Liberty trying to offload F1?

[Everso Biggyballies]

Formula One For Sale, Again

It seems Liberty are having second thoughts about F1, having failed to meet any of their objectives to date....
Having read their thoughts on Bernie re-aquiring the shares he once owned I am not so sure, on the basis minly of his ge, now near to 90. (88 to be precise). I think he knows he got out at the right time. But I guess, if the price is right.....

Less than 3 years after Liberty Media acquired Formula One, the company is reportedly exploring scenarios that would decrease their stake in the international racing circuit; everything from an exit to the introduction of new equity partners in on the table. Liberty has failed to add races (see: Miami) and/or major sponsors, attract younger fans (fact: just 14% are < 25 years old) or drive digital revenues (.06% of total revenue in ‘18); issues that collectively indicate the C-suite is in over their heads and taking direction from the wrong places. Keep an eye on former owner Bernie Ecclestone, the British business magnate has the capital, know-how and can likely reclaim the asset back for a fraction of the $8 billion he sold it for.
https://johnwallstreet.com/formula-one-for-sale/

[erwin greven]

lol...
Now we got a Lexit?

[John]

Bernie has been 88 years old for 10 years now.

I do feel that Liberty have made progress in many areas, especially in the way they market the product online and on various social media platforms. But if they expected a boom within two years, they were delusional. Didn't they know what they were getting themselves into?

[Everso Biggyballies]

They may present things better, but all to no avail. They have put too many issues in the too hard basket and instead tried band aid fixes and strange strategies.

I also think that they put too much faith in the teams all wanting to rush in and take a share of the business, even at inflated prices which of course they did not, leaving Liberty perhaps with more capital tied up than they anticipated or could justify given their additional huge increases in costs for all their marketing office space etc, not to mention the huge increase in staffing costs.

Clearly now any shares sold in the business are going to be at fire sale prices.

[kals]

Apparently the person who wrote this blog piece is a well know bullshitter.

Liberty have done a fair amount of good in their initial years in control, bringing certain aspects of the sport into the modern age. There's lots more to do however. Liberty and their board will have made long terms plans and investment strategies so for them to want to bail so soon would be unlikely. It isn't unlikely that their board are asking questions about progress in certain areas. That's normal business for every organisation.

[Everso Biggyballies]

Apparently the person who wrote this blog piece is a well know bullshitter.

To back that I see planetF1 are running with the story.... (talking of bullshit reporting)

https://www.planetf1.com/news/formula-1 ... in-report/

Also not the best time for reports such as this, claiming that 16 of the current GP Promoters criticising Liberty

The Formula One Promoters Association, which describes itself as “representatives of 16 grands prix”, issued a statement critical of Liberty after meeting its senior representatives in London on Monday.
Among FOPA’s concerns is the sport’s move away from free-to-air broadcasting. This year the UK will become the latest in a series of countries to lose live free-to-air coverage of the sport. The sport’s previous owners awarded pay-TV channel Sky exclusive live broadcast rights to every round aside from the British Grand Prix.

“It is not in the long term interest of the sport that fans lose free access to content and broadcasting,” said FOPA in its statement.

It also challenged Liberty’s rate of progress in developing Formula 1. “There is a lack of clarity on new initiatives in F1 and a lack of engagement with promoters on their implementation,” said the statement.

FOPA warned Liberty not to undermine existing races by adding new rounds to the calendar. This appears to be a thinly-veiled criticism of Liberty’s courting of Miami to host a second US round of the championship by offering it a cut-price deal.


Why Hanoi and Zandvoort look like well-timed good news for Liberty

“New races should not be introduced to the detriment of existing events although the association is encouraged by the alternative business models being offered to prospective events,” it said.
“As we enter a new season of the sport that we have promoted for many decades, the promoters seek a more collaborative approach to the development of the championship and the opportunity to offer their experience and expertise in a spirit of partnership with Formula 1 and the FIA,” the statement concluded.

FOPA is chaired by Stuart Pringle, the managing director of Silverstone, which hosts the British Grand Prix. It is one of five rounds on this year’s schedule which does not have a contract to appear on the 2020 F1 calendar, having triggered a break clause in its current deal in 2017.

Update 08:41: RaceFans has confirmed the 16 races represented by FOPA are as follows: Australia (Melbourne), Azerbaijan (Baku), Spain (Catalunya), Canada (Circuit Gilles Villeneuve), China (Shanghai) – not present at meeting, France (Paul Ricard), Austria (Red Bull Ring) – represented by Hungary at meeting, Great Britain (Silverstone), Germany (Hockenheimring), Hungary (Hungaroring), Belgium (Spa-Francorchamps), Italy (Monza), Singapore, Mexico (Autodromo Hermanos Rodriguez), USA (Circuit of the Americas) and Brazil (Interlagos). The five races not represented (excluding newcomer Vietnam) are: Bahrain, Monaco, Russia (Sochi), Japan (Suzuka), Abu Dhabi (Yas Marina).

https://www.racefans.net/2019/01/29/lib ... -f1-races/

[kals]

I don't see any issue with those (or any) race promoters questioning the strategy and providing critical feedback. Their contracts are still legacy Bernie so it's only fair they seek a better deal.

[kals]

Long but worth a read as there are some relevant points as to why Liberty appear to not be making progress in certain areas and why they are not deserving of as much criticism as they are getting.

This week's media statement from the Formula One Promoters' Association (FOTA) criticising Liberty Media for its running of the championship has fuelled the debate about whether F1's chiefs are doing a good enough job.

A quick glance on social media shows there are fans who remain enthralled and full of excitement for the on-track battles ahead. Then there are those who are more unhappy about modern F1.

There are debates about the lack of action on the track, concern about the gulf between the top three teams and the rest, F1's falling income, declining viewer numbers in some markets because of the pay TV switch and uncertainty about what is really going to change from 2021. Amid that, it is all too easy to think that F1 has been cut loose and is lost at sea.

But at times like this, it is important to sit back and understand that a lot of the issues central to the negative thoughts are those that either Liberty inherited from the previous regime or that simply cannot be realistically immediately changed.

For example, one key point of contention for fans, teams and sponsors (and now promoters) is the shift towards pay TV. In the UK, in particular, there is some discontent about F1's viewers now having no choice but to subscribe to Sky if they want to watch the championship's action live - whereas last year they could watch a lot of the races free and live on Channel 4.

The promoters are right that it is "not in the long term interest of the sport that fans lose free access to content and broadcasting", but the Sky deal was agreed before Liberty came on board, and there is no other option than to stick to it until it runs out in 2024.

But what else can be done for British fans? As frustrating as it is, the F1 TV streaming service that Liberty has been rolling out in certain markets won't be coming to the UK very soon even if the F1's bosses wanted it to happen. Contracts are contracts, at the end of the day.

F1's commercial chief Sean Bratches has long hinted that he would have preferred more flexibility, but with deals already in place there is very little that can be done unless you want to end up in court.

Back in 2017, ahead of the launch of F1 TV, Bratches was pushed on what he could do for British fans that didn't want to subscribe to Sky and would prefer the streaming option.

"I don't want to get into specifics of any given contract, but, generally speaking, our ability to exploit the digital marketplace will come in deals that are not prospective, rather than legacy deals," he said. "There wasn't as keen a viewpoint for the exploitation of digital in the existing deals that have been done."

It is also not quite so simple to conclude that just because some markets have reduced viewing numbers because of the move to pay TV, F1 as a whole is suffering.

For its commercial bosses, the extra amount that channels such as Sky are willing to pay (its exclusive UK contract is believed to be worth more than $1billion) goes far beyond what normal terrestrial channels can offer. Maximising income is one of F1's key targets.

Also, the global picture for television viewers is brighter than some have suggested - and there has been a turnaround since 2017 in the number of viewers the championship is attracting. From peaks of around 600 million unique viewers in 2008, the march towards pay TV has served to slash audiences. But in '17 F1's chiefs claimed there was a rebound.

Since then, F1 has recalibrated the way it counts audience - it now uses the industry standard three-minute viewing figure rather than the 15 taken before - so it is hard to get a fully clear picture of how the trend has gone over a long-term period.

But comparing 2017 to last year, a revised figure of around 445 million viewers for '17 (using the three-minute count) jumped up to 490.2 million tuning in for '18. A 10% uplift in audience is a sign of things moving in the right direction, not the wrong one. While some markets have indeed struggled, others have boomed: France was up 51%, Russia up 27%, and the USA up 20%.

With Liberty's hands tied in terms of the contracts it inherited, there is not much opportunity for things to change - and no reason why F1 should abandon a tactic that works well in most other sports of trying to mix up free-to-air and pay TV.

But this is an area that Liberty really cannot do anything to win over the critics in the short term.

The promoters' other gripe about "lack of clarity on new initiatives" and "lack of engagement with promoters" is also something that has been voiced by the teams.

When Liberty arrived in F1, there was bullish talk about making the championship bigger, brighter, better and more popular. But when the honeymoon period ended, and its broad stroke vision was not given more detail, some angst started about there being too much hot air and not enough action. One team boss cheekily suggested that the only change he had noticed was the odd zip wire behind the grandstands.

But in terms of reimagining F1, Liberty is also trapped in a 'damned if it does, damned if it doesn't' scenario. If it had rushed feet first into a total revamp, then it would have been criticised for making kneejerk changes that were not needed.

In adopting the approach it has taken, by doing a lot of research to evaluate how best to change things, it has taken time to try to get things right. In the short term that can be frustrating for those that want to see more, but in the long term the results should (hopefully) be better.

After all, we learned through panic changes such as elimination qualifying and double points for the 2014 season finale (above) that rushing things through quickly is not always the right answer.

Perhaps Liberty's only mistake has been in not speaking more openly about what it is doing behind the scenes. It was only by mistake, for example, that images of its 2021 concept cars leaked out last year - leaving fans excited about what was potentially coming. But had they not emerged, then we would have been none the wiser about the amount of work that F1 has been doing to try to make grand prix racing cars look exciting again.

Ultimately, the battle between the promoters and F1's owner is about money. The racetracks want cheaper deals and bigger audiences (more tickets sold), while Liberty wants to keep race fees as high as possible.

"F1 and the FIA want to improve the sport, want to improve it for the competitors and for spectators and fans"
Ross Brawn
Both sides are coming at it with different needs, and a deal that overjoys the promoters is not one that will work well for Liberty. It's a classic business battle.

Under Ecclestone's tenure, his masterful negotiating tactics ensured that he kept getting top dollar from everybody - any tracks or countries not willing to pay out were cast aside. Plenty of governments were willing to skip to his beat.

Being at the head of F1 is not a popularity contest. It's not about making decisions that win you as many friends as possible. It is about juggling the needs of the numerous stakeholders to come out with the best product possible and take it to the biggest audience you can.

In the perfect world, F1 would be sold to free-to-air channels who were paying the biggest bucks and fans could have free access to the streaming service on as many devices as they want. But that is ultimately an impossible dream. Someone must pay to keep the wheels going around - and real world needs must be accounted for.

In a business as complicated as F1, you can't have your cake and eat it. Liberty is not running a charity; this is a global business where unpopular decisions have to be made.

Before the Christmas break, F1 managing director of motorsports Ross Brawn left a clear message, saying that while progress hadn't been as quick as he would have liked, he hoped everyone would understand that efforts were being made to make things better.

"My wish would be everyone recognises our ambition, and the ambition of the FIA, is to only improve the sport," he said. "We've got no personal ambition in this. F1 and the FIA want to improve the sport, want to improve it for the competitors and for spectators and fans.

"The changes we would like to make only have that one objective: and I think if everyone can focus on and understand that we are only working to improve the sport, that will be great."

In the short term, there is little that Liberty can do to silence the critics, and there is no need for it to abandon its path just to keep people happy. What is much more important is that it gets 2021 right. F1 needs the right rules, the right cost control, the right prize money structure, the right cars and the best racing.

Only then, because Liberty has had a blank canvas to draw upon, will we finally be able to judge the job that it has done and declare it a success or failure.

[MonteCristo]

https://racer.com/2021/02/26/formula-1- ... -hit-2020/

Formula 1 posted a loss of nearly $400 million as a result of the impact of COVID-19 on the 2020 season, according to Liberty Media’s latest earnings report.

Makes you wonder...

[Aty]

When was it last time F1 made any money under normal conditions?

[Everso Biggyballies]

When was it last time F1 made any money under normal conditions?

In real terms when Bernie was running it for CVC (pre 2016). The problem (or one of them) with Liberty is they have taken a show that Bernie ran with a handful of people and a gold plated phone book with personal contacts to die for, running out of a small office, and replaced that with a staff of 1500 departmentalised overpayed underqualified idiots with fancy degrees and Phd's in management and marketing, who know nothing of the business or the real world, and who need a city centre high rise to accommodate them all.... and all the overhead and fixed costs that go with that. And then had Covid compromise their plans further..... none of which were real world.

In real terms they lost money in 2016, (the year of the acquisition I guess) but that was a result inherited from the previous owners (CVC) activities. They lost money every year until 2019 when they made a' mighty' S17 million profit on an income of $2,022million, an abysmal figure for any investor seeking a return.

Then of course 2020 was an unmitigated disaster due to the Covid ramifications. In the same period the teams income dropped successively until 2019 when it increased by $90 million across 10 teams.

The Liberty POV on their lack of financial performance is that they are building a structure to develop the income in future years.

To be fair to Liberty they bought a business from CVC that Bernie had operated (on instruction from CVC who by now were his employer with him having a minimal shareholding and a handsome profit share for renumeration), with the sole objective of being extraordinarily profitable, solely for the purpose of sucking in someone like Liberty who thought they could maximise it further.

[Aty]

When was it last time F1 made any money under normal conditions?

In real terms when Bernie was running it for CVC (pre 2016). The problem (or one of them) with Liberty is they have taken a show that Bernie ran with a handful of people and a gold plated phone book with personal contacts to die for, running out of a small office, and replaced that with a staff of 1500 departmentalised overpayed underqualified idiots with fancy degrees and Phd's in management and marketing, who know nothing of the business or the real world, and who need a city centre high rise to accommodate them all.... and all the overhead and fixed costs that go with that. And then had Covid compromise their plans further..... none of which were real world.

In real terms they lost money in 2016, (the year of the acquisition I guess) but that was a result inherited from the previous owners (CVC) activities. They lost money every year until 2019 when they made a' mighty' S17 million profit on an income of $2,022million, an abysmal figure for any investor seeking a return.

Then of course 2020 was an unmitigated disaster due to the Covid ramifications. In the same period the teams income dropped successively until 2019 when it increased by $90 million across 10 teams.

The Liberty POV on their lack of financial performance is that they are building a structure to develop the income in future years.

To be fair to Liberty they bought a business from CVC that Bernie had operated (on instruction from CVC who by now were his employer with him having a minimal shareholding and a handsome profit share for renumeration), with the sole objective of being extraordinarily profitable, solely for the purpose of sucking in someone like Liberty who thought they could maximise it further.

[White six]

William storey says he's buying it in 5, 4, 3, 2, 1.....

[Antonov]

https://racer.com/2021/02/26/formula-1- ... -hit-2020/

Formula 1 posted a loss of nearly $400 million as a result of the impact of COVID-19 on the 2020 season, according to Liberty Media’s latest earnings report.

Makes you wonder...

It shows you all the more how grateful we should be Liberty went ahead with the 2020 championship.
Not running it would have been more profitable without a doubt.

[Everso Biggyballies]

https://racer.com/2021/02/26/formula-1- ... -hit-2020/

Formula 1 posted a loss of nearly $400 million as a result of the impact of COVID-19 on the 2020 season, according to Liberty Media’s latest earnings report.

Makes you wonder...

It shows you all the more how grateful we should be Liberty went ahead with the 2020 championship.
Not running it would have been more profitable without a doubt.

No it would not have been because the reason they had all the double headers they did, with no spectators was to meet its quota to satisfy its broadcasting commitments. Had they not had a certain number of rounds they would have been in breach of contract and up for tens of millions in compensation to broadcasters. It is also the reason behind using circuits without GP contracts and for double headers at others, and for minimal charges to the circuit. It was cheaper for them to forego / reduce the charges for holding a GP and to thus get to the minimum number of rounds to meet broadcasting requirements.

Basically doing what they did ensured they still received the full broadcasting money, their prime source of income. The races were put on to minimise their losses.