Those little red mittens came to symbolise the 2010 Olympic Winter Games in Vancouver. At $10 a pair, with half going towards Canadian athletes (though I’m not sure by which specific route), they were the must-have item for those attending the Games.

As I left the BA lounge for the flight back from Vancouver last week, I fell into step behind a group of passengers who were debating the success of the mittens and what London 2012 should produce that might perform a similarly symbolic role. One of them thought it a good idea to produce a specially commissioned football shirt. I thought at the time that this was a silly idea; on reflection I think it would be borderline catastrophic. Here’s why.

The mittens performed a number of roles, some obvious and others less so, but all of which were entirely relevant to the occasion: they kept your hands wrapped in fleecy warmth; they branded the Games as they featured in their deep red multitudes in TV coverage of every Olympic event; and they allowed viewers to show their appreciation and applause for competitors as they clapped their mitten-clad hands together or held them to the sky.

I’m led to believe that the mitten is also a traditional Eskimo garment, which has positive cultural overtones relating to the native population; and they also supported a worthy cause, looked great and were priced accessibly.

Contrast these benefits with the message that a football shirt would send. It would reinforce (mostly) ill-founded foreign views of British sports fans as an ill-mannered rabble; its symbolic function is to divide us into tribes rather than unite us in support; it is unlikely to be cheap to buy; and it sure as hell won’t protect us from our weather.

I think the right souvenir garment - London’s version of Vancouver’s red mittens - is a stellar idea, but what should it be? Suggestions on a postcard please (or in the comment box below) as to what we might produce for London 2012.

By Scott Garrett on March 2nd, 2010

Tags: Advertising, Football, London 2012, Olympics, Vancouver 2010, Winter Olympics

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In an article in The Times last week (IPL auction likes Morgan a lot), Nick Hoult detailed the fact that only one English player attracted any bids in the annual scramble for overseas players to add star quality to the Indian Premier League. Swann, Bresnan and Trott languished penniless while Eoin Morgan went to Bangalore for $220,000.

Mr Hoult writes that “…as far as England’s players are concerned the future now looks to be a decision between Test cricket and the IPL.” The point he is making here is that because of the timing of England’s various tours relative to the world’s richest cricket competition, players cannot do both.

An inevitable consequence is that players will choose to specialise: to become expert one-day or Twenty20 players (presumably chastised for taking Indian coin) or to focus on “proper cricket” and the multi-day game. I believe this to be true, based on evidence much closer to home, where my 13-year old son recently announced his intention to reduce his limited over cricket for fear it will turn him into a batsman less effective at the three day game (which is as long as it gets for a 13-year old). Sage words, and I wish that more illustrious talents would abide by them.

Where my views diverge from Mr Hoult’s and, I suspect, from those of a great number of “purist” fans of cricket, is that I think it is a brilliant idea for players to specialise, to choose one format of the sport over another. In this way they will get better at what they do and provide greater enjoyment for us all. If this happens then it will hasten recognition from the game’s administering authorities that Twenty20, one-day and test cricket are essentially different “codes” of the sport requiring different skills, different players and different commercial models to support them. This means a greater range of opportunities for players, viewers and sponsors, and I think this is A Good Thing.

I point to rugby as evidence of this positive effect. Rugby union, rugby league and rugby sevens are different codes of the same game. Some fans enjoy all codes, others prefer one. Players occasionally swap from one to the other, or develop from one to the other, but most players choose to specialise. All shapes and sizes of player are accommodated across the three codes and sponsors enjoy a wider range of commercial opportunities. Rugby in its broadest sense is richer as a result; it’s even made it into the Olympics.

Twenty20 in 2020 has a nice ring to it. My only regret is that Garrett jnr, having made his choice, will not be opening the batting.

By Scott Garrett on January 29th, 2010

Tags: Cricket, ICC World Twenty20, Indian Premier League, Olympics, Sponsorship, Sponsorship consultants, Sport

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I was saddened to see that Donington Ventures Leisure Ltd has gone bust. Amid all the furore about the location, and very existence, of the 2010 British Grand Prix it has been easy to forget that DVL had a vision that extended far beyond a single race in the F1 calendar.

DVL CEO Simon Gillet is an immensely likable man and it is easy to agree with his views on just about anything, such is the clarity and passion with which he communicates them. I am not certain of exactly whose idea it was to fund a race track through debenture sales, but when I heard him expound the virtues of his scheme, I completely understood what he was trying to do.

Yet the basic assumption behind the scheme was deeply flawed and in the final analysis I am surprised that it got as far as it did. To expect regular race fans to subscribe to multi-year debenture seats in unbuilt stands, to attend multiple races each season to justify the cost, at a location that is remote from the centres of commercial power in this country, was just too much of a stretch. The approach works well in sporting environments where tens of thousands of loyal fans live locally to a facility (The Emirates, for example) where the number of games is high and demand historically outstrips supply.

But motor sport doesn’t work like that. The Bahrain International Circuit concluded after five years of hosting a Grand Prix that the race earned the circuit no money at all; the cost of organising and hosting the event over five days is significant. But what it did do is confer on the circuit the awareness, credibility and gravitas to allow it to promote itself on the open market as a venue for events throughout the remaining 360 days of the year. The BIC is successful at executing this strategy and hosts hundreds of events on track and at its various facilities each year, which earn more than enough to compensate for its F1 loss leader.

Donington chose not to attempt to replicate this model, perhaps feeling that without the steady stream of government business that the BIC enjoys (it is government funded), the East Midlands facility would struggle to survive as an independent exhibition and events venue in the manner that Gillet had conceived. Instead it chose to focus on hosting lesser races and driving events on a more regular basis, and charging regular punters more than they could bear, for the privilege.

There is insufficient demand for Motorsport away from F1 to justify this approach, and that is why DVL’s dream has died. Sad, I know, but true.

By Scott Garrett on November 20th, 2009

Tags: Default, Formula 1

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Formula One pits nation vs nation in A1GP copycat shock!

Some time ago, I recommended to FOTA that it adopt some of the infrastructure of A1GP (the self-styled World Cup of Motorsport), were it to start a breakaway series, which was a topic being discussed earlier in the 2009 season by the F1 teams’ representative body. I meant it as a logistical efficiency, whilst bemoaning the decline of A1GP which I reckoned was founded on some interesting principles: nation vs nation in identical machinery.

F1 machinery is not identical and I am happy for that: A1GP could never offer a constructors’ championship. But I remain intrigued by the nation vs nation idea and think that - more by accident than design - F1 is heading this way. I think it would be good for the sport if it were to do so because national passions could be piqued, adding a spice to its competition that F1 has largely been missing. The news today that Jenson Button has signed for McLaren has helped.

To begin not with McLaren but with Jenson’s former team Brawn GP, here’s how I see it:

Brawn is now Mercedes Grand Prix. Mercedes is German. In 2010 its drivers will be Nico Rosberg and possibly either Nick Heidfeld or Adrian Sutil. All are German. They may be sited in the Northamptonshire countryside (Mercedes F1 engines are made down the road from Brawn’s Brackley site, in Brixworth) but this team will be under teutonic management. Team Germany.

Not ten minutes’ drive from Brackley, Force India F1 operates from Silverstone. Promoting Indian brands globally, and western brands in India, the team’s commercial proposition is clear. Owner ViJay Mallya is the face of this team that has no Indian drivers yet, though Arun Chandhok remains a decent bet for a drive next year. Flushed with pride at its late season progress and with an Indian GP on the cards from 2011, Team India is alive and well.

To the east, in Hingham, Norfolk (until it moves even further east to the home of its Malaysian owners) is Lotus F1, managed by Tony Fernandes, the man that built Air Asia on the back of a Williams F1 sponsorship. The corporate body behind the team (Malaysia Racing Team Sdn Bhd) has embarked upon a programme of driver development aiming to put Malaysians in F1 cars in the future. In his tweets, Fernandes refers to “Team Malaysia aka Lotus F1″.

On the other side of London, the McLaren team pairs Jenson Button with Lewis Hamilton. Ignoring the fact that the team remains 30% owned by Bahrainis and will run Mercedes engines under its existing contract, we know that Mercedes will be reducing its investment in the team over the next couple of years. This will allow McLaren to become Team GB A.

In Oxfordshire, Williams F1 markets itself as the only truly British-owned team, the only true independent and the only team still managed by its founding partners. In 2010 none of these statements will be true, so the commercial proposition will have to evolve. Nonetheless, for Sir Frank’s unstinting loyalty to Queen and country, I think Williams can comfortably assume the mantle of Team GB B. At least it will run a British (Cosworth) engine in 2010.

One new entrant struggling to assert its nationality is Spanish team Campos Meta, which has been desperately trying to sign Spanish driver Pedro de la Rosa but there is so little interest from Spanish sponsors that the team is having to run a Brazilian and (probably) a Russian or a Venezuelan. But it’s a Spanish team sited in Valencia and Madrid, and no-one else is laying claim to the title of Team Spain.

By contrast USF1 positively glows with pro-American sentiment. I cannot imagine a sports team from the USA with the name US in its title, based in Charlotte NC, being anything other than Team America, whoever ends up driving the cars..

Ferrari is of course an Italian brand and excites rabid passions among the scarlet-clad grandstands of Monza and beyond. Even though it has failed to excite with its driver selections since Michael Schumacher departed (a shame: Felipe Massa is a cool character worthy of more than he receives from the fans) it will doubtless rise again in 2010 to become Team Italy.

So there you have it: Team Germany v Team India v Team Malaysia v Team GB A v Team GB B v Team Spain v Team Italy. This is a solid reflection of where F1 is touring, location-wise, and I think we will see teams from Korea and Russia before too long.

The teams that do not fit this model (Renault, Red Bull, Toro Rosso, Qadbak Sauber and Virgin Racing) are backed by sponsors with naming rights that care little for national boundaries and so fail to excite national passions. This is not a criticism: their commercial objectives are transparent and they will doubtless serve their sponsors well. But I predict that their share of national support will be weaker than the “national” teams with a corresponding reduction in media attention that may yet cause sponsors to take note.

All of which may mean that A1GP’s legacy is more memorable than most commentators assume, as Formula One becomes the true World Cup of Motorsport.

By Scott Garrett on November 18th, 2009

Tags: Default, Formula 1, New Product Development

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Settle back. This is a season review blog, and it’s been a long old season.

Before the last wheel had turned in 2009 we welcomed the second British World Champion in two years, driving for a team that has risen, phoenix-like, from the ashes of another. All the talk coming into the final few races was whether Brawn could keep ahead of Red Bull but in the end it wasn’t even close. And shame on the poo-poo-ers that decry Brawn for its failure to perform consistently over the whole year: Schumacher and Ferrari did that and it nearly killed the sport. Besides, when you’re 6-0 up at half time you’re entitled to take it easier in the second half.

For me, the season was fun because Ferrari tugged around at the back, whichever driver drove, and in true Italian style the team gave up early and went home. McLaren looked to be in danger of suffering a similar fate but Martin pulled his boys together and the silver cars looked quick at the end. This bodes well for next season, especially if the brilliant Red Bull team can keep advancing and the midfield can start to get two drivers in the points, every now and then.

In 2010 the grid will look somewhat different, and not just because the cars will have swelled to carry a whole race’s worth of fuel. We’ll be a manufacturer lighter than in 2009, following the withdrawal of Toyota and BMW, replaced by Lotus, with only Ferrari and Renault remaining as true manufacturer teams. Three manufacturers; ten independents. This is A Good Thing because it focuses the sport on what it should be all about: racing. It is less likely to result in the technological arms race that was responsible for driving budgets to irresponsible levels in recent years despite hollow assertions to the contrary from - you guessed it - manufacturers like Ferrari and Toyota.

More importantly, it will result in racing through to the back of the grid, as independent teams duke it out for the lower places and gradually find their feet enough to - I hope - occasionally challenge the big boys at the front. With the ability that resides in some of the new teams, I fancy the upsets might be more than occasional.

Which makes Ferrari’s attitude (I paraphrase only a little: “we blame the sport’s authorities for allowing in this bunch of monkeys that are not worthy to compete with us”) all the more understandable. I think the team is running scared not of losing next year, but of having to spend upwards of $400m - ten times the formerly proposed budget cap - in order to do so.

It will be interesting too, to see how ex-Ferrari boss Jean Todt fills Max Moseley’s shoes at the FIA. Todt’s manifesto was a strangely bland mix of policies that sought to appeal to all but alienate none. We’ll see what he makes of it and the sport will give him a year to do so before rounding on him in its typically toothless style although to be fair, there are no mechanisms in the FIA constitution for sanctioning the organisation’s leader anyway.

Commercially, I think the F1 patient is stable and out of intensive care after liegate, crashgate and the manufacturer withdrawals which while they may be good for the sport, do have a negative impact on teams’ ability to attract sponsorship. With no Honda, Toyota or BMW there are no first fill deals for Esso or Petronas, no technology partnerships with Panasonic, Dell or Intel and a massive number of road cars that no longer need to start their lives on Bridgestones. Bridgestone too, will leave the sport at the end of 2010, completing a Japanese exodus that will see fewer sponsors from that part of the world despite the fact that the country retains its GP. Shame; Japanese fans are among the most passionate in the sport.

Yet I see reasons for commercial optimism. The grid will be 26 cars long next year. More cars means more sponsorship opportunities, at lower prices probably, which will mean that more brands can enter the sport. Some of the teams have already shown that it is possible to attract top partnerships (Virgin, Megafon). The geographic base of F1 team ownership continues to expand with Qadbak-Sauber and Lotus spreading the love eastwards. If Tony Fernandez can excite Malaysians behind their own team, then everyone will benefit; Sepang has been quiet in recent years because of the failure of Malaysian business to realise the benefits of F1.

I think the show will improve, on and off the track. Bernie is trying to sort out HDTV at Abu Dhabi which may go some way towards livening up a dull race at least by giving us a more detailed look at the facilities on the telly. Social media advances irrespective of copyright concerns; about half the drivers tweet and most have facebook sites. F1 Rocks added great value to the Singapore race and if they can get their contracts sorted out, should appear at more races next year.

All we need now is a British Grand Prix. As I write, it doesn’t exist, but I fully expect that this situation will change before the day is out. Watch this space.

By Scott Garrett on November 9th, 2009

Tags: Default

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@synergytim tweeted this morning about a music download service soon to be launched by Sky. Sky Tunes, it says here, will take on iTunes and offer a bona fide alternative in the music download market which is to say these days, the music market per se. It’s the second such service to have crossed my bows in as many weeks, the first having been brought to my attention my my 11-year-old daughter Maddie who received what she perceived to be a genuine offer of free music from her mobile provider, Vodafone. Being the sensible girl that she is (she gets it from her mother) she first checked with me to see if it was OK to reply “yes” to Vodafone’s text and receive 10 tracks of her choice, for free.

I checked it out to find that had she done so, she would have been able to choose her 10 tracks from the UK top 50-ish, and then would have committed with no further action on her part, to a monthly subscription of £5 added to her mobile bill, for which she would have received a further 10 tracks and “the option to buy loads more”. Dangerous stuff when you’re 11 years old and Daddy pays your phone bill, so we declined to proceed.

@synergytim’s tweet reminded me of this today, as I checked out Sky’s service as described in The Guardian, finding that for a monthly subscription of £7.99 I could receive 10 tunes or an album each month. Pricier than the Vodafone service and with no apparent differential benefit.

If I understand these services correctly, I believe that in both cases should I neglect to choose tracks or albums or if I forget, the service provider will choose my music for me. How kind.

Digital natives will be too young to remember a company called Britannia Music, but migrants may recall how in the 1970s and 80s, members of the Britannia Music club, snared by the offer of four albums for £1 each, then paid about £5 per month to the club, for which they received the Britannia Music-selected “Album of the Month” in their chosen format: LP, cassette or 8-track (this last is a dimly recalled format from my pre-school days, I assure you). The entire catalogue of Britannia Music was available for purchase at full or discounted prices. Funny, but all the stuff I listened to always seemed to be full price.

Sky Tunes and the Vodafone Music Club use similar mechanics to the old Britannia Music club, adapted for the digital age. Having wasted my hard-earned pocket money as a teenager on Kirsty MacColl’s Desperate Character and Witchfynde’s appalling debut Give ‘Em Hell, I want to warn all you young folk out there that there is a better, more transparent way of buying music. It’s called iTunes and whilst I welcome competition in the free market, the above two examples are not it because they are fundamentally not transparent. Not honest, even.

These lock-you-in-to-a-punitive-contract music supply services are not new and offer nothing that can not be obtained for similar prices or cheaper elsewhere.  The Guardian points out two added benefits of the Sky service: first, that its tracks come DRM-free and can be played on any MP3 player whereas iTunes tracks require an iPod. With iPods dominating the personal music scene to as great a degree as Microsoft dominates the personal computer OS market, this seems a dubious benefit. And second: Sky offers unlimited streaming for free, which is nice, but I get that anyway via Last.fm and Spotify. I have done so for months.

And where do I listen to these free music services? On my iPhone and iPod, of course.

By Scott Garrett on October 12th, 2009

Tags: Default, Digital marketing, Downloads, Music, New Product Development

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I always liked the idea of A1GP. Even as a Formula One purist, employee and fan, the idea of competing for one’s country as the zenith of an athletic career is a concept I understand. And it’s a concept I am happy to support with my heart, my voice and my wallet every time I enter Twickenham, Wembley or Lord’s.

My former F1 colleagues decried A1GP as being sufficiently inferior to F1, technically and commercially, as to be irrelevant, a place where driver careers went to die rather than peak. I suppose that they were right.

Yet the appeal of competing for one’s country in motor sport doesn’t die with one series. Instead, I think we’re about to witness its resurgence in Formula One. USF1 is a good example: viewed positively by F1 aficionados for its promise to rekindle interest in the world’s biggest commercial market, it will doubtless sell itself well in the USA, become sponsored by US companies, employ an American driver and run the stars and stripes on its livery. Yee-hah!

In 2010 the team will compete against Formula One’s oldest brand, Ferrari, which recently rediscovered the commercial effect of running an Italian driver in an Italian car at an Italian circuit. Ferrari has always been, in varying degrees, Team Italia. F1’s newest team before 2009 was Force India, which aims to bring Western brand sponsors to the huge Indian market and 2010 entrant Lotus, though it hides behind an English brand will be based in, owned, sponsored and supported by Malaysia and Malaysian businesses.

Enough cash is being invested in driver development programmes in developing markets like India and Malaysia that it won’t be long before we see drivers from these nations in F1. It is only natural that they should drive for their nation’s teams, employing indigenous support staff. Meritus Racing, a Malaysian-backed GP2 Asia team is already on record as saying ”We would be honoured one day to race as the national team in F1 and we hope to be ready to build our own F1 car, with Malaysian engineers, to achieve that goal by 2016.”

I think that this sense of national pride is something that F1 has been missing. I think it could add a certain frisson to proceedings. Not that Formula One needs it necessarily, but I like the irony that the raison d’etre of a series so heavily criticised by the techno-snobs of Formula One might be a key factor in keeping the series alive as motor manufacturers wave good-bye.

By Scott Garrett on September 21st, 2009

Tags: Formula 1

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Let’s say that the WMSC on Monday rules that yes, Renault did cheat at last year’s Singtel Singapore Grand Prix. Here’s what might happen.

The team will go instantly bankrupt as the FIA levies a massive fine (it has to be more than the $100m levied on McLaren, doesn’t it?) and every sponsor withdraws immediately, citing the reputational damage clauses that they have in their contracts. The 2009 season finishes with 18-car grids while Russian oligarchs mingle with Middle Eastern sheikhs in the queue to buy the team with the small change they have in their pockets. So far, so normal for the wild roller-coaster that is modern-day F1.

The FIA goes further though, and disqualifies Renault from the Singapore race. Rather than declare Nico Rosberg, who finished immediately behind Alonso, the winner, the FIA cruelly denies Williams its first race win in years by awarding the race to Felipe Massa, who was leading at the time of the safety car deployment in the wake of Nelson Piquet Jr’s crash, that allowed Fernando Alonso to go on to “win”. So Massa is retrospectively awarded 10 points, which means he’s earned enough to win the 2008 World Championship. Lewis Hamilton hands over the trophy and the title without so much as a whimper.

What a mess. What’s the solution? Who’d be a judge on the WMSC? Not me.

By Scott Garrett on September 17th, 2009

Tags: Default

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I’ve debated in this forum previously, the merits of various activities calling themselves “sport”. In a nutshell, sport is competitive activity that can be won outright and which raises a sweat through the competitor working physically for his or her victory. Thus running, jumping and swimming are sports. Darts, golf and anything synchronised are not.

Whither motorsport? Clearly a machine bears the brunt of the load, but having lived in Formula One for a while, I can testify that F1 drivers definitely sweat in pursuit of victory and need to be fine physical specimens in order to pilot their machines at all. Motor racing, and Formula One in particular, is definitely a sport.

But not according to the Indian government.

India’s aspirations to join the developed world as a sporting venue are well documented. The Commonwealth Games beckons and F1 is supposed to visit an as-yet un-built circuit somewhere in Uttar Pradesh in 2011.

F1 has a record of attendant commercial prosperity: witness the annual $500m delivered in attributable commercial benefit to Bahrain and the (admittedly unlikely) $570m claimed by Valencia in relation to its 2008 race. F1, commercially speaking, will be A Good Thing for the good people of Uttar Pradesh.

Which makes it surprising that the Indian authorities this week refused to allow a special tax allowance to the company seeking to build the circuit and promote the Grand Prix, on the grounds that Formula One is not a sport. The tax allowance relates to foreign currency transfers and applies to sport, but not to entertainment.

F1 has been deemed an “entertainment” rather than a sport (please, Indian government, what is the difference?) and, more pertinently, a “commercial exercise” (again, what is the difference?) and therefore not eligible for the allowance.

This decision will cost the promoter about $36.5m. Not enough to slow development, but enough to leave a sour taste in the mouths of those seeking to develop one of the world’s emerging economies through the unifying medium of sport.

Shame on you India. This is a very poor advertisement for your country as a sporting venue and one which will, for a while, drive potential investors elsewhere.

By Scott Garrett on August 26th, 2009

Tags: Commonwealth Games, Formula 1, Politics, Sport

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Formula One faces interesting times. The governing body of motorsport, the FIA, is attempting to impose a number of conditions on the sport, which many competing teams reject. Among the proposed changes are a huge reduction in operating costs administered in the form of a budget cap: for the teams to resist this seems to the uninitiated to be financially irresponsible at best; massively out of touch with the prevailing economic conditions, at worst. 

All teams - along with any proposed new entrants - must have lodged entries to the 2010 Formula One World Championship before the end of May 2009. The existing F1 teams, under their trade body FOTA (Formula One Teams Association) initially entered en bloc, with a number of conditions attached to their entry, concerning both budgetary and regulatory issues. The FIA rejected the conditions and urged FOTA to reconsider. Under the pressure of negotiation, Williams and Force India, two existing teams, cracked. They resubmitted their entries to the FIA without conditions. FOTA promptly suspended them and stands firm. 

Complicating the debate is the fact that several new entries have been received and the FIA is due to announce which of these has been successful, and therefore the make-up of the 2010 grid, today (Friday 12th June).

There are four possible scenarios that I can see from the announcement today:

1. The 2010 grid will include Williams, Force India and up to 11 new teams. The FOTA entry will not be accepted and Ferrari, McLaren, BMW, Toyota, Brawn, Red Bull, Toro Rosso and Renault will no longer compete in Formula One (at least for 2010).

2. FOTA will split along manufacturer/independent lines, with Red Bull, Toro Rosso and Brawn joining Williams, Force India and up to eight new teams. Manufacturer teams will not enter, but may still supply engines to some teams.

3. FOTA will split along contractual lines. Some teams have separate contracts with the FIA binding them to compete until 2012. Ferrari is one of these. Under this scenario, these teams honour their contracts and join Williams, Force India and new teams sufficient to make up the proposed 13-team grid.

4. The FIA capitulates and allows the FOTA conditional bloc entry, adding only three new teams to make 13 in all. Favourites are USF1, Prodrive and Lola.

Any one of the first three scenarios will leave Formula One commercially stronger than it is currently. The fourth scenario would be a disaster.

Here’s why…

Scenario 1: FOTA stands strong but is rejected

Formula One teams compete under a budget cap and with some other FIA-led environmental conditions. This is socially responsible and therefore attractive both to fans and sponsors. Lots of new teams mean lots of unpredictability; unpredictability is what makes sport exciting. This generates viewership on TV and is therefore also good for sponsors. Lots of new teams combined with the reduced financial burden on existing teams means that there are new sponsorship opportunities that represent very good value. The FOTA teams may carry through their threat of forming a competitive series which - if successful - will double the potential sponsorship opportunities and bring the price of sponsorship down further.  Under this and each of the first three scenarios, the FIA re-asserts its authority and this promotes a stable environment, essential for commercial investment.

Scenario 2: FOTA splits and manufacturers leave F1

Formula One teams compete under a budget cap and with some other FIA-led environmental conditions. This is socially responsible and therefore attractive both to viewers and sponsors. The independent teams that help to give F1 its entrepreneurial character remain and are joined by new independent teams: suddenly it’s all about racing again and fans flock to the sport in greater numbers. Sponsors follow.

Manufacturers retain a presence in the sport via engine supply, giving technology and marketing benefits for them without the cost/profligacy of Formula One under the current model. Same points as above regarding new teams, new opportunities and the likely effect on the cost of sponsorship. Same point as above regarding the FIA promoting a stable environment for investment.

Scenario 3: FOTA splits and teams act independently

All the benefits of scenario two. Some manufacturers will remain in the sport. For those who believe that auto manufacturers like Ferrari and Mercedes add value to the credibility of F1, this may be the best scenario. But will manufacturers remain under sufferance? Ferrari is well known to oppose the FIA’s budget cap proposals and may suffer if these are forced upon it.

Scenario 4: FOTA stands strong and is accepted

More limited budget reductions over time, with many exclusions, will be a fudge and F1 will remain fiscally irresponsible and will struggle to attract new sponsors. Rejection of FIA-driven environmental initiatives will achieve the same effect. New teams will not be able to compete on either budgetary or technical grounds and an opportunity to refresh the sport with new blood will have been missed.

In summary, sponsors will benefit from any split, implosion or explosion announced on June 12th. They will not benefit from either the status quo or any lack of decisiveness on the part of the FIA - although if things runs true to form, lack of decisiveness is the last thing we should expect.

By Scott Garrett on June 12th, 2009

Tags: Default, Formula 1, Sponsorship

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