For over 30 years they presided over Formula in lockstep. Thus, after former F1 tsar F1 Bernie Ecclestone suggested to reputable outlets such as Reuters and the BBC that the 2020 F1 season should be cancelled, to many it was simply a matter of time before similar comments were heard from ex-FIA president Max Mosley.
The next step was to gain the keys to the top floor of the FIA’s presidential palace in Paris, achieved in 1993 after Mosley had spent two years as head of motorsport’s governing body, FISA. Once firmly ensconced at the building overlooking the place de la Concorde, they devised the sale of F1’s commercial rights, with Ecclestone being the recipient.
How the original 10-year deal morphed into 113 years at the same price is a tale for another day; suffice to say, Ecclestone paid $313 million for a deal estimated to be worth at least 10 times that, even at 1998 levels. The rights were variously moved on at ever-increasing values – the last time at an enterprise valuation of $8 billion – with Ecclestone each time remaining in control of what he considered to be his personal fiefdom.
Until, that is, 2017, when Liberty Media acquired control from CVC Capital Partners. Ecclestone was unceremoniously “booted upstairs with a fancy title”, as he termed his ‘promotion’ to chairman emeritus, a sort of “don’t call us, we’ll call you” function. The calls, of course, never came, and thus Ecclestone seemingly has cause to act mischievously on occasion, his pot shots usually aimed squarely at Liberty.
As expected, Mosley, who chose to exit the FIA in 2009 when his term expired after showdowns over both his private life and with teams, this week joined the chorus, telling the Deutsche Presse-Agentur that F1 should cancel the 2020 season. “Waiting risks making things worse with no certainty of gain,” he said. “There is no guarantee that racing can start again in July, indeed it looks increasingly unlikely.”
While it is all too easy for (multi) millionaires – particularly those who struck the sale of F1’s commercial rights in the first place – to make such calls, is it all feasible for F1 to simply shut up shop until next season? Ecclestone and Mosley surely realise this is a global business turning over a combined $4bn and directly employing upwards of 10,000 people (and many multiples of that figure indirectly).
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The pair, ex-F1 team owners both before switching focus to running the sport, fully understand that F1 teams derive income from two primary sources, namely sponsors and so-called FOM revenues, namely income generated by the commercial rights holder via race promoter fees, TV rights income and hospitality/marketing. Sponsors pay for exposure and association, be it trackside or on TV.
Equally, the sport needs to return to action, not least for its legions of fans and for the sake of the many businesses who supply the sport with commodities ranging from food and beverages through software, components and trade products.
For better or for worse, F1 is listed on NASDAQ as an indirect result of that original commercial rights deal which, much as Mosley may argue that it was an FIA council decision, occurred under his watch and saw his close friend of many years benefit hugely. Thus Liberty has a fiduciary duty to ensure the interests of shareholders are best served, which they most certainly would not be were F1 put on ice, as he suggests.
Finally, Mosley’s comment that F1 should use the forced hiatus “to put it on a much sounder financial footing for the future” seems somewhat churlish given that the rights deal deprived teams of much of F1’s income in the first place. Before the deal was struck they shared 80%, which dropped to 23% before gradually rising to a sliver under 70%, most notably under the watch of the current FIA president Jean Todt.
The fact is that F1 is as much a global consumer activity as is any other global business, and were Mosley and Ecclestone to suggest that other industries shut their doors for the rest of this year they’d be rightly ridiculed, not least by legions of workers and their dependents, many of whom face uncertainty. Would such a suggestion be taken seriously if Ecclestone and Mosley had not once headed F1?
Asked by DPA what advice he could give his successor, Mosley said he was “out of touch with F1” and had no “inside knowledge.” From his response it is unclear whether Mosley was referring to himself or Todt. But it surely could not be applied to Todt, given his efforts to restructure F1 in the wake of the pandemic and prepare it for a return at the earliest safe opportunity.
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2020 F1 season
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