GPWC Discussion (merged)

[Silk Cut Jaguar]

This seems to have raised its head above the trenches yet again with most F1 sites covering a story of the GPWC promising bigger payouts to the teams.

What surprises me is that no site has picked up on the fact the GPWC is just offering the teams 80% of the income, which doesn't technically mean more money. Afterall, even with Ferrari on board can you see TV companies paying F1 money to secure contracts for what is really just a fledgling and unproven series?

[Kicking-back]

The thing is this wouldn't be a rival series - it would be F1, run by other people. There will only be one series.

It won't change anything as this is a bargaining tool.

[Marbot]

What the GPWC seems to be offering is to pay the teams 80% of all revenues instead of the poultry 23% they get now,bit of a no brainer really!

[Kicking-back]

But who's to say the GPWC's total revenue would be as much as F1 makes now?

[Silk Cut Jaguar]

While I know it's all a giant game of "I've got more money than you" to get the teams onside, my point was that 80% doesn't automatically mean more money.

Bernie has spent years wrangling the best price out of everyone, an upstart championship (which is what this is on paper) would be hard pushed to get the same kind of sums surely.

[Marbot]

Originally Posted by Kicking-back

But who's to say the GPWC's total revenue would be as much as F1 makes now?

It depends on whether you think F1 makes the money or Bernie ecclestone,we will find out in due course,not too many people tune in to F1 to see BE.Sure he's good at his job(making money)but he's not F1,it's bigger than one person.

[Kicking-back]

True, but much of the current revenue is due to deals he has put in place (and taken personal risk on to establish in the first place.)

[Logrence]

GPWC believe they could dramatically increase F1 revenue through exploring new opportunities - would be interesting to see their business plan.

[RWC]

It's a good point about them assuming they could get deals just as good as bernie.

It is pretty dumb though to think they won't get CLOSE to what bernie can get.He is just a tough negotiator after all and the world is full of these kind of folk

80% minus a few percent is still a massive shedload more than the approx 40% (?) they get now

What really worries me about all this GPWC thing is that they are most likely going to have to go ahead with it because bernie is too proud to back down.
As everyone is saying,a compromise would be ideal but it's not a sure thing by any means (sadly)

[Hungary 89]

Originally Posted by Kicking-back

The thing is this wouldn't be a rival series - it would be F1, run by other people.

Are you sure I fear that we are going to have a similar situation to what happened in America, two series fighting for market share to the (initially at least) massive detriment of both.

I fear that if that were to happen it could spell the end for F1 as we know it

[Kicking-back]

I am 100% certain there will not be two rival series.

[oziengineer]

Why do they need a rival series, why can't they talk these things out? They clame to be ready to race for 2008. Why can't F1 just stay the way it is and keep the manufacturers...

[Armco Bender]

Money basically.

[Super Tourer]

Originally Posted by oziengineer

Why do they need a rival series, why can't they talk these things out? They clame to be ready to race for 2008. Why can't F1 just stay the way it is and keep the manufacturers...

You've covered a lot of issues in your question. Part of the answer...

1. Money and more commercial freedom

The teams currently receive approximately 40% of the alleged $700M annual income of F1 between them, with BE/FOM taking the remainder. The GPWC say under their series the teams will receive the lions share of the income (70% to 80%) and they will generate more annual income ($1bn) as they feel F1 is commercially underdeveloped.

2. Regime change

The big players in F1 are corporations, therefore they are happy dealing with a similar structure. Under the current series, BE runs the show, he and Max Mosley are seen as a double act from time to time. This makes the car makers nervous they don't like being in the hands of one person over whom they have very little influence and no control.

3. Regulations

Manufacturers don't like the way regulations are implemented, I'm sure they felt backed into a corner by MM over the V8's for example. But this is force majeure on the part of the FIA, the manufacturers have proved time and time again that they cannot agree on changes or regulations, so they end up being imposed which means a least some of them are unhappy.

4. Costs

These are escalating and no one will put the brake on them unilaterally, therefore if they can increase income (see point 1) and get some unanimous reduction in costs the car makers probably see F1 as more viable. We have seen Ford pull out and we have this week heard straws in the wind from Toyota about justifying the cost compared to results. However this is another self inflicted wound and I can't see how it would be any better under the GPWC, it's lack of agreement that is preventing massive costs reduction.


Why can't they talk things out?

The manufacturers will tell you they have talked with BE but not got anywhere so decided to start their own series instead. BE is a tough negotiator, probably the toughest in the business, so it's hardball all round.At the moment it's like an election, each candidate is making their pitch to the teams. BE has offered more money to the teams, now the GPWC are making their pitch to the teams.

Who will be the winner?

Probably no one - a draw. There will not (IMO) be two series what will probably happen is that a merge of some of the GPWC 'want's' along with BE's existing FOM will occur. FOM has the contracts with the circuits and owns the rights to the F1 name. A new board would be created to run F1 with greater representation from all the interested parties. BE will remain a nominal fugurehead for a while, but I don't see him as team player in that respect. In anycase as he is in his 70's, BE's ability to run F1 for many more years is limited. F1 will always need a CEO or some sort of figurehead, if we are nailing flags to the mast I think it will be Ron Dennis who will allegdly sell his stake in McLaren to Mercedes shortly.

As for why we need change at all.

The concorde agreement expires at the end of 2007, therefore a new consitition to run F1 is required, there would always have been some change even without the GPWC, as the teams would be very unlikely to agree the same terms they did many years ago.

[Logrence]

Originally Posted by oziengineer

Why do they need a rival series, why can't they talk these things out? They clame to be ready to race for 2008. Why can't F1 just stay the way it is and keep the manufacturers...

I don't think any of the parties involved have ever expected a rival series - they know they couldn't do better, but they have to get Bernard by the balls and threaten him to get a bigger slice of the pie.

It's high-stakes poker.