Shhh,
don't let the cat out yet
Photo
by
Getty Images
There has been a lot of speculation both here and abroad about
the recent series of meetings between Championship Auto Racing
Team CEO Chris Pook and Formula One supremo Bernie Ecclestone.
The speculation ranges from the sublime to the ridiculous,
from a partnership between the two open-wheel road-racing
series to Bernie buying CART lock, stock and lug nut.
If one steps back from the politics surrounding the situation,
I think the answer may be, as Sherlock Holmes once observed,
"hiding in plain sight."
Major league open-wheel racing, worldwide, is in trouble.
Formula One, CART, Formula 3000, the IRL -- wherever one looks
race attendance and television ratings are not what they once
were and leave a lot to be desired.
With Bernie being the de facto head of two of the
aforementioned series and Chris being the head of another, it
is actually pretty obvious what the meetings were about: what
can be done to make things better.
For Bernie's Formula One and F3000, the United States has
proved to be a tough market to crack. United States Grands
Prix have ranged from as many as three in 1982 to as few as
zero. The Formula 1 circus has tried racing at Sebring, FL;
Riverside, CA; Watkins Glen, NY; Long Beach, CA; Las Vegas,
NV; Detroit, MI; Dallas, TX; Phoenix, AZ; and Indianapolis,
IN. All without appreciable long-term results. Formula 1 has
even tried surrounding the States with North American Grands
Prix in Canada and Mexico.
Somewhere along the line, probably after Long Beach, Bernie
must have more or less given up. The rumor was that if one
came up with the requisite sanctioning fee, Ecclestone would
let one hold a Grand Prix in a Ralph's supermarket parking
lot.
Whether or not that's the mood he was in when Tony George came
waltzing through the door with a reported $15-million annual
sanctioning fee (+ television revenues) and a willingness to
bulldoze the Indianapolis Motor Speedway to the tune of a
rumored $75 million, is anybody's guess?
The bottom line stayed the same: it didn't work.
One George apologist remarked defensively, "While the return
of the U.S. Grand Prix, now based at the historic Indianapolis
Motor Speedway, has been well-attended, it has thus far failed
to spark a wholesale revival of widespread interest in Formula
One racing in America."
The publicist failed to add some footnotes: "well-attended" is
a relative term and doesn't necessary mean growing attendance,
which is good, because it isn't. Only George knows for sure
but even he was optimistically talking about a US GP crowd of
120K for 2002, down from the inaugural count two years ago of
200K. It looked like a lot less than 120K. George has a habit
of counting tickets "sold" as equaling attendance.
Theoretically, he could "sell" 100K tickets to the Girl Scouts
of America for a penny each for charity door-to-door sales and
boost the "attendance" quite a lot.
The other footnote would have to be about that supposed
"widespread interest in Formula One racing in America." It's
never been what could be called exactly "stellar" (except when
Mario Andretti was chasing the F1 championship).
In the past,
Bernie and his "former" lawyer, Max Mosley of the FIA, could
turn their back on such failure and shrug. It's hard to ignore
a potential gold mine of nearly 300 million consumers, but it
can be done. China has over two BILLION "consumers" and
Bernie's only looking into it now. But, there's a difference.
China's market could probably best be described as a salt mine
on a good day (with a per capita daily income a tad over a
buck). Plus, there's the Hollywood factor. America is to
international media as Bernie is to Formula One. Make it there
(Hollywood) and one simultaneously makes it everywhere.
So, Bernie was probably hoping for a little more from his
minor partnership with George than was delivered.
Situations, as they say, change. In the three years that
Bernie's circus has been camped out in Indiana, they've
changed a lot and not for the better. The world's economy has
gone south and so has Formula 1's television ratings. The US
market that was so easy to ignore just might prove to be the
edge that saves Bernie's bacon. It would go a long way toward
mollifying skittish Formula One sponsors if one could open up
some new market exposure in the NAFTA countries, especially
the US.
That's the split in the road where Ecclestone takes a path
different from George. Tony is first, most, and always a track
owner and he thinks like one. What's important to him is
attendance. That's where the ticket and concession income is
and it's his filled stands, to his mind, which attracts
television money. That's because in his grandfather's case the
one came before the other. Bernie can think like that also
because he's promoted a few races in his time, but that's not
how he built Big Formula One. He did the reverse. He built the
television first and IT attracted the fans. Once he had a lot
of both, television coverage and fans, then Ecclestone
concentrated on ticket and concession sales. Plus, Bernie's
had an experience completely alien to George: collecting fat
sanctioning fees for deigning to bring his circus to town.
So, it's not so much of a surprise that Bernie is talking to
Chris Pook, one promoter to another, about what can be done to
fix the current state of affairs. Ecclestone knows that Pook
knows that one race does not equal market penetration, no
matter how big (or small) it is. Bernie's problem extends well
beyond the success or failure of the US GP. His Formula One
has a schedule of 17 races worldwide. For his series to have
any marketing impact in America, he needs a considerable
number of its auto racing fans to be following all 17 of his
races; kind of like they follow the 36 NASCAR races.
Ecclestone has already tried the "put on a race and they will
come" approach until he's blue in the face--with negligible
results. What he really needs is a Formula One based in the
U.S.
Why? Because the only motorsports market in the U.S. that is
completely saturated is the one for All-American oval racing.
Anyone attempting to compete in that market will have to be
content with NASCAR's leavings. Anyone else is going to have
to find a new market or revive an old one or, most likely, a
bit of both. And one can't do that from London with one measly
remote-controlled race.
Bernie:
If I have to watch another oval race I'll poke my eye out
Photo
by
Getty Images
All the conventional wisdom about the American motorsports
market has been exhausted: Americans mostly want to see
American drivers--check, NASCAR has it covered. American fans
love racecars running in packs with photo finishes--check,
NASCAR has it covered. American race fans are in love with
oval speedways and want nothing else--check, NASCAR has it
covered. All the way down the conventional wisdom
clipboard--check, NASCAR has it covered.
Try to get a new motorsports series off the ground in the
US--check, NASCAR *had* it covered but it was shot dead while
trying to escape.
Formula One didn't have the instant recognition and tremendous
global popularity it enjoys today when Bernie took its helm.
Ecclestone developed it, almost from scratch. Bernie created
the convention wisdom where Formula 1 is concerned, he had
none to go by himself.
So, he knows a thing or two about creating a new market where
the interest is dormant or only partially realized. His goals
for the American market, were he to accept the mission, would
be to revive widespread interest in road racing (particularly
the open-wheel variety)--of which there was plenty--and
increase it, while branding it (somehow) with an
identification with Formula One. In other words, go for the
American motorsports audience that the conventional wisdom has
overlooked or ignored. Given that task alone, even now, Bernie
could pull it off.
But Ecclestone has bigger fish to fry, lots of them.
Therefore, one solution to his problem would be to find a
surrogate for himself and a surrogate for Formula One in the
United States. For such a solution to work, the guy would have
to be balsy and smart and the open-wheel series would have to
be clearly labeled "Formula 1" to provide a bridge to the real
thing.
Bernie has already talked with Tony George and kicked the
tires of the IRL. Now, he is talking with Pook and walking
around the CART paddock.
Ironically, one of Ecclestone's biggest impediments is the
popularity of his own showcase series. There is more demand
for Grands Prix worldwide than Bernie can accommodate. He's
making preparations to add a Grand Prix in Bahrain and he's
made it clear that means one of the traditional GPs is going
to have to go. Seventeen races and no more. Thus, the days of
staging three US GPs in a season, even if it would work, are
over.
Clearly, the only thing that would work is a US-based major
league open-wheel road-racing series with "Formula One"
written all over it. With major teams in both series and
drivers coming and going, the mounting success of the American
series would be carried over to Formula 1 and its full season.
If the American series had, say, 20 races, added to Formula
One's 17, that would provide the fan of the combined series 37
races to enjoy--one more than NASCAR.
Plus, Bernie would then be the position of having "expansion"
Grands Prix. He couldn't dilute the American series' venues
too much, but he'd have a least two or three new "Grands Prix"
to barter elsewhere in the world; say the Pacific Rim. Also,
the new series could be expanded to as many as 24 races.
With careful scheduling at least half the new American series'
races or more could be held on weekends between Grands Prix.
Thus, both series would get the required "down time" necessary
to prepare for the next race yet be able to provide nearly
weekly races. The combined series could maintain NASCAR's
grueling schedule but at a comparatively relaxed pace. Over
the long haul this would give open-wheel road-racing an edge.
Everyone tries to
think like Bernie, but only Bernie thinks like Bernie. Having
said this, if I were Bernie, here's what I'd be thinking:
(1) I need a Formula One 'Lite' based in the United States. It
can't be perceived as being TOO close to Formula 1 to be real
competition, but it must be close enough so that the fans of
it will be more than eager to watch the "big show" (i.e.
Formula 1). Size and performance of the cars aren't really a
threat as long as the series is a "spec" series and Formula 1
is not. So, Formula 1 Lite cars must have enough power and
size to get respect and put on a great show. The two series,
though, should never run on the same track.
(2) Besides the obvious correlations (i.e. big, open-wheel
formula cars) the American series must be literally branded
with Formula One, so the series needs to officially be
"Formula 1's support series".
Immediately, this has certain ramifications. The series will
need to be "spec" for sure, to keep costs low and so that the
cash-strapped Formula One teams can afford to run a "junior"
team. The payback, though, is potentially enormous. The
Formula 1 manufacturers are not only growing Formula 1's
international exposure but they get to "double-dip" in the
American market: 20-24 extra races in the NAFTA region with
Formula 1's sponsors on full-display!
Formula 3000 will somehow have to accommodated. That's not
going to be easy unless one is willing to give up one thing:
having the cars run in Europe on the same tracks as Formula
One. If having the cars run over there is a requirement,
things get messy. The costs will skyrocket for the Formula 1
"junior" teams to compete on both continents and the American
schedule would have to be pruned to accommodate the European
races. Worse, comparisons will naturally be made so the
American series cars would have to be degraded in performance
relative to Formula 1. That would hurt the "show" and that's
something Bernie really doesn't want to do.
Perhaps better would be to modify the current Formula One
practice where the progression for a new driver is usually
F3000-->team test driver-->F1 seat. Except for familiarity
with a few of the tracks and the European ambiance, the
driver's skills would not suffer from a season or three spent
in the Americas before being brought over for Formula 1 test
driver duty. Do this and one gets some potential side
benefits, like the American series can run V-10 engines like
Formula 1. This will give the Formula 1 up-and-comers a better
taste of the "real" thing without risking comparisons with the
main attraction. Also, this would help to further brand the
American series as "Formula 1 Lite".
As it is Formula 3000 is in dire straits and in need of
infusions of cash if it is to survive. One problem is that it
is playing to the exact same audience as Formula One. Besides
a training ground, what additional benefit would the sponsors
of, say, the Williams Formula 1 team receive from a Williams
F3000 team? The F3000 team plays to Saturday's audience
(usually a reduced amount of Sunday's audience). Replace F3000
with a new American series and the teams are the feature
attraction for a whole new Sunday audience.
(3) One doesn't need the hassle and expense of starting from
scratch. The CART FedEx Championship, the best candidate, is
already up and running with a schedule of 20 races and a loyal
fan base numbering many more than the rival open-wheel series.
It's also a no-brainer in that one series is a road-racing
series like Formula One and the other is an all-oval series
based at speedways. With its official status, the new CART
series (say "Formula America") would be directly linked to
Formula 1 such that there would likely be a transference of
interest by the fans of Formula America to Formula 1.
Moreover, CART is basically only in need of a subsidy and a
strategic alliance with a partner with some media clout. Add
an engine partner like Cosworth (or a badged Judd) and it
would likely pay half of its own expenses initially. Within a
relatively short period of time it would be self-supporting
and returning a profit. The series is now well run and well
organized. It's in the unique position that it is capable of
being radically transformed in short order with virtually no
obstacles, unlike the current attempts to reform Formula One.
There are virtually no entrenched special interests left in
CART: the engine manufacturers, many of the large sponsors, as
well as the powerful team owners have bowed out of the series.
The series could be reconfigured in a remarkably short period
of time at a reasonable cost and the Formula 1 junior teams
would have a level playing field from the first day.
(4) The all-important American television equation could be
solved by using Formula One's international media power to get
the new series domestic coverage.
First, the marketability of the new American series would
skyrocket with the addition of the brand recognition and
glamour associated with Formula One and with the participation
of teams with names like Ferrari, Williams, McLaren, Sauber,
etc. The attendant elevation in prestige would put the series
on the map as never before. Plus, the new series could now
match the media muscle of the entrenched oval-track
conglomerates with that of the international Formula 1 press.
In a battle for credibility, there is no way that the
parochial view of an Indiana or Daytona Beach-based press
could win out against overwhelming global opinion. With NASCAR
itself preparing to allow in foreign manufacturers, it lays
itself open for the first time to criticism from the
international community. It could no longer circle the wagons
and take refuge in traditional American isolationism--i.e., an
"us vs. them" stance.
With Formula One using its influence to ensure the new
American series gets international exposure as the official
jumping-off point to the highest level of open-wheel road
racing the series would have blanket international media
coverage overnight! Just as American movie studios have found
they can't ignore the lucrative international market, so too
would American television. (Would they rather be in a position
of buying the Formula America feed from international media or
selling it to them?) Sponsors who have more than regional or
national ambitions would have to look seriously at a motor
sports series with 80% global reach.
The new American series would be easy to "piggy back" on the
traditional Formula One press. Whereas CART does not even have
a magazine devoted to it, Formula 1 print media, TV shows,
news broadcasts, highlight shows, etc. could add coverage of
the new series for very little cost--yet the immediate reach
would be enormous. What subscriber ever complained of
additional free features?
The television situation has unique benefits for Formula One.
Any American audience that results from the popularity of the
new series is a net gain for Formula 1 if they transfer over.
Most Formula One races take place in time zones that are
inconvenient for the American fans to watch. While this
difficulty can be partially off-set by taped-delay broadcasts
on cable systems in the U.S., it does nothing to address the
lucrative free-to-air media market and does nothing to
increase the general popularity of Formula 1 in the U.S.
Without increased popularity, both free-to-air and cable
broadcasters in the U.S. are reluctant to show re-broadcasts
of Formula 1 races. In this regard, in the American media
market, Formula 1 is little better off than CART.
CART, on the other hand, has nearly all its races taking place
in time zones and at venues that allow convenient viewing
and/or race attendance by its American fans. It is the better
vehicle to "sell" Formula One's open-wheel road-racing
message.
As the new American series' popularity increases so, likely,
will Formula One's. Thus, Formula 1 will be able to negotiate
increasingly better US media packages. Or the two series could
be combined for added muscle in contract talks.
For Formula One the new series has the wonderful media affect
that it adds to Formula 1's audience without diminishing it
one bit. Since, in a way, the new series is the "flip-side" of
Formula 1, the new series has the same disadvantages with
international audiences as Formula 1 has with American. It's
races will take place in time zones and dates inconvenient for
casual international viewing so it will probably have to be
tape-delay broadcast and might even become, in some areas, the
equivalent of America's "Monday Night Football." This means
Formula 1 gets the benefits of any new American audience that
is created yet retains its traditional audience who plans
their weekends around Grands Prix.
(5) Both Formula One and CART share the "American driver"
problem. It is a widely held belief that no motorsports series
in the United States can gain popularity without the presence
of both American teams and drivers. To a very limited extent
this is true. However, the vast majority of drivers in NASCAR
are American. As the most popular form of motor sport in the
US one could never hope to compete with NASCAR for popularity
primarily on the basis of the presence of American drivers.
While some American presence is obviously necessary, what is
really lacking is a familiarity and identification with the
drivers already in CART and Formula 1.
Hollywood can be used as an example. Such is its media and
cultural reach that American and Canadian actors become major
international stars; but few foreign actors attain that status
unless they come to and are accepted in Hollywood.
In American motorsports at the present time there is little
crossover because there is no acknowledged "center" of the
sport (like Hollywood is to movies). American driving stars,
primarily NASCAR, stay American stars almost exclusively;
while international Formula One stars, with rare exception,
stay stars primarily outside the US. For a variety of reasons,
CART has recently experienced the loss of many of its
well-known drivers to other series, including Formula 1. As
Formula 1 is almost a non-presence in the United States, CART
drivers 'graduating' to Formula 1 might as well have
disappeared.
The alliance of Formula One and CART offers the first
opportunity to use the media to build the celebrity of both
series drivers because they are not being "lost" to another
series. Fans can follow their favorite drivers from the minor
to the major racing league seamlessly, much like baseball.
This will expand the marketing opportunities for everyone
concerned: sponsors, teams, and drivers.
(6) The alliance could provide an answer to the "Ferrari
problem" which would not require the extensive reordering of
Formula One. The very lowest budget for a team in Formula 1 is
reported to be around $50 million. The budget for a Champ car
in the upcoming 2003 season is estimated to be about a tenth
of that, $5 million. With pre-planning and attention to detail
the new American "spec" series might conceivable reduce it
another third. Theoretically, however, all the cars in the new
series would be equally competitive. So, one could expect to
see a Jordan or BAR or Minardi out front in the new series as
much as a Ferrari or Williams or McLaren. Suddenly, the usual
back-marker teams' sponsors are getting a big added return on
their investment for a fraction of the Formula 1 budget.
This could not only provide bone fide results for the smaller
teams but provide some real drama and excitement to Formula
One itself. For example, imagine if Minardi's up-and-comer in
the new American series consistently beats Ferrari's
up-and-comer. Despite whatever disparity might exist in
Formula 1, Minardi fans would probably feel a great sense of
anticipation waiting for their "hot" new driver to arrive in
the big leagues to duel with Ferrari's ace.
This benefits everybody and will likely double the number of
recognized celebrity drivers in both series.
(7) The oval track-owning conglomerates in the U.S., IMS's
owners included, do not have Formula One's interests at heart.
In fact, they are openly hostile to professional road racing
in all its forms (except within their speedways) and consider
it competition. If CART is allowed to succumb under pressure
from this special interest group, Formula 1 will never again
have the opportunity it has now to gain a foothold in the U.S.
For Formula 1 it is act now or never.
(8) Finally, CART is cheap. Cheap to buy and inexpensive to
run. To the extent that one has confidence in one's ability to
build up the series there can be no greater investment. Even a
fifth share could eventually reap billions in profit.
AutoRacing1 is an
independent internet online publication and is not affiliated with, sponsored by, or endorsed
by CART Inc., NASCAR, FIA, FedEx, Winston, or any other series sponsor. This material may not be published,
broadcast, or redistributed without permission. User agreement
& disclaimer
