There were a number of interesting comments posted to my entry yesterday concerning trouble looming for Formula One.
In addition, my emailbox generated private responses. In the end, the general consensus is that a sea change is on the horizon and all are curious as to how Bernie Ecclestone, and F1 generally, will handle it.
As was pointed out, correctly, by several people, Formula One racing is an entertainment that’s for sale. Promoters, be they individuals or countries, apply for races and — for the most part — they’ve been awarded to the highest bidders.
But there are signs that F1 had already priced itself out of the marketplace, never mind what’s happening in the Middle East currently.
— Williams F1, the legendary team led by Sir Frank Williams, has been forced to sell shares in itself because sponsors willing to pay the outrageous fees demanded have dried up.
— Nearly half the teams are now supported by a driver, or drivers, putting up the money for the privilege of racing for them.
— Canada is back on the schedule after losing the Grand Prix in 2009 but F1 comes here now for what amounts to a pittance ($15 million a year) compared with the amount it’s been used to getting, here and elsewhere.
— Australia, perhaps taking a cue from Canada, has let it be known that the current F1 deal there is no longer acceptable and when the contract comes up for renewal it will be at a dramatically lower price or there will not be a race.
— It’s costing the organizers of the 2012 U.S. Grand Prix in Austin, Tex., a fortune to build an Abu Dhabi-type circuit (it’s Formula One, dontcha know?) and when combined with what they’ve agreed to pay the circus to put on a show, ticket prices are sure to be astronomical.
So it’s very possible that, just like Malaysia, Singapore and China, the first year in Texas will be a success because of the curiosity factor but then fewer and fewer people will be able to afford to attend.
— India and Russia are new races — India this year and Russia in 2014. The huge population of India might guarantee success for F1 in the medium to long run but it’s a good bet that people in Russia will find themselves in the same boat as (see countries listed in paragraph above).
The fight for democracy in the Middle East started in Egypt and spread throughout the region. There is a lull, at the moment, in the violent Bahrain protests, which led to the cancellation of the Grand Prix, and perhaps this lull will be permanent if things can be worked out.
But whatever, it’s clear — as one emailer wrote — that the royal family came to realize pretty early on that ordinary people in Bahrain view the GP as a giant waste of money being spent for the benefit and amusement of the privileged and ruling class.
And this divide between the general population and the ruling classes is only going to get bigger, and take place in more places around the world, as the cost of living increases and the quality of living declines.
As popular as it is, F1 can't compete against the need for more basic and sensible spending, either personally or nationally. As happened in Canada, it’s only a matter of time before all other race-hosting countries or promoters have to face that fact.
Does this mean the end of F1 is near? Of course not. But sooner or later, in the vernacular of the stock market, there will have to a “correction.”
How that “correction” is handled will determine the future direction of F1.