June – Following the Brexit vote in June what could the United Kingdom’s decision to leave the European Union have on Formula One?
Bracing for impact of Brexit
Formula One could feel the decision by British voters to leave the European Union as soon as next week’s Austrian Grand Prix after falls on the global stock market.
The cost of the pound has hit a thirty year low after almost 52% of the public voted yesterday to leave the EU which has prompted falls across all the global stock markets. This means that costs for teams could rise as the cost of hotels, food and basic supply’s has risen.
Brexit will not happen overnight, but it remains to be seen regarding the nature of individual deals struck with European governments over the movement of goods and people.
It’s believed that the UK will retain visa-free short term travel but for teams employing people it could lead to a substantial amount of paperwork and added costs for work visas if UK Nationals wanted to work in the EU. However some teams like Mercedes, Renault and Red Bull could relocate to the Europe which could further impact the economy.
Formula One and Motorsport in the UK is a huge industry worth £9 Billion to the economy and employs over 40,000 people with many more industries like aerospace and automotive through to military and manufacturing linked to the sport.
No one during the referendum would comment on the potential impact of Brexit on their team or the sport as a whole. This could impact on the on the re-negations of the Concorde Agreement in 2020.
August – When he was announced as a Toro Rosso driver aged sixteen many in the sport were asking why a driver could get a drive with only a season of car racing. But why has Mika Hakkinen admitted he was wrong?
I was wrong on Verstappen – Hakkinen
Two times world champion Mika Hakkinen says he was wrong to criticise the age which Red Bull driver Max Verstappen came into Formula One.
The former McLaren driver said Verstappen was not suitably prepared for his 2015 debut season with Toro Rosso, and said at the time: “I would never let a driver as young as that race in F1.” But speaking at Assen home to the Dutch TT Hakkinen admitted he was wrong.
He said “I criticised him personally when he was entering Formula 1, thinking he was too young. “But I was really happy I was wrong, and it has strengthened my understanding that young girls and young boys they are much more ready in this world.”
“Max, obviously, it’s great what he has been doing and when I was a young kid – 16, 17 – when [I was] go-karting, it was amazing. It was incredibly competitive: the materials, discipline, physical efforts – what I needed to perform was at a very high level.”
Hakkinen says people are developing faster and not just in motorsport but in sport and business because of the tolls available or them to study and understand what is happening in this world.
“You can go for it and study as much as you want on the internet if you find the right information. So the life is much more in the fast lane these days. That explains why these young drivers are entering in such high positions.”
He finished by saying “nevertheless you need great talent and commitment, great discipline to be successful and Max obviously has done a great job.”
December – With drivers making their debut as young as seventeen how concerned is Jacques Villeneuve about the push to younger drivers?
Pushing at younger age worries Villeneuve
Former world champion Jacques Villeneuve says the trend of pushing teenagers into Formula One is giving the “wrong image” of the sport. In 2015, Max Verstappen made his debut aged seventeen and next year Lance Stroll will make his debut for Williams aged eighteen.
The former world champion believe that teenagers coming into the sport suggests it look too easy now to make their debut in the sport. Villeneuve told Motorsport.com “Basically their luggage is not full yet. Normally you would get to F1 with luggage that was half full, and you just have to do the other half.”
“Now they come in and the luggage still has the new tag from the shop, and it hasn’t been opened yet! That’s wrong. It doesn’t matter how talented you are, this is F1, it’s the pinnacle.” Villeneuve added that there’s something missing.
Speaking about Stroll, he says the Canadian could rise to the challenge. Strol will make his debut for the same team as Villeneuve. “He’s super quick, but we don’t know what he’s made of mentally or psychologically, because F1 is a different beast.”
Villeneuve says the biggest unknown for Stroll, is how he will manage not being in the best car and team where everything is not set up for him to win. Meaning its unknown how he is going to react to that.
However, Villeneuve understands why Stroll has the made the jump so early in his career: “It doesn’t matter, he has the money to come in, so why wait? It’s just the way it is. Why bother wasting a season in GP2 where you risk not winning, or [your image] getting hurt.
November – He was key in Mercedes rebirth as a power house in F1 so after what his predecessors described as ‘the foundations’ to their current success. So why couldn’t he trust Niki Lauda and Toto Wolff?
Why I left Mercedes – Brawn
Ross Brawn says in his new book Total Competition that he left Mercedes at the end of 2013 because he could not trust Niki Lauda and Toto Wolff, who were added to the management team by Mercedes.
In his new book Total Competition written with Adam Parr, Brawn says “What happened at Mercedes is that people were imposed on me who I couldn’t trust. I never really knew what they were trying to do. I mean Niki would tell me one thing, then I would hear he was saying something else.”
Brawn added that Wolff was making critical comments about him in a conversation recorded by former F1 team boss Colin Kolles. “So I was beginning to deal with people who I didn’t feel I could ultimately trust; people within the team, who had let me down already in terms of their approach.”
He says when he learned that Paddy Lowe was joining the team and challenged Wolff and Lauda they blamed each other. Brawn says he couldn’t trust them and he said he had not previously been in an “us or them” situation at a senior level in a team: “I have never faced that and maybe I just didn’t feel passionately enough about the whole project to want to go through that grief.”
Wolff and Lauda became shareholders, which Brawn say he never understood. “Their view was that they wanted management who were committed and I think they also took a view that by being shareholders they would gain greater respect from the team.”
November – McLaren ousted Ron Dennis after Brazil but what does his successor Zak Brown see has their priorities as they look to rebuild?
Brown confirmed as McLarens director
McLaren has confirmed that Zak Brown will become the groups new executive director as they begin restructuring after the departure of Ron Dennis last week.
Brown will work with Jonathan Neale the teams chief operating officer and work with the executive committee to appoint a successor to Ron Dennis. He will start his role next month and will have “a significant part of a restructuring programme that will align the Group’s commercial and strategic operations relating to achieving success in Formula One.”
Brown has experience from the commercial side being the founder of JMI marketing group which has had close involvement with sponsorship deals in the sport. He had been linked with Liberty Media the sports new commercial rights holder, but last week it emerged he was leaning to the McLaren role.
Brown said “I’m immensely proud to be joining McLaren Technology Group, I have the utmost respect and admiration for what the business has achieved to date.”
“Having worked closely with McLaren for many years, I’ve been struck by the talent and ambition of the entire workforce, and I very much look forward to complementing the business’s many existing strengths, and building on them.”
He added that he has worked closely with the team before on sponsorship deals which has allowed him to develop excellent relationships across the company.
One Brown’s priority will be looking for a new title sponsor as the team has been without one for three years.
November – This year F1 got new owners. But what is Liberty Media’s plan for the future of the sport?
Liberty’s vision for F1
Liberty Media has outlined their vision for Formula One following there takeover of the sport.
The group has outline the main areas of focus will be in the next few years. “Big Opportunity at Formula One” was the title of the document. Liberty highlights the “opportunity to develop the sport for benefit of all stakeholders (fans, teams, partners, shareholders)”, before narrowing it down to five select opportunities
There key points are
- Increase promotion and marketing of F1 as a sport and brand
- Enhance distribution of content, especially in digital
- Establish broader range of commercial partners, including sponsorship
- Evolve race calendar
- Leverage Liberty’s expertise in live events and digital monetisation
Speaking to the media today the new chairman John Carey said “in terms of developing markets, clearly new markets are opportunities as a global sport, and we’re excited about that, to grow the sport, expand the sport in places like the Americas and Asia.”
December – it’s been off the calendar since 2014, bogged down in legal disputes and this week the saga over the Indian Grand prix took another turn. Why is FOM still owed the race fees?
India owes £41m in race fees
The dispute which has been running for three years over the Indian Grand Prix has taken another turn, as it been reviled that the race organisers owe £41.1m to FOM in race fees.
The race was halted in 2013 because of a legal dispute with local government who don’t class F1 as a sport and classes it as entertainment. This means that organisers need to pay tax and duties on everything connected with the race.
The Liberty Media say that if the money owed by Jaypee is paid to F1’s operating company, Formula One World Championship (FOWC), it will raise its £3.5bn offer for the sport by the same amount. Organisers still have the rights to two more races.
According it The Telegraph “If Formula 1 receives certain monies owed to it in connection with race fees in India, Liberty Media will pay up to approximately $51m of additional cash consideration to the selling shareholders.”
Adding “’Indian Race Fees’ means the total of US$51,350,000 relating to fees due from Jaypee Sports to FOWC under the Indian Race Promotion Agreement, the race promotion agreement between FOWC and Jaypee Sports” In September 2011.
The contracts between FOWC and race organisers state that fees are paid free of all taxes.
That’s all from this special edition of Reporters, from the team we wish you a very Happy New Year!