F1 Business Diary 2015: the Monaco Grand Prix

Lewis Hamilton’s hopes of winning a fourth Grand Prix of the season were written off by an embarrassing strategic mishap during Sunday’s race in Monaco.

Lewis Hamilton’s hopes of winning a fourth Grand Prix of the season were written off by an embarrassing strategic mishap during Sunday’s race in Monaco.

Leading by more than 20 seconds and all but certain to claim his first victory in the principality since 2008, Hamilton was called in by his Mercedes team for a tyre change as the safety car halted proceedings following a crash involving Toro Rosso rookie Max Verstappen and Lotus’ Romain Grosjean. It proved to be a catastrophic misjudgement for Hamilton. The reigning world champion, seemingly destined to extend his championship lead after dominating from practice at F1’s blue riband event, emerged from the pit lane in third behind teammate and eventual winner Nico Rosberg and Ferrari’s Sebastian Vettel.

“There is no single person to blame,” said a visibly fuming Hamilton after the race. “We are a team and we win and we lose together.” It was, as ever, a classy response from the Englishman but it is clear his team owe him one heading into Canada. Perhaps more ominous for the rest of the field, though, is that the fastest guy on the grid might just get a bit faster from here on in.

A valued member

It is funny how things happen in sport. Just 72 hours before the nightmare of Monte Carlo, Hamilton couldn’t have been happier with his employees as he finally put pen to paper on a bumper new contract. The new deal, thought to be worth in the region of UK£100 million in total, will keep Hamilton at the Silver Arrows until at least 2018 whilst making him the highest-paid British sportsperson.

As expected, many of the figures flying around following Thursday’s big reveal were wildly inflated, with Mercedes motorsport boss Toto Wolff publicly rubbishing speculative reports that Hamilton had been offered an eye-watering UK£1 million a week. It is clear, nevertheless, that Formula One’s hottest property – in at number five in SportsPro’s list of the world’s most marketable athletes for 2015 – has come out of the protracted contract negotiations rather well.

Having left XIX Entertainment, his long-time representatives, last November, Hamilton is said to have negotiated the deal himself, ensuring he will not have to fork out hefty management fees. Add to that considerable performance-related bonuses and the ability to monetise the personal image rights he has reportedly managed to retain, and there can be no doubting Hamilton is a man well aware of the value of his personal brand. Even Wolff was happy to admit few can match him commercially.

“This is a market and in that market you have a value or you don't,” Wolff told Sky Sports. “Lewis is one of the best racing drivers out there, maybe the best at the moment and he has a huge value for the brand and fundamentally this is what drives his value and this is a classical win-win situation for the team and for himself.”

Customer dissatisfaction

Sticking with Mercedes, three Formula One teams approached the German marque this weekend about the possibility of acquiring 'customer cars' if rules allow, according to Wolff. Speaking to reporters ahead of Sunday’s race, the Austrian suggested some smaller constructors would be willing to run cars provided by their rivals, contrary to reports suggesting otherwise.

“It's interesting they say that because three of them came to see me [on Friday] about whether we could supply customer cars to them,” Wolff said.

Though critics say tweaking the rules to allow ‘customer cars’ would lead to a two-tier scenario in Formula One and preserve the dominance of the major manufacturers, proponents say that is already the case, insisting more must be done to reduce the cost of competing and ensure there are enough cars on the grid.

At present, Force India and Lotus both use Mercedes power units but both have reiterated their intention to race their own cars as current rules stipulate. Williams also use Mercedes engines while Sauber and Marussia utilise Ferrari units.

“I think we need to have a contingency plan in place and customer cars, or franchises, we have seen that in other sports, in Nascar, and it functions pretty well,” said Wolff. “So if the contingency is about supplying our cars to customer teams, hopefully current teams, then yes we will be looking very much into it. I think it is a good model. As a contingency plan it works, and if we can find a business case around it, we shouldn't rule it out.”

Wolff’s view is somewhat unsurprising given Mercedes’ current dominance but it seems the proposal has high-level support in the form of Bernie Ecclestone, who has said he would be willing to see cars supplied to smaller teams at a fixed cost.

“You make all the chassis the same and we do a deal with one of the engine suppliers. It should work,” Ecclestone said, giving a vague outline of how the proposal would operate in practice.

We’ll supply two chassis complete by 1st January for US$15 million. We’ll pay. If it costs more we have to pay more, if it’s less that’s good for us. And they have to race. The lowest team gets US$50 million anyway, so they would have two cars, plus US$35 million.”

Who cares? Eurocares

A new study conducted by Eurocare, a network of NGOs working to reduce alcohol-related harm across Europe, has suggested alcohol sponsorship in Formula One could contravene European Union directives. Titled ‘Alcohol Advertising And Sponsorship In Formula One: A Dangerous Cocktail’, the study was released to coincide with this year’s Monaco Grand Prix, a race with more alcohol brand advertising than any other.

According to the report coverage of last year’s Monaco showpiece, watched by 500 million worldwide, contained nearly 1,200 references to alcohol brands, or around 11 per minute. Such exposure is believed to be the highest in any global sport.

Though alcohol sponsorship is already outlawed in many Formula One markets, the authors of the report are urging the sport to do with alcohol advertising as they have done with tobacco promotion – that is, ban it outright.

“The amount of alcohol related exposure in F1 settings is extreme by anyone’s standards,” said Mariann Skar, the secretary general of Eurocare. “There seems to be a lack of recognition within the F1 community about their responsibility when showing alcohol adverts every five seconds to an audience of 500 million viewers. We now urge the involved bodies in F1 to move away from alcohol sponsorship.”

The subject of alcohol sponsorship in motorsport and sport in general is nothing new but tighter restrictions or an outright ban, were either of them to come, could have a telling impact on the ability of Formula One teams to generate income at a time when many are already operating under significant financial pressures. Force India, McLaren and Williams all have major deals in place with alcohol companies. Blocking another key revenue stream would only heap more misery on the back of the grid.

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