Notebook from the Café George V

IMG_0051There are many ups and downs in the life of a Formula 1 reporter. We don’t lead normal lives at all. It is anything but 9 to 5 and we get ourselves into all kinds of scrapes. In Bahrain, I ran into trouble because I had filled in the entry visa form using one of my two overworked passports, and then I tried to enter the country using the other. Passport-juggling is a complicated business when one has to waste a lot of time jumping through hoops for visa people. Anyway, a nice gentleman in a big hat finally decided that I was obviously not going to damage the state and allowed me to enter the country. I assumed that he would amend the computers accordingly, but when it came to leaving, it was a drama because I was then trying to leave the country on a passport with which I had not entered… Fortunately, I keep copies of everything in my computer and so I was able to prove all the things that the immigration men wanted so that they could tick the necessary boxes and finally I escaped to the departure lounge, where there was standing room only, it being the morning after the Grand Prix. There is a good thing about overcrowded airports and planes. It means that planes are often overbooked and when they are, the gold card holders get upgraded to the next class and so I flew home in Business Class, which was a nice bonus. This gave me space to do some work, rather than watching movies…

First thing this morning, however, was a trip to the Chinese Consulate’s Visa Department, a place where I have had many previous adventures over the years. Each year I go fully prepared, armed with far more documentation that they require, but each year it seems the system changes, so I never seem to get an easy run. The rush to get there today was due to the fact that I need the passport back again in order to get into the Russian visa process, hopefully before I leave for China.  When the people putting together F1 calendars  put Australia, Bahrain, China and Russia together, they don’t take into account the legwork required for visas.

Anyway the good news is that I am able to drop into the Café George V for coffee and a croissant, as this happens to be opposite the Chinese Visa Department, which is above the Hugo Boss store, something I am sure that Chairman Mao might have creaked an eyebrow at, back in the day…

Back to the point, the powers-that-be in F1 wish that the media would go away and leave them alone. They always forget that the reason that F1 has grown is  because the media has helped. Now, I admit that at the moment there is a lot of negativity in the press about F1. This is unnecessary, but to a large extent it is self-inflicted. The powers-that-be do nothing to promote the positive aspects of the sport, indeed minds are left boggling by promoters saying that sport is rubbish, or meddling with things that do not need fixing. All of these activities highlight the complete lack of respect that they have for the fans and the traditions of the sport.

The teams clearly understand that we live in the world of social media and they can hear what the fans think. But others have no clue what this even means. Social media does not mean what is written on websites and blogs. It means interactive things, notably Twitter, where fans can react to what is going on. These heavy-hitters may read this blog, but do they read the comments from the fans saying nasty things about them? I doubt it, the big bananas is F1 politics are surrounded by people who I am sure are very selective when it comes to what is printed out and shown to the great leaders. I am not kidding, entire forests are cut down to enable them to be able to say that they keep up with electronic media activity. But, of course, they don’t.

FIA President Jean Todt said in Bahrain that the sport should not be run by social media opinion. Translate that into real world terms: We should not listen to our customers. Or, to put it another way, “Get lost fans. This is our business”.

I hear that the meeting on Sunday in Bahrain to discuss what to do about qualifying , concluded with the same message being delivered to the teams. “Get lost teams. This is our business.”

But is it? I would argue that these people are supposed to be custodians of the sport. They don’t own anything. They make money or get off on power trips using the sport, but it does not belong to them. It belongs to us all. The FIA President had a press conference in Bahrain. Sitting in front of a suitably limp FIA flag, without a microphone, he tried to put forward the case of the FIA’s recent activities: notably the madness that has been going on over qualifying.

Bad news folks, I think we are going to see the same thing happen again in China, because the powers-that-be do not want to back down and be seen to be defeated. They would rather go on driving away fans than admit that the idea was stupid and does not work. There are some who might argue that this behaviour is prejudicial to the interests of motor sport, and there is an Article in the International Sporting Code (151c) which could be used to get them to stop messing about and treat the sport with the respect it deserves. However, the age-old problem remains: who polices the police?

I was tempted to ask Jean during his press conference if he would be good enough to explain how the FIA was established. I presume he would know the story and be able to tell the story. For those who do not know, let me quickly explain. In June 1904, before even Bernie Ecclestone was alive, representatives of the six nations taking part in the Gordon Bennett Cup race at Bad Homberg, near Frankfurt in Germany (France, Germany, Italy, Great Britain, Austria and Belgium) met and agreed that it would be a good idea to have an international federation of motor clubs to organise international motoring events.

Yes folks, the FIA began as a club organising motor racing. It was only later that some of those involved decided that it should try to turn the role of President into that of a kind of Road Safety Batman with a reflective cape and underpants, who must rush around the world, painting zebra crossing in Uganda and putting up traffic lights at crossroads in the Sahara.

Jean Todt is not good at communications, particularly with the media, and when he tried in Bahrain to explain the FIA’s position relating to the question of Formula 1 qualifying, it was inevitable that the discussion would turn, almost instantly, to the question of governance. The message Jean delivered was that the federation is powerless, unless everyone agrees to abolish the current governance structure and all over start again. He said this would only be possible at the end of the current Concorde Agreement in 2020 because getting unanimous agreement on anything in Formula 1 is a task of Sisyphean proportions, even if it is deciding whether they should have Rich Tea or Ginger Snaps during the coffee breaks.

Todt argues that when he agreed to give up the regulatory body’s right to regulate Formula 1, he did so because he had no real choice because previous administrations had left the federation weak. So he signed a document called the Concorde Implementation Agreement in July 2013 and since then nothing has worked properly because the Strategy Group is an oxymoron, along the lines of vegetarian meatball, athletic scholarship, civil service, military intelligence, business ethics, a fine mess, a little pregnant, a young 85 and so on…

Why did the FIA put itself into a situation in which it cannot regulate the sport for which it is the regulator? The answer, inevitably, is money. Before the deal, the FIA was getting around $24.2 million a year from Formula 1 and about $3.67 from all its other activities (no I did not miss out the world million). I don’t know about you but I could a sporting federation on the measly stipend of $2 million a month. It would not be hard. One just has to cut the coat according to one’s cloth. Does a sporting body really need a jet, First Class travel, red carpets, flowerpots, road safety campaigns, tree-hugging initiatives and car washes for caravans? No, the problem is that the FIA now consists of a lot of mobility clubs  which do not have sporting roles, so one has to suck up to them in order to get their votes in elections. It is not a coincidence that the Concorde Implementation Agreement came just a few months before the FIA presidential election.

The deal he struck was to hike the FIA revenues from F1 to $43.7 million per annum. This broke down as an additional $4.7 million from entry fees from the teams, a further $13.5 million in regulatory fees from the Formula One group and an additional $1.3 million in Superlicence fees, from the drivers. In addition, the FIA was granted free allowances for freight and air tickets, a one-off contract signing “bonus” of $5 million and the opportunity to pay $460,000 to acquire a one percent share (and associated loan notes) in Delta Topco, the Formula One group holding company, which had a notional value of something in the region of $60 million, depending on which evaluations one wants to believe. Whatever the number it was a good deal, except that the money cannot be accessed because the share cannot be sold until CVC Capital Partners sells its own shares in the company. However, the value of the shares can be put into the balance sheets of the FIA and make them look healthy.

Todt’s suggestion that this might one day be fixed is, I believe, misleading. If there is to be revamped structure of sporting governance in F1, with the FIA doing what it is supposed to do, there is no reason (nor justification) for the other parties to pay as much as they do. The diamond-nosed financial attack dogs at CVC (and their hired hands) want two eyes for an eye and two teeth for a tooth. Handing out money is something that causes them physical pain. If the money coming in to the FIA from F1 reduces, who is going to pay for the tea and biscuits for the Kangaroo Island Penguin Crossing Sub-Committee? Todt has a marketing plan to try to increase revenues from all the other FIA championships, in order to reduce the power that F1 has over the federation, and to help fund his other ambitions, but it is struggle to find promoters willing to pay what he wants. You not have noticed, but the subject of Formula 2 has been quietly shuffled under the carpets because no-one wants to pay. There is a stand-off at the moment over the fees that GP2 and GP3 should pay the FIA to act as the regulator for these F1 support races.

The only way out of this mess that I can see working is that the manufacturers and big media companies form an alliance in 2020 and say that they will not be involved unless the Formula One group agreed to take less, which it cannot afford to do because of its colossal debts, which have been created because CVC and the other shareholders have gorged themselves on money taken from the business. If that happened there would then be a period in which they would all throw lawyers at one another (sadly, not literally) but if the teams hold together, the Formula One group no longer has a product to sell. The 100-year commercial agreement with the FIA would then be difficult to sustain. The FIA would then be left with no choice but to scurry along behind the manufacturers, yapping occasionally about how it can give “World Championship” status, and begging for money, in much the same way as the Football Association had to do with the Premier League.

In the interim nothing will change in relation to qualifying and we will go from one race to the next with the daft system that was agreed until either all the fans have left or someone backs down. The purpose of changing qualifying is to spice up Saturdays (how about more support races?) and to disrupt the grids so that there will be better races. The bad news, however, is that the racing in F1 is now fine. We have had two consecutive good races with tons of action. This is due to two things: there is a convergence in terms of performance between the teams. Ok, it could be better, but it is enough. The other thing is that the new three Pirelli compound structure, rather than two, has opened the way for different strategies and better racing. The lap times are getting quicker and quicker (so we don’t really need all this negotiation over new rules in 2017) and those who think that there were better times in the old days ought to go and look at the overall quality of F1 fields a few years ago. Today, the teams are better, the drivers are better and not only do we have a really quality field, but we also have plenty of exciting young talent, breaking into the sport and looking to challenge the established names. What is wrong with Formula 1 is the decision-makers, not the product. It is muddle-headed thinking to say that the glass is half full, or half empty. The glass itself is a thing of beauty.

Others stories kicking around relate to these basic core questions. Why is the Formula One group trying to stop Lewis Hamilton posting video footage of himself in the F1 Paddock on Snapchat? Control. Why is Fiat’s Sergio Marchionne apparently trying to buy Sauber? To add to the strength of the manufacturers in the sport. The killer blow now would be for Marchionne to find a decent manufacturer for the two Red Bull teams. If that happens, then the Formula One group will be trying to buy paddles at the Shit Creek General Store.

Elsewhere, there is talk of a new race in California, which would explain Bernie Ecclestone talking about Las Vegas. He often uses a lever in a negotiation and if there isn’t one available, he invents one. A bit like the two parties who have agreed to pay the price being asked for the Formula One group. That would be Invisible Industries Inc and The Non-Existant Investment Corporation of Qatar…

Time to return to the croissant.