Reporters – 07/05/2017

Features Reporters

Bernie Ecclestone’s admission to overcharging venues for holding races hasn’t gone down well in Malaysia. So how does the promoter feel?

“Ripped off” and “Conned” – Malaysia promoter

The promoter of the Malaysian Grand Prix says that he felt “ripped off” and “conned”, when former F1 Boss Bernie Ecclestone admitted he had charged too much for venues.

This year is scheduled to be last race in Malaysia ending its eighteen-year stint in formula one. Sepang was the first purpose built circuit in South East Asia.

However, many of these races proved short-lived, with South Korea and India being dropped after three years. Last month, Chairman Emeritus Ecclestone admitted that such venues “can’t make it work” as his organisation “charged them too much for what we provide”.

Sepang circuit chief executive Dato’ Razlan Razali expressed his disappointment at Ecclestone’s comments. he told Autosport “I just felt ripped off in some ways, even though we were not forced to sign the agreement.”

“But to come up with a statement like that – how does it make us feel? All this time you have been overcharging us and we are not getting what we want, such as good racing and access to drivers and teams.”

“Of course, nobody put a gun to our head but for you to come up with comments like that makes us feel worse. It makes us feel like we’ve been conned.

Ecclestone hit back saying “”Nobody made him look stupid, and it’s difficult to make people look stupid. If they are, they are. They have done a very good job with the motorcycles.”

Ecclestone says that if Ferrari keeps up their good job the racing should be good and things should be better for promoters.

 

100 Days is a long time, Friday marked 100 Days since Liberty Media took over Formula One bringing in radical change. Our editor assesses the last 100 days in the early era of Liberty.

Liberty’s first 100 day’s

Today Friday marks one hundred days since Liberty completed their take over Formula One. New leadership should be judged after the first 100 days, and like we seen in America these past 100 days have seen almost a revolution in the way the sport has changed.

To be honest I’ve seen more change in the way the sport operates over the last 100 days than since I’ve seen since I started following the sport. Bernie himself has admitted he doesn’t like the way Liberty are ‘giving away’ free content by social media.

Bernie said the sport needed three people to replace him as the sports ringmaster. The team, headed up by Chase Carey with Sean Bradges and Ross Brawn are seeming to work well together. They are more open with what they want the sport to be going forward

We are still early on in the Liberty era, but we are seeing a shift in the way the drivers can interact with the fans online. Liberty has issued the first social media guidelines for the drivers and teams

We can judge Liberty on having a good first 100 days, but these changes will take time to bed in and come in. Liberty is committed I feel for the long term and could make Formula One profitable.

However, in the short term, I think investment to build the events up into these Superbowl’s will see profits fall. But, Liberty is freeing up the sport more.

 

Read more here. Gaming is becoming ever more professional. McLaren are looking for one gamer to join the team as their simulator driver.  

McLaren wants the fastest gamer

McLaren has launched a competition to find the world’s fastest gamer to become the team’s simulator driver. The team and Logitech today revealed details of its ambitious plan to find the ‘World’s Fastest Gamer.’

The prize will be a one-year deal as simulator driver and will get to work with engineers at McLaren’s factory and at race tracks. The competitors will be pitted against each other on different platforms to be selected as finalists.

Team boss Zac Brown told Motorsport.com “This is a hugely exciting opportunity – not only within the gaming industry but for everyone at McLaren.”

“We’ve long witnessed the growth of online sports gaming, and, right now, the parallels between the real and the virtual worlds have never been closer.” Brown described it as a unique and exciting prospect which connects racing and gaming.

Esports is one of the fastest growing sports in the sport, with revenues now overtaking those of more traditional Hollywood movies. The global gaming industry is worth more than $100 billion.

 

The FIA’s relationships with Formula One amounts to bribery a leaked report suggests, but how independent is the regulator?

FIA relationship with F1 could amount to bribery  

ITV News say they have seen confidential documents from the UK’s Serious Fraud Office, saying that the relationship between the sport and the regulator the FIA could amount to bribery.

ITV say that the 2013 Concorde Agreement, reorganised the sport giving more power to the commercial rights holder and the FIA while reducing the influence of the sport’s four smallest racing teams, two of which have collapsed.

Details of the agreement say that the FIA was given £3.9m and 1% stake for entering the agreement. The FIA are posed to be the sports independent regulator, there according to experts a strong argument that the Concorde Implementation Agreement between F1 and the FIA may have broken the law.

Jonathan Fisher QC, a barrister who specialises in corporate and financial crime, told ITV News that the deal has potentially breached sections 1, 2 and 7 of The Bribery Act.

The agreement ends in 2020. This is bound to raise questions whether the FIA profited from the £6.4bn takeover by Liberty Media. The FIA had the power to block the deal. The FIA approved the transaction in January and went on to cash in its shares in return for $80 million (£62.4m)

The FIA says the Concorde Implementation Agreement ensured that the FIA is “properly remunerated for its regulatory role” The FIA insists “no individual received any payment out of this sum”.

Chairman emeritus Bernie Ecclestone, says he was not involved with the negotiation of the deal and recommended we contact Donald MacKenzie, chairman of CVC Capital Partners.

Tonight the SFO said it was “reviewing material in its possession”. A pre-investigation process is underway although the SFO added that it “does not comment on the progress of such assessments”.

 

The Indian tax saga continues as a court upheld a judgement saying Formula One had a permanent establishment in the country. But why?

Indian court upholds judgement on tax

India’s supreme court has ruled that Formula One had a permanent establishment in the country making income generated taxable in the country, marking a key victory for the tax department.

A permanent establishment (PE) is a fixed place of business which generally gives rise to income or value-added tax liability in a particular jurisdiction.

The Justices A K Sikri and Ashok Bhush ruled “We have held that FOWC has PE in India and income that is attributable in India will be taxed. The amount that is to be taxed is to be assessed by an assessing officer.”

A reprehensive for the race organisers Ankur Saigal, said the detailed judgement is awaited but the apex court has held that an assessing officer will assess the income to be taxed. The Jaypee Group signed a five-year deal to host the race from 2011.

But, the race was dropped in 2013 because the state government in Uttar Pradesh, doesn’t say F1 is a sport and classes it as entertainment. This means that organisers need to pay tax and duties on everything connected with the race.

FOWC last year challenged a judgement which ruled that Jaiprakash Associates Ltd for the use of FOWC logos and symbols to promote the Grand Prix couldn’t be considered royalty and be taxed as such.

 

That’s all from Reporters for this week, thanks for reading

Jack

Jack is responsible for the day-to-day running of Formula One Vault. He brings you all the brilliant content. Has an obsession with all things Formula One and anything with an engine.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.