A year ago reports were rampant that Bernie
Ecclestone was going to buy into what was then CART. He didn't do it then so
why should he do it now? By now some of you probably think here we go again,
more Bernie Ecclestone buying CART/Champ Car fantasy talk. Perhaps you're
right, but if you bother to read further you will learn that indeed sound business
arguments can be made for why Ecclestone should do this.
Whether by accident or by strategic planning, what
is unfolding before our eyes in the world of open wheel racing could have major
implications for the future of the sport. Amid fears of fan complacency and
Ferrari domination, Champ Car is planning
major changes to its engine and chassis package and the FIA has proposed massive
cost cutting and sporting changes to Formula One.
Meanwhile, Bernie Ecclestone is busy
revamping the F1 motorsports calendar like never before, but although there have
been some rumors about Bernie either moving the USGP to another venue, or adding a
2nd USGP to the already crowded F1 schedule, in reality with NASCAR's monopoly on
the USA market, F1 is going to remain largely obscure unless he does something
significant, significant enough to loosen NASCAR's grip on everything racing in
Bernie Ecclestone was looking at buying the Champ
Car Series a year ago but backed away for two key reasons - 1) CART was still a
public company, and stamping his name on the series would have made it difficult
to take private because the stock price would have climbed through the roof.
2) Bernie has a non-compete clause in the current Concorde Agreement which would
have prevented him from buying into another open wheel series.
Since then several key things have occurred that
now make the idea of him buying, or buying into the Champ Car World Series not only possible, but
perhaps the deal of the century.
Argument 1 Faced with too many venues
that want an F1 race, Bernie has a dilemma - the Concorde Agreement only allows
for 17 maximum F1 races a year, and the new agreement currently being negotiated
can perhaps hope for 20 at the very most. With both series owned by
Bernie, he would have 33 races to offer the race promoters/governments around the
world (see hypothetical 2006 schedule below).
Argument 2 Threatened with a breakaway series,
engine manufacturers who feel they are not getting enough for the money they are
spending in F1, and runaway costs, Bernie and Max Mosley must find a way to
bring costs down and deliver more value to the manufacturers. The FIA
(Mosley) recently proposed sweeping changes to the F1 regulations (customer cars,
customer engines, standard electronics, multiple race engines, no entry fee for
new teams, etc.) that would reduce costs to field a competitive 2-car team to
around $30 million per year. If implemented, costs would be reduced
significantly, but how do Bernie and Max deliver them added value? (See
Argument 3 Kevin Kalkhoven is a
Venture Capitalist. He and his Venture Capital partners at KPLJ Ventures
don't invest huge amount of capital into a company without a solid plan to make a
reasonable return on their investment within five years. Kalkhoven is new to
racing. Is he all of a sudden willing to lose significant sums of money
because all of a sudden racing is his first love and he's willing to go broke
having the time of his life owning Champ Car? Something doesn't add up.
Kalkhoven has gone on record that they plan to lose
money the first two years (2004 and 2005) but by the third year they will be
making money. It doesn't take a rocket scientist to figure out that without
car manufacturer support that isn't going to happen. Car manufacturers have
historically been willing to spend huge amounts of money in racing because selling
cars and showcasing your product on a race track in competition with your
passenger car competitors have a lot of synergies.
So what is the plan? How does OWRS lure
engine manufacturers into the series when they would not be negotiating from a
position of strength, but one of hat in hand begging for their support?
Argument 4 The Champ Car World Series has
many fantastic North American venues, but is in desperate need of engine
manufacturers if it is to survive. For decades Bernie Ecclestone has been
trying to make a big splash in the USA with F1 but has met with mediocre success
in, this, the world's biggest passenger car market.
If Bernie Ecclestone buys into the Champ Car World Series,
renames it F1 West (vs. F1 East for the existing European based
immediately announces that Champ Car will run to the same car and engine
specifications as proposed by Max Mosley for F1 starting in 2006, several birds
can be killed with one shot.
Champ Car immediately gets the manufacturer
support they need because the new rules would stipulate that each manufacturer
must supply engines to at least one 2-car team in each division at a set maximum
price. The manufacturers get immediate value because for far less money than
they are spending today in F1 they get 13 races in the lucrative North American
market (for most their largest passenger car market) versus just two today
(Montreal and Indy). With 33 total races as proposed below, they still
retain ample worldwide exposure in addition to now having the North American
market well covered with a top-level racing series.
Argument 5 The Champ Car World Series
would benefit from having all its races broadcast through Bernie's existing TV
outlets around the world and with a total of 33 races, Bernie can offer these
broadcasters an F1 race every weekend from the end of February to the beginning of
November. Part of the success of NASCAR is due in large part to the fact
that its fans know there is a NASCAR Nextel Cup race to watch or to attend nearly
every Sunday afternoon from mid-February to mid-November. There is far more
continuity by having a race every weekend - just like football, soccer,
hockey, basketball, baseball and all the other stick and ball sports. By
having open wheel races two, and sometimes three, weeks apart you lose the
connection with the casual fan and even the hard core fans, with their ever
increasing busy lives, who are hard pressed to remember to tune in.
The proposed schedule below consists of two
divisions, F1 West based in North America (current Champ Car teams) and F1 East
based in Europe
(i.e. current F1 teams). Each division would have 13 regular season races and crown a division champion.
Then like in NASCAR, and every stick and ball sport on this earth, there would be
a playoff series of races to crown the overall World Champion.
hypothetical schedule below I propose 7 joint
races, arguably at some of the best venues to determine the champion. The
top 10 drivers from each division would have the opportunity to compete for the overall
title and will go into the final 7 playoffs in the same order they finished the
regular season based on points scored during the regular season.
Going into the final 7 playoff races, imagine the
rivalry that will be played out in the media on both sides of the Atlantic.
The fans will be riveted by national pride, East against West, the Americans
against the Europeans. The racing world, and perhaps the entire sports
world, would be focused on the fierce fight about to unfold for the World Championship
crown (both drivers and manufacturers). Who is better, the Americans or the
Europeans? We shall decide once and for all.
Each of the
top 10 drivers from the regular season in each division would start with the
following points based on where they finished in the regular season. In this
way the drivers would be rewarded for how high up in the standings they finished
during the regular season, but the 10th place driver would still have an outside
chance to claim the overall crown.
Drivers and manufacturers points would be awarded based on the current F1
system 10-8-6-5-4-3-2-1 for 1st through 8th. With 7 races, there would be a
maximum of 70 points that a driver could accumulate toward the overall
championship. These would be added to the points they would start with as
determined from their regular season finish. The maximum total points
possible would be 100 if a driver were to win the division championship and all 7
Starting points for playoff races based on
regular season standings of top 10 drivers
1st: 30 points
Hypothetical 2006 Schedule
West (North America Based)
||F1 East (Europe
||Rio de Janeiro, Brazil
||Umm Jidr, Bahrain
Long Beach, CA
Break - No Races
New York, NY
Elkhart Lake, WI
||St. Petersburg, Russia
Overall Championship Rounds (Top 10 drivers
from each division)
Seoul, South Korea
Surfers Paradise, Australia
||Mexico City, Mexico
||Las Vegas, NV
Is this entire concept just my fantasy, or does it make sound business sense
because it's a win-win situation for everyone if all the big egos can be
set aside for a moment? Bernie gets more venues to sell and
make money, he delivers the lucrative North American market to the manufacturers
in a major way, Champ Car gets itself the manufacturers and worldwide TV
distribution it needs and the sport of Formula One, and perhaps more importantly
road racing, gets a major boost (fan attention and sponsor/manufacturer value) against the growing threat of the oval track
cartel who is planning to expand worldwide.
You decide. More importantly, Bernie has to decide.
The author can be contacted at
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