Bob McMurray: Simple economics in simple terms
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Just before the outbreak of World War II, British prime minister Neville Chamberlain returned to the UK after a meeting with the German chancellor and declared “Peace for our time”. In his hand he waved what he purported to be that signed agreement.
Well, we all know how that turned out.
It is exactly the sort of statement the people of Britain want to hear again concerning the outcome of Brexit.
Whatever is going to happen, it seems the motor-racing world, at least the core of that world centred in the UK, is greatly concerned about the outcome.
Some teams are investigating plans to base more parts of their team manufacturing overseas.
It will mean a huge shift in the way international motorsport, at all of the top European levels, is conducted — for the UK is the epicentre of that industry.
The “peace for our time” sentiment is something that has desperately become required from the offices of Liberty Media.
In another old saying, there seems to be “trouble at mill” with Liberty Media on one side and the majority of the teams on the other.
Throw into the mix the Formula One Promoters Association (FOPA), which has its own issues with the sport’s owner and it seems troubled times are ahead.
Essentially the problem with all the parties lies with the failure, so far, of Liberty to come up with a plan or proposal that sets out with any clarity how the commercial landscape will look after the current deal expires in 2020.
Some circuits, Silverstone and Monza for example, do not know if they have any deal for 2020 and beyond.
The teams still do not know how the proposed budget cap will work or even if it is going to be used. Things are so confused that even Bernie Ecclestone has offered to return to help the situation.
It was not unusual for confusion to be part of the language of Formula 1 when Ecclestone was running the show. He thrived on destabilisation and uncertainty, in the certain belief that he could manipulate any situation to his way of thinking. But, frankly, the chiefs of Liberty do not possess his fox-like cunning or ability to make the deal when it needed making.
There is still no hint of how Liberty intends to “help” the minor teams with some form of equalisation of spending.
The danger still exists, perhaps more than before, that some teams simply will not have any budget to help them compete with the big spenders of the sport.
It is a philosophical question as to whether those smaller teams should be helped.
Formula 1 is a cut-throat commercial business. If you cannot compete, as in any business, you go bust.
Simple economics in simple terms.
The problem for Liberty is that there are no new teams lining up to replace departing teams.
Likewise, if it loses teams and loses the larger traditional tracks, what does it have to sell to the fee-paying TV watching public?
Somehow, a Liberty Media person has to come out of their own particular ivory tower, metaphorically wave that piece of paper and declare that peace and stability have broken out.
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