Motorsports Commentary - Ecclestone Doubts Formula 1 Will Be Success In America (Again) But He'll Take The Money Anyway...
 |
According to Bernie Ecclestone, Formula 1 is unlikely to do well in America (again), even with two US GP rounds running by 2013. The F1 World Championship is slated to return to the United States in 2012 at Austin's new Circuit of The Americas, followed by a 2013 event sited in New Jersey. But even those events are not likely to turn what has become a recurrent pigs ear of a motorsports attraction, into a business silk purse.
"If we had a lot more races there and a lot more television [coverage], it would be OK. (But) it's a bit like the rest of America in that they want to see a profit before they start something and it's not easy to do that."
Ecclestone's comments suggest a credible business concern. He should know, since during the last 30 years various promoters and event stakeholders including city managers and commercial organizers in the mid-market cities of Long Beach, Phoenix, and Indianapolis, allowed him to suck their cash drawers dry, then run away, leaving them with nothing to show for their investment, except excessive debt service, and the knowledge that Bernie et. al, had managed to take the American rubes once again.
The mounting of a successful large-scale motorsports event is an incredibly expensive endevour in good times, let alone during a global economic downturn, and in order to make a buck one has to spend one first. However, where NASCAR makes up for live event losses by cleverly leveraging the domestic aftermarket through recurrent brand sponsorships, 'reasonably priced' regional/local affiliate television advertising, and a piece of branded driver/team product revenues, F1 offers none of that affordability, since it is generally viewed as highly specialized, niche-oriented, and generally unimpressive to US customers. So to be blunt, mounting one F1 event here makes little or no business sense, let alone two.
Let's consider the basics for a moment, cars are one-offs and offer no residual value in terms of 'Race On Sunday Sell On Monday' branding, drivers are generally unknown to national/regional/local audiences, advertising and promotional costs on Speed Channel and its parent Fox Sports are always pricey due to limited economies of scale, regional/local event and affiliate concession, travel/hospitality, and ticket costs are typically well beyond what the US fans will pay for a day at the races, and all of that and more, create a series of situations where one begins behind the eight ball, then proceeds to drill-down into deeper and deeper deficits.
As a practical illustration, in 1990 Ecclestone finally managed to get Phoenix city fathers to mount an USGP round, after many years of trying to get close to the west coast market again, after losing his deal with the City of Long Beach. However, after two year's worth of damage to the regional/local economies as licensing and operational costs spiraled upwards, further rounds were terminated prior to 1992.
By then, ticket costs were $175 per day for general grandstand seats, local gas, travel and hospitality costs had spiked, and a cup of lukewarm all-American blend coffee (meaning the cheapest grounds mixed with water from the local Municipal water system) cost $4.25 for a small order at a circuit concession stand, and that was well before Starbucks haute cafe'. So in the end of the day, the City of Phoenix, said 'No more.' However, they were dealing with Bernie 'The Round Rubber Bandit' Ecclestone, so in the end, the city still had to pay him handsomely to 'accept' the termination, because woe be on the poor clutch of municipal lawyers who tried to argue otherwise.
As a result, and given the history, one can presume that when Austin rolls around, we will experience similar behavior from Ecclestone and his 'F1 Flying Circus Of Economic Death', but who knows, perhaps he has mellowed. However, just based on recent events alone, when he held up not only the city, circuit organizers and the State of Texas over a licensing pre-payment, don't bet on it. So be prepared Austinites the circus is coming to town and try to enjoy the ride, because Bernie is already suggesting that your effort will fail, even though he'll still be smiling all the way to the bank. Now, how's that for a 'positive partnership.'
Rick Carlton has been covering professional automotive/motorsports news for 30 years in a range of print and online publications including; SCCA Magazine, On-Track Magazine, The Global Racing Network, AllRace Magazine, Automobile Magazine, Teknikan Maalma, F1 Maalma, RaceTech, Forrest Bond's RaceFax, Hill Country Wheels and Wings, The Highland Lakes Business Journal, The Austin Business Journal, and The Auto Channel.