It was in late September 2016 that Formula 1’s newest moustache made its first appearance on a grand prix grid, under the bright lights of Singapore. The naked glare of TV cameras followed every move made by the owner of said luxurious upper lip strip as he snaked between rows of F1 cars, each an unknown monster to the US America, each tended by groups working in perfect harmony.
The wavy, greying moustache belonged, of course, to Charles G. Carey – better known to F1 fans across the world as Chase – who had been plucked from a relatively obscure broadcasting executive role to close Liberty Media’s latest deal: the acquisition of F1’s commercial rights from venture fund CVC Capital partners.
A scathing assessment of CVC’s tenure in charge was provided by then-Force India team boss Robert Fernley in 2013. “They have raped the sport,” he said. “CVC have done an absolutely awful job. They are the worst thing that has ever happened to Formula 1.”
In many ways – and to many fans – Liberty’s acquisition of the rights proved F1’s salvation, although rebuilding the sport after CVC’s cynical ownership proved a tougher nut to crack than even the most optimistic Liberty board member could have foreseen at the time.Domenicali replaced Carey in charge after 2020
Consider: thanks to CVC’s revenue structure, which paid obscene bonuses to four teams simply to commit to F1 and didn’t give a hoot about independents, and an inequitable governance structure that permitted the majors to veto rules unless these played to their best interests, every independent team that signed up to CVC’s eight-year agreements in 2013 changed ownership under distressed circumstances during that period.
The net effect was that for 100-plus grands prix not a single team from outside this privileged minority managed to win a grand prix, a situation that prevailed for over six years. There can be no bigger indictment of CVC’s ‘custodianship’ of the sport, nor a better illustration of the mess F1 found itself on that humid evening in Singapore. “Is he up to it”, we asked ourselves as we traipsed along, intently observing Carey’s every twitch.
Rumours that a deal was in the offing surfaced during the Belgian Grand Prix a month earlier, then intensified during the subsequent round in Italy – where CVC’s head honcho Donald Mackenzie was, for a change, much in evidence. The reason for his presence soon became clear: to put about the story that Liberty was not the only bidder for the rights; that there was another syndicate in the running.
The word was that sports entrepreneur Steven Ross had put in a belated bid, in turn boosting the price. A source with knowledge of the process later told me that the owner of the Miami Dolphins withdrew after cutting a deal with Liberty, one that included the granting of rights to a Miami Grand Prix.
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When this scenario was put to Tom Garfinkel, promoter with Ross of the upcoming Miami race in the Dolphins stadium, he said flatly, “That’s not accurate,” but would not elaborate. Either way, Liberty went to enormous lengths to make the race a reality, as outlined here previously, a scenario a Liberty insider described as “accurate”.F1’s old logo flew for the final time at Yas Marina in 2017…
With its opponent side-lined, Liberty pressed on, and in late November it emerged that subsidiary Liberty Media Corporation had filed a Schedule 14A return, as required by the US Securities and Exchange whenever major changes to a listed entity are planned. The filing confirmed Liberty as the buyers of all shares in Delta Topco, which was effectively CVC’s F1 operating company.
Simultaneously Greg Maffei, Liberty’s president and CEO and thus Carey’s ‘boss’, wrote a letter to shareholders outlining the advantages of the acquisition. “The Formula 1 acquisition will enable Liberty Media to leverage its long-term perspective gained from investing in media and sports assets to help Formula 1 to continue to develop and grow the popular global sport that is Formula 1 racing and to take advantage of new opportunities created by increasing demand from broadcasters, advertisers and sponsors with access to mass live audiences,” he wrote.
“These new opportunities include additional commercial sponsorship partners, increases in promotion and marketing of Formula 1 as a sport and a brand, enhanced content distribution and expansion to new media.”
Through it all Bernie Ecclestone, F1’s diminutive master who ruled F1 with an iron fist wrapped in fire-proof gloves – first for his own account, then for CVC – put about that he had been offered a five-year deal to stay on, with others suggesting marketing entrepreneur Zak Brown was in the running. The latter, though, denied the story, telling me he was joining McLaren as CEO – which he did a month later.
At the time a US sports marketing consultant with close links to both Liberty and F1 doubted that Ecclestone would survive the take-over, offering this assessment of the operating style of John Malone, chairman of Liberty Media and its sister Liberty Global, and the largest private landowner in the US.…before Liberty stamped a new identity on the sport
“There will be no sacred cows,” he told me in an interview for another publication. “Liberty will look at every aspect, from broadcast deals to weekend format, with the teams likely to benefit the most. They’ll look at it from an American perspective, which means NFL-type treatment of franchises [teams] and salary [cost] caps. All in it’s very good news for us teams, so for the fans as well,” he added.
He also predicted that Fiat and Ferrari boss Sergio Marchionne and Mercedes CEO Dieter Zetsche would “stand no chance [against Carey], and Bernie will meet his match when push comes to shove.” In fact, he opined that Ecclestone would be gone by the  year’s end such would be the power struggle…
In the event he was out by three weeks, with Liberty on 23 January 2017 announcing completion of the deal, plus the executive structure of what was listed as the Formula One Group (FWONK) after Delta Topco was reversed into Liberty Media Corporation – with Ross Brawn taking on the managing director (sport) role, supported by Sean Bratches as MD (marketing), both reporting to Carey, then CEO and executive of FOG.
On his first official day in office Carey had taken the toughest decision of all by side-lining Ecclestone, effectively booting him upstairs by appointing the octogenarian as ‘chairman emeritus’ and adviser to the board – both being ‘don’t call us, we’ll call you’ roles. “If Chase could do that to Bernie without a backward glance the team bosses stand no chance,” the source said later.Long-awaited Miami race was announced in April
Five years on, how has Liberty fared as custodian of a sport that thrives on passion? For starters, there are no doubts that F1 fared substantially better than predicted by cynics at the timer of the acquisition – but then CVC had set the lowest of low bars – but on numerous metrics Liberty still falls well short of (mainly its own) projections. Indeed, the perception lingers that Liberty was oversold F1’s short-term potential by CVC.
That said, Covid affected two of the five years to date, and one wonders whether CVC and Ecclestone could have salvaged the 2020 season to the same extent if at all. The pandemic also delayed some of F1’s plans, including the introduction of ‘new era’ regulations. In order to properly analyse Liberty’s performance since 2017 it is necessary to divide the F1 business into its constituent parts:
RegulatoryNew rules presented in 2019 were delayed to next year
Although the FIA is the sport’s regulator, Liberty provided data-led input and concepts to the governing body and as such had a major hand in the processes for technical, sporting and financial regulations. Liberty cannot, after all, commercially exploit a product it has no faith in.
Covid delayed the new cars, so it is too early to judge their performance and potential for closer racing definitively, but the regulations were signed-off by the time Covid hit, so full marks on that front. The acid test will be 2022 on the chassis front, while power units have been largely carried over despite early promises to revamp them for 2021, with 2026 projected as switch over date.
Although on-track action is closer this year that is arguably a by-product of Red Bull-Honda’s improved performance.
SportingUnloved sprint qualifying format is expected to stay
Liberty promised to revamp weekend formats and has done so for 2022 – reducing the timetable to three days (even in Monaco!) and introducing sprint events, seven of which are forecast for next year. Parc ferme regulations have been tightened although along the way there were numerous hiccups – think reverse grids.
While sprint events may work for certain promoters and broadcasters and theoretically enables F1 to eventually schedule fewer race weekends there are no doubts, though, that the concept has not found universal favour, particularly among RaceFans readers.
Signing Aramco at the beginning of last year is a big-buck deal but F1 has fallen far short of projections in this regard, having initially touted advertising as low-hanging fruit and a major growth area. Crypto was signed this year as sprint sponsor, but for the rest it’s been lean pickings apart from regional partner Workday and, of course AWS as computing provider.
While Covid affected hospitality, this particular product in any event needs a total overhaul, as do licensing and merchandising activities.
CalendarA race in Hanoi was announced but never held
Liberty managed to salvage a 17-race season and is on track to hit 22 rounds this year despite Covid but has failed to add new events apart from returning oldies (France and the Netherlands) plus a few that recently stepped into the breach. Headline addition Vietnam dropped out, expansion in Asia is stagnant, an African race is far off despite constant discussions – the latest this week – and Miami took four years to get across the line.
Arguably Liberty’s biggest achievement was the Netflix deal – ironically sealed by Bratches, who left thereafter – which opened doors across the globe, provided additional exposure for sponsors and teams, and attracted new audiences – many of whom became converts. Off the back of this, interest in the USA has rocketed. Equally, the quality of presentation of the global feed has improved massively.
Against this some of the AWS data seems an excuse to flash a logo. F1 TV Pro is a massive disappointment despite improvements in this area. Once projected as Liberty’s big revenue spinner, the fact that numbers are not disclosed is telling. Broadcast contracts have been renewed lucratively or alternatives signed, but Liberty needs to bag Sky TV at the same (or better) rate come 2024 to maintain credibility in this area.
Concorde AgreementNew teams are unlikely to join due to Concorde changes
Another massive achievement was the signing of the 2021-25 Concorde Agreement last August despite the machinations of Mercedes (in particular), which in turn introduced a more equitable financial and regulatory playing field for all. Although the ills of the past are likely to take three to four years to wash out of the system, the significance of the agreement should not be underestimated – save for one aspect (below).
If there is a negative to the Concorde it is the $200m ‘anti-dilution’ fee, which effectively precludes new teams from entering. What was Carey thinking when he accepted this proposal from the major teams? Ironically the sport is now bending over backwards to attract VW Group as engine supplier yet does everything in its power to dissuade teams from joining.
Having driven the signing of the Concorde Agreement, Carey handed over his CEO role to Stefano Domenicali. This marked a high point as F1 again has an F1 ‘guy’ in charge, one who is undoubtedly right for arguably the toughest job in sport The American, though, continues to oversee FOG as non-executive chairman.
Telling, though, a number of high-level heads recruited during the early years departed, including Bratches and heads of department in marketing, broadcasting and research. It seems that F1 was not for them. Against that, most F1 ‘lifers’ have remained (or transferred from elsewhere in the sport), suggesting that F1 should look internally rather than recruiting on the basis of impressive curriculum vitae.
Other‘We Race as One’ was created following pressure from drivers
There was some cosmetic changes such as the introduction a new logo and creation of an official anthem. Grid girls were replaced with Future Stars and the We Race as One campaign created in response to drivers’ concerns over, among other things, the lack of diversity in the sport. How far will the effects of these changes endure?
A significant shift in the sport’s future direction was prompted by sustainability studies which led to F1’s pledge to go carbon neutral by 2030. These are all steps in the right direction and one wonders whether CVC and Ecclestone would have introduced similar projects
Liberty has done an admirable job under trying circumstances, and F1 could undoubtedly have fared better but for Covid. The commercial rights holder laid a solid foundation for a new era despite coming into the business cold. It is all too easy to overlook that too Liberty F1’s culture was foreign and its global fan base most unlike that of US sport franchises such as the Atlanta Braves – another of Liberty’s assets.
It has built a solid base for the future, and that is in itself praiseworthy. Roll on the next five years – the end of which coincides with the sport’s next new formula.
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