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Insight: The Start of a pivotal fortnight for the future of Formula 1

This week will see one of the significant dates in the history of Formula 1, Tuesday January 17th, as the Liberty Media shareholders meet in Ameri...

Insight: The Start of a pivotal fortnight for the future of Formula 1

This week will see one of the significant dates in the history of Formula 1, Tuesday January 17th, as the Liberty Media shareholders meet in America to approve the takeover of Formula 1 from CVC Capital Partners, who have owned it since 2006.

There haven't been many changes of ownership in the sport's 66 year history, but this one could prove significant as it is likely to bring about a change of focus and direction for the sport - and also quite possibly a change of management at the top.

Bernie Ecclestone, who has made all the running on the commercial side of F1 since the late 1970s, spelled out that he had been asked to stay on for three years, when the Liberty Media deal to acquire F1 was first announced in September.

Chase Carey, Bernie Ecclestone

But in recent weeks the discussion in F1 circles has been that his tenure as CEO of F1's commercial rights holder may be nearing its end.

Ecclestone is the ultimate survivor, so only time will tell whether those predictions will come true or not.

But sources among US analysts who cover Liberty Media stock have told this website that the deal will certainly be approved on Tuesday.

The following day the F1 Strategy Group and F1 Commission are due to meet, with the FIA World Council also in line to meet to sanction the deal. The FIA's 100 year agreement with F1 Group states that no sale of F1 commercial rights can take place without the FIA's approval.

The more important point is what direction the sport takes after the deal has been completed.

Whereas CVC was content to let the sport continue with its governance structure and rule making procedures initially, it then tried to prepare the ground for a flotation in 2012. That process is what led to the break up of the F1 Teams Association, which had aligned all the F1 teams in a shared position.

Arrivabene, Wolff

This was followed by bilateral agreements with individual teams, which made the financial distribution to teams so lobsided in favour of top teams and also ushered in the controversial F1 Strategy Group, which basically puts the rule making powers in the hands of the top six teams in a committee which also features F1 Management and the FIA.

Liberty has an aggressive business plan to grow the sport and the business and to do that it needs to shape the product in a more entertaining way. It also plans to expand the calendar to 23 Grands Prix, which will be challenging for the teams to cope with logistically. It will also be challenging for Liberty in terms of setting the price promoters are willing to pay to host a Grand Prix.

The noises coming out of Malaysia and Silverstone recently, for example, show that one of the first things that is likely to happen once the ink is drying on the sales contract of F1 to Liberty will be the promoters knocking on their door looking for a more favourable deal. Many of the contracts, like Silverstone's, are considered unsustainable over the long term.

But it will be the vision for the sport itself, the cars, the racing and the positioning of the driver as the hero that fans will be most interested in. A long term plan will be needed soon after the takeover, which has to be shaped by someone who is a custodian of the values and history of F1, but who also has a sense of what formula will work best for the future.

Ross Brawn

Ross Brawn has been a consultant to Liberty Media for several months and could come in to head up the some aspects of the direction of the sport, provided certain conditions are met after the sale goes through.

To find clues as to what his recommended vision for the sport might be, we can consult his very well-timed book, which came out last Autumn. Here are some selected quotes:

"For F1 to succeed people have got to watch it. If people don't watch it, F1 is in a vacuum and it will just disappear."

"What I think F1 has to achieve is to be accessible to the largest number of teams possible. That's what I feel is a big challenge and where F1 fails. Wouldn't it be great if we had 13 strong teams, with the franchise of a Formula 1 team being extremely valuable and a queue of people who want to come into the sport because they can be profitable and successful?"

"We've got to improve the product over the next three years. You would do your analysis, make your plan and implement it...Getting any form of agreement in F1 to carry out a proper process is almost impossible. I think the players don't want it and clearly Bernie doesn't. So fixing the regulatory and rule changing process and achieving a fair and economic (engine) supply position would be my priority."

"When Mercedes, Ferrari, Renault and Honda make an engine for a high level road car they set a price target... So why is that challenge not part of F1? All those manufacturers are used to the challenge of designing a product that has to meet price targets as well as performance targets and yet that's a missing constraint in F1...There was no mandate to keep the (hybrid turbo engine) price down."

Start F1

Whether it is Brawn's vision or that of someone else that ultimately prevails, the change of ownership in F1 brings with it the responsibility to set a direction for the future and to work with the FIA and teams to achieve it.

Ideally the situation would evolve whereby a Brawn or someone similar listened to all stakeholders and fans and then created a set of regulations and a three year implementation plan and cost targets. The teams would then build the cars to those rules and the FIA would regulate it.

The rules, certainly as far as the powertrain is concerned, are set until the end of 2020. As it happens, if a plan were devised by the end of 2017 there would be three years until implementation in 2021. In parallel with that, Liberty will have to negotiate with the F1 teams for the commericial deal that takes them beyond 2020. That will be a very hard negotiation and will define how many of the current top teams continue in the sport after 2020.

Will we have a vision emerging during the course of 2017? Or will F1 continue with its cycle of short-term thinking? This next two weeks could be decisive in that regard.

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