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Friday 5 September 2008

For Formula One, sex sells; but not the way Max likes it

Christian Sylt and Caroline Reid say the motorsport industry is in turmoil — and could lose millions in sponsorship — as a result of Max Mosley’s tabloid embarrassment

Stewart is more vocal: ‘This is the biggest scandal I have known in Formula One. The sponsors have to turn around and ask if this is something they want to be part of.’ This could present a hurdle for F1’s plans to establish new races in Singapore, India, Abu Dhabi and South Korea over the next three years. ‘If we go to a Muslim country or to a large Jewish organisation, because of what has occurred, they might put any plans on hold,’ says Stewart.

Dealbrokers concur. Kolja Spöri, chief executive of Grand Prix Group, a leading F1 sponsorship brokerage, says, ‘This latest episode may justify those sponsors who always had an emotional scepticism towards F1.’ Pippa Collett, managing director of Sponsorship Consulting, adds, ‘I’m sure [sponsors] will be reviewing their investment in the light of the alleged activity. The crunch will come at the 3 June meeting.’

The scandal could also weaken Ecclestone’s negotiating position with companies looking to renew their involvement with F1 — such as Sony, which is in talks about producing a new F1 video game.

And the worst-case scenario would be if auto clubs in some countries walk out on the FIA. This might make it difficult for those nations to host F1 races, because F1 is regulated by the FIA and the auto club in every country hosting a Grand Prix is an FIA member. This is the last situation that CVC would want, since it receives £660 million annually from these races, primarily through broadcast rights and hosting fees. But it’s far from impossible.

‘AAA have threatened [to pull out of the FIA] if Mosley doesn’t resign, but they’re waiting to see what happens. ADAC I think would do the same, I think the Dutch would do the same, I think the Israelis would do the same,’ says Stewart. Meanwhile, CVC’s response is cautiously low-key. ‘Max has done a great job at the FIA over a long time and now he and the FIA need to decide what the appropriate next steps are and it’s not for us to comment,’ says Nick Clarry, CVC’s UK managing director.

More articles from: Christian Sylt and Caroline Reid | this section

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