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Sunday 7 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

Ecclestone is one of Mosley’s few cheerleaders. ‘This is an FIA thing, this is nothing to do with anyone else,’ he has said. ‘I’m happy with Max, I don’t have any problems at all with Max.’ This response is perhaps no surprise since Ecclestone has the FIA to thank for the majority of his estimated £2.4 billion fortune. In 1997 the FIA transferred the commercial rights to F1 to Ecclestone’s private business for the paltry annual sum of £5.5 million. With this as his core asset, Ecclestone was able to sell stakes in his company to private-equity firms and media businesses, netting his family trust an estimated £1.3 billion.

Ecclestone now has just one share in F1 and runs the business for CVC, which needs rising revenues from the sport to meet £110 million a year of debt repayments. With new circuits paying around £20 million in fees to host an F1 race, adding grands prix to the calendar is a quick way to do this. Ecclestone says he would like to increase the number of races from 18 to 20 but to do so he needs FIA agreement. Likewise, the FIA could veto Ecclestone if he wanted to remove ‘traditional’ races such as Monaco and Italy’s Monza Grand Prix from the calendar to go to higher-paying tracks elsewhere. So if Mosley was replaced with a president who was hostile to Ecclestone, it could be a big blow for CVC.

Big money is at stake, but at least the sport probably doesn’t need to worry about losing fans. Stephen Cheliotis of the Centre for Brand Analysis says the scandal won’t do much damage to the overall brand. ‘What Max Mosley does as head of the FIA is totally, utterly different from the sport... the public can differentiate.’ Nevertheless, the global coverage F1 has attracted these past few weeks has been for all the wrong reasons. Compare F1’s US rival, IndyCar, which recently crowned its first female race-winner, photogenic 26-year-old Danica Patrick: that’s the kind of news that gives a sport sex appeal, not tabloid tales of sadomasochism.

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

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