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Whitmarsh: F1 must grasp media 'opportunity'

15 July 2011

Martin Whitmarsh has asserted that F1 must 'change' and seize the golden opportunity that lies in front of it by embracing the exciting new media age – adding on the subject of a potential takeover that 'it is better to find good and constructive ways of working together, rather than saying, 'Oh, here is someone new, whom we don't know, who wants to buy the sport so let's rush off in that direction''.

The future of F1 has been a hot potato for some time, with the roots of the recent discussions about what approach it should adopt on the commercial side to be found two years back in the teams' 2009 'breakaway' menace. The chief bugbear amongst competitors is the slice of the financial pie that they presently receive – in comparison with the chunk that goes into the pocket of Formula One Management (FOM) chief executive Bernie Ecclestone.

With that in-mind, it was speculated three months ago that the sport's current majority owners CVC Capital Partners – who took control in 2005 – could be evaluating selling F1 on, with Rupert Murdoch's News Corporation declaring itself an interested bidder...and the teams ostensibly prepared to entertain such a bid.

Perhaps deterred, however, by the recent storm of negative publicity engulfing the Australian media mogul, and speaking with his Formula One Teams' Association cap on, Whitmarsh claims the first avenue should be to endeavour to resolve the current issues from within – rather than seeking to find an outside saviour who may or may not transpire to be a better proposition.

“The teams want to work together,” FOTA's chairman told the official F1 website. “It's the first time in 60 years that the teams are working together better. Historically, the teams have fought each other – they fought with the FIA and FOM – so it was kind of a battlefield. What we are trying now is to collaborate in a manner that promotes partnership.

“There are new suitors, but we think we are better off working with the partners that we have. Bernie knows the sport and has done many great things for the sport, CVC are the owners, so we have got to be respectful. Bernie is an enormously influential and powerful figure in the sport, and I hope we will wake up for many years to come and Bernie is still there.

“That doesn't mean we always have to agree and doesn't mean we will agree all the time, but I think it is better to find good and constructive ways of working together, rather than saying, 'Oh, here is someone new, whom we don't know, who wants to buy the sport so let's rush off in that direction'. I think that there is always danger in change.

“In my view, that would be the wrong thing to do. We all have flaws and weaknesses, but if we can work together, that would be the best option. This is a fantastic sport. Of course, we can do better and we always should be open to embracing new technologies, opportunities and new challenges, but we are better off doing this with people we know – probably – than suddenly saying we must go off in a different direction.

“There are a number of issues with News Corp. There is a lot of concern over pay-per-view [television], which has been historically the Sky model and that is probably not suitable for F1. Yes, they've got a lot of challenges at the moment in the UK, but nevertheless, we all know that News International and News Corp will be alive and powerful in the media in twelve months' time. They will move on, but there will be casualties as they've closed down a newspaper, which none of us would have believed two weeks ago. It's a dynamic time.

“News Corp is a £20 billion or whatever turnover news corporation, so I am sure they will remain a big player – but I don't think that F1 needs to rush into their arms. I think we should be open-minded looking at what is in the best interests of the sport in the long-term. There will always be controversies in and outside our sport, so we have to be balanced and look at how we can promote, develop and sustain it.”

One of the key aspects in that promotion, Whitmarsh contends, is learning how to better exploit the increasing digital proliferation of the media, with the traditionally dominant TV coverage now complemented by more recent phenomena such as smartphones and tablet devices. F1 is at a crossroads, he opines, and rather than regarding these new technologies as a 'threat', it must come to seize them as 'opportunities'. It is time, he argues, for the pinnacle of international motor racing to move with the times.

“The sport has to change,” the Englishman stressed, “because none of us will be here in 20 years' time – or not most of us – so I think we owe it to the sport that we find a positive and good way to move forward. Media is much more complex these days. If you take the young generation, they don't just watch television – they probably have the TV on, then they have probably something different running on their iPad or on their 'phone or laptop.

“We grew up with television and for a moment thought e-mail was cool – but kids don't e-mail anymore. They are definitely on a much more advanced level than that. The power of these new media outlets is enormous, but how do you monetise that? Bernie's great trick has been monetising the media exposure of F1, and we all have to be grateful for how he commercially developed the sport, but today it's a much more complex media environment. The question is, how are you going to control that and how are you going to monetise it?

“We have to work together as there is a real threat to our business model, which is this whole new world of how people use entertainment. You can say it's a threat, but it is also an opportunity. F1 is a world sport and it is data-rich, and in this digital arena we can populate the digital environment with much more data and information than tennis, soccer or any other sport, so I think it is a huge opportunity that we have.

“Sure, there will still be people watching terrestrial television, but for the generation below us that's not good enough anymore. They want more information and they want to interact. They want to have communities going – and that's the challenge, to find ways to monetise this as Bernie has done with television. He made sure that the revenues for the sport were very high. You can't hold new developments back, so we need to bring in expertise that probably doesn't exist in F1 today.”

The other major topic to address, Whitmarsh underlines, is making sure F1 is an attractive and above all relevant proposition to the wider automotive industry in terms of enticing in global car manufacturers. Over the last few years, Honda, BMW, Toyota and – in large part – Renault have departed the grand prix grid, with only Audi dropping hints that it may be keen to come on-board, and even then subsequently seeming to get cold feet.

Whilst acknowledging that such things are cyclical – and that even if major manufacturers may come and go, the likes of F1 stalwarts such as McLaren and Ferrari will remain steadfast – the Woking-based outfit's team principal insists efforts to improve the sport's general appeal must never slacken. Its very future, he points out, depends on it.

“Firstly, McLaren through FOTA do a lot to try and sustain the sport,” Whitmarsh stated. “Ferrari and ourselves, I am sure, will be here in five years' time – even in 20 years' time – whilst probably other teams won't. Our core business is F1, so we will be here in the long run. Since McLaren started in F1, though, 107 teams have failed, so we are very much aware that the teams have to survive. The sport has to be sustainable, as Ferrari and ourselves can't just race each other – we need all these other teams – so sustainability is an important issue.

“We had the tobacco era, then the automotive era – who were natural investors – and now we don't have enough of them. We have Renault half in, we've got Mercedes and Ferrari, but actually we need to create an environment of governance, of regulations, of stability and entertainment which convinces the Hondas, Toyotas and BMWs that it was wrong to pull out – and I believe that in time we will get them back and probably can add the Volkswagen/Audis, the Hyundais, whatever. We need to create an environment that pulls them in.

“When you look at the 60 years that F1 has existed, the automotive industry has been in and out – Honda has been in and out three times, BMW has been there a few times – so at some points they all believe that F1 is the perfect platform for brand exposure and differentiation. You have to accept that an automotive company's core business isn't F1, and consequently we have to accept that there will be times when their marketing budgets will make them pull out, so they will come and go and we should not criticise them for that.

“If these automotive companies go for complete team ownership, then inherently that's unstable because when they go, it leaves a mess. We had that with Honda, Toyota and BMW, who came in for ownership and it has been difficult for the sport to manage that. If they come in as technical partners and then decide to quit, that's an easier situation to manage.

“It is a fact that the automotive industry had the largest recession in its history and is slowly coming out of that. Now we have to make sure we can convince the boards of big companies that the conditions are right to come back – then I think it could be possible to have four or five automotive companies involved. I think the ideal model is that we create a situation where we are attractive, we're relevant and we are powerful and appropriate for automotive manufacturers, because the natural affinity is automotive. I am sure that in the next five years, we'll have one or two more come back in.

“We need to make sure that we maintain the show. In previous years, the complaint was always that the show was no good, but I believe that in the last two years we've responded responsibly, and actually we have had some incredible races. I think we have a great show – and that's good, so we can tick the box there. Now we have to make sure that we are relevant, and maybe the new V6 engines do that. We have to be responsive, and not wait until our 'marque' is dying. We have to go out there and make it ours – that's the challenge.”


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