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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Jenson Button had a dream last Friday night that he would have a bad qualifying session in Brazil but do enough in the race to win the F1 World Championship.
And so he did.

Button added his name to the history books over the weekend. The first ever English back-to-back world championship win the sport has witnessed. All of this happening in just the first season of Brawn’s existence, a fairytale for the team. The charismatic and handsome Button is now in an enviable position. With a wealth of experience, the support of a strong team around him, a model girlfriend on his arm, this year’s BBC Sports Personality of the Year a shoe-in and the likelihood of tens of millions of pounds to follow through sponsorship and endorsements, it all rounds off the year rather nicely for him.

And the best thing? He seems like a really nice guy to boot.

Jenson is a PR dream and a hark back to the old days of work hard, play hard F1 drivers. His earning potential is certainly set to rocket so long as he continues to perform on the track. As well as his success in the car, Jenson’s personality, charisma and good looks will help to make him a global bankable star. If he wins next year’s World Championship, he will almost certainly become the highest paid British sportsman.

Interestingly, he is not currently contracted to a team for next year. His negotiating powers right now are surely at a premium, especially having taken a severe pay cut to race for Brawn this season. For brands and future sponsors, Jenson is a very attractive investment. He is a popular figure, a leader amongst his team, speaks well, is well educated and glamorous and is also close to his family (his father attends every race). He is perceived to be more modest than Lewis Hamilton, more approachable and has a real sense of fun. Couldn’t have imagined writing this a year ago but Jenson could very well end up as the more successful of the two British drivers. It may have taken Jenson ten seasons to arrive at this stage (compared to Hamilton’s two) but Button is viewed by many as the more consistent and even tempered driver.

Certainly it will be interesting to watch what he does next from a sponsorship perspective. In F1, most brands are sponsors of the team, not the individual drivers. There are occasions of drivers having individual sponsors – Jenson himself has a personal deal with the (number 1 by volume-sales energy drink in the US) Monster Energy. However, what his manager may well be doing at the moment is looking at long-term opportunities for Jenson to take an ambassadorial role with existing team sponsors - something Lewis Hamilton has done very successfully with brands like Hugo Boss and Tag Heuer. We shall see.

For the time being, Jenson is back in the UK to fulfil sponsor activities (Virgin Media’s SpeedWeek50 campaign, as you asked) before the end of season finale in Abu Dhabi next month which will finish off one hell of a dream season.

By Stephanie Branston on October 20th, 2009

Tags: BBC, Formula 1, Jenson Button, Lewis Hamilton, Public relations, Sponsorship

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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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Scott Garrett comments in The Guardian on the continuing fallout from the Renault F1 cheating case.

To read the article, click here

By Roberto Colandangelo on September 18th, 2009

Tags: Formula 1, Press Clipping, Sponsorship, Sponsorship consultants

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Reading through my daily Google News Alert I came across a press release from Endsleigh Car Insurance issued Sunday last where, according to the headline, Endsleigh ‘looks ahead to the rest of Formula 1 Grand Prix 2009 season’.

What followed was a short summary of Michael Schumacher’s failed return to Grand Prix racing, Luca Badoer taking the place of the injured Felipe Massa, and questioning how many more teams will leave the sport following BMW’s decision to call it a day.

Not exactly ‘what Formula 1 Grand Prix fans can expect from the rest of the season’ as promised in the release, but more a lazy regurgitation of old news.

Luca Badoer has been and gone, having raced in both the European and Belgian Grands Prix, before being replaced last week by fellow Italian Giancarlo Fisichella; BMW are well into the process of trying to find a buyer; and ‘Crashgate’ has been dominating the F1 media agenda.

Despite the stories mentioned in the release being more than two weeks out of date, a quick Google search revealed pick-up on more than twenty websites.

It’s tough for brands not directly associated with Formula One or one of the current teams to benefit from the sport’s perceived glamour and large fan base. Endsleigh Car Insurance have shown themselves to be a little off the pace, which for a sport that lives and dies by fractions of a second will not endear the brand to motorsport’s hardcore.

By Nick Mott on September 17th, 2009

Tags: Default, Formula 1, Sport

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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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It’s been an interesting few months for Lewis Hamilton. Not only has he struggled to get the pace he has been hoping for in the new design McLaren, but he suddenly has serious competition from another Brit in the Paddock.

This time last year Hamilton fever was in full swing and the rising star could hardly put a foot wrong as far as the media and general public were concerned. At the same time non-F1 fans would have been forgiven for asking ‘Jenson who?’  Twelve months later and how the tables have turned. Jenson Button’s feel good story – from a driver who at one point looked unlikely to have an F1 drive this season to winner in Melbourne - has captured the hearts and minds of the public, and you can’t open a newspaper at the moment without seeing an article about Jenson.

Such interest and support for Button must surely be hard to swallow for Lewis who had previously held the position of the media’s F1 darling.  And to make matters worse, while Jenson’s column inches focus on his rise to success, his loyalty to the team through the recent difficult times and his aspirations for the future, Lewis’s recent mistake of misleading the race stewards in Melbourne is splashed all over the papers, and the reigning World Champion is having to call a press conference to publicly apologise for his actions following the Australian GP.

Watch the Lewis Hamilton press conference here.

Gripping stuff.  It seems the off-track dramas are just as interesting as the racing itself. I for one will be tuning in to the Malaysian GP this weekend to see how the next episode of the battle of the Brits unfolds….

By Amy Mansell on April 6th, 2009

Tags: Default, Formula 1, Jenson Button, Lewis Hamilton

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Regular readers will know my views on the state of Formula One, commercially speaking, and that it currently represents a potentially very sound investment.

I am not quite as bullish as Kevin Eason of The Times who sees “Sponsors rushing to join Branson on board the Brawn express” but I am certainly more optimistic than Mark Kleinman, City Editor of The Sunday Telegraph, who claims “The F1 formula is failing”.

Kevin Eason’s arguments are easy to follow:  a new British team wins (and takes second place too) in its first ever race, becoming a magnet for sponsors in the process. The story is given added spice by the fact that the car is essentially devoid of sponsor logos with the exception of one, that of the ever-prescient Richard Branson and his Virgin Group, who made what now appears to be a visionary investment in sponsoring the team before its first race when, presumably, the price of doing so was cheaper than it is today.

Irrespective of the detailed facts of the story (other sponsors are present, though less visibly; the actual amount of money paid, if any, by Branson) it’s a feel-good piece, a story of British success in a highly competitive field. I like it.

Mark Kleinman’s comments are harder to understand, though I presage criticism with the caveat that his piece was written before the Australian Grand Prix won by Brawn GP. He sees a mass exodus of sponsors in the sport, led by ING and RBS whose forthcoming departures were recently announced. There is a clear implication that other sponsors will follow. I do not agree.

F1 commercial managers understand that it can appear irresponsible for publicly-owned financial institutions to engage in high profile sponsorships just now, maybe for ever.  This is exactly the same situation that the industry faced when it realised it would be irresponsible to continue to court tobacco sponsorship. Formula One will reinvent itself in the seasons to come, as it reinvented itself seasons ago, in order to remain relevant to the environmental conditions that prevail at the time.

Mark Kleinman would be quick to point out of course, that the environmental and financial conditions that prevail today are more challenging than those of yesteryear, and he would be right. But he underestimates the resilience of the industry and the moves afoot to change it from within.

Regulations are radically different this year and if Australia is indicative, it will be an exciting season on the track (how can you say, Mr Kleinman, that “…the 20 cars gathering on the starting grid in Melbourne for the first race of the 2009 season will look much like those that finished the last campaign…”? The cars are clearly different and the racing will be more exciting.

Away from the track, we are starting to see F1 teams talk with one voice via FOTA, begin to take environmental concerns seriously with KERS, and recast their operating cost models to comply with the FIA’s proposed £30m limit.

This may not be enough to keep motor manufacturers in the game, but no matter. Under the new cost models, the price of entry into the sport will be radically reduced, opening the field to private individuals or automotive companies beyond the household name brands.

In this way, the recession will be good for Formula One, driving the sport to be different, vibrant, more accessible, more relevant to a cost-conscious, environmentally sensitive society. 

By Scott Garrett on April 2nd, 2009

Tags: Formula 1, Jenson Button, Media, Sponsorship

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