F1 2016
- Thread starter 1%er
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1%er
Well-Known Member
I'm sure it is a great story but unfortunately it is behind a paywall
The more I think about this deal the more I wonder how Liberty Media will ever make money from it, I'm sure they believe they will, but there are a number of stumbling blocks they could hit. For example;
Liberty Media are expected to Franchise the sport in a similar way to many big American sports and clearly that has worked well in the USA, but Liberty Media are a quoted company on the NASDAQ who have very strict rules of transparency, which would mean that teams such as Force India would not be allowed to hold a franchise, as both major shares holders have massive legal problems, one (Roy) is in jail and the other Mallya is facing charges as a willful defaulter and for money laundering and under the current rules of the NASDAQ they would not be allowed to hold a franchise in a quoted company.
TV revenues, The TV revenues for F1 content are currently held by a number of different companies, but from 2016 they will be held exclusively by Sky until 2024. Sky who have invested around $1 billion in F1 coverage are in direct competition with Liberty Media, who own Virgin Media, 10% of ITV and a large stake in Discovery Communications, so the new owners will not get advertising revenue for F1 until after 2024.
Income for F1 has been falling. While it is true that CVC made a massive return on its investment in F1, it is important to look at where that money came from. CVC paid itself very high dividends, but much of that money came from loans it took against its investment, CVC is believed to have taken loans of around $4 billion against its F1 holdings.
Where dose the money in F1 come from? It comes from 3 main sources, hosting fees from race promoters, television deals and sponsorship. Hosting fees range from around £15 million a year for Silverstone (the only race on the calendar that doesn't get a government subsidy. Monaco pays nothing in hosting fees but does cover some of the costs in holding the GP) to as much as £40 million, with a 10% increase each year, these hosting fees make up around 34% of F1 revenue.
It is estimated that governments around the world pay in the region of £460 million in hosting fees a year. Can that really keep going and if not, F1 loose a lot of revenue. It is estimated that over the life of a 10 year deal to host F1 it cost the promoter well in excess of £600million, if you take into account circuit maintenance and other costs. Higher hosting fees means higher ticket prices and as is clear the numbers of people attending F1 races is dropping at most circuits, with one or two exceptions.
Also will an American public quoted company be able to host races in countries such as Azerbaijan, Bahrain and Russia (at the moment the USA has sanctions against Russia). They say they want to expand the number of races but who has the money to pay for new races. These are the cost of building a new F1 circuit today;
Track (using f1 standard technology) £48m
Pit Building & Paddok Club £34m
Special Electronics £20m
Earthwork & Infrastructure around the track tarmac £32m
Main Grandstand £18m
Medical Centre £3m
Media Centre £10m
Income from TV rights sales. It used to be the case that F1 was shown on free-to-air TV stations and had a global audience in excess of 600 million this has fallen by 1/3 since 2008 and is now falling even faster as the content is moving to pay-to-view around the world, while Sky have invested around $1 billion for exclusive rights until 2024, what will the TV viewing figures be by then? This was a great short term deal for F1 but in the longer term it could really harm the sport. TV is not the only mass media nowadays, the Internet is fast overtaking the television in how people access sport, news etc. so will governments, promoters and TV companies be willing to pay such high prices in the future for F1, I think not.
F1 current annual revenue is around £1.1 billion of which around £700 million goes to the teams but very few if any make a real profit from F1. The manufactures expect to get a return from exposure and promoting their brand on a global platform, but for how long will they continue in the sport with the changes we are seeing in road vehicle technology. They not only need to see a return on their investment in their F1 teams but the also need a return on the massive investments they make in engine technology, how much longer will F1 be relevant to road cars and will the boards of directors be willing to invest so much in a sport.
I think it is clear that the current model for Formula one is coming to an end, falling viewer figures, massively increased costs for teams and with the number of countries willing to invest in new circuits dropping and ridiculous hosting fees Liberty Media must have some very interesting new ideas if they want a return on their investment.
Buddy Bradley
Pantheistic solipsist
Alex Zanardi wins gold in wheelchair race at Rio Paralympics:
Rio Paralympics 2016: Alex Zanardi wins gold on eve of 15-year crash anniversary
Rio Paralympics 2016: Alex Zanardi wins gold on eve of 15-year crash anniversary
1%er
Well-Known Member
Good morning and welcome back Mr Juice
"There's a giant lizard on the track. I'm not joking!" said the young Verstappen over his radio
"Have you been visiting those coffee-shops and smoking that wacky-baccy, Max?" asked his engineer
A monitor lizard appeared on the inside of the circuit and scamper across the track just after Max had driven passed it, a video available here halfway down the page
I'm sure they'll show it during coverage over the weekend
"There's a giant lizard on the track. I'm not joking!" said the young Verstappen over his radio
"Have you been visiting those coffee-shops and smoking that wacky-baccy, Max?" asked his engineer
A monitor lizard appeared on the inside of the circuit and scamper across the track just after Max had driven passed it, a video available here halfway down the page
I'm sure they'll show it during coverage over the weekend
1%er
Well-Known Member
Looks like Ferrari have found a great way of saving their tyres
1%er
Well-Known Member
You are correct and in case anyone says Red Flag means session stopped I was being ironic, reacting to the commentary
1%er
Well-Known Member
If they were to make double waved yellow mean that all lap times under those flags will not count, that would stop the silliness
Limejuice
Well-Known Member
Exactly.
If Charlie can nullify a qualifying time for putting all four wheels off the track, then they can apply the same regime to a safety breach.
Limejuice
Well-Known Member
The Red Bulls seem to get away very well, and Danny Ricc is no slouch, so I'm going to check the odds on Danny Ricc to win tomorrow.
1%er
Well-Known Member
I'm looking forward to see how Nico manages if Danny can push him hard, how will he react to the pressure, if Danny can stay close from the start
Limejuice
Well-Known Member
So far Max has been able to get away (mostly) with his "no-respect" style.Max will be pushing Lewis for sure, so some interesting racing to look forward too, lets not forget Kimi will be right behind Max as well
My guess is that Lewis is highly unlikely to accommodate Max, and that Lewis will be able to out-Max Max.
It should be a great race if the two of them go hammer and tongs.
1%er
Well-Known Member
And Kimi right behind them
