global audience, including “football, the Olympics and tennis amongst others” but “F1 was the best choice. It offered an unrivalled blend of a large global audience, with a profile that closely matched the needs of our business.”

Sounds as if you made the wrong call, mate. You should have stuck to boring old tennis or the Olympics. At least they are fairly clean.

As it happens, we can see an unflattering similarity between high-rolling finance and F1 all too clearly – but not in the way Tilmant will have intended when he signed away all those shareholder dividends on the deal. Let’s have a look at that parallel a little more closely. Both communities, banking and top motor racing, suffer from a surfeit of testosterone and are suicidally competitive – which makes them “reckless” with the rules when they think they can get away with it. Both are ludicrously overpaid for what they do – in the highest echelons that is – and are adept at finding new ways of enriching themselves whatever the collateral cost. Both are bloated  and have a dubious ‘social utility’ (to use FSA chief Lord Turner’s phrase). And both have shown only the most superficial contrition when faced with their misdeeds. A perfect fit, in short.

Any other parallels I may have forgotten? Probably.


Ecclestone’s last stand

July 13, 2009

Bernie Ecclestone’s uncritical outburst of fuhrer-worship will bring down his own autocratic regime at F1, no doubt about it. The question is when.

Ecclestone, whatever his awesome reputation, is only a minority shareholder in Delta Topco, the company which ultimately owns F1’s commercial rights. The majority shareholder is CVC Capital, with about 70%. Although Ecclestone was able to haul CVC chief executive Donald MacKenzie to the phone for a vigorous denial that he was about to get the heave-ho, all is not what it seems. CVC has had enough with the way FIA president Max Mosley and Ecclestone have been running things or, as they see it, running things into the ground. Mosley’s intransigence over reform of the rules recently led to a mutiny by eight of the racing teams – representing all the powerful motor manufacturers – and the threat of a breakaway championship under the Fota moniker. No one really wants a breakaway, including the teams. It would mean diminished income all round, especially in the key areas of TV rights and sponsorship. But CVC has more to fear than most: a breakaway would either destroy or severely impair its multi-billion pound investment in the sport. So it is keen to appease the teams, who now find themselves in a powerful bargaining position.

Sorrell: Not amused

Sorrell: Not amused

On the board of the Formula One holding company are two prominent Jewish businessmen, Peter Brabeck, former head of Nestlé, and Sir Martin Sorrell, ceo of WPP – both Delta Topco investors in their own right. It scarcely requires me to articulate their thoughts on Ecclestone and his continued tenure. The question is, who could replace him? No easy answer comes to mind. Not, for example, the flamboyant Flavio Briatore – head of the Renault team and close confederate of Bernie (both, among other things, have a major stake in football club QPR). The other teams simply wouldn’t wear it. Nevertheless, a replacement looks likely by the end of the year. It’s a gripping Mexican stand-off in which Ecclestone has yet to fire his last shot.

We might ask, while all this unseemly wrangling is going on, what of the sport, what of the brand, what of the sponsors? More in my magazine column this week.


What made Max Mosley step down?

June 25, 2009

Max MosleySo farewell, Max Mosley – linchpin of Formula One – and one part of an inseparable double act that has gone down in history. While Bernie salted the money away with ever more ingenious financial engineering, Max made sure that no one else got their hands on the rule book and spoilt their game. Together, they were the enforcers, exercising an arbitrary control over the sort of  fiefdom last seen in these realms about the year 1485.

Why exactly did Max quit so suddenly? Like everything else to do with the chicanery of Formula One, we can only see through a glass darkly. Was it a case of Max, the consummate  poker player, finally overplaying his hand? Or, more improbably at first sight, Max the sacrificial lamb laying down his career for the sport he loves?

Incredibly, you can make a case for both positions without fear of contradiction. After besting his opponents during an in flagellante delicto scandal that would have brought a lesser man down, Mosley must have dispelled any surviving doubts that he walked on water. He claimed he would resign this autumn as president of the Federation Internationale de l’Automobile (FIA), his power base these past 16 years. But those familiar with the situation reckon he had no such intention and, come the time, he would have put himself forward for another 4-year term, there being no obvious alternative. Under pressure, he indicated as much himself during the heated controversy of the past few weeks. Sponsors, shareholders in F1, the constructors, the teams, Ecclestone even, may have thought he had damaged the reputation of F1, but they couldn’t see an alternative either. So they shut up.

In these circumstances, Mosley may have wrongly concluded that he had the power to drive through the structural reforms F1 so badly needs if it is to remain an appealing spectator sport. Chief among these was the need to radically reduce the budgets deployed by the F1 teams from about £200m per annum to nearer £40m. The point of this was to make the sport more affordable to new would-be teams. Honda has recently pulled out and it has not proved that easy to fill the grid, especially in the current straitened economic circumstances. A brilliant idea, passed through the committees nem con? Not exactly. Eight F1 teams (there are only 12 altogether, and two of those remaining are not established) threatened to secede and form an alternative championship. Funnily enough, these eight teams all have powerful constructors – like Mercedes, BMW, Renault, Toyota – behind them and they took a dim view of having their technical advantage in the field handicapped by an ‘arbitrary’ budget ceiling which might help less well-endowed newcomers.

Fota, as the alternative organisation was dubbed, would have split the sport, reduced spectators, damaged TV rights and had the sponsors tearing their hair out. But Mosley was convinced that when push came to shove, the constructors would back down. After all, he and Ecclestone had been here before, and seen them off. They may have the money, but they don’t have the organising skills.

So, why after showing supreme brinksmanship did Mosley still lose? The first point (one he would make himself, no doubt) is that he did not. Well, not exactly. The sport remains united, under the control of Ecclestone and the FIA and – so Mosley claims – the dissident teams have agreed to a glider-path of diminishing budgets over several years. So a triumph of sorts, even if he won’t be around to relish it. But the big mystery, according to a source familiar with the situation, is why his negotiating position collapsed so dramatically and he agreed to go more or less immediately. As they point out, he could have called Fota’s bluff and maybe got away with it. Not only had he thrown writs in their path, which would have to be answered in court, there were circuit owners to be brought around and TV rights to be negotiated. No small hurdles to overcome.

Now that he is going, the immediate reaction in F1 circles (not excluding Ecclestone) is a sense of relief. For all Mosley’s accomplishments over the years, the whiff of scandal has left a nasty smell about the place. Relief, too, at the FIA, now that no one has to pass his colossal personal expenses.

Looking further afield, there may be cause for regret. Whatever his flaws, Mosley knew both what he wanted for the sport and how to get it. It is for any successor to prove that he has both the leadership and sufficient detachment from the many powerful stakeholders in F1 to make a success of running the FIA.


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