FT SPECIAL REPORT The Business of

Friday March 14 2014 www.ft.com/reports | @ftreports

Then there is the introduction of the controversial rule, derided by fans as totally artificial: awarding double Inside » points for the final race of the season in Abu Dhabi. Off­track Cynics argue it is a knee-jerk reac- tion from Mr Ecclestone to last sea- Cost controls son’s yawn-fest. Vettel has called the idea “absurd”. Time is short for It raises the question of how far F1 an agreement as should go down the road of artificial- distractions ity when prioritising entertainment sport divides over over sport, as it agonises over dimin- cap on spending ishing TV audiences and an ageing fan base. Page 2 Around the corner is the inaugural season of Formula E, the electric car championship in city centres, starting Green moves aid cast shadow in Beijing in September. Largely dis- missed by F1 as a sideshow, it may image makeover offer an intriguing alternative to the Sponsors bang the sport of car racing. Then there is the uncertainty drum for more over F1’s own attempt to present its sustainability green credentials. The new 1.6 over season litre hybrid turbo engines and power- Page 2 ful energy recovery systems, repre- Red Bull falters ‘How far should F1 go Engine changes set Political, regulatory and technical upheavals in down the road of to reintroduce a sport struggling to attract fans contribute to artificiality when prioritising element of surprise sense of farce, write Roger Blitz and James Allen entertainment over sport’ to the racing Page 2

here is an odd-looking shape ’s fourth consecutive sent the biggest change in F1’s to Formula One cars this sea- world championship last season was technical regulations for 30 years. Ecclestone and son. Safety concerns have such a turn-off. The idea of the Fédération Interna- brought a “nose job” at the Not his fault. Halfway through a tionale de l’Automobile, the governing Todt face future front of the vehicle to pre- season that was turning farcical body, is to move away from gas-guz- Beleaguered boss Tvent cars somersaulting on impact because of tyre degradations, he and zling V8 engines, shed the image of and to protect drivers in side-on colli- Red Bull took control, dominated the conspicuous consumption and move enjoys backing of sions. podium and never looked back. To the in step with automotive trends. FIA’s top man Fans and experts have greeted the discerning viewer, it was a deathly After three years in the planning, nose designs with disdain, which dull procession. the new cars hit the track for the first Page 3 pretty much sums up the mood sur- The sport treads a fine line between time in February for testing, with rounding F1 as the 2014 season comes shiny new technology and Keystone very mixed results. into view. Cops farce. There is the spectacle of Mercedes emerged as the clear Rookies on track A new engine, a new points system, , F1’s chief execu- favourite for the 2014 season. Its three the return of Ron Dennis to the tive, attempting to combine the busi- customer teams managed to hit target Regulation updates helm of McLaren, a new race at the ness of running the show with his testing mileage with reasonable relia- may help season’s Russian resort of , and those trial in a Munich court on bribery bility and strong performance. noses – there are plenty of talking charges. ran into problems and left newcomers show points to keep F1’s profile on the up He will fly to Munich for two days a its teams, including world champions their best side and up. week, giving him just enough time to Red Bull, underprepared. Christian Yet the sport is struggling. Viewing get to Grands Prix and fix the latest Page 3 figures are down, not least because on-track problem. Circuit driven: Sebastian Vettel, world champion, on the Bahrain track Getty Images Continued on Page 2 2 ★ FINANCIAL TIMES FRIDAY MARCH 14 2014 The Business of Formula One Timeisrunning out foragreement oncostcontrols Engine change

for introduction in January. Cost control may have through “a gentleman’s end of the 2013 season to Christian Horner, Red challenges Red Team budgets Cyril Abiteboul, principal been talked about since agreement”, and was widely rejoin Ferrari. Bull team principal, says: of the Caterham Formula 2008, but teams are split on flouted. The sport is arguing over “The timetable to reach The sport is divided One team, says the docu- the move. Big teams such The shallow economic a proposed £155m budget an agreement is tight over a proposed ment is no more than “a as Ferrari, McLaren, Mer- recovery, particularly in cap per team for the 2015 We think a budget cap Bull dominance holding position”. He says cedes and Red Bull do not Europe, has continued to season. However, this figure would be arbitrary. We £155m spending cap, the wholesale changes the want a cap that would hit the cash-intensive sport has a number of opt-outs. think a better way to cut sport has made to the restrict their inherent and has put a budget cap Drivers’ salaries would costs would be to limit the says Roger Baird engines and aerodynamics financial superiority. Red back on the agenda. not be included to allow number of upgrades of the car have contributed Bull has won four drivers’ One of the smaller teams, teams to compete for the allowed each season.” The contenders Pre­season When F1 teams and the to the lack of “tangible and constructors’ titles Spanish HRT, folded at the best talent. Marketing and However, Graeme Low- sport’s most senior figures progress” on cost control since 2010. end of the 2012 season and hospitality would be don, Marussia president James Allen looks at testing met in Geneva this year since the resolution passed. Smaller teams such as has not been replaced. excluded, because caps and shareholder, is a big how rule changes will they pledged to introduce Cost control has been on Caterham, Lotus and there would hinder a team’s supporter of a budget cap Team Kilometres “healthy and affordable” the F1 agenda since the Marussia say their survival, ability to attract crucial because he says the sport bring back element cost control for teams. financial crisis swept the as well as the growth of the sponsorship cash. needs it. He points to Mercedes 4,973 Yet the sport is divided globe in 2008. The years sport, depends on the intro- Smaller teams say All outfits say publicly F1’s 2013 global TV viewing of surprise to results on the proposal, despite the that followed saw leading duction of controls. their survival and that they support cost con- figures, which fell 10 per Williams 4,893 fact that in the past two carmakers pull out or scale In 2009, the bigger teams trol, but the larger teams cent, or 50m, to 450m over “It’s very difficult, but I’m Ferrari 4,489 years HRT, the Spanish back their involvement in were able to head off a the growth of the are accused of blocking spe- the course of another pre- not calling us favourites for team, has gone bust, while the sport. Companies such budget cap by winning cific proposals in detailed dictable championship. the ,” McLaren 4,153 Lotus, owned by Genii Capi- as Honda, Renault, BMW agreement to introduce a sport depends on discussions. He says: “Teams are drop- said Sebastian Vettel, reign- Sauber 4,039 tal, has worked wonders on and Toyota all reassessed Resource Restriction Agree- the new controls And the timing is impor- ping out of F1, and that is ing world champion, at the 3,975 the track but faces debts of their F1 commitments. ment. This watered-down tant. While cost control not a sign of an industry recent conclusion of the more than £100m. This slashed a big chunk cost-control measure lim- can be brought in on a that is growing. The decline pre-season test sessions in Caterham 3,313 The resolution was of the finance that teams ited physical assets that Lotus, another small majority team vote by the in the media figures last Bahrain. Toro Rosso 2,458 passed by the World Motor relied on, leaving them to were supposedly easy to team, has grabbed the head- end of June, any later than year should ring alarm “We haven’t done enough Sport Council, F1’s legisla- fund budgets from their monitor. It restricted ele- lines by finishing fourth in this, because of the close- bells. All teams should wel- laps and the speed is not Red Bull 1,711 tive body, on 23 January. sponsorship programmes ments such as the number the constructor’s title over ness to the start of a new come this proposal for the there compared with some Marussia 1,686 The move charges the and the payments they of people a team could take the past two years. But season, and significant good of the sport.” other teams.” Lotus 1,288 Fédération Internationale received from Bernie Eccle- to a race and cut back on despite this, it ended last changes will have to be If Lowdon is right, this Vettel has been having a de l’Automobile, the stone’s Formula One Man- costly wind tunnel time as season with a £114m black unanimous. leaves the industry effec- torrid time with his new sport’s governing body, agement, which controls well as the type of comput- hole in its accounts. This Critics fear bigger teams tively less than four months Renault, with drawing up detailed the broadcasting, organisa- ers a team could use. prompted Kimi Räikkönen, will block budget caps by to pull off a rule change it which has suffered consist- the Renault, ended up doing cost control proposals to tion and promotional rights But, as Abiteboul says, its lead driver, to leave the delaying the proposal into has not managed in the ent technical problems dur- barely a handful of laps in a be voted on in June in time of the sport. the code was policed largely team two races before the the second half of the year. past six years. ing testing, with the result day. that it has done only about The longest run Vettel a third of the mileage of the has managed so far is 17 pacesetting Mercedes of laps. The race distance in and Nico Melbourne is 58 laps. Rosberg (see table). Ron White, Renault’s It would be fair to say, engineering boss, has however, after four seasons admitted that “Melbourne Sponsors and dominated by the German will be an anxious week- and his Red Bull Racing end”, as he waits to see if team, that F1 would be rea- any cars powered by his sonably relaxed if he engine make it to the started this year not as chequered flag. favourite. Spare a thought for Pas- supporters The sport is in desperate tor Maldonado. After a dis- need of a new storyline; mal year with Williams, he declining numbers of TV took the opportunity this viewers in the closing year to move to Lotus, stages of last season, as which had been winning drive the shift Vettel romped to a nine- races and scoring regular race winning streak, hinted podiums. at a growing disaffection Such are the vicissitudes with the sport among its of sport. fan base. The other contender is to sustainability This year promises a Ferrari. The team has taken revolution in more ways the bold step of pairing than one, with a new set of regulations based around a small capacity hybrid turbo engine with a very powerful Technology will be a energy recovery system at major performance its heart, changing the dynamic among teams. differentiator and Technology Green innovations are helping to For the past eight sea- sons, F1 has been using V8 reliability is a big change the sport’s image, writes James Allen engines which had not only question mark become ultra reliable, but there was little to choose ere you to draw up a list regarding corporate sustainability pol- Testing times: ments as so much “greenwash”. They cant CO2 reductions,” says Cowell. between the manufacturers with Kimi of global sports that icy to apply to the sport. Renault is and Ecclestone have been overruled. “Racing helps to take inertia out of in performance terms. Räikkönen. The Finnish damage the environ- One can sense some thought leader- investing in The greening of F1 has not come a the R&D system; if you can show This year, it looks as driver won the 2007 world ment, you would imag- ship from companies such as Unilever innovative moment too soon, says Jonathan something is possible in racing and though engines will be a championship for the team ine that Formula 1 – a big sponsor of the team – technology Reuters Neale, acting chief executive of create a desire, you can pull the cost significant performance dif- but fell out with them in Wwould come close to the top. whose chief executive, Paul Polman, McLaren, whose team is backed by out and do it mass market.” ferentiator and reliability is 2009 and spent a few years Not only does it move large num- has set a target to double the size of companies such as ExxonMobil, the The Williams F1 team developed a a big question mark for out of the sport. bers of people and equipment around the consumer goods group while oil major, SAP, the German business flywheel technology for energy stor- most of the teams heading After two stunning come- the world to its 19 race venues, reducing its environmental impact. software group, and GSK, the UK age that did not work for F1, but they into the first race in Mel- back seasons, with two encouraging audiences to drive to This weekend Formula 1 takes a big pharmaceuticals company. have spun it off for use in road cars, bourne. great victories, he is back at those venues in their cars, but it also step on that journey when the new “Our investors, shareholders and buses and trains. The testing has clearly Ferrari as partner to the creates carbon dioxide emissions in cars, powered by 1.6 litre hybrid turbo sponsors, the people who want to use It is not just the transport sector shown that Mercedes is the strong-minded Alonso. the very act of the sport itself. engines, line up on the grid in Mel- this sport as a marketing platform, that F1 technology transfers into. best prepared for this new Ferrari is changing strat- At its heart is one of the most dam- bourne. The old 2.4 litre V8 gas guz- wanted to see from us that we were McLaren has evolved its simulation era of F1 technology. egy here, fielding two world aging inventions on the planet – the zlers used over the past eight years being proactive and that this was software to allow better planning of The engine has been relia- champions instead of keep- internal combustion engine. have been replaced. The new power externally accredited,” he says. “They electricity demand for large data cen- ble, not only in its own ing to its policy of having a Yet there is a revolution going on in units comprise an electrical energy have a requirement to have a corpo- tres. Significant savings could be chassis but also in the Wil- number-one driver. the sport this year: the first time that storage system capable of injecting rate sustainability policy and if we’re made by using computer modelling to liams, McLaren and Force Luca di Montezemolo, F1 has banged the drum for sustaina- 160hp for 33 seconds each lap, from going to charm them into the sport predict peaks in demand, allowing India cars too. company president, once bility. A new set of regulations is energy harvested from braking and and maintain the longevity, we have some of the data centres to be All of these teams have, said that he would never about to take the emphasis away from from heat from the turbo. The cars to respond to that.” switched off at quiet times. at some point in the test “put two roosters in the rewarding brute power and instead will use about a third less fuel to The motor manufacturers were also But the most visible gains will sessions, set the fastest henhouse” but changed his put a premium on resource efficiency. cover the same distance at the same proactive in bringing about the surely be on the F1 track itself. time of the day. mind after a rough time And there are some within the sport speed; instead of 150kg, the limit will change in regulations. For Renault Although the 22 cars lapping the The Mercedes team has with Alonso last year, when who point to F1’s relentless pursuit of be 100kg. It is the biggest shake up of and Mercedes to stay in the sport and Grand Prix circuits account for its nose in front on pure the Spaniard criticised his technological innovation, which then F1 technology for 30 years. continue to invest hundreds of mil- roughly the same amount of emis- pace, however, and that car and made overtures to filters down to automotive and trans- “In terms of CO2 per kilometre, that lions, they needed technology more sions per race as a return flight from makes Hamilton and Ros- Red Bull. port improvements for all. With this means a 35 per cent reduction from aligned to future vehicles. London to New York, it is the image berg the favourites for vic- It is a long season and as change of regulations, they say, the last year to this,” says Andy Cowell, “We are in F1 because we believe of conspicuous consumption which is tory in Melbourne, with usual it will come down to sport is set to become net-positive head of Mercedes’ F1 engine pro- it’s not only a competition among the out of step with modern sensibilities. Williams looking pacy the hard slog of developing when it comes to sustainability. gramme, which supplies four teams best drivers in the world, it’s also a The switch from that to one of enough to challenge for a the cars through the races At the 2013 Sport Conference of the on the grid. “If you compare that to competition among the best engineers resource efficiency and reduced emis- podium. to keep pace with the oth- Federation International de L’Auto- the improvement in the automobile in the world,” says Toto Wolff, Mer- sions, without any decline in speed or This would be quite a ers. mobile, motorsport’s governing body, industry as a whole, that is huge cedes head of motorsport. excitement, is intriguing. change for the once-mighty This work is done out of guest speaker Nick Nuttall of the UN “The FIA has encouraged regula- F1’s message to the wider world And, because a significant percent- Williams team, which fin- view, in the wind tunnels Environment Programme had a warn- tions where performance is linked to appears clear: it is becoming more age of F1’s huge, but ageing global TV ished a dismal ninth last and the workshops of the ing for delegates: “Motor sports will thermal efficiency. This marries sustainable and, by exploiting the audience is sceptical of “greenwash- season with just 5 points, team’s headquarters. not be immune to some of the pro- with the interests of the platform it has as the world’s most ing” and environmental jargon, the compared with the 596 The rough calculation is found sea changes at work around the transport world.” popular annual sporting competi- sport has the chance to educate a par- notched up by Red Bull. that if you don’t make the globe, from environmental and repu- Bernie Ecclestone, F1’s vet- tion, it aims to drive sustainabil- ticularly hard-to-reach demographic. Now it has all turned car go about 1/10th of a sec- tational risk.” eran ring- ity across the automotive sector. It is a tough sell for F1 apologists to around. As well as having a ond per lap faster at every The FIA recognised some time ago m a s t e r , “I think we will see some claim the sport could ever be environ- tricky car that is not sorted race – equating to a gain of that if it did not address sustainability opposed impressive spin-off technol- mentally friendly simply by virtue of out yet, Red Bull’s hybrid 1.9 seconds over a season – and regulate to improve its own pro- t h e ogy filtering down to what it contributes to society via tech- engine from Renault is you will lose competitive- file, then outside forces might come in c h a n g e automotive nology transfer and education. Can proving very unreliable. ness. and force regulation on it. and wanted to and mass that ever offset the damage caused by On more than one occa- The new regulations and At the same time, the F1 organisers keep the old transport shipping cars and people around the sion in testing, Vettel, Dan- immaturity of the technol- and participating teams were coming engines. Many s o l u - world? At least in toning down its iel Ricciardo, his team ogy mean the gains are under intense pressure from large devotees of the t i o n s , image of conspicuous consumption on mate, and potentially larger. So Red corporate sponsors. They wanted the sport denounce such l e a d i n g track, it does seem to be taking the and Pastor Maldonado, the Bull might catch up after same standards that applied to them technological develop- to signifi- right steps. Lotus drivers who also use all.

Off­track distractions cast shadow over critically important season

Continued from Page 1 decent performance would nites with Honda, with but by investor interest deals with Mr Ecclestone. So much hangs on this been a somewhat interest- momentum that will carry be a step up from last sea- whom they dominated the from elsewhere. Cable bil- Their respective satellite trial: the immediate future ing experience working it through any change,” Horner, team principal, said son’s dismal showing. After sport in the Senna-Prost era lionaire John Malone has teams, Sauber and Toro of Mr Ecclestone; the lead- with Bernie over the past says Mr Dennis. he would be delighted just ousting Martin Whitmarsh, of the late-1980s. held talks about taking a Rosso, also withdrew, leav- ership of F1 if he is con- few years. He is probably right. to finish the first race in group chief executive, with This will be a season stake in the business. ing Fota to limp on with victed; the chances of reviv- “He is a little more Organisations tend to Melbourne. shareholder support in Jan- when it will be hard for The teams have also lost just seven members from 11 ing the postponed flotation mature than I [Mr Dennis is invest too much in larger- Ferrari’s experience was uary, Mr Dennis has set anyone to keep one’s focus their focus as a collective active teams. With the of the business; the pros- 66], and one way or another than-life leaders such as somewhere in the middle. ambitious targets for the when there are so many dis- unit. They are now are on teams once again divided, there will come a time Bernie Ecclestone. Williams scored only five season, promising to win tractions on the sidelines. their own when it comes to they can more easily be when Bernie won’t be run- The sport can and will points last season, less than races and reinvigorate the The increasingly grim bargaining with Mr Eccle- ruled by Mr Ecclestone. ning F1 for whatever rea- find a modus operandi as 1 per cent of Red Bull’s team. silence from the bedside of stone and the FIA. But what of the 83-year- 83 son.” and when the Ecclestone total, but enters the season Rather like Steve Jobs , for The season will begin old ringmaster himself? Can Age of Bernie Ecclestone, And then what? It may be era comes to an end. on a wave of confidence. returning to save the com- example, continues to cast a without the Formula One he survive yet another F1’s chief executive overstating it to say this But one thing is clear. It had the second fastest pany he made great from pall over the day-to-day pro- Teams Association, their threat to his domination of could be a seminal, make- After many false dawns, F1 car in testing, behind Mer- mediocrity, Mr Dennis aims ceedings of F1. representative body, which F1, perhaps the biggest in pects of CVC selling up; the or-break moment in the his- and Bernie Ecclestone cedes, and landed signifi- to guide McLaren back to CVC Capital Partners, was disbanded last month. his long and colourful possible Malone invest- tory of F1. Mr Dennis says a really do look like they will cant sponsorship deals over the top of F1. leading shareholder of F1, is Fota had been in decline career? Or will this season ment; the balance of power flotation may be a long way be parting company. It may the winter from Martini, It will be hard to achieve distracted not just by “the since December 2012, when be remembered above all between the ever-warring off, but if or when it hap- be a fraught, painful and Banco do Brasil and Brazil- quick success when much Ecclestone issue”, which on Ferrari and Red Bull with- for the drama taking place interested parties. pens, it would give F1 a val- seismic divorce, but it looks ian oil company Petrobras. of McLaren’s focus is on its own raises questions drew, as a prelude to both offstage in a Munich court- Choosing his words care- uation of $8bn-$10bn. inevitable. Even Mr Eccle- As for McLaren, any half- 2015, when the team reu- about a possible successor, signing lucrative unilateral room? fully, Mr Dennis says: “It’s “F1 has a size and stone recognises that. FINANCIAL TIMES FRIDAY MARCH 14 2014 ★ 3 The Business of Formula One Powerful pair plot course through trials and trying times

Politics Beleaguered boss Ecclestone has full backing of FIA’s Todt as he faces bribery charges in Germany, write James Allen and Roger Blitz

ean Todt, president of F1’s gov- usually with his position enhanced. payments. Heading the panel of Joined at the hip: Bernie Ecclestone So the trial is to begin with Bernie now be governed the way Todt wants erning body the Fédération However, given developments in the judges is Peter Noll, who two years and Jean Todt have a combative Ecclestone still running F1. He will fly it to be; part of the deal he struck Internationale de l’Automobile, courts there could soon be a power ago presided over the trial and convic- but loyal relationship that goes to Munich to attend sessions, which with Ecclestone last summer revolved and Bernie Ecclestone, F1 com- vacuum in F1. If this is to be the case, tion of Gribkowsky. back decades have been arranged on Tuesdays and around governance of the sport, nota- mercial boss, go back a long Todt would figure strongly in what At the conclusion of that trial, Noll Wednesdays, and carry on with the bly the introduction of the controver- Jway. In 1992, it was Ecclestone who comes next. said it was Ecclestone who had business of attending Grands Prix, sial F1 Strategy Group, which sees the proposed to Luca di Montezemolo, Judges are not the usual adversar- “brought the accused into breaking the and managing what promises to be a FIA, the commercial rights holder and Ferrari president, that Todt would be ies Ecclestone encounters but they law and not the other way around”. fraught and difficult season. the six leading teams deciding on the the ideal man to take over the under- now pose perhaps the greatest threat As the legal challenges mount for If he ends up being acquitted, with direction and rules for the sport. performing Ferrari F1 team. Mon- he has faced in his career. Ecclestone, Todt is fully supportive of his freedom secured and his reputa- High on Todt’s agenda for this year tezemolo heeded the advice and Todt In London’s High Court, Ecclestone his beleaguered colleague, tion safe, there may be no clear-cut is the long overdue implementation of went on to make Ferrari unbeatable, has recently come up against Mr Jus- “I feel Bernie has done an outstand- reason for CVC Capital Partners, the proper cost control, which needs to be winning five drivers’ and six construc- tice Newey who presided over German ing job in F1,” says Todt, sitting in biggest shareholder in F1, or any agreed by the end of June to be imple- tors’ world championships between media company Constantin Medien’s the FIA offices, a stone’s throw from other stakeholders, to get rid of him. mented in 2015. 1999 and 2004. ultimately failed $140m lawsuit Geneva airport. “And I respect a lot But the likelihood is that he has “I feel that [the FIA] has a responsi- Next Ecclestone was eager for Todt against the F1 chief executive. what he has been doing. There was a concluded that whatever the outcome bility to the sport to make sure that to replace his closest ally, Max Mos- At the conclusion of the civil dam- case in England where the conclusion in Munich it is time to go. Fifteen F1 is less expensive. It has to happen ley, when he stood down as president ages case over the 2006 sale of F1 to was that he was declared not years ago, he had heart surgery – he this time,” says Todt, pointing to the of the FIA in 2009. Despite making the CVC Capital Partners, the judge may guilty . . . The next step is in Germany has done remarkably well to hold the fact that with the F1 Strategy Group occasional scathing comment in the have ruled in Ecclestone’s favour, but and at the moment we aren’t in a reins for that time. in place, the FIA and the commercial media about the Frenchman and he said it was “impossible to regard position to comment until the verdict In December, Todt was re-elected rights holder together have enough despite some tough negotiations last him as a reliable or truthful witness”. there is given So at the moment for a second four-year term and he votes to force through change. year, when Todt managed to increase And he concluded that payments Bernie is not guilty. has a complex agenda. Plans include Running F1 is not as straightfor- the amount of money the FIA takes made by Ecclestone to Gerhard Grib- “Does he have my support? Sure.” using some of the FIA’s new revenue ward as it used to be. CVC has im- annually from F1 coffers to about kowsky, a former German banker It is a testament to Ecclestone’s stream to grow grassroots motorsport posed checks on Ecclestone’s commer- €40m, the pair give the impression of working on the sale of F1 in 2005-06, importance to F1 that even with these If there is to be a power in developing countries, and pushing cial dealing in light of the Munich being joined at the hip. amounted to a bribe to secure the sale charges against him, even at the age technologies and innovations from case, and there are any number of After more than 50 years in motor- to his favoured bidder. of 83, even though a succession plan vacuum left by Ecclestone, motorsport and F1 in particular, into besuited executives among the teams sport, Ecclestone’s demise has been Those conclusions may have a bear- is long overdue, the sport’s owners the wider automotive world, with the getting in the way of dealmaking. predicted many times. Somehow he ing on the criminal case in Munich in cannot bring themselves to part com- Todt will be a key figure in accent on sustainability and safety. All signs point to this being Eccle- has always found a way to outfox April, when Ecclestone stands trial on pany with the motorsport billionaire or what comes next Whether or not Ecclestone is stone’s last season running F1. Then his opponents and remain in charge, bribery charges relating to those start to ease him out of the hot seat. removed from office, the sport can again, maybe don’t bet on it. Race hosts need State of flux could help the deep pockets new kids stay on track and patience a dominant championship the end of 2009. But it was a The rookies win in the Formula Renault close-run thing. 3.5 feeder series last year, On FT.com “The first half of last sea- better cities before you have Young drivers may believes that the sheer scale » son was a disaster,” he Circuits recovered your investment. of the changes to Formula says, “because I had the To get it right, F1 race enjoy boost from One’s technical regulations speed to be fighting for Getting it wrong can weekend organisers need to regulation updates, this year could prove a wins every weekend, but be a costly business, get the national, or at the boon for the newcomers. things kept going wrong for very least, regional govern- Site scrutiny: Spielberg in Austria prepares to return to F1 writes Simon Gray “For a rookie like me, it’s me and the team. writes Roger Baird ment to back the project. helpful that things are “We didn’t score any As Zak Brown, chief exec- changing so much, because points over the first half of utive of Just Marketing licence fee of about £24m a race was dogged by falling The three drivers who will it means that everyone in the season, and I knew if Despite the fragile global International, a motorsports year to put on the race. The crowds and financial losses. start a Grand Prix for the Formula One will have to You can’t keep a that continued, it would be economy, there is no short- marketing agency, said: commercial rights holder Even though facilities first time in Melbourne this learn a lot,” he says. “It game over for my Formula age of hosts willing to “This is not just so it can keeps sales from TV rights improved in Mokpo, the loss weekend will be acutely may not be an advantage to good man down One dreams. But I managed stump up hundreds of mil- help with funding. The and track sponsorships. of the race was not greatly aware that Formula One is be a rookie, but this year Roger Blitz talks to turn it round and show lions to persuade the F1 car- state of Texas provided Because the organiser can mourned by the teams. an environment with little it’s less of a disadvantage.” in the second half of the avan to bring a race week- around £18m of funding for only make money from But they expect big mercy for rookies who fail Other F1 insiders agree, to Ron Dennis, season that I had the abil- end to their city. the Austin track. But ticket sales, it takes several things from Russia’s Sochi, to prove their worth rapidly. noting that experienced McLaren’s ity.” The sport may have given importantly, the state will years for a circuit to recoup which hosted the Winter McLaren’s Kevin Magnus- drivers must unlearn the Ericsson believes that up staging Grands Prix in help pass bills to greenlight its outlay, while it takes a Olympics last month, and sen, Toro Rosso’s Daniil reflexes built up driving comeback king having won three races India and , but planning, redirect traffic large marketing budget to from Austria’s Spielberg Kvyat and Caterham’s Mar- with normally aspirated www.ft.com/f1 with different teams in GP2, they have been seamlessly and close down parts of the promote a Grand Prix circuit, which returns to F1 cus Ericsson will be under engines, which produce he has demonstrated good replaced this year by tracks city to host street parties.” throughout the year. competition after 11 years pressure to deliver results. power at the top of the rev one-lap pace and strong in Russia and Austria. The race should be close The during which time it was Magnussen has been cho- range, in order to get the racecraft. “The challenge The reason is clear. If you to a big city so as to provide drew 95,000 fans to its first rebuilt by Dietrich Mates- sen by McLaren, despite the most out of turbo-powered for me is to be more consist- get it right, the way newer entertainment for the hun- race, but the next year, chitz, Red Bull owner. Dane’s relative inexperi- power plants that some- ent over the whole season, circuits such as Singapore dreds of sponsors and because of poor promotion, Observers expect Sochi to ence, to help the Woking- times require a more deli- to deliver my best every and Austin, Texas, have guests each team flies in. this had dropped to 65,000. have smoothed out infra- based team return to the cate foot on the throttle. weekend,” he says. done, the event nets tens of Tom Webb, head of com- The Indian race suffered structure teething problems front of the grid after its Says Magnussen: “The Kvyat endured a difficult millions in local spending. munications for the Cater- because it was not fully after the Olympics, but Rus- first season without a new power unit is much start to preseason testing, As Bob Fernley, Force ham team, says: “Montreal, backed by the Uttar sia’s opposition to gay podium in three decades. more complex in terms of principally because of the India deputy team princi- Austin and Melbourne are Pradesh regional govern- rights and Ukrainian sover- Kvyat, Russia’s second- systems. You also have to unreliability of Toro Rosso’s pal, says: “Singapore and good at this. There is a buzz ment, which decided that eignty issues could dog the ever Formula 1 driver, after manage the fuel in a very Renault engines, although Austin are shining exam- for days before the race. F1 was an entertainment Sochi race in October, in a Renault’s , different way, and it will he eventually managed 81 ples of how a Grand Prix Bars, restaurants and hotels not a sport and so was sub- way similar to when human leapfrogged the highly rated change from race to race. laps on the final day in can help showcase a region. are all happy to see you. ject to tax on all from fans’ rights protests beset the António Félix da Costa, You have to work really Bahrain – more than during In Singapore, people now This makes sponsors, who tickets to drivers’ salaries. . who has had to make do well with the team to make the whole of the first two come into the country days have high disposable in- The matter ended up in Red Bull’s deep pockets with a test and reserve the car work for you.” tests in Jerez and Bahrain before the race, or stay on comes, want to come back.” India’s Supreme Court. and experience in F1 lead driver role with Red Bull. That is something combined. and spend money.” But perhaps, most impor- The , teams to expect the revival Ericsson knows that Cat- McLaren are confident that The 19-year-old Russian, The Singapore Tourist tantly, an organiser needs launched in 2010, suffered a of a classic European race. erham dropped Giedo van Magnussen, whose father who had a storming run to Office said last year there deep pockets and patience. bumpy four years until it Geoff Simmonds, Lotus der Garde last month after Jan drove for McLaren as a last season’s GP3 title that was a 12 per cent surge in Bringing an F1 race to a was dropped from the calen- race team co-ordinator, says: just one season. Like Mag- stand-in, can deliver, point- catapulted him straight into flights into the country city is not cheap. Jaypee dar. As far as the teams “Apart from a great track, nussen, paired with 2009 ing to his impressive per- a Formula One seat, says: over its September race Group, organisers of the were concerned its main we expect a return to the world champion Jensen formance in preseason test- “Having carried out many weekend, which brought in Indian Grand Prix, spent problem was location. The old days – parties around Button at McLaren, the ing and high-quality techni- important tests and done an extra £71m to the island about £250m to build the race was situated close to the campsites at night.” Swede has to prove himself cal feedback to the team’s some longer runs, I am state over the period. Buddh International Circuit the port city of Mokpo, 250 Organisers at Sochi and against an experienced engineers. much more confident with But if you get it wrong, in Uttar Pradesh and host miles from the capital Spielberg will be hoping they teammate, the sometimes He believes he benefited the car. We are still trying you can spend huge sums three races there from 2011. Seoul, and had none of the get things right. If they do erratic but fast and combat- from racing in the Formula to catch up, but we are to build and promote a cou- This includes paying F1’s restaurants, bars and hotels not, there is no doubt a ive . Renault Series, rather than making good progress.” ple of races only to see the commercial rights holder, the teams were used to. queue of rivals who reckon The shortlived Formula 1 the GP2 feeder series that Kvyat is looking forward sport move on to potentially led by Bernie Ecclestone, a Over the four years, the they could do a better job. experience of Van der races on Grand Prix week- to his country’s inaugural Garde and another 2013 ends. “In GP2, your track round of the championship, rookie, Marussia’s Max time is limited because of scheduled for October at a Chilton, is a cautionary tale the need to fit in circuit on the Winter for the three newcomers. around Formula One Olympics site in Sochi. Contributors » They can take heart from practice sessions,” He says: “Having a Esteban Gutierrez, who Magnussen says. “We Grand Prix is very after an unpromising start chose a series that good for the fans, at Sauber kept his seat with gives you a lot of time and motorsport is James Allen Roger Baird Andy Mears (0)20 7873 4148 and a series of excellent late- in the car.” definitely getting F1 correspondent, Financial FT contributor Picture editor [email protected], or your season performances, and Competing in front of more popular in Times and BBC Sport usual FT representative. All FT Valtteri Bottas, who has Formula One bosses Russia.” Simon Gray Steven Bird Reports are on FT.com at shown his ability in pre- watching from the pit FT contributor Designer ft.com/reports. Follow us on season testing of the much wall eventually paid off for Daniil Kvyat Roger Blitz Twitter at: @ftreports improved 2014 Williams. Ericsson, who spent four is Russia’s Leisure industries Peter Chapman For advertising details, All editorial content in this Magnussen, who won years in GP2 and first second­ever correspondent Commissioning editor contact: Liam Sweeney, +44 report is produced by the FT. over McLaren’s bosses with tested a Formula One car at F1 driver 4 ★ FINANCIAL TIMES FRIDAY MARCH 14 2014