Changing Hands: A New Era for Formula 1

It is official, long time main man of Formula 1 (his time spanning near four decades), Bernie Ecclestone has been removed from his position and will now be an advisor to the F1 board (as of January 23rd). This change occurring due to the U.S company Liberty Media $8 billion takeover. His position will now be filled by American, Chase Carey.

It is needless to say what Ecclestone did for the sport (not without controversy) was great and he has made it what it is today…BUT, overall the change in hands was needed. For a few reasons and ones that will benefit in the long run.

From this change in ownership, it will potentially be ‘Americanised’ and a worry from those in Europe, where the sport has a heavier following is that it could lose it’s true essence. ‘Americanisation’ occurring within the sport I can imagine is within the minds of of fans and stokeholders alike. But within Sports, the North American market gets it right in terms of how they treat consumers (heavy investments into CRM programs) and how they create a match day experience for everyone. The main goal building long lasting relationships and opening revenue streams, not just relying on ticket/over priced concession sales. And I have heard people joke and say “Oh but all of it is so cheesy, so over the top, no need for it.” And yes, some of it won’t work in a European market, cultural aspects are very hard to change or at least take a while to implement. What it comes down to is how the North American system manages their consumers and fans via technology and data collecting. This needing to be implemented in a number of sports within Europe.

Carey has already stated that he wants to expand and capture further audiences in the Americas. He does realise the importance however of the classic European destinations and they are vital since Western Europe is a big stakeholder in F1. Referring to the previous paragraph, the Americanisation is bound to come through under Carey. The new thinking is that the races should be an event for the whole city, something to be celebrated and not just the event to occur on the weekend. F1 gains revenue through race track hosting fees and at first the idea of something occurring longer than initially planned may scare off race tracks due to potential increase in fees. But of course, via various events and digital media being embraced further, new revenue streams will open for the tracks and F1. The goal Carey aspires to achieve is to make race meets much more financially successful.  It will be interesting to see how it unfolds and how the F1 encourage tracks to take on and fully embrace such new ideas after such a long time in the similar regimes.

However there has been no mention of ticket prices in recent reports, the average ticket (3-day General admission) price in the last season was $133. And in the various ticket categories can go up to as high as $1250 (Mexico). Again will these change with other weekly events added to the event calendar? If Carey envisions the event to be a celebration for the city, ticket prices will have to change.

Secondly, the sport can now continue on into the digital age. As much as the cars are of technological engineering wonders (this could be argued with recent rules and regulations regarding as to what engineers can and cannot do). The sport itself in terms of engaging in digital media pales in comparison, Ecclestone would not accept it and it was put low on priority. Instead he focused on the selling of TV rights (what he knew best) and with figures in the past few years going down and the sport losing confidence the odd rule was changed. Even tracks have been argued to appear similar to one another.  These changes he implemented were in attempt to add excitement to the sport, currently similar controversy is occurring in equestrian sport. Ecclestone knew that he was actively ignoring this area of the business since as quoted from Campaign Asia-Pacific magazine (2014) “I’m too old fashioned. I couldn’t see any value in it.” 

The topic of F1 embracing the digital age has floated around for long enough and it was inevitable. Last years drama involving Lewis Hamilton using Snapchat during a press conference (which I do admit was rather unprofessional) shed light on this issue since a follow up tweet by Hamilton made a strong point. It read, “Re press conference, it’s been the same for 10 years. It’s not the media or mediator, it’s the format. Fans should be asking the questions!!” Plus the use of drivers as communication ‘assets’ has been lost out on (hopefully) until now. There are numerous sports personalities both in younger and older generations within the motor racing world (Kimi Raikkonen, David Coulthard, Max Verstappen and Lewis Hamilton to name a few). Fans globally need to be further connected to such personalities and Carey has recognised that the marketing and communications needs to be expanded with as many possible/viable digital platforms. Senior team members (ex: Ferrari) have also critiqued on the lack of digital integration within the sport.

There to is a HUGE gap in terms of ESports and F1, this being a potential area for an event to occur in the lead up or during an F1 event. Not to mention the lack of digital integration limits the accessibility of the sport to consumers. The sport has been in decline in viewing numbers in the past decade with a number of moves to pay TV instead of free view.

Ecclestone was very much driven monetarily and interested in building successful relationships in which he could succeed from. This thinking being important in business but he was within a myopia. The youth and millennials were not a priority since apparently we would not impact the business monetarily or those involved in the business via sponsorship; we were put to the back burner. But the change to a more open and willing to diversify team, will only do the sport good in my mind. There may be changes but I am sure when Ecclestone brought in the groundbreaking changes that F1 needed back in the day, they were questioned. By this point F1 can only move forward, not backwards.

Reference: The Guardian, BBC Sport, The Conversation, GP Update.

 

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