Continued from part 1 Q: Let's get into the current disputes and politics driving Formula One. How likely is it that we will see a split in the sport given the current situation? TC: Well Formula One is run by a genius and it takes a fair...
Continued from part 1
Q: Let's get into the current disputes and politics driving Formula One. How likely is it that we will see a split in the sport given the current situation?
TC: Well Formula One is run by a genius and it takes a fair bit to get around a genius normally. Now just as I referred earlier to the split in America between the IRL and Champ Cars, I sincerely hope it doesn't happen in f1 because it will damage the sport in an enormous way. I don't think any motor sport fans want to see that, and I certainly don't. Look I think it just comes down to a grab for power by the manufacturers. Some of those manufacturers are kidding themselves. I think there's a vast difference between knowing how to manufacture a car and bringing all those things together to do that, and running a sport. I don't think Bernie Ecclestone is sitting there telling them how to run their plants and they shouldn't be sitting there telling him how to run the sport.
Q: How much of this split is down to the domination of Ferrari who is siding with Ecclestone, and the other car makers who seem to find it impossible to compete against the might of Ferrari and so think maybe it's just better to have their own championship?
TC: "I think there's an awful lot of truth being hidden as to the real reasons why they're trying to get hold of control of the sport. There's clearly a jealousy factor in the job Bernie has done and the money he has earned out of it. But I also think that probably in the end common sense will prevail and they will have to split the pie up differently before they reach a new Concorde agreement. There's still a lot of water yet to flow under the bridge and I'm not particularly close to it, but you can bet there's going to be a lot more argument before this gets resolved.
Q: But doesn't this avalanche of legal battles and the sport constantly at war with itself, seriously risk fracturing f1 to the point where fans just walk away from it?
TC: Oh of course...but can I just make this observation. I have never come across any other sport that I have been professionally involved in that has the ability to call in lawyers as quickly as motor sport. It's just phenomenal the amount of money that AVESCO and TEGA (the V8 Supercar team owners) waste on lawyers each year. I find the whole thing just unbelievable. Every year I sit here in frustration thinking 'well hopefully that's the last time we spend that amount of money on legals'; and yet every year we seem to be under new challenges. I don't' know what it is, whether it's the association with petrol fumes...but whatever it is, and you can quote me; there is no more insane sport when it comes to rolling out lawyers than motor sport!"
Q: Getting back to Bernie Ecclestone, what makes him tick? Why doesn't he just walk away at his late stage in life and just smell the roses instead of all this continual confrontation?
TC: Because he's a genius. He is the greatest exponent of marketing of sport in the modern era there has been. He makes the likes of (former Olympic boss Juan Antonio) Samaranch and (IMG founder) Mark McCormack look like they were in short pants!
Q: If he's such a genius why can't he keep the troops happy in his own sport?
TC: Because he's dealing in billions of dollars and as soon as you're talking about that kind of money everybody thinks they should have a recalibration of their share. They conveniently forget the enormous job he has done in the sport over something like 40 years. That all goes out the door while some "Johnny come lately" who's recently become the head of some motor manufacturer suddenly decides he knows more about the sport. As I said before, some people in the sport just love calling in lawyers, they seem to think they go together like chalk and blackboards!
Q: But isn't there a point where he's made a phenomenal amount of money from the sport that he should let go or at least make a real concession that the teams do all deserve a bigger slice of the pie?
TC: I can't speak for him because I have never discussed it with him, but I'm sure he's a realist and that in the next Concord agreement there will be a tweaking of the way the pie gets cup up. But there's a big difference between tweaking the pie and he's just expected to walk away after 40 years of his life. He's clearly not doing it any more for the money, but for the pride and the lifetime effort he's put into it...
Q: The power...?
TC: Look I don't blame him one little bit for holding his ground under those circumstances. I would do exactly the same thing if I was in his shoes!
Q: Is it unfair to describe him as something of a megalomaniac, where even allowing for his enormous contribution he appears to refuse to even partially relinquish his power? Is it the power trip that ultimately drives him...excessively so?
TC: No I don't think so. I think he had more than paid his dues and he deserves some respect for his position. Like most thing in life, people are quick to criticize and try to create change when it doesn't suit them. I think he should hold his ground and just deal with the teams. I don't think he has to deal with the manufacturers because they don't own the sport. It's more a matter for him and the teams to find a new way forward via the next Concord Agreement. I will have any amount of money anyone wants to bet me, that he does."
Q: But I could also observe that while he has reinvented the wheel as it were for Formula One -- he's also done a brilliant job of taking care of himself first?
TC: (laughs) That makes him smart doesn't it?
Q: It might make him smart but does it make him morally right?
TC: (still laughing) I didn't know that we were arguing morals. I thought you were writing a story about motor sport?
Q: Am I right in believing you are on the record as saying you would like the sport to consider a future where it might be opened up to other local car makers to compete in your championship with Holden and Ford?
TC: No what I actually said at Bathurst last year was that I think V8 Supercars is a category and a business that is mature enough to hold an open forum on this subject and discuss it with all the various stakeholders. Which of course includes the two existing manufacturers, along with the fans; the teams and television. There are many different parts to this and all I did was to ask "have we arrived at a point where this can become an active discussion'? It hasn't become one yet but if it was to become so, of course you would involve and get the viewpoint of the two incumbent manufacturers who have both been there a long time.
As things currently stand with the board of AVESCO, we don't have the manufacturers as such. What we have is equal representation from two Holden and two Ford based team representatives on a six person board.
Q: So potentially the four teams could put their head together and effectively block any move to widen the manufacturing base within the sport?
TC: Well potentially yes if it came down to an actual decision but that's not what I was calling for. I was calling for a mature discussion and whether it was viable or necessary or desirable. I thought it could be worthwhile to have a forum with the existing stake holders to consider our position for the future. That doesn't mean that you go into such a forum with a pre-conceived idea of whether you need more manufacturers. I'm on the record as saying that we've run a very healthy sport now for a long time with two, but whether we need a third or a fourth...well I don't know the answer to that? So all I was doing at the time was raising the possibility of whether we might have a mature discussion about that, but as to whether it might change the status quo or not, it might we won't change it for another 50 years?
Q: What's the current provision as regards other car makers being qualified or not to be able to enter the championship as things now stand?
TC: The only rule in our regulations or rule book that a manufacturer has to satisfy, is that the competing car must be basically manufactured in Australia. The rule is very specific on that point. So both Toyota and Mitsubishi would qualify but there would have to be rules changes if the likes of BMW or Nissan or other overseas car markers were to be involved.
Q: Where do things currently stand with regard to your future domestic TV rights currently with Ten until the end of 2006? You're a key part of the log jam of major sports waiting to see what happens with AFL?
TC: No we've already started our process and our attitude is that we're a strong enough stand alone sport to start the negotiating process and not wait and see what the fall out of the AFL decision is.
It's interesting to consider how today when the media talks about major sporting TV rights, then we are talked about in the same breath as AFL, NRL, Union and cricket. Only five years we wouldn't even have been considered as on the radar in those same articles.
Q: So what do you say to one strong rumour that's been dropped in my ear regarding Seven running strongly to win you away from Ten?
TC: That's not something I can discuss as to what prospects we are being presented with other than to say we're now talking to the industry.
Q: Well to give us something for the record you are now confirming you will conclude your new rights deal before the AFL agree their own?
TC: My belief is that we will have a deal concluded by the end of this year. We're open minded as to the actual length of any deal but typically we've done five year deals. So at the moment we're talking five years but that's doesn't mean if someone was to make us an offer out of left field that made it well worth our while to go beyond five years then naturally the board may consider it.
Q: So what is the current TV product as regards your race calendar and is there a preferred critical mass as to how many races you can stage in the championship?
TC: Critical mass for us would be in on our forward plans for 2008-2009 is to stage 14 races with 10 in Australia and four offshore. The teams have made it very clear that 14 is the maximum because of the tyranny of distance, where to do more is very difficult, because we also have logistical problems in just getting around Australian given the huge distances that can be travelled from one end of the country to the other with our transporters.
Q: The sport has cleverly repositioned itself so that the emphasis is no longer purely on Holden v Ford but promoting the drivers as personalities and also building fan loyalty to particular teams. Is that actually the biggest change that has come over the sport since the Supercars launch back in 1997?
TC: I certainly think that has been one of the major planks in our development, but I also think one of the other major planks has been the generic marketing of V8 Supercars as a category where it's become something people can really get their heads around. It lends itself not only to our overall branding as a major sport in Australia but has been a real boon to our sponsors and advertising and promotion across the board.
Q: By any conventional standard, V8 Supercars 20% annual compound growth is hugely impressive. Does it show any signs of flagging?
TC: There's not one economic indicator in gauging our success and popularity that shows we are not going to continue to enjoy still more significant growth here and abroad. We think we are in for a crackerjack championship season this year on every front - both in terms of our business and what's in store for the fans racing wise.
Now that eight years straight of net compounded growth of 20% as you mentioned, and there wouldn't be another sport in Australian that's done that. Don't get me wrong there are other sports doing great things and Rugby Union for one is a prime example. But when you look at the way we have come out of the pack, we have come from "nowheresville"!
If you go back and look at 1996 the last year before we launched V8 Supercars, I think there was something like 450,000 people who attended the championship series; that is paid through the gate. Now last year we did a little over 1.6 million people and I would like to think that is living proof of the racing product we are offering the sporting public.
Our championship is incredibly competitive where we had a multiple number of round winners and the title race went down to the wire. We had events last year where we had something like 25 drivers who were separated by less than a second in qualifying, which when you think about it is just phenomenal and I don't think there is another motor sport in the world that is so evenly competitive.
Q: You have "controlled" tweaking that helps promote a more even competition which makes a lot of sense, and also ensure some teams can't simply outspend everybody else to win a championship. Which begs the question why Formula One can't seem to produce a more level playing field and protect itself against the total year-on-year domination by Ferrari?
TC: But you have to understand that Formula One is an open cheque book in terms of pretty much what the teams can spend on development and achieve. So you have a vast discrepancy between what Ferrari can spend compared to Minardi. You are talking hundreds of million of dollars difference. So on that basis you can never expect to see Minardi anywhere near a podium but you can expect Ferrari to be there most times.
Where motor sport is a bit different from other sports is that of course you can spend the money not only on your team as such, but vast sums purely on technology. Now where we try to control that, and believe me I am not saying we do it perfectly, we have a number of control parts in our car so you can't throw endless money at brakes or tyre compounds and the like.
So you can't simply compare motor sport with AFL or cricket, because by and large you don't a huge technical component to much as a salary position. In other words if you have the money you can attract the best people and have the best team. But in motor sport you can have the best driver in the worst car, but he still won't finish in the results and vice versa!
Q: You have overseas interests now heavily entrenched in the sport through team ownerships and the like, and one such team boss told me he was in no doubt this is the best Touring Car championship in the world. What's your view of your place in world motor sport?
TC: Well if you put NASCAR to one side because it's a very special race series all on its own with a special set of rules and the fact that it's an oval based series, I think you would be hard pressed to find a more competitive or stronger Touring Car championship in the rest of the world. If you look at say the British Touring Car Championship, they get average crowds to their races of about 30,000 while we average over 100,000, and yet we have only a third of their population. Again if you put NASCAR to one side, we are the only significant Touring Car championship that has live free-to-air television. No other championship has that.
Or take the German DTM championship and they typically run between 16 and 20 cars where we run 34 cars. So I think no matter what barometer you want to choose; that if you don't include NASCAR and most wouldn't now, you would be hard pressed to find anyone who could mount a counter argument that we aren't the strongest Touring Car championship in the world today.
Q: A measure of the health of any sport is of course its level of sponsorship and there's been a real move away from just the more traditional motor sport related sponsors to all kinds of national and international brands now on board.
TC: I would say that when you look around at Australian sport now, we are probably ranked second in attracting overall sponsorship. We have got a phenomenal sponsorship income now across the teams, events, AVESCO itself...
Q: How do you quantify that because I would have thought that AFL dwarfs everyone else?
TC: Not in terms of sponsorship they wouldn't. To give you a direct comparison; there's not too many club earning more than a million dollars a year from their primary sponsor. Nearly every team in our championship draws far greater than a million dollars. We've got 22 teams in all where we have 13 level one two car teams, and nine more level two single car teams.
I can also tell you that later this month in Adelaide we will be announcing a couple of huge new multi-national sponsorships that show we are continuing to raise the bar in our development as both a business and a sport.
By: Ross Stapleton