Happy Saturday, everyone! All the important F1 types are in Singapore at the moment. Since Singapore is supposedly the new place for getting deals done, I thought I'd spend this post explaining the weird and wonderful business world of F1.
How Business is Done in F1 (with a cow)
Everyone understands how cows work as a commodity, right? The farmer owns the cow, he sells the cow to a burger guy, the burger guy sells burgers. Bearing that in mind, let's use the cow to explain the bizarre business setups within Formula 1.
The Rights to F1
Formula 1 is the FIA's championship, but Bernie runs the commercial side. In a bizarre move, the FIA sold Bernie the rights to run F1 for a century for a ridiculously low price. That meat smells rotten to me.
The Rights to Host a GP
Here the Cow represents the circuit and the farmer must sell his own beef (F1 tickets). To sell his beef, the farmer must first pay Bernie for the rights to sell that beef and hope that he can sell enough beef to make back the price of the right to sell beef. Not complicated at all.
Here, the farmer provides the Cow, which represents the car. The pay driver pays for the right to help the farmer sell the beef, but the farmer still takes all the beef profits. The pay driver just really, really loves cows.
The BBC and Sky Sports are both paying to sell beef, but Sky get to sell the burger fresh from the griddle, whereas BBC have to wait til the lunch rush is over and can sell the cold, leftover meat.
FOTA Bargaining Power
Ecclestone owns the Cow, but FOTA have all the burgers. They reckon they can scare Ecclestone by making their own cow and selling fresh beef. Good luck with that.
The Rights to F1
Lotus Renault GP want everyone to think they have a Cow. They fought for the rights to own a cow. But, for now, all they can legally do is name their Sheep, Mr Cow. Mr Cow the Sheep.
I hope that cleared things up!