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What can a rugby and baseball lover whose career was largely in the media bring to Formula 1? As I learned from Chase Carey, the new Chief Executive Officer and Executive Chairman of the Formula 1 Group, plenty.
Following the US media giant, Liberty Media’s, US$4 billion acquisition of F1 rights holder - Delta Topco - John Malone wanted only one man to help manage the acquisition. Entering F1 as a relatively newcomer, Chase Carey knew exactly what his strengths and weaknesses were when he took up this role. After all, he has been known for his achievements in taking media companies, such as 21st Century, Fox TV, DIRECT TV and News Corp, to newer heights, and was even once tipped to be the successor to media mogul, Rupert Murdoch.
Recognising that taking a business to the next lap is never a straight line, Chase embarked on a 'listening and learning tour' right after he took the helm. He increasingly seeing investment in sports franchise as an alternative asset class, especially due to the fact that last year saw global sports revenues exceed US$140 billion. I ended the Keynote Interview, energised by a palpable sense of change and excitement around the sport. Three themes stood out in my conversation with Chase:
- creating a shared vision
- developing an exciting narrative
- engaging the fans and the commercial benefits
Creating a shared vision
Chase acknowledges that there is still a significant amount of work to be done in F1, describing it simply as 'early days' . He is looking to better manage the large ecosystem of drivers, teams, promoters and broadcasters, and aligning their various agendas into one shared vision. This is important because, like any other sports, the engagement with fans and sponsors is imperative to sustaining a viable future for F1. The stakeholders need to stay cohesive and invested in this conviction.
Over the past 40 years, the management of the sport has traditionally and successfully been synonymous with Bernie Ecclestone, a one-man human dynamo. However, Liberty Media recognises the complex and multi-dimensional world of F1, and the need to create a more inclusive and partnership-style culture. Chase values input from various stakeholders on how to build a spectacular sport with high octane racing at the centre – one that is filled with great competition, action, drama and meaningful engagement.
The vision that Chase wishes to create is not one that satisfies his vanity, but one that belongs to all the stakeholders of F1 and that everyone can be proud of. In revitalising a spectacular sport, Chase and his team have studied various aspects of F1 and are wanted to understand not just the frustrations and challenges faced by teams, drivers and promoters, but also the opportunities to grow the sport from the perspective of people both in and outside the privileged paddock.
In September 2017, as we geared up for the F1 Singapore Grand Prix - with the then looming doubt of Singapore’s contract renewal to host the sport’s only night race - I had the pleasure of hosting Chase for the Keynote Interview at the All That Matters event. Our law firm has been both proud and fortunate to have been assisting various stakeholders in F1 for over 30 years, from drivers, racing teams, promoters and broadcasters. What was clear from the Keynote Interview was that Chase shines as one of the most inspiring communicators in articulating his future plans for F1. This is crucial given the growing interest from many successful and wealthy entrepreneurs (including many clients of our Firm) who are looking to put together a long-term strategic plan, which identifies and prioritises innovative ideas that are needed to make the sport relevant for the next 10 years.
Developing an exciting narrative
Many sport fans, myself included, can agree that the competition on the track, field, pitch or court is only part of the excitement. A compelling narrative of the history, drama and the sports heroes are what captivate the fans even at times when the cars are in the garage and after the engines are switched off. As a huge fan of baseball and rugby, Chase is no stranger to the excitement that can brew in the locker rooms and dugouts. As he grows his appreciation for the rich history of F1 and its many stars, he relishes in the great personalities of the drivers. Given Liberty Media’s strengths in digital and social media, Chase’s team is doing everything they can to give the drivers the opportunities to excite, inspire, entertain and more importantly, to connect with the audience, especially through social media.
Moments like bringing a crying six-year old to meet his hero, Kimi Räikkönen, in Barcelona give the sport, amid the roaring engines and screeching tyres, a softer, gentler and more human side. These are the moments that bring F1 closer to its fans and make it more accessible for everyone. While these moments cannot be organically recreated, Chase and his team are committed to letting drivers, teams and fans do things that will create positive energy and excitement, and ultimately touch people’s hearts. After all, the sport belongs to not just Liberty Media, but to everyone.
Engaging the fans and the commercial benefits
Let’s face it, a sport without fans is no sport at all. With Chase, it is all about what the fans want to see, but within reason. His time at the races to date has also given him an appreciation of the F1 fans and an understanding of the rich culture and history that many of us treasure. While open to trying new ideas, the sentiments and passions of the F1 die-hards are something Chase and his team will not underestimate nor overlook.
F1 is looking to engage in a different way with host cities and countries and to include more Asian drivers, teams and circuits, including China. This will reach a wider, and possibly newer, fan base in a region where over 60% of the world’s population live. F1 must shake off the long-held perception that F1 is solely the indulgence of Rolex-wearing, middle aged white men. Chase’s experience in TV has allowed him to grasp what engages the newer generations – the Millennials – who no longer watch TV the way their parents did and are part of the Omnichannel Generation whose lives are now entwined on their hand-held device. As such, Chase and his management team are looking to re-energise traditional broadcast television to give it a sense of freshness for F1 fans the world over.
Apart from the fans, sponsors are equally important in the ecosystem. Chase believes the one-dimensional relationship, with sponsors sticking their logos on the track and hoping for some TV airtime during the race, is in the past. Both of us have observed in our different roles in the sport, that with new media, it is important to have tailor-made sponsorship opportunities that help sponsors maximise mileage through meaningful activation programmes. I have personally observed the importance of this need for a win-win outcome through our firm’s long history in advising Benetton Formula 1 Ltd. which is now Renault Sports Racing, following Renault’s recent acquisition Lotus F1 Team.
Early Days but positive signs ahead
Indeed, under the new leadership F1 is in for an exciting time as it enters the next lap of its illustrious history. The vision set out by Chase is most definitely an impressive one, with the stakeholders – drivers, teams, fans, sponsors, broadcasters and hosts – forming the central core of F1’s future. If the new changes are successfully implemented, it will bring financial and commercial reward for all, as revenues increase and the prize pool grows, creating a virtuous circle. Many of the F1 team owners also look forward to discussing Liberty Media’s plans to grant publicly listed shares to the teams to unlock the benefits in allowing potential investors the ability to value a F1 team, long seen as a challenge and one of the barriers to entry. Over the past few years, many of the Firm’s clients have engaged us to carry out due diligence on some of the teams with a view to investing and we believe that this is likely to continue as Liberty’s plans become reality.
As a long-time fan and legal adviser to stakeholders in the sport, there is a sense of excitement that change is coming. Personally, I just can’t wait to see the future unfold.