tag:theconversation.com,2011:/ca/topics/bernie-ecclestone-8622/articlesBernie Ecclestone – The Conversation2017-07-12T15:18:56Ztag:theconversation.com,2011:article/809052017-07-12T15:18:56Z2017-07-12T15:18:56ZWill F1 bosses step in to save the British Grand Prix?<figure><img src="https://images.theconversation.com/files/177855/original/file-20170712-14421-1r4ptlo.jpg?ixlib=rb-1.1.0&rect=17%2C92%2C2749%2C1815&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/formula-one-grand-prix-great-britain-303597215?src=etyYPWT-2nBOG0U9kbUapQ-1-0">BAKOUNINE/Shutterstock</a></span></figcaption></figure><p>Silverstone is playing hard to get. The venerable racing circuit <a href="http://www.skysports.com/f1/news/12433/10944415/silverstone-confirm-break-from-f1-contract-from-2019-what-does-that-mean-for-british-gp-future">signalled its withdrawal</a> from the Formula One season from 2020, citing escalating costs. It is a fascinating moment for the sport. So much of F1’s appeal is wrapped up in the sentimentality of history, but its push for a modern, glittering future risks leaving that behind.</p>
<p>So will F1’s new owners, <a href="https://theconversation.com/reasons-to-be-cheerful-as-liberty-media-era-dawns-in-formula-one-72406">Liberty Media</a>, take the bait and seek to help? The only legitimate way for everyone to save face in this scenario would be for Liberty to buy Silverstone itself and shut down any accusations that they are letting the circuit back in the game on the cheap.</p>
<p>Or might there be a new role here, perhaps, for a certain billionaire with a shock of white hair who <a href="https://www.theguardian.com/sport/2017/jan/23/bernie-ecclestone-no-longer-f1-chief-executive">only recently relinquished his grip</a> on the world’s premier motor racing competition?</p>
<h2>Street fighters</h2>
<p>The Silverstone circuit is enshrined in motor sport history. It hosted the first ever World Championship Formula One race in 1950. But now its owner, <a href="http://www.brdc.co.uk/">the British Racing Drivers Club</a> (BRDC) has reached a financial tipping point. It feels <a href="http://www.independent.co.uk/sport/motor-racing/Formula1/british-grand-prix-at-silverstone-faces-extinction-as-owners-activate-break-clause-with-f1-a7835571.html">unable to sustain continued losses</a> from hosting the British Grand Prix, which were £2.8m in 2015 and £4.8m in 2016. It has therefore exercised a break clause in its contract with F1/Liberty Media.</p>
<p>There has been talk about the race relocating elsewhere, but there is no other facility that could host the 350,000 spectators that annually visit the former airfield in Northamptonshire, northern England. </p>
<p>A mystery street circuit in London was <a href="http://www.standard.co.uk/sport/f1-chief-chase-carey-on-why-he-wants-less-shooting-from-the-hip-as-he-bids-to-drive-the-sport-a3585146.html">suggested as an alternative</a> by Liberty’s F1 CEO Chase Carey but no details have been aired in public. In any case it seems unlikely that the Mayor of London, Sadiq Khan, who is working with the <a href="http://www.c40.org/press_releases/press-release-mayors-of-paris-and-london-announce-car-scoring-system-to-slash-air-pollution-on-city-street">C40 Cities organisation</a> to identify real-world car emissions and their impact on air quality, would find that this fits with his agenda.</p>
<p>Politicians are sensitive to their electorate. Wherever such a circuit might be in London the local residents almost certainly would follow the lead of the <a href="http://savebatterseapark.com/issues-at-a-glance/">“Save Battersea Park” campaigners</a> who saw off the much more politically acceptable <a href="https://theconversation.com/how-electric-car-racing-could-one-day-challenge-the-spectacle-of-formula-one-76192">electric motor racing series Formula E</a> after just two seasons. </p>
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<a href="https://images.theconversation.com/files/177854/original/file-20170712-14421-1o8h7pu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/177854/original/file-20170712-14421-1o8h7pu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/177854/original/file-20170712-14421-1o8h7pu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=480&fit=crop&dpr=1 600w, https://images.theconversation.com/files/177854/original/file-20170712-14421-1o8h7pu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=480&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/177854/original/file-20170712-14421-1o8h7pu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=480&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/177854/original/file-20170712-14421-1o8h7pu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=603&fit=crop&dpr=1 754w, https://images.theconversation.com/files/177854/original/file-20170712-14421-1o8h7pu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=603&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/177854/original/file-20170712-14421-1o8h7pu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=603&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">No more green lights for Formula E in Battersea Park.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/sheeprus/19334691668/in/photolist-vsxmdU-wkdCAM-wk6hm1-vsu7WQ-vEQq7p-wk6Ey9-wkdEcH-wkdGxe-vEGcdL-wkdeH2-wCchNn-vEFUBj-vEQQLK-wCctn8-uoZ6L2-uN6BFd-wzorZE-vEQSMi-wkdfcP-wB1shG-wk78uU-vEGnZA-wk63dw-vEGvtd-vEGqrQ-wBHH5D-vr3LW8-vsFAXZ-vJubE9-uNcT4W-JShTwu-uNf7ka-JmKP39-vJyNP5-vJtKwo-uNeHJP-vsuud9-KfmEzy-vK6WCx-JmSJ6v-vJtXcC-vKsLm4-wk76gL-vki84m-wCcr7g-wB1Se9-wBHCsH-wBHBnM-vEQJ5t-vEQFRk">Sheep</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
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<p>Well-known motor racing circuits such as <a href="http://www.brandshatch.co.uk/">Brands Hatch</a> and <a href="http://www.donington-park.co.uk/">Donington</a> cannot cope physically with the demands of modern grand prix racing and the huge crowds involved – Brands Hatch’s record crowd is only a <a href="http://www.independent.co.uk/sport/motorcycling-fogarty-pulls-in-record-crowd-1109838.html">little more than 100,000</a>. Silverstone itself seems the only realistic solution for the British Grand Prix. If no deal is done the worst case scenario would be that the this iconic event, which was first run at Brooklands in 1926, could be lost. </p>
<p>Silverstone could be sold or leased to the right bidder. Jaguar Land Rover, which was recently keen on just such a purchase, <a href="https://www.motoringresearch.com/car-news/jaguar-land-rover-not-going-buy-silverstone">failed to pull it off</a>. One of their aims had been to establish a company heritage centre at the track. The BRDC has plans for <a href="http://www.silverstone.co.uk/news/silverstone-heritage-experience-secures-funding/">its own heritage experience</a> to open there in 2019 as well as for a hotel complex.</p>
<p>So, what sort of organisation might take on such an asset? Is it too far fetched to think that F1’s new owners might fit the bill perfectly? Liberty Media is well versed in the entertainment business and you only have to look at another of its sporting assets, Suntrust Park, the home of the Atlanta Braves baseball team to see the <a href="http://atlanta.braves.mlb.com/atl/ballpark/">company’s existing experience</a> in establishing a major entertainment complex.</p>
<h2>Old hand, new role?</h2>
<p>Liberty is hoping to emphasise F1’s potential as an entertainment spectacle, and to bring in more and younger fans from around the world, but it still has a keen eye on the decades of glamour and stories which have defined the sport’s appeal. The company has stated its wish for the British Grand Prix to continue as one of motor sport’s historic blue-riband events, and has already <a href="http://www.standard.co.uk/sport/f1-chief-chase-carey-on-why-he-wants-less-shooting-from-the-hip-as-he-bids-to-drive-the-sport-a3585146.html">offered to run the race for the BRDC</a>. But what about buying the whole entertainment complex and developing it? Zak Brown, executive director of the McLaren Technology Group, <a href="http://www.reuters.com/article/us-motor-f1-britain-silverstone-ecclesto-idUSKBN19V0OU">thinks they should</a>.</p>
<p>The added bonus is that this would sidestep any accusations of favouritism from other race promoters if, in an alternative scenario, the BRDC were granted a reduced fee for the race.</p>
<p>The final twist could be that Bernie Ecclestone, who is just getting used to semi-retirement from a lifetime of running F1, is not without influence, knowledge and funds. Could he come up on the rails and buy Silverstone and could the BRDC work with him? He admits to having made <a href="http://www.reuters.com/article/us-motor-f1-britain-silverstone-ecclesto-idUSKBN19V0OU">just such an offer in the past</a>, but denies he is interested right now. Is this a classic piece of posturing?</p>
<p>At the British grand prix this weekend, the action will be focused on a historic circuit as iconic names such as Ferrari, Mercedes and Williams fight it out. The huge crowds both at Silverstone and watching on global television will find it hard to believe that the race might be lost after 2019. Think that’s impossible? Well things do change in this sport. The French Grand Prix <a href="http://www.eurosport.com/formula-1/french-grand-prix-returns-as-part-of-austria-silverstone-triple-header_sto6223818/story.shtml">reappears on the F1 calendar</a> again next year after an absence of ten years.</p><img src="https://counter.theconversation.com/content/80905/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bruce Grant-Braham is a Council Member of the British Automobile Racing Club.</span></em></p>Formula One owners Liberty Media, and perhaps even old-hand Bernie Ecclestone, might hold key to saving a crucial part of the sport’s history.Bruce Grant-Braham, Senior Lecturer, Bournemouth UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/718272017-01-26T15:04:09Z2017-01-26T15:04:09ZEnd of the Ecclestone era gives F1 hope of a turbo-charged future<p>Bernie Ecclestone’s <a href="http://www.motorsport.com/f1/news/ecclestone-confirms-chase-carey-has-replaced-him-as-ceo-of-f1-868019/">removal</a> from the head of Formula 1 is almost hard to believe. Despite a rollercoaster life, a <a href="http://www.bbc.co.uk/news/world-europe-28656050">costly bribery trial</a>, and a triple coronary bypass, the 86-year-old F1 supremo has never showed any sign of relinquishing his dominion over the sport. </p>
<p>It is, after all, an industry that he created and transformed from a grassroots racing hobby for a few adrenaline junky mechanics, into the <a href="http://www.raconteur.net/business-of-f1-2016">most-watched sport series in the world</a>. So, as US giant Liberty Media takes over F1’s parent company Delta Topco, the decision not to keep Ecclestone as CEO marks a major change to F1’s business model. </p>
<h2>From the ground up</h2>
<p>Ecclestone has often made the news for the wrong reasons (<a href="https://www.theguardian.com/sport/2017/jan/05/future-f1-british-grand-prix-silverstone-in-doubt-hosting-costs">questionable commercial strategies</a>) , <a href="http://www.bbc.co.uk/news/world-europe-28656050">allegations of bribery</a>, a colourful array of politically incorrect statements which included praising Adolf Hitler <a href="https://www.theguardian.com/sport/2009/jul/04/bernie-ecclestone-interview-hitler-saddam">for “getting things done”</a>). But loved or loathed, nobody denies his critical role in building Formula 1 over the last 40 years.</p>
<p>Having started his career as a second-hand car and motorcycle salesman, Ecclestone began racing as an amateur driver in 1949. After some stints managing drivers, he became the owner of a small Australian team, Brabham, in 1972. This was instrumental in transforming his own fortunes and that of the sport.</p>
<p>Back in the 70s, the business of F1 was made up of an unstructured, unfair and inefficient system of one-to-one deals. Each team would independently negotiate with the track owners a fee for their participation in races. This granted higher bargaining power (and richer deals) to prestigious teams, which were considered a “must-have” to attract spectators. Smaller ones got next to nothing. At the same time, the track owners would sell broadcasting rights to TV and radio channels on a race-by-race basis. </p>
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<img alt="" src="https://images.theconversation.com/files/154397/original/image-20170126-30413-706id5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/154397/original/image-20170126-30413-706id5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/154397/original/image-20170126-30413-706id5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/154397/original/image-20170126-30413-706id5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/154397/original/image-20170126-30413-706id5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/154397/original/image-20170126-30413-706id5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/154397/original/image-20170126-30413-706id5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">F1 in the 1970s.</span>
<span class="attribution"><a class="source" href="https://en.wikipedia.org/wiki/Jochen_Rindt#/media/File:Rindt_at_1970_Dutch_Grand_Prix.jpg">Joost Evers</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
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<p>Ecclestone was the first to realise this system was unsustainable and advanced a solution. In 1978 he become the president of the Formula One Constructors’ Association, the F1 teams body, and offered to represent all teams’ interests in a centralized system of negotiation. This granted returns to all parties (including the smaller teams) and higher profits across the board from the direct negotiation with broadcasters. </p>
<p>This central arrangement transformed F1 into the extremely profitable industry it is today. Audiences – and sponsorship – skyrocketed around the globe.</p>
<p>Ecclestone’s ability to make money seems to be second to none. He brought races to locations such as <a href="http://f1destinations.com/introducing-baku-f1s-newest-destination/">Bahrain, Russia and Azerbaijan</a> where national governments were willing to pay multi-million fees. At the same time all TV rights were progressively sold to pay-tv channels through costly multi-year contracts. Revenue for the ten teams competing in F1 in 2015 <a href="http://www.forbes.com/sites/csylt/2016/03/05/f1-teams-race-off-with-1-5-billion-revenue/#208b711450e1">was US$1.5 billion</a>. </p>
<h2>Hit some road bumps</h2>
<p>The sport has, in recent years, however, witnessed a dramatic <a href="http://www.f1fanatic.co.uk/2016/01/17/how-do-you-explain-f1s-falling-popularity-since-2008/">plunge in its audience and overall traction</a>. Excessive regulation has limited the development of car technology, prohibiting the appeal of races. A small number of teams dominate and the result of races is often predictable. Ticket prices are so high that only the very wealthy (or die-hard fans) can afford to watch the sport live.</p>
<p>Ecclestone’s tight grip on the sport is a big reason it hasn’t evolved. Despite dwindling audiences, he preferred to perpetuate the idea of F1 as a glittering world of golden gates and VIP passes, where ordinary fans are kept at a distance from their heroes and the show is conceived to target older, deep-pocketed, nostalgic motor-heads. </p>
<p>Necessary reinvestment was reduced to the very minimum. For example any sort of significant engagement with the internet and social media <a href="http://www.gpupdate.net/en/f1-news/319016/ecclestone-no-point-trying-to-reach-young-fans/">were dismissed</a> and were instead promptly and successfully adopted by <a href="http://www.theroar.com.au/2016/10/07/rise-formula-e-f1-facing-relevance-crisis/">Formula E</a>, F1’s sister series. </p>
<p>The complacence of teams in this was bought by establishing a governance system where top teams (namely Ferrari, Mercedes and Red Bull) <a href="https://theconversation.com/how-to-save-formula-1-without-overhauling-the-business-model-39205">have higher powers</a>. They can basically veto any changes to the sport that do not work in their interest. This includes proposals like a cost cap for technology, or a more fair redistribution of revenues to help minor teams “stay in the game” – and make the sport more competitive. </p>
<p>It did not take long for Liberty Media to realise that the way Ecclestone set the business up is not geared towards making any radical changes. The decision to appoint a new managing team and dismiss him with a pompous but token title of “chairman emeritus” shows a desire to take the sport in a new direction.</p>
<h2>Turbo boost</h2>
<p>So those hopeful of a rejuvenation of the sport have welcomed the news. The sport’s new chairman, <a href="http://www.dailymail.co.uk/wires/pa/article-4151382/5-things-new-Formula-One-chief-Chase-Carey.html">Chase Carey</a>, a former 21st Century Fox executive, has said that Formula 1 will be run differently.</p>
<p>Top priorities will be expanding into the US (while maintaining its presence in Europe), and greater effort will be made to engage younger generations. Carey has talked of introducing <a href="http://www.bbc.co.uk/sport/formula1/38731760">“21 Super Bowls”</a> to the F1 race calendar. Inspired by the American sport series format (familiar to American football and baseball fans), it will be a more engaging show for fans to follow. It’s a promising recipe. </p>
<p>Crucially, Carey will have a strong new team around him. The experienced <a href="http://www.bbc.co.uk/sport/formula1/38734708">Ross Brawn</a> returns to the sport as managing director, to lead the technical and sporting side of things. As former Mercedes team boss and technical director of Ferrari, overseeing Michael Schumacher’s seven world titles, he is one of the sport’s best. His task will be changing race regulations to bring back exciting races that can be enjoyed by even occasional viewers. To bring in the revenue, he is joined by ESPN veteran <a href="http://formulaspy.com/formula-1/ross-brawn-sean-bratches-join-formula-one-managing-directors-30810">Sean Bratches</a> as commercial managing director, focusing on sponsorship and broadcasting deals. </p>
<p>Having been in the hands of Ecclestone for so long, this new trio will have a tough job of implementing the revolution that fans have been longing for. Still, <a href="http://proceedings.aom.org/content/2015/1/18407.abstract?sid=8733df04-3af5-4b9e-8704-ca2b5fb73c3c">a study</a> I recently conducted with colleagues Simone Santoni, Luiz Mesquita and Alessandro Marino shows that this change to F1’s management bodes well. Our research found that when top management teams in F1 are made up of members with more diverse background and experiences, they will be more effective and efficient in embracing innovative solutions and making bolder decisions. </p>
<p>If this is the case, Liberty Media’s F1 takeover might not be the sport’s last lap, but perhaps just a useful turbo boost to revamp the industry.</p><img src="https://counter.theconversation.com/content/71827/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dr Paolo Aversa received funding from the European Commission’s Marie-Curie Actions (Project nr. 301688 - Project Acronym AJ86RH5GYM - FP7-PEOPLE-2011-IEF) and the EPSRC UK Research Council (EP/K039695/1 Building Better Business Models) to conduct F1-related research.</span></em></p>Ecclestone made F1 the success it is today. But the sport needs rejuvenating if it’s to continue to prosper.Paolo Aversa, Lecturer in Strategy, Cass Business School, City, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/437902015-06-24T13:40:14Z2015-06-24T13:40:14ZHow a US-Qatar takeover will take Formula 1 up a gear<p>One is a nation where the car is king and has been part of the country’s narrative for almost a century; the other is more like a young prince, where the car is fast becoming a central part of its emerging identity and narrative. Now, the US and Qatar look set to form what might seem an unlikely alliance in their attempt to buy Formula 1.</p>
<p><a href="http://www.bbc.co.uk/news/business-33249041">Reports are emerging</a> that America’s RSE Ventures, owner of the Miami Dolphins, and Qatar Sports Investments (QSI), a sovereign wealth fund, are seeking to acquire the 35.5% of F1 owned by CVC Capital Partners. It is being predicted that any such deal would be worth between $7 billion and $8 billion.</p>
<p>Significantly, should the deal go through then it will probably also see F1 supremo Bernie Ecclestone selling his 5% holding in the sport. It is also being suggested that QSI will use its purchase of the two shareholdings to ultimately launch a complete takeover of F1.</p>
<h2>An unlikely alliance?</h2>
<p>A US-Qatari partnership may seem like a strange juxtaposition. But taking a stake in F1 makes sense for both parties. Both countries have a well-established love of cars. The US has the <a href="http://www.academia.edu/10055649/Motorsports_and_American_Culture_From_Demolition_Derbies_to_NASCAR_Review_">largest motorsport economy in the world</a>, which the <a href="http://www.wsj.com/articles/SB124036522998941969">Qataris have invested</a> in recently. </p>
<p>At the same time, Qatar has been aggressively pursuing both the internal development of sport and external investments in sports properties. The country has had <a href="http://www.dailymail.co.uk/sport/formulaone/article-2906752/Qatar-s-plans-host-F1-race-limbo-deal-Bahrain-says-Bernie-Ecclestone.html">aspirations to host an F1 race</a> for some years, and already hosts a MotoGP race and the Qatar International Rally.</p>
<h2>Lucrative opportunity</h2>
<p>Both parties will see F1 as an opportunity to make money on several fronts, as well as to address various other issues. For instance, while the US has a well-established and highly lucrative motorsport economy, it is largely based around series such as NASCAR. </p>
<p>F1 races have been intermittently staged in the US but the sport has not been very successful, with no clear home for the event having emerged. Compounding these problems, any affection the country might have for F1 was sharply tested by the 2005 US grand prix debacle, when only six cars started the race at Indianapolis.</p>
<p>But such travails provide fertile ground for the potential new owners to create a new vision and strategy for the US market. RSE would be ideally placed to do this given their understanding of the fan engagement process in American sport and the elements needed to provide fans with compelling experiences of the sport.
At the same time too, given the global profile of both the Miami Dolphins and the Superbowl, RSE will also be aware of what it takes to internationalise a sport, build an overseas fan base and secure lucrative sponsorship deals.</p>
<p>Such revenue generating opportunities are no doubt appealing to QSI as well. The sovereign wealth fund has been aggressively pursuing overseas sporting investments, which most notably led to the <a href="http://www.theguardian.com/football/2014/apr/03/psg-world-cup-football-tv-rights-qatar">acquisition of French football club Paris Saint Germain</a>. </p>
<h2>Power play</h2>
<p>At one level, acquiring a stake in F1 would potentially generate a financial return. At another level, the investment would contribute to Qatar’s pursuit of its <a href="http://www.gsdp.gov.qa/portal/page/portal/gsdp_en/qatar_national_vision">2030 National Vision</a>, which has adopted sport as a key focus in the country’s attempts to become more than just a powerhouse for oil and gas.</p>
<p>Bahrain and Abu Dhabi will no doubt be incensed by this latest development. Both are host to the only two grand prix in the Middle East. Indeed, when Bahrain signed a contract with F1 to become its first race in the Middle East, the deal was that there could only be two in the region. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/86240/original/image-20150624-31495-1rtsm6n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/86240/original/image-20150624-31495-1rtsm6n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/86240/original/image-20150624-31495-1rtsm6n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/86240/original/image-20150624-31495-1rtsm6n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/86240/original/image-20150624-31495-1rtsm6n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/86240/original/image-20150624-31495-1rtsm6n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/86240/original/image-20150624-31495-1rtsm6n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Ferrari World in Abu Dhabi may soon be overshadowed.</span>
<span class="attribution"><a class="source" href="https://en.wikipedia.org/wiki/Ferrari_World#/media/File:Ferrari_World_Abu_Dhabi.jpg">Aziz J Hayat</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>With Bahrain and Abu Dhabi firmly ensconced in F1’s race calendar, Qatar’s pursuit of a race had started to look futile. Yet, as one commentator has <a href="http://restaurants.einnews.com/article__detail/272452059?lcode=ZhQlcXGZCLF1gsRnDWOz7A%3D%3D">wryly observed</a>, Qatar’s latest move “is like buying the restaurant if it won’t give you a table”.</p>
<p>There are clearly soft power issues at play. Qatar has not only positioned itself as a regional power but has been seeking to exert a stronger influence on the global stage, most potently symbolised by its intended staging of the 2022 FIFA World Cup. Running F1 would also enhance the emergent “Brand Qatar”, with its associations of affluence, luxury and exclusivity. </p>
<h2>Ecclestone’s legacy</h2>
<p>As with seemingly every development in F1 over the last four decades, Bernie Ecclestone inevitably remains central to this latest chapter in the sport’s history. The octogenarian has apparently been seeking an <a href="http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10701393/Bernie-Ecclestone-says-he-will-sell-his-Formula-One-shares-with-CVC.html">exit strategy</a> from F1 for a while. Given that there is no obvious heir apparent to him, RSE/QSI would appear to be an ideal solution allowing him to cash in his chips.</p>
<p>While Ecclestone’s impact on F1 has been <a href="http://edition.cnn.com/2013/07/30/sport/motorsport/f1-money-billion-dollar-business/">profound</a>, there are notable weaknesses in the way he has helped commercialise the sport. While television revenues and the fee for hosting an F1 race have dramatically increased, few other revenue generating opportunities <a href="http://www.bmmagazine.co.uk/news/formula-1-must-change-unsustainable-business-model/">have been pursued</a>.</p>
<p>Unlike, America’s NBA or the English Premier League, there has been no active engagement of fans, creation of a strong brand identity or development of retail outlets and merchandising using the F1 name. There have been problems too with social media – Ecclestone <a href="http://www.autosport.com/news/report.php/id/114278">effectively dismissing it</a> as irrelevant to the sport’s Rolex-wearing target demographic.</p>
<p>As long as the television revenues keep rolling in, RSE and QSI will no doubt remain happy. But Ecclestone’s legacy is a potential impediment to the future development and commercial success of F1. Getting to grips with social media, developing F1’s presence and monetising content will be among the immediate priorities should the takeover happen.</p>
<p>Whatever the outcome of this latest F1 development, a US-Qatar takeover will certainly the sport up a gear as a commercial entity.</p><img src="https://counter.theconversation.com/content/43790/count.gif" alt="The Conversation" width="1" height="1" />
How a US-Qatar F1 takeover will take the business up a gear.Simon Chadwick, Professor of Sport Business Strategy, Coventry UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/173882014-01-21T06:51:26Z2014-01-21T06:51:26ZDithering blazers let moneymen like Ecclestone take over sport<figure><img src="https://images.theconversation.com/files/39313/original/qdpp2vgz-1389964565.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">F1 can't run smoothly all the time.</span> <span class="attribution"><span class="source">David Davies/PA</span></span></figcaption></figure><figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/39313/original/qdpp2vgz-1389964565.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/39313/original/qdpp2vgz-1389964565.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/39313/original/qdpp2vgz-1389964565.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/39313/original/qdpp2vgz-1389964565.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/39313/original/qdpp2vgz-1389964565.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/39313/original/qdpp2vgz-1389964565.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/39313/original/qdpp2vgz-1389964565.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">F1 can’t run smoothly all the time.</span>
<span class="attribution"><span class="source">David Davies/PA</span></span>
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</figure>
<p>For those unfamiliar with the workings of Formula 1 motor racing, <a href="http://www.faber.co.uk/catalog/no-angel/9780571269297">No Angel</a>, Tom Bower’s biography of the sport’s supremo Bernie Ecclestone, is a fast-paced chronology of F1 during the modern era. It reveals a sport dominated not only by one man, but also by conflicts of interest, duplicity, deceit and at times a degree of menace.</p>
<p>As the larger-than-life boss of F1, Bernie Ecclestone now finds himself under the spotlight. He is currently facing charges in Germany for bribery – the alleged recipient, banker Gerhard Gribkowsky, has already been jailed for accepting the payment. Ecclestone accepts he made the payment but <a href="http://www.bbc.co.uk/sport/0/formula1/25762411">denies bribery</a>.</p>
<p>The sporting world is littered with similar allegations of wrongdoing: some of immorality, some of impropriety and some of them downright illegal. </p>
<p>For example, FIFA and several of its officials have long been embroiled in claims and counter-claims involving alleged misconduct. Indeed, even recent internal FIFA reports have <a href="http://www.telegraph.co.uk/sport/football/10027107/Sepp-Blatter-under-fire-for-bribery-culture-after-Fifa-honorary-president-Joao-Havelange-resigns.html">raised fears</a> of a “culture of bribery” throughout the organisation.</p>
<p>Another example is professional cycling; the Lance Armstrong affair saw the sport’s governing body, the UCI, <a href="http://www.bbc.co.uk/sport/0/cycling/20258931">accused of receiving “hush-money”</a> and failing to promote any meaningful transparency, among other issues. </p>
<p>Perhaps such standards of behaviour, conduct and morality could be explained by the very nature of sport and the way it attracts intensely competitive people who are intent on winning at any cost. But there is rather more to this than high jinks and a desire to finish first. </p>
<p>Sport has become big business, <a href="http://www.pwc.co.uk/consulting/issues/changing-the-game-outlook-for-the-global-sports-market-to-2015.jhtml">estimated by PWC</a> to be worth US$145 billion globally. Such is the scale and magnitude of sport that even international organisations such as the UN, the World Bank or the EU are now paying close attention to what happens across the industry. And many of these bodies have simply concluded that there is something deeply and fundamentally wrong with the world of sport.</p>
<p>Sport may once have been “just for sport’s sake”, but no more. These days, too many sports seem to be run on principles no one agreed to, by people we don’t know much about, with only minimal oversight. As such, whether they like it or not, the controversies surrounding Ecclestone, FIFA’s Sepp Blatter and former cycling boss Pat McQuaid have inadvertently pushed governance to the top of what is fast becoming the world of sport’s most pressing organisational and managerial agenda.</p>
<p>We have been building toward this point for the past two centuries. Some sports organisations are so deeply and historically embedded in a network of socio-political forces that affecting any sort of meaningful change in their approach to governance continues to be a formidable challenge.</p>
<p>Returning to Bower’s book on Bernie Ecclestone, he notes that many F1 teams have traditionally not wanted to govern, they have simply wanted to race. At the same time, the teams have not necessarily wanted a governor governing them, preferring instead to control their own destinies. Catch 22 therefore, and not just in F1 but in other sports too, particularly those with their modern origins in either the 19th or early 20th centuries.</p>
<p>The consequence of this desire by major teams and other actors to do no governing and yet not be governed themselves is that, for too long, certain sports have been controlled by what some refer to as a “blazeratti”. That is, a group of internally focused, lifetime sports administrators – think the likes of former Olympic President Joao Havelange and you get the picture.</p>
<p>Many of these leaders have let poor governance standards ferment to such an extent that they are now beyond their control. So serious is this neglect that the “blazeratti” is now out of place, out of time and, arguably, no longer fit for purpose.</p>
<p>Into this governance vacuum swept the “moneymen”, those who view sport as a commodity, something to be bought and sold for profit, with governance primarily dictated by market-forces.</p>
<p>If the blazers nurtured the conditions for a governance crisis in sport, then those with money and a lust for power exploited whatever deficiencies this engendered. Bower portrays F1 as having been a classic battle between the “blazeratti” and the sport’s “moneymen”. In Bower’s view, therefore, a classic moneyman like Ecclestone could not have seized control of a well-governed sport.</p>
<p>It is no exaggeration to describe the current situation as a crisis in sports governance, and we surely stand on the cusp of much needed changes. </p>
<p>Yes, some organisations have taken admirable steps towards improving their governance standards (such as the International Olympic Committee). Some have advocated fan-led approaches to building better governance; others believe external authorities such as lawyers and academics are the route to improved standards.</p>
<p>Jerome Champagne has just announced that he will <a href="http://www.theguardian.com/football/2014/jan/20/jerome-champagne-sepp-blatter-fifa-presidency">stand in the 2015 election</a> for FIFA’s next president (assuming Sepp Blatter does not put himself forward too). He has promised the kinds of reforms noted above – this could be a tipping point for world football. But then, without effective change, Champagne’s potential presidency could yet turn out to be “more of the same”.</p>
<p>It therefore remains to be seen what the most effective governance model will be for sport in the 21st century, but some sort of hybrid between the blazers and the money seems almost inevitable. Assuming standards do change though, the moneymen will find the going harder than ever.</p><img src="https://counter.theconversation.com/content/17388/count.gif" alt="The Conversation" width="1" height="1" />
For those unfamiliar with the workings of Formula 1 motor racing, No Angel, Tom Bower’s biography of the sport’s supremo Bernie Ecclestone, is a fast-paced chronology of F1 during the modern era. It reveals…Simon Chadwick, Professor of Sport Business Strategy, Coventry UniversityLicensed as Creative Commons – attribution, no derivatives.