Chicane by SportBusiness Group

INNOVATION | TECHNOLOGY | SUSTAINABILITY EDITION 001: JANUARY 2013

Only one circuit laps the world. In 2012, Tata Communications delivered mission-critical applications to Formula 1™ across 20 races globally, enabling a sport where milliseconds count. This was enabled through our first ever round-the-world sub-sea fibre optic cable network, carrying video, voice and data at close to the speed of light. That’s why we’re first choice for Formula 1™. Now you can also enable your business and win cool F1™ collectibles by registering on www tatacommunications.com/globalring

© 2012 Tata Communications Limited. All Rights Reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. The F1 FORMULA 1 logo, F1, FORMULA 1, FIA FORMULA ONE WORLD CHAMPIONSHIP, GRAND PRIX and related marks are trademarks of Formula One Licensing BV, a Formula One group company. All rights reserved.

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issue 001

“View Suspended II” Artist: Paul Veroude, Curators: Artwise, Many thanks: LAT Photographic and Mercedes-Benz World UK

contents Editorial 4

drivers

Management From the Top: Christian Vogt

branding Passion for Precision: Rolex Nick Downes: Enhancing Formula One’s Assets

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electric words Alejandro Agag: Why I Chose Formula E

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Technology F1 Uncut F1 Profits from New Pay-TV Era Maximising Insight into the Formula One Fan Space: Formula One’s Final Frontier High Speed Connectivity F1 Sans Frontières: Caterham Composites

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teams The Changing of the Guard: Monisha Kaltenborn New Breed, New Principals: Cyril Abiteboul

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sponsors

USGP The Long and Winding Road to Turn One USGP Danny Lopez: Formula One - Great for Britain Austin: Formula One’s Tipping Point? Making a Long–term Success of F1 Business Diary: Andreas Sigl, Global Director, Infiniti Interview: Mario Andretti Texas Wide-Open for Business

On the Button, Out of the Blue: Richard Goddard Simon Fitchett: Inside the Driver’s Mind Alex Wurz: Driving Fast & Driving Safely The First Lady of Formula One: Maria Teresa de Filippis

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First Time Sponsor: Optimal Payments The Premium Partner: Oerlikon

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fans From Circuit to Street

Through the looking glass Adam Parr: Can’t buy me Love F1 Uncut: The Supplier, John Bailey, bf1systems Mark Gallagher: Lessons from the Fast Lane Graham Mitchell : CTO Column Jonathan Neale: Engineering the Future of Formula One Mark Gallagher: F1’s Power Gamble Countdown to 002

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EDITORIAL

PUBLISHING TEAM Editor

Christopher Joseph cj@sportbusiness.com

EDITORIAL

Editorial

Design

Slipstream, not Mainstream Welcome to the inaugural edition of Chicane. Formula One is a labyrinth; a complex framework of corporate synergies, strategic partnerships and evolving brand assets. It is a hub of engineering excellence, technical wizardry and tactical ingenuity. It is a sport, and a marketplace, that is evolving and has at its heart the concepts of innovation, sustainability and technology. These are the same pillars upon which Chicane has been constructed. The stories, people and companies you will read about in these pages display the depth of the Formula One marketplace, and its place in the wider world of business, technology and sport. We would like to thank our columnists who have helped to illuminate on their chosen specialities. We’d also like to thank those who we have spoken to in creating issue 001; those we have interviewed, those who have provided counsel and the many who have been sources of constant encouragement. We’d also like to thank the following people for recognising a great opportunity to communicate a strategic message through a unique new platform to a select audience: Mehul at Tata; Simon at UKTI USA; Andrew, Martin and Joel at Optimal; Jochen at Geobrugg; Olly at UBS; Neil at Getty Images and Burkhard and Sven at Oerlikon. Our first issue has many focal points, but perhaps there are three areas that stand out in painting a picture of today’s Formula One. The first is America. Austin, COTA and the new TV rights deal with NBC Sports are three areas that, combined, present Formula One with an opportunity to endear itself to the American public. We speak to COTA ambassador, Mario Andretti, and Zak Brown of JMI Marketing, and hear from Mark Alexander and Danny Lopez, Director General of UK Trade and Industry USA, to find out how Formula One can work in the US. Second, there is the sport’s clearer focus on sustainability. As you will read, Formula One as a whole is now locked-in on the issue of addressing its own long-term future, and that of the world around it. Jonathan Neale, Managing Director of McLaren Racing, looks at the issue in his column and our Through the Looking Glass section will keep a dedicated account of the future visions of those in the F1 community. Thirdly, there is the generation shift. Gradually, the next generation of leaders, principals and decision makers are taking their positions, providing a snapshot of how the sport may look in the near future. This issue, we talk to Monisha Kaltenborn and Cyril Abiteboul, the paddock’s newest team principals, who will be taking the helm for their first full seasons in charge of Sauber F1 and Caterham F1 respectively, in 2013. If Formula One is fast-moving on the track, then it is just as fast off it. We are already well into development for issue 002 as we prepare for the dawn of another season. If you would like to be involved then we would like to hear from you. cj@sportbusiness.com / @chicanef1

Christopher Joseph Editor @chicanef1

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MANAGEMENT

From The Top: Christian Vogt Formula One Management “We are at a crossroads. Formula One is in a crucial phase. The future is not what it used to be. The present is already not what it used to be. But the future… the speed at which the future is arriving is incredible. The change is amazing.”

Despite the requirements of a flotation, it is hard to envisage anyone who could replace the dealmaker and mythmaker that is Formula One Management’s CEO Bernie Ecclestone. With the appointment of Christian Vogt as Marketing Director, there is a clear indication of a more integrated approach to the promotion of Formula One. Chicane sat down with Vogt to discuss his plan to reflect the sport’s innovation factor in the way it is marketed. : What does a more integrated approach mean in terms of moving Formula One forward, embracing new ideas and defining a clear future vision for the sport? Christian Vogt (CV): If innovation is the thing for which we are known, if we are known for being innovative in technology, then we should be innovative in everything, especially marketing, because otherwise it doesn’t make sense. Let me start with an anecdote: I remember in my football days there was one brand, a sponsor of The World Cup, that spent their whole marketing budget on this one event only to have no money left over to do any activation. I remember the situation well: the CEO said “my plane is waiting. I’ve got to go”. The faces of the marketing department dropped. This is fundamentally wrong. Major companies that are absolutely crazy about Formula One must make sure that the two brands fit well together… it has to work. My aim is to bring this innovation factor that you mention into Formula One because it has a culture of innovation – I want to bring that into the marketing of Formula One and create new products, new services that go beyond mere signage and hospitality. : For Formula One to achieve this goal, is it best done through creative and media agencies who are the real custodians of the brands, rather than sports agencies? CV: The ’Big Five’ are the obvious choices – you know who I mean – they control roughly 70 per cent of the market. Remember, there are two schools within FOM. In the past, we used to do deals in a certain way: talking, lunches, etc. Nowadays, CEOs can’t do that. Suddenly, we may find ourselves not talking to anyone anymore, so this is why we are out there talking to the creative agencies particularly because lots of brands are now very sophisticated. I want these agencies to be my evangelists. There are many challenges that Formula One faces in the near future especially when it comes to the notion of audience and who will

be watching the spectacle after the current generation. The erosion of the audience is crucial and related to the future participants in the sport. Nobody admits this: you go to a race, but where do you see families? All of the drivers will tell you they started in motorsport because of their parents. So it’s not only about the future viewers and audience, it’s about the drivers. : What did your boss ask you to do when you first started six months ago? CV: He asked me to develop new business and I replied that the new business is not what the old business was. I am interested in developing a more a la carte Formula One; a remix, if you like. I would call it ’unplugged’ because that is the nature of my involvement. Mr Ecclestone has done an absolutely fantastic job – you won’t find anyone in the paddock who would dispute that – I am just a small piece in a very large jigsaw. This jigsaw puzzle that is Formula One has the ability to incorporate many new and varied pieces, so I start to press for more on-the-record, tangible developments. : So why don’t we have a fan zone at each race? CV: I think that should be the case. I don’t want the race just to last for a long weekend. I want Formula One to have a year-round presence; that is what I am working on now. I also want to use our assets more wisely; to use our drivers as a living hall of fame. I want to see more exdrivers in the paddock and at B2B conferences, as an example. : Do you think you need to link the race centres as well so when we are at Melbourne next year we need to have a viewing event in London, Abu Dhabi, Barcelona? CV: Yes, exactly. : Formula One was built on mentoring and should continue to be so. Look at Fangio and Maria (Teresa de Filippis), Ron Dennis and Lewis Hamilton, Sir Jack Brabham and Bruce McLaren. Do we need to start talking more about new ideas and new approaches as to the direction in which F1 is heading? CV: It’s a very good idea, absolutely brilliant. The door is open and there is definitely a generational change taking place. I don’t know if I sense this change or if I sense that it’s high time to make a change. I will reveal more for the next issue.

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Passion for Precision

“It was the right time to be involved in Formula One… somewhere, it is part of our DNA.”

With their shared passion for technical precision, the new relationship between Rolex and Formula One should run like clockwork. Arnaud Boetsch, Director of Communication and Image at Rolex SA tells us more. How do the brand values of Rolex and Formula One fit together? The very strong link we see with Formula One is this approach of pushing the limits of the technical aspects of mechanical objects. Our people are able to produce a mechanical object which is beautiful, magnificent and so precise that it’s pretty close to what they’re doing with the cars and performance in Formula One. Even if you don’t like cars, you know sometimes you are just very excited to see the starts – there’s something very exciting about the start of the competition and the start of pushing the performance of a car and a man – a driver – and there is a kind of a battle, which is very interesting. What is behind that is also, again, the immense passion for cars, for technical aspects. So many people are behind the watchmaking, so many passionate people are working on the watch. It’s the same for cars. There are many people beyond the driver that work to make sure the car will be the best one you see. And every day, they try to push the limit, and every day they try to be better and better. It’s exactly the link we want to create with Formula One. It’s exactly what we’re doing every day in our manufacturing here. The watch, it’s at least a year of hard work, a lot of passionate people are behind that, and that’s the passion that we want to see and want to show. How did the actual deal come about? Times are changing, and everything’s going so fast that we thought that it was the right time to change a few things and to improve a few things.

Rolex is changing. DNA is so important, especially for a brand as mythical as Rolex. We need to change in terms of what is happening around us – the new technology, the new media, the new ways of getting our message across. We need to reinvent ourselves with the same DNA but for modern times. And we thought it was the right time to be involved in Formula One because, somewhere, it’s part of our DNA – a natural link. So you choose these relationships carefully, over time. What are the key indicators that you require before you select such a partnership? Partnership is very important for us, so we’re talking about the quality of the events, the quality of the image of the events, and the people behind them – not just the people who are negotiating the contract. It’s not only the people in front, it’s the people behind, too – what they’ve achieved in the last few years and what kind of strategy they have for the future. What about the activation package for Rolex? Will we see you at races? Will you be entertaining clients? We have the opportunity to do such things, so we’ll have a look at the different affiliates and the different people in the country. I’m sure that it will happen and there are plenty of different things we can do. We have a lot of things in mind, of course. I think maybe we won’t choose all the races for the first year. It’s going to be a learning process as well. We need to create this partnership so we need to look at each race in turn and see whether we can do something very special there.

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BRANDING

ENHANCing F1’s Assets Nick Downes, Founder and Partner of Interstate, London, on the evolution of the formula one brand.

Associate Professor of Marketing at Melbourne Business School

ver 25 years ago, I scripted a series of opportunist letters to Bernie Ecclestone, then the owner of Brabham-BMW. Mr Ecclestone responded with curious interest, saying, “I’m really not too sure what you can do for us, but perhaps you would like to give me a call,” and this led to one of the most visually influential projects Formula One has experienced. Ecclestone had been elected the FIA Vice President for Commercial and Promotional Affairs and quickly put into play his idea to modernise the sporting marque of the FIA and create global identities for its World Championships, starting with Formula One. Whilst something of a culture shock for most of the promoters – many of whom did not appreciate their ’personal touch’ being neutralised – the most important effect of this operation was to finally establish the global brand franchise of the FIA Formula One World Championship with a consistent and controlled presentation. Prior to his initiative, each Grand Prix behaved as a standalone national event where the promoter would frequently associate the Formula One image with local firms or swap brand rights for payment-in-kind. This undermined the full potential of the Formula One brand, as one event would offer packages of rights on very different terms to another. It also presented real challenges when developing a truly global World Championship which could appeal to the growing number of international brands. If Formula One was to be taken seriously by the global brand community, it too had to conform to the same international standards of quality and reliability. The conventions that were introduced in 1988 provided clear rules and frameworks for any sponsor’s brand to associate itself with the sport and ensured that cost and value were brought into line to ensure that the days of logoclutter and ’mates-rates’ were brought to an end. The complex and rather descriptive FIA Formula One World Championship logotype was replaced in 1994 by the now globally recognised ’flying F1’ marque. However, the Formula One brand is a little different – a formula without

a formula. Formula One is a multicultural, multifaceted, global nomad that is tuned to put destinations and brands on the map via a sophisticated sporting spectacle. There are few, if any, platforms so adept at accelerating a brand’s global awareness or enhancing the image of one of its venue destinations. Formula One is incredibly adaptable and adjusts effortlessly to its surroundings – sometimes with barely a week’s break: an urban park setting in Melbourne transitions to a circuit deep in Malaysia’s rubber plantations, whilst the majestic Autodromo Nazionale di Monza makes way to Singapore’s twinkling skyline by the waterside for Formula One’s dramatic night-race. Professor Mark Ritson’s1 elegantly simple definition of brand is “everything that remains once the generic has been removed”. However, in Formula One, nothing is generic – everything is unique, dedicated, bespoke – no show is ever the same. There is absolutely nothing generic or comparable in Formula One – it evolves and changes on a sixpence. The relentless individuals that characterise Formula One teams, the revolving sponsorship doors and the transient nature of the events all contrive to make Formula One a place where change is a way of life. But it is a brand with exceptional provenance and premium values, founded by the brave and noble drivers and formeraero engineers of post-war Europe who dedicated their careers and, in some cases, their lives to the pursuit of Grand Prix success that the class of ’challenger corporate’ brands seek to associate with. From the outset it was clear that Ecclestone intended to define a simple, powerful and memorable brand that would be universally accepted as motorsport’s equivalent of the five rings representing the Olympic Games. And, contrary to the usual expression, not third after the Olympics and World Cup, but outright first for brands seeking frequency (of message), reach and diversity enveloped in high-tech drama. Based on these criteria, Formula One has no peers; it is more than a sport and more than human drama – it combines cutting-edge technologies with ’Boy’s Own’ jet-set lifestyles. But most uniquely, it is the most ultimate manifestation of sport and business. Formula One would not be so successful if this equation was not working in harmony. It recognises the importance of sport as the theatre that brings everyone together in a modern-day medieval joust but it does so with the utmost professionalism and finesse. Bernie used to say that he expected Formula One to be as recognisable as Coke and probably be consumed by as many. Twenty-five years later, it probably is. As individuals, Formula One and Bernie are hard to separate: macro, micro, relentless perfectionist and forward thinker; perhaps similar to Steve Jobs and Apple where both characters are so instrumental in the development of their businesses and intertwined

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From the outset it was clear that Ecclestone intended to define a simple, powerful and memorable brand that would be universally accepted as motorsport’s equivalent of the five rings representing the Olympic Games.

with their brands. Just as Jobs could, Bernie can steer the Formula One brand with a few, often witty, sound bites; one minute, LG is here because “I need a new washing machine” and the next, UBS, “because I’m going to ask for a loan.” And now, as Rolex decided Formula One is the right place to drive its brand in a premium context, Bernie stated “Rolex has incredible sporting heritage and therefore Formula One is the right place for Rolex to be.” He has aligned the planets again. It is difficult to separate these two icons – if indeed it is possible at all – Formula One or Mr E? During the last two decades, F1 has developed exponentially from a European-hearted sport starring Ferrari, Monaco and a host of playboys to a globally-recognised, automotive media machine where Ferrari vies with McLaren and Monaco, Yas Marina and Singapore Promenade for the prize of most beautiful destination. Its power is unrivalled for today’s ambitious brand owners – especially those seeking visibility and experiences in the world’s most dynamic markets, an audience of half-a-billion plus and, perhaps, most significantly, a performance every other weekend for nine months of the year. From 15 provincial Grands Prix to one global Formula One in 25 years, the model is now dependable, repeatable and still much in demand. In this age of content-driven, embedded advertising and ’like’ endorsed media, Formula One is a model platform for experiential brand messaging. Mobile devices and apps will provide greater access for consumers to engage and probably transact directly with the sport, allowing it to fully appreciate the profile of its community: 500m

’anonymous fans’ or 500m names, addresses and payment details is a very different prospect for growth. With new technical regulations due in 2014 the sporting ’formula’ is set be redefined again to be more in-step with industry, engineering and environmental imperatives - a new era of creativity awaits.

THE POWER OF FORMULA 1; SPORT & BUSINESS PUBLISHED in 2010

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electric words

WHY I CHOSE FORMULA E Over the past few months, Alejandro Agag, CEO of Formula E Holdings has been working with his team on setting up the foundation for a new global motor racing championship. Here, he explains why. There are many reasons behind my drive to establish a new world formula, built largely on things like intuition, feeling and belief, and I will try to explain them as best as I can. Firstly, I love motor racing. I’ve been involved in GP2 and Formula One, of which I am, and will always be a passionate fan. Secondly, I like a good business opportunity when I see one and I believe Formula E Holdings (FEH) has the potential to become a great project. When I was working on the sponsorship side of Formula One and GP2, I frequently faced an objection by potential sponsors: “we like motor sport, but it’s not sustainable or environmentally friendly”. Now, with Formula E you have a motor sport that is not only sustainable, but that will have a positive effect on the environment and people’s lives in the long-term. Thirdly, before moving to sports, I spent many years at the European Parliament and was closely involved in issues shaping policy for future generations. My concern for the environment stems from here. Formula E’s ambition is to revolutionise the world of clean mobility on the racetrack and on our streets – for everyday people. I expect electric racing cars to be a catalyst for the development of tomorrow’s road-going cars. As our world

becomes increasingly more urban, with UN estimates of a 60 percent urban population by 2030, clean urban mobility in our cities is a pressing issue for today’s governments, city mayors, companies and our children – essentially everyone that understands the demands of 21st Century cities. This is where I feel that, through Formula E, we can make a difference and leave a legacy for generations to come because it has been proved that what happens on racetracks transfers to the streets. And finally, I think we can do it. We have tried to bring together, under the FEH umbrella, the main players that have been at the forefront of electric motor racing in the last few years. To have with us people like Lord Drayson, who developed the first electric racing prototype, Eric Barbaroux and Pierre Gosselin, pioneers of the Formulec formula car, adds a great breadth of experience to our team. Also, it’s very exciting to have companies such as McLaren and Spark Racing Technology joining and believing in our project. We have a great task ahead of us, and we will have a lot to do before the first race takes place in the centre of a major city in 2014. It will be a major change in motor sport as we know it, and hopefully a catalyst for future change.

Formula E’s ambition is to revolutionise the world of clean mobility on the racetrack and on our streets – for everyday people.

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The FIA Formula E Championship Launch date: 2014 Formula: Solely electric-powered cars Host venues: The races will run exclusively

in major international cities. At time of press, both Rio de Janeiro and Rome have been confirmed as host cities for 2014. Sustainable USP: The Formula E Championship is seen as a catalyst for the development of new electric car technology that will be transferable to road-cars of the future and of significant benefit to the environment. As Alejandro refers to in his column, McLaren has announced that it will be a key partner of Spark Racing Technology, which is led by Frédéric Vasseur and is “dedicated to the creation and assembly of the electric cars participating in the FIA World Championship Formula E,” according to the company’s official release. In their own words…

Martin Whitmarsh McLaren Group CEO and Team Principal of Vodafone McLaren Mercedes

“I’m a passionate believer in the role that motorsport can play in showcasing and spearheading the development of future technologies, and regard the Formula E concept as an exciting innovation for global motorsport. McLaren has worked with Frédéric Vasseur for many years, and our association has been very successful. Working together in Formula E, McLaren’s world-class technology and Spark Racing Technology’s expert knowledge will combine to allow both companies to stay at the forefront of technical innovation and hopefully open up great opportunities for the racing cars of tomorrow.” Frédéric Vasseur CEO of Spark Racing Technology

“With Rio and Rome on board, as well as Spark and McLaren, the FIA Formula E Championship now looks forward to the announcement of the first American host city in the New Year. We have many exciting things in the pipeline for 2013. The selection of the host cities is an ongoing process that should be finalised over the next few months.” Alejandro Agag, CEO, Formula E Holdings.

“I am proud and happy to give birth to this project that is innovative and extremely rewarding for a company both technically and philosophically. Personally, I can write a new chapter, regardless of my other ventures in motorsport. Confidence and commitment from our partner McLaren is a guarantee of quality and reliability without which this project would not have been possible. The association with a globally recognised car manufacturer is definitely the right way to go. Sport and society are evolving and Spark Racing Technology is proud to be the pioneer and leader in the new field of electric cars that will revolutionise the motor racing industry and attitude.” Jean Todt FIA President on announcing Rome as first European host city

“It gives me great pleasure to be in Rome for this exciting announcement that the eternal city has expressed its firm interest to host a race in the Formula E 2014 championship calendar. The contrast between this innovative motorsport series and the rich ancient history of Rome is one I am sure the public and the media will be intrigued and enriched by.” 11

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USGP

The Long and Winding Road to Turn One USGP 18.11.2012 14:00:01:03 “Other than a disgruntled former partner, not having a contract for a race while simultaneously having a partially-built track, lawsuits, impossible construction schedules, politics, the weather and needing a couple of hundred million bucks, the project was a piece of cake.” bobby epstein “Red McCombs changed my life and so has this project and I am sure it has been the biggest thing that Bobby has done in his life. Perhaps it is the biggest thing we will ever do.” - Rad Weaver

Bobby Epstein crackles over the phoneline in that silky southern Texas drawl of his and immediately apologises for being late as he was taking his son to ’soccer’. Yes, even in Texas they play soccer. Across the board, from management, teams, drivers, sponsors and fans, the inaugural United States Grand Prix was universally acclaimed, yet not a lot is known about the people who made it happen. As the introduction to our USGP Focus, Chicane had the pleasure of some exclusive insights from the key protagonists behind the scenes in this most successful of American dramas. Turn One at the Circuit of the Americas (COTA) may yet become an iconic part of Formula One folklore, but the first turn for the men who brought the race to Texas was a downturn in the economy which brought an unexpected result. “I bought the land. I bought it at the worst possible time and I used to joke that we’d put rollercoasters and waterparks there one day because no one was going to build houses as the housing market had died. “So when I was told that some marketing executives were looking at various properties in that part of town to bring a Formula One race here, I listened. I listened very carefully,” says Epstein. We’re listening very carefully, too, as we wonder what exactly this former bond trader thinks his biggest challenge was and his biggest achievement. “Besides ensuring the financial health of the project and navigating some of the very difficult waters, I think I focused mainly on what happens outside the racing lines. I focused on the fan experience, the spectator point of view. I think that’s where I knew I had something to contribute.”

He continues: “From the start I asked for a great fan experience: ’Give us a large number of overtaking opportunities,’ was my first instruction to the designers. We gave them more or less a blank canvas. We let them choose the land that they thought would fit from a driver’s standpoint, as well as give a unique fan perspective. “Tilke was able to draw upon the best characteristics of the most respected features of different tracks from around the world and incorporate that into something that functions all year round but can still be the premier track in the world. I think we ended up with something special.” The San Antonio Connection

Texas may be “wide open for business”, as the slogan goes, so it’s unsurprising that it also took a great partnership to get the job done. Former baseball player Rad Weaver, who is a director on the board of McCombs Partners, the investment capital firm founded by the extraordinary Red McCombs, joins the conversation to explain his role. “Red and I were lead investors on the project. Bobby and I, in many ways, have kind of held each other’s hands through this project and worked together to help guide this thing through to race day.” McCombs Partners are canny investors who believe in people first but also in the strength of brands. So where will business, both from within and outside Texas make the most of the USGP? They will all learn how they can integrate and activate their brands around Formula One and how to make the most of the race weekend as a corporate event.

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Looking ahead to next year’s race, Weaver is full of that infectious American optimism: “In my opinion, a natural maturation process will take place, through which the teams, COTA and Formula One, as well as the brands, will find the best way to maximise the exposure that Formula One provides. I think there’s no question you will see the US get even more excited next year and more importantly, US brands will get very excited.” Whilst the USGP and COTA were definitely an all-American affair, they did have some European assistance. Throughout the process, they were guided by KHP Consulting in the most important aspects of cultural, social and economic engagement that are necessary to successfully stage a Grand Prix for the first time. Katja Heim, KHP’s CEO, who has guided Bahrain, Shanghai and Abu Dhabi through the same challenging process, is also optimistic for the future. “Year one is normally when you struggle right up to the last minute to deliver the race on time and you think to yourself, ’My God, is everything ready, is the paint dry, is everything in the right place?’ Year two is when people start to show a lot more interest and look to position their brands, especially if you’ve done a good job, as COTA have. You have to manage people’s expectations and deliver even better than the first time. “Year three for the new Grand Prix is the most difficult year, like the difficult third album in music. You have to retain the fans from the first two years but still gather new fans while improving the quality of the product. You might be older and more experienced but you have to be a lot wiser.”

“Expect to Win, Prepare to Win, Execute to Win.” - Red McCombs

Bobby Epstein

“COTA’s impact on Texas should exceed $500 million in 2013, while the Grand Prix itself is estimated to bring in more than $250 million to the local economy.” “I didn’t get into this as a Formula One or racing fan. My initial reaction was ’Why Austin? Why Texas? I didn’t get into it with the expectation that I’d be running the whole show one day. I think we’re going to do well with Formula One racing. I think we will be here for a long time.” Katja Heim, KHP

“Year three for the new Grand Prix is the most difficult year like the difficult third album in music.”

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USGP

Formula One: GREAT for Britain

by Danny Lopez the Director General of UK Trade & Investment USA and British Consul General in New York

Formula One is a sport at which the UK consistently excels. Britain is home to twice as many teams as the rest of the world combined, and UK-based teams have won well over half the constructors’ championships in the 54-year history of the sport. Even among nonUK teams, British engineering dominates Formula One: so much so, in fact, that every car on the starting grid benefits in some way from technology developed in the UK. So when Lewis Hamilton won the inaugural Austin Grand Prix for McLaren in November, it was a triumph for British industrial as well as sporting prowess. The victory, together with the fabled strength of the commercial relationship between Britain and the US, meant that Austin was the perfect venue for showing off the very best of what Britain has to offer. During the buildup to the race, we held two high-profile events. Firstly, for true Formula One aficionados, we hosted a Tech Rally on the Friday afternoon before the race. I facilitated a fascinating discussion featuring key personalities, including McLaren Applied Technologies Managing Director Geoff McGrath, Williams Advanced Engineering Head of Commercial Operations Kirsty Andrew, and Mercedes AMG Petronas CEO Nick Fry, who is also a British Business Ambassador. Our discussions focussed on the advanced technology developed for Formula One that is spilling out into all kinds of other fields. For instance, British cyclist Mark Cavendish won the 2011 World Cycling Championships in Copenhagen on a bike that, thanks to McLaren’s materials science, has a frame weighing less than one kilogram (about two pounds). Williams is testing its energy-conserving flywheel technology for use in London’s red buses as well as in the next generation Jaguar C-X75 hybrid. Telemetry software developed to monitor Formula One cars is being used to track the vital signs of hospital patients, and Mercedes is in talks to see how its incredibly efficient pit stop sensors and procedures might be adapted to saving lives in the similarly frenetic environment of the emergency room. Manufacturers are also taking note of the efficiencies achieved by constructors: whereas the typical road car takes three to four years to develop, a Formula One car can be built from scratch in seven months. The high-powered guestlist, drawn from the wider industrial community as well as Austin’s vibrant tech sector, reflected the breadth of interest in the technology, business and best practice of Formula One.

Secondly, the British Ambassador Sir Peter Westmacott hosted a starstudded ’Best of Britain’ reception attended by senior figures from sport, business, politics and the media. Speakers included Texas Governor Rick Perry and racing legend Sir Jackie Stewart. Damon Hill, Sir Frank Williams and executives from several Formula One teams were on hand to work the room, with a little help from some stunning visual aids, including a McLaren MP4-12C, a Bentley GT Coupé and Rolls Royce Ghost – all British. The event underlined Britain’s global preeminence in advanced automotive engineering, for road cars as well as the racing variety. Media coverage of both events was extensive. Segments filmed at the reception featuring the Ambassador and Sir Jackie aired on CNN and Sky Sports News. In keeping with Austin’s burgeoning reputation for creative tech, both events gained significant exposure on social media, including Twitter, Facebook, Tumblr and Storify. For UK Trade & Investment the Grand Prix meant a bonanza of opportunities to connect British companies with potential US partners. Indeed, the level of interest from business was such that we were able to engage with executives of some 500 US firms over the course of the race weekend. Against a high-octane backdrop, we helped introduce them to their British counterparts as well as cutting-edge UK technology. And to judge by the conversations we are hearing about potential deals in the works, our matchmaking efforts may already be paying off. For me, what these events demonstrated above all is the enduring glamour, vitality and creativity of Formula One. It is an unparalleled marriage of sport, spectacle and high-tech business. As we have shown repeatedly in 2012, Britain excels at all three, and Austin provided fantastic opportunities to demonstrate this. We look forward to capitalising on these opportunities, and to returning to the Circuit of the Americas for the US Grand Prix 2013.

“The Grand Prix meant a bonanza of opportunities to connect British companies with potential US partners. The level of interest from business was such that we were able to engage with executives of some 500 American firms over the course of the race weekend.”

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Britain is a world leader in advanced engineering and more Grand Prix cars are built here than in any other country. With low tax, less regulation and a talented workforce we offer international business the edge. Find out more with UK Trade & Investment. Follow us on twitter @ukti_manufacturing

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Austin: Formula One’s Tipping Point?

Just Marketing International (JMI) has been the unseen force behind some of the most recent high-profile commercial investments in Formula One, most notably UBS’ multi-million-pound global sponsorship of the sport. So how does the renowned full-service motorsports agency regard the sport’s return to America and its potential impact on the F1 calendar of the future? Chicane sat down with JMI CEO and Founder Zak Brown to find out.

ormula One’s return to the United States was a success. From the moment the paddock caught wind of Tavo Hellmund’s plans to create America’s first purpose-built Formula One circuit, aptly titled ’Circuit of the Americas’ (COTA for short), commentators, analysts and authorities descended en masse to apply their individual perspectives on how significant this move would be for the sport itself, and for the country belatedly accommodating it. For who can forget the last time that Formula One was a staple of the American diet? It didn’t go down too well, with only six cars starting a farce of a race that left the sport’s reputation in tatters. Taking place at that shrine to US racing, Indianapolis, surely Formula One’s days were significantly numbered. Ultimately, they weren’t. The new deal presented a completely new opportunity: a purpose-built track that could not only handle Formula One cars for one weekend a year, but also the Australian V8 Supercars Series and the American Le Mans Series to bolster, if not justify, its

relevance. But it was also a new opportunity for Formula One to repair what damage had been done by events of 2005, and to make the case for its own relevance to an American public that might need convincing. Being the only transatlantic motorsports agency, Zak Brown and JMI are perhaps best positioned to observe America’s relationship with Formula One, so well-versed are they in the country’s domestic motorsports and in communicating Formula One to the American audience in a language that they fully understand. For Brown, Formula One’s return to America couldn’t have gone any better. “Austin was a huge success. I’d say it exceeded everyone’s expectations,” Brown enthuses. “The track is a proper Formula One track; there aren’t any others like it in North America. They (COTA) stepped up and gave the Formula One circus the type of environment it needs to show its stuff, and Formula One then delivered.” From the observer’s point of view, Formula One stepped up to the occasion on that weekend to deliver the most captivating of races, and

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Austin rose above all expectations from an event-delivery perspective right down to the logistics that had sparked some early concern prior to the race weekend. “People were concerned, and understandably so, that there could be dramas with regards to traffic,” says Brown. “However, the feedback I’ve been hearing is that everything from the event to the logistics went extremely well, especially given that it’s a first-time event, and given that they got a late start. “Once they got started, because of all the stops and starts, I think that they pulled it off as well as anyone. And I think that fact, combined with the new television package, is going to set up Formula One to have the best opportunity to be successful in North America, long-term.” The new TV rights deal will see NBC Sports provide the kind of coverage currently enjoyed by NASCAR and IndyCar. But how crucial was the deal in determining the fate of Formula One in the States? Brown asserts, “If there are three things you can do to make Formula One popular in North America, one is getting the right venue, and I think they’ve done that. Second would be getting the best television package possible – NBC Sports also covers IndyCar, so all openwheel racing is on one channel and I think that will benefit both parties. And then NBC Sports is making a big push to have a big sports channel, similar to what Fox is doing. The longer coverage is critical because so much of Formula One is about understanding what’s going on around it. Americans in general are behind on their level of knowledge of Formula One and how it works, and when you then have a smaller broadcast allocation, you have less time to tell your story and get the audience excited. “And then the third thing,” he continues, “although I don’t believe it’s critical, is that it would be nice to have an American world champion. Not just an American driver – there have been American drivers and that didn’t move the needle – you need an American world champion.” Just as an American world champion may be some way off, Brown observes that Americans are also some way off fully understanding what Formula One is all about – how the dynamics of the sport away from the track affect what happens on it. The new and expanded TV coverage will certainly help in that regard, but there is an education process that needs to take place over the lifetime of Austin’s tenyear contract to truly engage the American public so that they take Formula One to their hearts. Would an American team on the grid help in that education process? “It would certainly be great, but I don’t think an American team or driver is crucial,” Brown challenges. “America has so much international diversity and it’s such a big country that, I think, unlike somewhere like Spain where you have a Spanish driver and the whole country rallies behind him, America is very used to (and welcomes) all sorts of geographic diversity. I think America is just as likely to rally behind an entertaining world champion, whether he’s American or British. As an example, Lewis Hamilton could be immensely popular in North America and is a world champion that North America would embrace and understand.” Hamilton’s win will have endeared him to an American public that will remember him as the last winner of the United States Grand

Prix back in 2007 at Indianapolis. They will remember, too, Michael Schumacher for his five USGP wins, including his first in front of an estimated 225,000 spectators at Indianapolis in 2000, and Austin 2012, his last. America loves its heroes, and Formula One has had its fair share of those, but perhaps if the country is to truly engage with the sport and see it at its best, then having an American team on the grid – and the exposure, access and education that could offer to the US audience – would be a major step forward. Business development

Austin’s success as a sporting spectacle is well and truly cemented, but as far as Formula One goes, the sport out on track is just the tip of the iceberg. The business marketplace that Formula One provides is unique; it is arguably sport’s most global networking conference, and it is still expanding. The sport’s reach into the emerging Emirate markets and its established foothold in BRIC countries (with Russia now on the map) means that, as a platform for companies harbouring international ambitions, Formula One stands alone. The sport’s return to the US extended new business opportunities to the companies within and on the periphery of the sport’s travelling circus. Indeed, Zak Brown suggests that JMI had been as “busy at this Grand Prix as we have been at any Grand Prix in the last five years”, as companies from Formula One’s entourage mingled with local, national and multi-national businesses. “It reminded me of Singapore’s first year, from a corporate participation level. It’s great for us, and obviously we’d love to see a healthy US Grand Prix, but traditionally our Formula One clients have not been heavy activators in North America. I think that will definitely change now, starting next year. It’s good for us; it’s good for the teams; it’s good for the sport; it’s good for America.” And what’s good for America, in this case, is good for Formula One. With announcements such as General Electric’s deal with Caterham, and with a long-term contract for a US race locked in, are we seeing the final pieces of the jigsaw falling into place to complete the globality of Formula One? “There are something like 20 to 25 inter-brand 100 companies – the biggest brands in the world – participating in Formula One. So I think – if you look at who makes sense for Formula One – that list, as opposed to any sector, is probably a good barometer. And when you have the biggest companies, the GEs of this world, participating, it certainly bodes well.” Home comforts

For JMI, Austin can be seen as the company’s ’home race’ and it had a suitably significant presence at the inaugural weekend. The signs are already promising that JMI’s unique ability to leverage its existing US motorsports heritage is providing a key avenue for it to capitalise on Formula One’s return to the US. “I think we’re well-positioned given that half of our business is in NASCAR and many of the NASCAR sponsors are global companies. There’s already a lot of interest from NASCAR sponsors who are 17

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For JMI, Austin could be seen as the company’s ‘home race’ and it had a suitably significant presence at the inaugural weekend. The signs are already promising that the company’s unique ability to leverage its existing US motorsports heritage is providing a key avenue for it to capitalise on Formula One’s return to the US. saying, ’Tell us about Formula One. What’s it all about? How does it work? We’ve had a successful experience in NASCAR, maybe we should look at something overseas.’ “Being the only motorsports marketing company that has North American roots puts us in a leadership position. I think we can be good champions for Formula One in our home country.” Now Formula One has returned to the US in such style and to such acclaim, the conversation turns to whether the country could, and should, sustain a second or even a third race. “I think a second race would be great,” Brown commits. “I think the market is large enough, wealthy enough and untapped enough to definitely justify a second race. I’m a big fan of that idea. It won’t double the success, because Austin’s done a lot of the heavy-lifting, but it will make it another 50 per cent better. As soon as New Jersey or the other appropriate venues are ready, I think you would add it as soon as you can.” With New Jersey and Russia on the horizon, and talk of Mexico and other business-related points of interest around the world as possible future staging posts, is the tradition of the sport – its mystique – in danger of dilution? The sport’s history is distinctly European, as is its traditional fanbase, but should that be an anchor to the sport’s will to acquire a newer, younger more geographically-diverse generation of fans? Is the sport’s migration away from Europe neglecting its hardest core of supporters in preference for new blood? “I don’t think so. I’m a hardcore fan and love the Eau Rouges of the world. But in reality, it’s in the sports’ best interest to capture new and younger fans – they are going to know Formula One as Abu Dhabi, they’re not going to know it as Eau Rouge. I think there are sentimentalists; people who have been around the sport for a while, like myself, who emotionally don’t want to see Eau Rouge go. But when your reality is that the world is changing every day, where Abu Dhabi wasn’t on the map ten years ago and now it is, it’s big business, even beyond Formula One. As long as Formula One continues to go to the right emerging markets, which it shows it has a great history of doing, then there will be sacrifices made along the way.”

buy and pay what they need to for the best, and I think Formula One is simply the best global property, year in, year out. “So, while a lot of other sports are suffering – and it’s not like Formula One’s having an easy go of it – I think they are doing a great job in a difficult environment. We’ve brought on a few Fortune 100 companies at a time when a lot of other properties are going out of business, and Formula One will continue to demand the prices it’s getting because it’s delivering the value. They wouldn’t be prepared to pay it if they didn’t think it was worth it.” So, Zak Brown and the rest of the Formula One roadshow have left Austin much the richer for the experience, the hosts having made a compelling case study in how to organise, stage and deliver an event. The race, set in the heart of America, brought out the best of the host country and, equally, brought out the best of finest formula that motorsport has to offer. The challenge will be in convincing Americans that this is the case.

A marketplace without equal

Sentimentalists beware. For all that the sport has grown in the last decade, Formula One hasn’t stopped yet, and as long as wealthy, emerging markets continue to emerge, so Formula One will continue to gravitate towards them. It is a blueprint that has both short and longer-term ambitions combined – to secure the marketplace for today, while plotting the course for the generation to which the sport will be handed down. As a sport, as a marketplace, it is without equal – a sentiment that Zak Brown shares. “It’s truly a global, year-long season. I don’t think any other sport compares to Formula One on an annual basis and delivers consistently like Formula One does. In this day and age, it’s the second-tier companies or properties that are struggling. The consumer and the sponsor, they’re always going to be prepared to 18

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MAKING A LONG–TERM SUCCESS OF F1 Mark Alexander, Head of Business Group at leading global motorsports company, Meet the Crowd, examines whether Austin can follow Singapore’s lead in making a success of hosting a Formula One Grand Prix. I was pleased to see the home-grown self-assurance with which Austin, Texas brought the world’s leading motorsport back to the world’s largest economy. Formula One in Austin saw great racing, largely unruffled event-delivery, a warm Texan welcome and even Pirelli cowboy hats on the podium. To the relief of many, year one was a success. The question that raises is why, against such a complicated backdrop, are US business and government able to deliver a new Grand Prix when those in Formula One’s traditional markets continue to struggle? The finger is typically trained on everybody’s favourite bogey man, Bernie, and normally the complaints are about greedy business practices. The classic solution put forward by politicians is to pay Formula One Management (FOM) less to host a Grand Prix. They are wrong. At the heart of most Grand Prix promoter’s difficulties are three things: they don’t know or use the facts about the economic impact of Formula One; they don’t optimise their hosting contract; and they don’t innovate and maximise what they get in that contract. Blueprint

I spend a lot of time looking at sports business models and the economic impact of major events and the truth is that FOM delivers an exceptional tourism and destination development product. There isn’t much data yet about Austin so let’s look at Singapore – MTC worked with our affiliate BCG on Singapore’s renegotiation of its hosting contract so I understand it well. Singapore is a relatively high-paying Grand Prix, yet it is the model of how to create a modern Grand Prix that works for FOM, teams, fans and for the host nation. While the Australian Grand Prix Corporation resisted pressure to accept a night race because of the additional cost lighting would bring, Singaporean race promoter and hotelier Ong Beng Seng must have been trying to make sure that their iconic night race was the only one on the calendar. The additional $5 to $10 million it costs to light a night-time race is one of many seeming disadvantages that Singapore has taken, made its own and turned to its advantage. Temporary street circuits are the most expensive way to host a GP. You can’t spread your costs by running other events at a fixed circuit, there are additional set-up and breakdown costs, plus you pay the opportunity cost of visitors lost to the city because they don’t want to come when a Grand Prix is on. Running a street race in Singapore’s city centre adds yet further costs: friction costs like loss of retail sales; the clogging up the city’s roads, stopping workers from

getting to work; losing revenues when wealthy city centre residents go overseas to escape the commotion of the Grand Prix. Combine all this with one of the higher hosting fees to FOM, a small domestic Formula One fan-base, no real TV rights market and the relatively successful, if wet, Malaysian GP just next door, and Singapore should have been a massive flop. But instead, they have created a top step podium finish. What makes the Singapore’s Grand Prix an international model?

There is the obvious. The Formula One weekend generates around $150 million in tourism receipts for Singapore and, from 2008 until 2011, it generated $560 million in incremental tourism spend. Spectators and viewers worldwide see not only the race cars but Singapore’s amazing skyline and that has value. I don’t like the commonly used metric of advertising equivalent value (AEV) for measuring the value of that exposure. In fact, AEV is only useful if the country is actually planning an annual advertising campaign and the Grand Prix substitutes that ad spend. A more useful question to ask is how much money is going to hit the ground in Singapore in the form of FDI, increased revenues for Singaporean-owned businesses or tourist spend as result of that exposure. In total, over a ten-year period, Singapore stands to gain $1 billion in net economic output from hosting Formula One and an equal amount from increased tourism and foreign direct investment. If, like Singapore, the ’mature’ markets went into Formula One with their eyes fully open, were proactive, did their research, worked with FOM in a non-confrontational and discreet way, kept innovating their business model and weren’t afraid to take well-planned commercial risk, they would likely to be doing their tax payers a significant favour in hosting a Grand Prix. With the Formula One community’s positive reaction to Texan hospitality, the 220,000+ plus tickets sold, the volunteers who canvassed the downtown area of Austin to help businesses get behind the GP and the small businesses who won big as result of the weekend, there are positive signs that Austin will make a long-term success of its Grand Prix.

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Business Diary: Andreas Sigl Global Director Infiniti Travelling the world on upwards of 50 flights a year to 20 Grands Prix is a demanding schedule, but what does it actually mean for the man at the helm?

Andreas Sigl is a man with a lot of stamps in his passport. He is the Global Director of Formula One for luxury automotive brand Infiniti, which means he is the man responsible for overseeing the global activation of the marque’s partnership with Red Bull Racing – a relationship that was enhanced at this year’s Brazilian Grand Prix with the signing of a new four-year deal that will rebrand the 2012 Drivers’ and Constructors’ Champions Infiniti Red Bull Racing – with Infiniti becoming the official technical partner of the Milton Keynes outfit until the end of the 2016 season. The original partnership has been in place since 2011 and has deepened, touching now on technical collaboration in build-up to the 2014 Formula One technical regulation changes which aim to make engine and drivetrain technology more relevant to production road cars. Infiniti branding features prominently on the Red Bull Racing RB8 and on the overalls of both drivers, and last year Sebastian Vettel was appointed Infiniti’s first ever Global Brand Ambassador. More recently, Infiniti collaborated with Vettel to produce the Limited Edition Infiniti FX Vettel Edition. Travelling the world on upwards of 50 flights a year to 20 Grands Prix is a demanding schedule, but what does it actually mean for the man at the helm? Here we get a look at Sigl’s role at the inaugural United States Grand Prix at the Circuit of the Americas, Infiniti’s first chance to leverage a Grand Prix in its largest market and its biggest activation of the year.

Wednesday 14 November 2012 20.22 Arrive in Austin, Texas on flight from Switzerland via Washington, using the flight time to prepare for the weekend. Transfer to Hilton Austin Downtown in Infiniti QX56 from F1 fleet. Thursday 15 November 2012

20.00 Dinner at ’Trulluck’s Downtown’ restaurant with Infiniti Mexico dealers and guests in downtown Austin to talk business, the Grand Prix and Infiniti’s involvement in Formula One. After dinner Transfer to hotel. Friday 16 November 2012

05.00 Wake up at 5am thanks to jetlag, but a good chance to get on top of emails before heading to the circuit. Transfer into the circuit at 9am.

07.45 Meet in lobby and transfer to track for the start of the Grand Prix. The Infiniti chauffeur, an Austin local, knows a back route, missing out the race weekend traffic so arrive in good time.

10.30 Status meeting with Infiniti F1 activation team, PRISM. Full run- through of weekend activities, objectives and priorities.

08.45 Drop off laptop in team office and greet team mechanics just finishing their breakfast. Double espresso to kick-start the day.

12.30 Lunch with Red Bull Racing Head of Marketing to debrief on recent Abu Dhabi test session. Sebastian Vettel stops to say hello as he passes through the team hospitality area.

09.00 Head up to Red Bull Racing Paddock Club hospitality suite to greet VIP Infiniti guests from Infiniti United States and Mexico. Infiniti is hosting over 200 guests at this race.

14.00 Meeting with head of Circuit of the Americas (COTA). Opportunities for next year’s race already being discussed.

09.00 - 10.30 Formula One First Practice Session. Giving garage tours to the US team and watching from inside garage joined by key colleagues from Infiniti US.

15.00 Meet and Greet with key F1 media as part of Infinitiorganised interview sessions with Sebastian Vettel and Mark Webber. Then interviewed by two leading F1 publications about the Infiniti partnership with Red Bull Racing.

11.00 Media session with Red Bull Racing Team Principle Christian Horner. 18 F1 journalists all keen to understand more about F1 and how major partners like Infiniti operate within it. A chance to bring them up-to-speed with the latest developments on our technical projects.

16.30 Quick change out of team attire and into cycling gear for three laps of the GP track on the Red Bull Racing bicycles for a work out. Seems half the F1 paddock has the same idea with countless people either running or cycling the circuit.

12.15 Lunch at Red Bull Racing hospitality with Infiniti Mexico dealers

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13.00 - 14.30 Formula One Second Practice Session. Watched from team hospitality sat with Mark Webber’s father. His boy is looking in good form this weekend. 15.00 Meeting with IPT – PRISM team to run through activation plans for Brazilian GP. Some exciting developments mean it is shaping up to be a bigger and busier race than we initially thought. 16.00 Transfer back to hotel. Email, shower. 19.30 Dinner at ’Carillion’ restaurant with Infiniti-hosted Hong Kong media. 15 minute opening speech outlining the Infiniti F1 story so far, followed by an hour and a half of questions and answers over dinner. After dinner Return to hotel. Saturday 17 November 2012 07.00 Out of the shower, and a 20 minute Skype chat with wife and two sons back in Switzerland. They are looking forward to this long season ending. Given a full shopping list of items to pick up whilst in US. 07.45 Meet in lobby and transfer to track. This time in an Infiniti JX. 08.30 Working through a global presentation document with senior members of the PRISM team ahead of key meetings taking place in Japan next week. 09.00 - 10.00 Formula One Third Practice Session. 10.00 - 11.00 An hour of one-on-one media interviews with Hong Kong business and automotive media.

19.00 Depart for Austin Downtown Activation by foot for one of the weekend’s key Infiniti experiential activations, the Infiniti G-Force Challenge Dyno taking place in the Fan Fest zone in central Austin. TV interview with local Austin broadcast station. Christian Horner makes a 30 minute appearance on stage to the delight of the large crowd. 20.30 Media dinner with United States automotive media and Infiniti executives. More questions and answers but the journalists seem very engaged in F1 and how it has unfolded so far this weekend. After dinner Return to hotel. Sunday 18 November 2012 06.45 The big day, race day. What all the work from the teams boils down to on Sunday afternoon. Meet in lobby and transfer to Hyatt Lost Pines resort for David Coulthard appearance. 07.45 Breakfast meet and greet with David Coulthard and Infiniti retail group. Coulthard is in good form as ever. 08.05 Infiniti Performance Team departure for track. 09.15 Formula One Paddock Club opens. 10.00 - 12.00 TBC An hour of one-on-one interviews with United States media. 11.30 or 12.00 TBC Lunch at Red Bull Racing hospitality with executives from Infiniti United States. 13.00 The US Grand Prix. Team headset on to listen in on all pit-to-driver comms. Time is split between the garage with key guests and the Paddock Club suite. It a great result – Red Bull Racing clinch the Constructors’ World Championship and Vettel extends his points lead over Alonso as we go into the last race in Brazil.

10.15 - 11.40 Pit lane walk – a chance to take senior representatives from Infiniti US into the pits to bring them closer to F1. 12.00 - 13.00 Formula One Qualifying Session. It’s a nail-biter as Lewis Hamilton is quick, but brand ambassador Vettel steals pole position with a dazzling fastest lap with moments to spare. 13.00 Lunch at Red Bull Racing hospitality with key members of Infiniti US and Red Bull US. Keen to put the two parties together to explore future opportunities. Transfer to hotel in QX56.

After race Back up to Paddock Club to see off Mexican guests who are departing for the airport straight after race. 19.30 Transfer to dinner with Infiniti Canada marketing team. Spurred on by the activation taking place in Austin this weekend, thoughts and ideas turn to Montreal 2013. 22.00 Transfer to the Red Bull Racing post-race team party in downtown Austin. A chance to unwind and enjoy the moment with the team.

02.00 Transfer to hotel. Time for bed. Monday 19 November 2012 Daytime Full day of office work from the hotel before leaving for Sao Paulo for the last race of the season.

To Infiniti, and Beyond! The final race of the 2012 season provided the platform for the now triple Constructors’ World Champions, Red Bull Racing, to announce a change of name for next season and beyond, and a change of emphasis in its relationship with a key technical partner. From the 2013 to 2016 seasons, Infiniti Red Bull Racing will line up on the Formula One grid looking to add to its relentless haul of drivers’ and constructor’s championships with the aid of an enhanced deal that will see Infiniti become the team’s title sponsor and major technical partner in engineering and developmental projects. Johan de Nysschen President of Infiniti

“While our first 24 months have been very beneficial to both parties, our new deeper relationship will bring increased advantages to Infiniti and Red Bull Racing. As title partner, Infiniti Red Bull Racing will help us garner even more worldwide exposure for our brand, products and technology.” Christian Horner Team Principal, Red Bull Racing

“Red Bull Racing and Infiniti have been working on a number of initiatives since the start of our relationship in March 2011. During that time, Infiniti has demonstrated significant technical prowess and I’ve been impressed by the depth of the wider engineering capabilities of the Nissan Motor Company. In terms of marketing, Infiniti has leveraged its involvement with Red Bull Racing and Formula One very effectively and has become well known in a short space of time. These two attributes are what makes Infiniti the ideal title and technical partner for Red Bull Racing.” Adrian Newey Chief Technical Officer, Red Bull Racing

“Formula One presents immense design and engineering challenges on a daily basis. Having a committed technical partner like Infiniti gives us a great platform for working together on technical projects, such as the Energy Recovery Systems for the 2014 season.”

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A is for Austin, America & Andretti America’s last Formula One World Champion was the first to officially christen the Circuit of the Americas in his 1978 title-winning Lotus 79. However, becoming the circuit’s official ambassador wasn’t a decision that Mario Andretti took lightly, as he told Chicane prior to race weekend. When you were asked to become the ambassador for the Circuit of the Americas, we understand that you took quite some time to analyse the role before making a decision.

well because of that. The overall plans, what they’d secured already with MotoGP and other events outside of motor racing to keep the facility active year-round, make a lot of sense.

First of all, it’s like any new project, you have many questions. There were potential issues that you would expect from a project of this magnitude. When you go to the private sector on something like this, and you’re trying to compete with venues that have been financed by governments, you wonder whether it’s ever going to come off. That was my concern. Of course, I was flattered that I was asked to be part of it, but I wanted to confirm many aspects of it. I started with Bernie. He gave me certain reassurances that the game is on, which was good enough for me but, of course, I had to see for myself. I went down there in June just before the Montreal Grand Prix and I was satisfied with what I saw as far as the plans, project and people involved. Then I just reported back to Bernie in Montreal and I said, “I think things should be good there”. I feel strongly that the group behind this is very, very committed.

You’ve pretty much raced on every US F1 track. Why do you think it will work this time in Austin at COTA as opposed to Indianapolis, Phoenix or Detroit? We guess the last time we had a stable US race was back in Watkins Glen.

So it wasn’t just a case of Bobby (Epstein) and Red (McCombs) acquiring you as an ambassador; it was a question of you doing your due diligence to see if these guys were serious and could bring it in on time? The thing that impressed me the most was Bobby. He was there with his work boots on and dirty jeans and construction helmet. He was hands-on, and very passionate about what was going on. Then I got the same feeling again when I met him for the second time, the third time… when you see someone who is investing but also wants to be part of it and get their hands dirty; that speaks volumes for me. You can see that they have a lot riding on it. When we spoke to him, he said it was probably the biggest thing he’ll ever do in his life. That’s right, and I saw so much satisfaction in their faces when they were finally able to present it to the press and the world. That, to me, was very rewarding, in many senses. Of course, you just wish them

Let’s start at Watkins Glen. Why does Formula One leave Watkins Glen? Because there was no real commitment or reinvestment in bringing the facility up to the standards that Formula One required, standards that the rest of the world was adhering to. Then there was Long Beach which was still a temporary course, and from there it moved around from Dallas to Phoenix to Detroit – all temporary venues. The temporary aspect of it was exactly that. I felt very good about Indianapolis, but here’s my take on it: there’s never been a successful dual venue for road racing. If it’s an oval with a road course, the road racing side suffers because there’s no ambience. We’ve even seen that with some circuits in Germany, for example, where they have a dual purpose. They never survive. Indianapolis suffered that tremendously. Finally, for the first time since the 70s, Formula One is going to have a proper home in the US, with a circuit built to the standards required to be competitive with the rest of the world. The United States does not have another venue like this. There is a cultural difference between Formula One and the rest of motorsports in the States. What do the guys in Austin need to do to make this work? One thing that’s going to work is the fact it has a solid home; it’s something you can look forward to for the years to come. That in itself should be very strong for the continuity aspects, and in bringing the fans back, and I have always said that the Formula One fan-base is underestimated here in the United States. I can’t see why the event shouldn’t be welcomed by the fans and be well attended for years to come. In fact, I think it can only get stronger. That’s the way

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I see it and, again, you’re going to have MotoGP going there as well as Grand-Am, some sports car racing and more. The place will continue to be showcased and I’m sure that the exposure it will receive will sit in the minds of the fans – the ones that will not be here this time, but who want to experience it. I feel strongly in that respect. What does F1 have to do to make it a success? Just be there. I don’t think it needs to do anything in particular; anything it doesn’t do anywhere else. However, I would love to see Formula One open up to the opportunity of guest drives. I know times have changed, but I got my opportunity by being the third driver in a top team when I broke into Formula One, and I won races as a third driver. Can you imagine if we go to some of these new markets and have a local hero be invited by McLaren or Ferrari to be the third man on the team and drive in the race? It has happened before and it could be a big promotional item to engage the local fans. Being so international, Formula One is very partisan and there’s a lot of national pride, and a lot of fans who would love to see how one of their own measures up in one of the top teams. And if the talent could reveal itself, it could be another launch. Formula One should be thinking in those terms – as elite as it is, there are drivers in certain countries who would love to have that opportunity and it would do wonders for the event in that country.

For the first time since the 70s, Formula One is going to have a proper home in the US, with a circuit built to the standards required to be competitive with the rest of the world. The United States does not have another venue like this. Do you think we need an American driver, and if not that, an American team for F1 to really take hold in the States? I don’t think so. I think it’s still taking hold but it would be more interesting, get a lot more coverage and a lot more interest from the fans and the press if they could be rooting for their own. When you have such an international event, being able to fly your own flag has a particular pride to it and it would be a big plus in promoting Formula One in the States. Being a businessman, where will the opportunities lie for Formula One in the US? This year, for instance, was the first time Unilever came on board, so what else do you think we’ll see? When you look at sponsorship in F1, you have global companies involved for the obvious reasons, and I’m sure those global companies do a fair amount of business in the United States. They would want to benefit from the exposure there. It might also attract those companies in the US that want to expand in international markets through Formula One’s visibility. What was your take on the whole Texas-New Jersey race? Is it beneficial to have two American races? It’s beneficial for America, for sure. I think, of any country in the world, America could easily host two Formula One races. I think New York would be a great market; it’s one that Bernie has been eyeballing for years. I hope that happens as well. I’ve been in touch with the principals there and they’re trying very hard to make it happen. It can only help the fan-base by having two events to look forward to. One can also feed off the other.

Mario Andretti on… The mindset of modern-day drivers

I don’t think the mindset should differ. My mindset was always to enter every event with the confidence of winning, regardless of how realistic that seemed at that moment. That’s the mindset of every champion: to go out there and feel, “you know what, things might not look too good but I still think I have a chance of winning today.” The preparation for the champion drivers has always been the same – the ultimate in physical condition and the total focus of the driver on his job. And that’s it. There’s no difference. The only difference is in the metal; the cars that you’re sitting in. Today you have more tools to work with, and that’s why you go faster. The balance of driver & car performance

I feel especially in Formula One, the credit goes 50 per cent car, 50 per cent driver. Obviously, that could shift by ten per cent either way at any given time but the driver is still in command, and it’s the driver’s job to bring whatever equipment he’s sitting in to the limit. I’ve gone through the decades and I felt that I fit very well back in the 60s and I would fit very well in 2012 if I was a little younger. I wouldn’t have to change a damn thing as far as my approach to the sport as a driver. His late, great friend Ronnie Peterson

From the human side and the professional side, he was the perfect teammate. We had a great relationship as friends with our families, and we definitely had a respect for one another. We enjoyed racing together and shared the team. We never had a cross word for each other at any time. When I lost him, it was like losing a brother or a son. No question about it.

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USGP

Texas Wide-Open for Business

On November 15, 2012, the University of Texas played host to the first MotorSport Business Forum: Texas Symposium, the day before the triumphant return of Formula One to the US. It is easy to forget, in the glorious aftermath of the Austin Grand Prix, that Formula One has only been away from the US for five years. Lewis Hamilton won the last race here in 2007 – it is the same generation of drivers that have returned in 2012 – yet, so keen was the anticipation of the country’s return to the F1 calendar that it felt for all the world like the twain had never met. But this is a very different US Grand Prix, and a more mature Formula One marketplace that returns to America. Sometimes, five years can seem like an eternity. One of the shifts in perspective that Formula One has undergone during its US hiatus is a clearer focus on the need to think longer-term about the future of the sport. The sustainability issue has encompassed everything from carbon footprint to spending, but here in Austin, the emphasis was very much on encouraging good, old-fashioned business networking. UK-headquartered sports marketing agency KHP Consulting and its long-term partner the Motor Sport Business Forum have been organising business symposiums at Formula One races since 2005 to bring together the businesses in and around the Formula One paddock with those local to the Grand Prix. And as the Austin Grand Prix showcased once more, the meeting of local businesses and the Formula One roadshow is a vital two-way networking tool. “There is an appetite in the US market to explore

the many commercial opportunities that Formula One has to offer,” said Katja Heim, CEO of KHP. “The first and most important step is always bringing the right people together in the right environment.” One of those personalities was keynote speaker, Nick Fry, CEO of the Mercedes AMG Petronas Formula One Team, who highlighted the benefits of the event for US businesses. “[It’s a] great opportunity for the Texas business community to get closer to those involved with the teams and our global sponsors, and to find out more about how the business side of Formula One operates.” Other speakers, like Paul Hembery, Director of Pirelli Motorsport, were keen to stress the reverse benefits for Formula One. The sport’s five-year exile from the US had been keenly felt by all involved and the return was welcome. “The United States is an important market,” he said, “not only for Formula One, but for all the sponsors and partners involved in the sport.” Roy Sosa, CEO of Rev Worldwide, sponsor of the symposium, added the Texan perspective. “The intersection of the entrepreneurial spirit in this city, combined with the global reach already represented by this sport, opens new business partnerships and product development ideas never seen before,” he said. “Our partnership represents an opportunity for business innovation that goes beyond technology and the track.”

And that is what Formula One is all about; encouraging and delivering a business legacy that extends far beyond the limits of the track. “Events such as [the Texas Symposium], which engage the business community, really do help to generate opportunities and contacts which will last well beyond the debut race weekend,” returned Fry. “Our sport needs to succeed in new markets to thrive.” The US may not be a new market, considering its place in Formula One history, but Austin has shown that the relationship between America and Formula One has markedly changed since they were last acquainted in Indianapolis. This is not business as usual, and as Fry intimates, Formula One needs to succeed in the US to thrive into the future. The list of UK-based speakers at the event included Geoff McGrath, Managing Director at McLaren Applied Technologies; Graeme Lowdon, President and Sporting Director of Marussia F1 Team; and Ian Burrows, Director of F1 Racing Group, who acted as the Conference Chair. Representing Santander was Pablo de Villota, F1 Sponsorship Manager, followed by relative newcomer, telecommunications giant Tata Communications, represented by Vice President of Strategic Alliances and Sponsorships Mehul Kapadia, fresh from a February 2012 multi-year technology service and marketing deal with Formula One Management.

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TECHNOLOGY

F1 uncut: The Analyst Nigel Geach, Repucom At a time when all forms of sponsorship are under intense scrutiny it is vital to know as much as possible about the fans, the competition, rights protection and sponsorship choices. Nigel Geach, Senior Vice President of Motorsport at Repucom is the man in the chair. He talked, we listened and we answered the right questions. We also had a lot of fun in the process. Nigel Geach (NG): I’ve been around in sponsorship for nearly 30 years now, but right at the very beginning there was an old phrase, but a very true one, that sponsorship was done at a chairman’s whim, or even at the whim of a chairman’s wife. That has obviously changed over the years and certainly in the last ten years there has been a lot more emphasis on return on investment, return on objectives and finding out if the money being spent on not only sponsorship but also marketing and PR is actually being spent correctly. : Despite the global recession, we have the feeling that the same amount of sponsorship money is still around with budgets not increasing but at least not decreasing. NG: Well, you’re right. The budgets probably haven’t decreased or increased much but our global surveys show that the total amount of spend on sponsorship has grown by four to five per cent. This is due to consolidation and, as we spoke about previously, new entrants to the sport. I should point out that the emerging markets for Formula One, such as the BRIC nations, as well as the return to the US, make for very interesting times ahead. Formula One is definitely spreading its wings and we will certainly see more interest in these areas. The US is very important to Formula One when you look at the number of American companies involved in the sport: Exxon Mobil, General Electric, Dell, Microsoft… the list goes on.

: Yes you can. What strikes us whenever we speak about sponsorship and Formula One is how resilient it seems to be as a business model despite recessionary pressure. NG: The sponsorship managers at Formula One teams are probably not going to like what I am going to say, but yes, the sponsorship market is fairly robust at the moment. It’s holding its own and I think the new markets are helping to do that. It’s a cliché to say it but it is a truly global platform and, as I mentioned, the jigsaw is now complete with the race that took place in Austin. It is also a great showpiece for new locations and we have seen how successful Singapore and Abu Dhabi have been in joining Monaco as key corporate events. One of the things that Formula One does well in terms of viewers is that it goes across the social spectrum, from students through to blue and white collar workers to high earners, which is different to many other sports. It means higher spending power which, in turn, means a different type of product can be sold to Formula One fans who tend to be ’techie’, gadget-mad and early adopters. Most interestingly, they are more influenced by sponsors in Formula One than football fans are by sponsors in football. Formula One fans are less tribal and more likely to buy sponsors’ products. : And how is that measured? NG: We ask them. If you ask people, as we regularly do, “what do you think of the image of Formula One?” the answers we receive are the same: excellence, dynamic, trustworthy, global… all things that brands would love to have. Again, through our research, it is shown that these values are transferred to the brands associated with the sport.

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top ten f1 sponsoring industries (no. of reported deals 2012)

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top ten sponsored sports 2011 (no. of reported deals)

: I feel as if we are only scratching the surface here today; for instance, we would love to talk about The Crimson Hexagon… NG: Yes, we should talk about that, and unique eyeballs and the sponsorship funnel – you will like that story; the door is always open.

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: There are certainly some heavyweights involved, with Exxon Mobil and General Electric being two of the top three companies in the world depending on the metrics used. NG: Exactly, there are not only a lot of American companies involved but there are many European or Far Eastern companies who want to promote their products in the US, which is why the race in Austin is crucial to Formula One’s globality, if I can say that.

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F1 PROFITS FROM NEW PAY-TV ERA Sportbusiness Intelligence/Eurodata TV Worldwide Pauline McVey, analyst for SportBusiness Intelligence, reviews television audiences in the big five European markets for the recently concluded 2012 Formula One Championship. Formula One Management’s decision to shift of coverage of the championship which will taken from this month’s Watching Brief live coverage of a portion of races in 2012 therefore increase viewers and exposure to publication, shows that the increased from free-to-air to pay-television has led to the sport outside of race weekends. competitiveness in this year’s Formula One a decrease in live television viewing for race Seen in a broader context, thanks to rises championship, which featured a renewal of coverage in the UK. The live race average elsewhere in the top five television markets the intense rivalry between Sebastian Vettel audience in 2012 was 3.05 million, down 38 in Europe (France, Germany, Italy, Spain and and Fernando Alonso, helped drive audiences per cent on the BBC’s 2011 average when it the UK), the drop in UK viewing is offset and up in Spain by 24 per cent, in Italy by nine per showed all races live. overall Formula One live race viewing across cent and in France by eight per cent. The fall was inevitable given that the UK the five markets fell by just three per cent Audiences in Germany were surprisingly public-service broadcaster relinquished year-on-year – from 22.814 million viewers in down on the previous season (by six per its exclusivity of the championship, ceding 2011 to 22.154 million this year. However, if the cent), representing a second consecutive exclusive live rights to ten races to pay- BBC’s delayed race coverage is combined annual drop in viewers for commercial television broadcaster BSkyB while retaining with Sky’s live audience, the cumulative broadcaster RTL. This despite German delayed rights to screen a highlights package. average audience is 23.587 million, up three driver Sebastian Vettel claiming his third Live coverage of all other races is shared. per cent (see below). championship in succession and 2012 For race weekends where Sky has This special analysis by SportBusiness being the final year in the career of national exclusivity, combining Sky’s live audience Intelligence and Eurodata TV Worldwide, immortal, Michael Schumacher. with the BBC’s delayed audiences, viewing figures are down by nine per cent. For race cumulative average live f1 tv audiences per race in top five european markets (audience in 000s)* weekends when the BBC and Sky have shown UK spain italy germany france 24,856 live coverage simultaneously, the combined 2010 average audience for race coverage is two per cent lower than in 2011. UK spain italy germany france 22,814 The changes to the way Formula One 2011 is broadcast in the UK – and its impact on UK spain italy germany france 22,154 audiences – will no doubt be watched keenly 2012 liveaudiences only (across all markets) by all stakeholders in the sport. Coverage will also be split in the same way in Italy from next UK spain italy germany france 23,587 season and there is potential for a similar 2012 liveaudiences (across all markets) plus uk delayed audiences strategy in France, where the rights are on f1 TV audiences in the uk, 2011 v 2012 (audience in 000s)** the market and a mixture of free-to-air and 2011 4,934 pay-television broadcasters are said to be BBC (live) talking to Formula One Management. Ultimately, while Formula One may 2012 3,050 have lost some live viewers in the UK, Bernie sky (live) BBC (live) Ecclestone has managed to extract far more 2012 4,483 money from its broadcast partners. In the UK, sky (live) BBC (live or delayed) fees increased by roughly 60 per cent and in Italy by more than 50 per cent. Formula One Management will argue that in the UK at least, * Sources: Compiled by SportBusiness Intelligence and Eurodata TV Worldwide; data from Mediametrie - Mediamat (France); GfK Fernsehforschung (Germany), Auditel, Nielsen TV Sky’s launch of a dedicated Formula One Audience Measurement (Italy); Kantar Media Spain (Spain); channel has massively increased the volume ** Sources: SportBusiness Intelligence; BARB, Attentional (UK) 27

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TECHNOLOGY

MAXIMISING INSIGHT INTO THE FORMULA one FAN Jack Murray, Head of Market Research at KantarSport, provides a brief insight into customer segmentation data to better understand the behaviour of the people that follow Formula One. The increased recognition that sporting properties are operating in a competitive marketplace, coupled with increasing requirements from sponsors to show the commercial benefits of sponsorship, have been driving a growing need for more granular information about sports fans and their interaction with both sporting properties and their sponsors. Sportscope TGI works on a number of levels. It enables federations to better understand their audience through more detailed profiling and get under the skin of the Formula One fan. By segmenting the Formula One fan based on emotional attachment to the sport, we measure the equity that lies within Formula One and compare strengths and weaknesses against other sports properties. We can take a couple of these areas by way of example. Profiling the Formula One audience

Firstly, Figure 1 provides a piece of standard profiling that you can get from any survey. The data is shown as an index relative to the national population. Figure 1: Propensity to follow Formula One vs other sports by age group

F1 Fan

18-24

25-34

35-44

45-54

55+

101

110

108

107

102

101

Figure 2: Life cycle analysis of Formula One fan v other sports 1

F1 Fan OTHER SPORTS FAN

84 119

F1 Fan OTHER SPORTS FAN

96 75

81 97

85 80 95 102 96 103 109 103

117 112 93 124 92 100 90 103

88 116

Formula One fans are lower than average across the first five life-cycle segments, but the group that is most interesting is the fledglings, (who are 15-34 years-old, unmarried and live at home) who over-index in following other sports. So, we have a highly-active sports consumer who is significantly less likely to choose Formula One in his portfolio of sports followed. If we look at the top four segments by gender (Figure 3) we can see that, as expected, female propensity to follow Formula One is lower compared to other sports. 1

OTHER SPORTS FAN

male f1 fans

90 78 100 98

female f1 fans

OTHER SPORTS FAN

114 108 94 106

OTHER SPORTS FAN

67 72 74 81 124 81 98 103

Note: With 100 = national average, in the table above 18-24 year-olds = 78, which means there are 22% fewer Formula One fans in this age group than in the national population (78 – 100 = -22). For 35-44 year-olds there are 10% more following Formula One than in the national population (110 – 100 = +10).

If we look at the age profile of a Formula One fan we see a skew towards 35-54 year-olds. However, the main concern is the younger age group choosing to follow other sports rather than Formula One. So from this basic analysis, we know that one of the challenges for Formula One is how it can engage with the younger sports fan. Otherwise, analysis by age shows only moderate differences between Formula One and other sports in general. If we look at our family life-cycle segments on Sportscope TGI we can provide deeper insight into the profile of a Formula One fan.

1| fledglings; 2| flown the nest; 3| nest builders; 4| playschool parents

Figure 3: Life cycle analysis by gender

The female fledgling is following other sports to a greater degree and flown playschoolprimary school secondary the nestdegree. nest builders parentswe need parents school parents Formula Onefledglings to an even lesser Therefore, to understand what the female fledgling is watching and why she isn’t watching Formula F1 Fan 84have flown 81 the nest 85(15-34 80 95unmarried 102and One. Females who years-old, have moved out of family home) are less likely to tune into sport in general OTHER 96 SPORTS and are FAN less of119 a concern.97 However, males103 who have109 flown the103 nest are active sports followers and show the lowest propensity to follow Formula One amongst men. So, has this group opted out of watching Formula One as they start out on their own independent lifestyle? If Formula One F1 Fan 96 117 sports 112 fan93 wants to appeal to the younger we have124 different88 lifestyle targets for males and females which go beyond age group. OTHER SPORTS FAN

92 100 90 103

116

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Space: Formula One’s Final Frontier

Background image: NASA

The Red Bull Stratos project took a man to the edge of space. Riedel Communications brought the event back to earth. On October 14, 2012, extreme basejumper Felix Baumgartner broke the speed of sound and three records during the Red Bull Stratos project, jumping out of a capsule hanging in the stratosphere 24 miles above Roswell, New Mexico. The historic event was watched on YouTube by eight million viewers, courtesy of German communications solutions experts Riedel Communications, who managed the relay of images from space, the audio, video and data communications in the capsule, on Felix, and in mission control. It was one of the most profound feats of extreme human adventure, but Riedel has been testing the limits of extreme technology for the past 25 years, performing in some of the most hostile environments on (and now off) the planet. The company’s relationship with Formula One goes back to 1993, since when it has revolutionised the sport’s communications infrastructure. It has also worked at other prestigious sporting events, such as the 2010 Vancouver Winter Olympics and UEFA Euro 2012. Since 2003, Riedel has been the official global supplier for the Red Bull Air Races, providing video downlinks from the high-speed planes. So, when Red Bull approached Riedel in 2009 to work on Stratos, it seemed like a natural and logical extension of a working partnership. “We have some really specific knowledge and expertise concerning running signals from moving objects. It is expertise that not many companies have,” says Matthias Leister, Riedel’s Head of Broadcast Solutions. There are not many companies, either, that are as able and fluent as Red Bull at conjuring the ’moving objects’ to which Leister refers. Riedel has already applied its unique skills to Red Bull’s of opposing aerodynamic desires; those that belong in the sky, and those that want to remain glued to the track. The Stratos brief may have been out of this world, but it was a project that Riedel’s communications solutions were ready for.

SYSTEMS CHECK

Providing the communications infrastructure for every race on the Formula One calendar is probably more daunting than it sounds. Riedel’s influence over how the teams, the authorities and key figures within the sport communicate with each other during a race weekend is vast. This is no mean feat when you consider that the company is responsible for team intercom (RiFACE), data services, digital radio (TETRA – handsets used by all of the teams and the FIA and FOM), communications links to team factories (RiLINK) and a race incident system used by the FIA, to name but a few. On the face of its Formula One heritage, the Stratos project wasn’t asking unknown questions of Riedel’s capabilities. The team set about designing and developing a special remote-controlled ’payload’ 9 HD camera and recording control system within the capsule for the mission. “We could remote control all of the video signals, correct colour, select shutter settings for the cameras or start and stop the recorders that were on board,” Leister explained. “This was more or less a full remote production. In the matter of transmission over these far distances, we learnt a lot.” The environmental dynamics as the capsule, and the passenger, ascended through varying layers of the earth’s atmosphere presented more pressing challenges on the hardware of the operation. “The system had to operate in temperature ranges from minus 50 degrees centigrade up to 60 or 70 degrees centigrade,” says Leister. The physical build

of the hardware had to be able to withstand pressures of alien proportions and still perform to its optimum level. The company’s robust communications interfaces that are built to survive an Formula One calendar that ranges from desert to monsoon will have been a key educator for the more extreme particulars of life in the stratosphere. THE FALL GUY

While Felix sits in the capsule, he is connected by an umbilical limb to its communication systems. The electronics inside his chest pack, which includes Riedel’s wireless radio link, will not function until he prepares himself for his jump by unplugging from capsule power. Leister reflects, “Though we tested all our communications systems on the ground, it still makes you nervous; you’re watching the (live) video from the capsule of Felix unplugging his umbilical, then waiting for the first new voice (via his wireless chest pack). It made my heart race.” There were concerns that the forces exerted on Baumgartner as he fell through the stratosphere would be sufficient to cause potential communications disruptions. “The lessons we’d learnt from the Red Bull air races, where these planes also experienced gravitational forces of up to 10G, told us we needn’t expect any dropouts of the radio links.” And so there weren’t, and Baumgartner fell gracefully back to earth. If (Zsolt) Baumgartner and Red Bull are the more obvious names that link the Stratos project to Formula One, then Riedel should be considered as perhaps the most strategic.

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technology

High Speed Connectivity Tata Communications is a company that excels in operating diverse entities that travel “around the world and touch all major continents”. The synergies it shares with Formula One made it a natural partner.

here is no better brand in the world for us to associate ourselves with,” Vinod Kumar, Managing Director and CEO of Tata Communications, told a packed press conference in London in February 2012. Tata Communications had just signed a deal with FOM to become the official connectivity provider for Formula One, a massive undertaking when you consider the dizzying level of network, hosting and security requirements of the world’s most cutting-edge technological sport. Furthermore, as the official web-hosting and content-delivery provider to Formula1.com, Tata Communications would have to offer hosting services that could cope with up to seven million unique users in one weekend. It’s no wonder that, as Bernie Ecclestone explained to the assembled press that day, FOM had had a very long, hard think about this one. In Tata Communications, Ecclestone was confident he’d found a company whose operations matched the scale of Formula One’s colossal connectivity requirements. Here was a telco that operated the largest

submarine cable network on the planet – as Kumar poetically described it, “a ring around the world that is truly diverse and touches all major continents”. This giant cable on the ocean floor also includes the first wholly-owned global fibre optic cable network. It’s this robust infrastructure that not only enables Tata Communications to host the millions of visitors to Formula1.com website but has also positioned the company as the largest carrier of international wholesale voice traffic in the world. In fact, Tata Communications’ network carries over 50 billion voice minutes annually across the world, as well as six per cent of all Internet traffic. The company owns one million square feet of datacentre space in 42 locations and is the fifth largest, fastest-growing tier 1 IP backbone (Renesys). Tata Communications is an Indian company that has grown into a true global player. Where once 99 per cent of its revenues were domestic, today it has offices in 33 countries globally, with about 75 per cent of revenue coming from outside India. However,

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“We are still babies of the sport. We have one season under our belt. I think that as a company we have been very agile and dynamic in a lot of innovative things that we’ve done. This is a fantastic platform for us to build on that.” after intensive consultation with business analysts and customers, Tata Communications realised that, despite meteoric growth, as a relatively new player in a highly competitive space, it needed to build brand recognition. As a company that operates purely on a B2B level, the key was to create the association in the customers’ minds between Tata Communications and technical brilliance on a big scale. The mission was to actively seek out high-profile operations that had huge demands for network reliability. As Kumar summarised, “The requirements in Formula One are of a level that any of our customers – whether they are in banking or logistics or shipping – will envy and aspire to. The time has come for us to showcase what we’ve been building for several years. “Formula One is a way to showcase to B2B customers. We serve large multinational companies, as well as other telcos and service providers. If we can do it for Formula One, we can pretty much do it for everyone else.” Tata Communications provides the infrastructure for Formula One’s connectivity and communications in all 20 race locations and offices worldwide. On race day, Tata Communications ensures that office-like connectivity is available trackside with practically unlimited bandwidth; bandwidth that is required because television production is all done by Formula One rather than being outsourced to local television producers. That means that broadcast centres are part and parcel of the Formula One circus, packed up at the end of each race and flown to the next venue where they are plugged into the networks. The network also transmits crucial live timing data from the racetrack to the back-end infrastructure. When you consider that a disruption to the network would substantially impact the race experience, you can see why the pressure is on Tata Communications to deliver a failsafe solution. Even a split-second of downtime can have huge repercussions for Formula One business, brand and reputation. “We can fundamentally play a role in the sport in terms of helping it become better,” explains Mehul Kapadia, VP of Marketing and Strategy at Tata Communications. “Technology – especially the kind of technology we bring to the table in terms of telecom – can help teams to do a lot of their testing at the back-end and ensure that it’s live, available back on to the race track.” “Newer technologies keep pushing for more bandwidth requirements and we can play a crucial role in that. This can help teams to figure out a way to make the car go faster, make it more efficient, safer, so there’s a variety of things that can happen on the car, which if it went back to the factory faster, better, you can make it work better. That’s how we can contribute.” “We can help more operations to run remotely. A lot of the testing that is happening around the practice sessions on Friday, which give

valuable data to make changes on your car, could now be assimilated back at home faster and better if teams were to start working with us.” The agreement between Tata Communications and FOM is a multiyear deal, which offers scope for further technological development, as Tata Communications works with Formula One’s engineers to seek out ways to deliver even faster connectivity and even more bandwidth. In the future, this new high-speed connectivity at each race location could make satellite broadcasts redundant and revolutionise the way that fans consume the sport, as high-speed Internet gives them access to feeds and data in real-time, as an when they want it. “Satellites are great,” says Kapadia, “and they’ve taken us to where they are, and they’ll always continue to be there but what fibreconnectivity can do, and what applications can do on top of that, will change fans’ experiences. “We also have a lot of other businesses – one being our global media and entertainment business, which focuses on how we can improve what is happening on the broadcast side of things. We are creating applications which are not just for the traditional TV broadcasts, but things which get into the second and the third screen; a lot of applications at the back-end which allow people to do a lot of work remotely.” Kapadia hints at a brave new world where satellite delays are consigned to Formula One history. But for now, he’s happy to reflect on a successful first season. “We are still babies of the sport. We have one season under our belt. I think that as a company we have been very agile and dynamic in a lot of innovative things that we’ve done. This is a fantastic platform for us to build on that.” 31

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TECHNOLOGY

Alex Thomson racings’s collaboration with Caterham Composites exemplifies the dynamic and groundbreaking diversity of Formula One engineering. Chicane caught up with Stewart Hosford, Managing Director of Alex Thomson Racing and sports marketing company 5° West, to find out more.

“Sailing can learn a lot from Formula One… from how they present the sport, how they engage the public, how the commercial model works with the investors and the sponsors and the cities. There’s also a lot that F1 can learn from sailing.”

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F1 Sans Frontieres: Caterham Composites By the time you read this, record-breaking yacht skipper Alex Thomson will be halfway around the world as he competes in the non-stop Vendée Globe race, the ultimate test of endurance in sailing. He will brave severe conditions of both wind and wave as he circumnavigates the earth, unassisted, at times beyond the reach of emergency response. Competitors in the Vendée Globe need to be in top physical and mental shape and their vessels must be at peak performance in order to survive gruelling conditions of over 100 days at sea. Many do not finish the race; boats capsize or suffer broken rudders, masts or keels, forcing their skippers to concede defeat. At the last race, in 2008, Thomson had to retire his boat, the Open 60 Hugo Boss, because of a cracked hull. It’s interesting, then, that with four years between each race to prepare, Alex Thompson Racing turned to Formula One and Caterham to give the team an edge and to offer protection and performance. “I just believe that Formula One is more advanced than most other technical sports,” says Stewart Hosford, as he explains the attraction of having Caterham on board. “It feels to me like sailing is where Formula One was 20-odd years ago, when there were fairly big problems with reliability. It all came down to the finesse and skill of the drivers, and it was pretty unsafe, and reliability was a major issue. But they figured it out as a sport, like we’re figuring it out now. “The devil’s in the detail and unless you capture the detail – unless you focus on reliability and performance and you understand the trade-off between the two – you can’t really be successful. They’ve got the processes and the procedures in place and they’ve got very stringent controls for reliability that sailing just doesn’t have today. “We’ve now brought a lot of their approaches and methodologies into sailing and have put that in place within our team. Caterham join our performance meetings and they ask the obvious questions that maybe sometimes we don’t ask ourselves.” On a purely technical level, Caterham is a composite partner. It doesn’t have a history of creating marine composites, so it works closely with Alex Thomson Racing at the design and engineering stage on the Open 60 Hugo Boss, before a marine specialist will be brought in to manufacture the parts. Then, Caterham will be present during the testing process, along with the marine experts, using the rigorous standards the team employs when testing Formula One car components. “It’s very much a collaboration across the entire boat, so we ask them about everything, from the sail through to the structures of the hull and the keel, through to the overall reliability and the mileage of all the component parts,” says Hosford. But beyond that, Caterham has also been able to assist with technological innovation. “They’ve actually built and engineered some core components of the boat for us,” he continues. “Earlier this summer we fitted hydro-generators, which now provide all our power. These are essentially carbon components with small propellers that you put down into the sea when you’re going over a certain speed – like a wind generator, but it’s turned by the momentum. And they were very involved in designing the carbon structures for holding that in place and, in fact, they built it for us. So they’ve been very involved in a number of the components.” Mutual curiosity

The relationship between Alex Thomson Racing and Caterham isn’t a financial sponsorship deal; no money changes hands. It’s more about a mutual curiosity between two sporting business technologies – a

collaboration in the purest sense of the word. For Caterham, however, as well as an opportunity to explore new facets of engineering, it serves as a showcase for its technical capabilities and, as Hosford puts it, “adds value outside the purely automotive space that they’ve always been in”. But does Hosford believe that Caterham, and Formula One in general, can learn any lessons from sailing? “I think it’s a two-way street,” he says. “I think sailing’s got some incredibly talented people and it’s also got a real strong passion for what it does. Everyone you meet in sailing is very committed because they love the sport and they’re sailors and they truly have a joie de vivre for what they do. It feels to me like some of that’s missing from Formula One at times. “There’s also a lot Formula One can learn in terms of some of the carbon design challenges. When you build a Formula One car, it’s a couple hundred kilos and it has pretty small components. When you build a boat, it’s 60 to 80-feet long and it has its own, much bigger technical challenges, and it also goes into an environment that can be much more extreme. I think the Caterham Composites guys are learning from some of the inventive ways we’ve dealt with flex and dynamic loads, for example.” Still, Hosford sees Formula One as an inspiration for other technical sports, for the way it has transformed itself over the last 20 years, in terms of commerciality, marketing and technical excellence. “Sailing can learn a lot from Formula One in terms of how they present themselves,” he says, “from how they present the sport, how they engage the public, how the commercial model works with the investors and the sponsors and the cities. “And then, at a process level, there’s a huge gulf today between how professional sailing teams operate and how Formula One teams operate, in terms of finding balance, training people, driving good details, tracking methodologies, tools, processes; right down to the final, technical level; the licensing, the structure of testing, the ability to understand all the different component parts. “I’m not saying it’s happened to us, but there are countless examples where a boat’s ready to sail and halfway around the world the mast track rips off or the sail fails. And, afterwards, when they do the wash up, it’s like, ’Oh, shit, someone put the wrong titanium screw into the mast track and we never checked it.’ That just wouldn’t happen in Formula One.” We’re going to need a bigger boat

In the future, the Alex Thomson Racing Team would like to collaborate with Caterham Composites on designing and building a completely new boat, but until then it’s very much about optimising the Open 60 Hugo Boss. And recent signs have been good. In the past six months, Thomson has made four transatlantic passages. On the last one, he sailed from New York to Lizard Point in Cornwall, breaking the world record for the fastest single-handed crossing from west to east across the Atlantic. Now, with less than a month to go before the race at the time we spoke to Hosford, all he and Caterham can do is wait, anxiously. “In sailing,” he says, “because it’s a technical sport, like Formula One, the reality is it’s one year or six months ago that all the decisions were made and you can’t really change them now. You can’t go back and say ’shit! if only!’ We made the decisions in terms of the performance of the boat, composites and structures, and we made all the performance and reliability changes we needed to make. Now it’s just a bit of fine-tuning and it’s very much focused on Alex and his mental readiness.” 33

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www.sauberf1team.com @OfficialSF1Team www.youtube.com/saubermotorsport www.facebook.com/SauberF1Team

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DRIVERS

On the Button, Out of the Blue Richard Goddard’s path to sports management was something of an accident. But it was not, contrary to the fable, a result of him bumping into John Button in the pub and agreeing a deal to manage his son Jenson. “That’s all a load of rubbish,” he snorts dismissively when we ask him about the pub rumour. “I was introduced to John Button by a mutual friend in Monaco, where I already lived. We met and had various different chats about investments, some property things I was working on and a few issues that John had with his son’s career.” When you consider the success Goddard has had with his Sports Partnership business, he would seem a perfectly logical candidate for Button Senior to seek out to offer his son advice. But this was 2004, and back then sports management was unfamiliar territory. “It was just out of the blue,” he reflects. “I’d bought, run and sold a business – that was the only knowledge I had. I had quite an extensive business background but I didn’t have any clue about sports.” But that was partially the point. Button was already an incumbent Formula One driver, one of the coming stars of the day, so he didn’t need help getting into the sport. “He just needed guiding and some honest advice, which is pretty difficult to come by in an industry where you’re paying someone a great deal of money to look after you. Honest advice is probably the most difficult thing.” Early advice centred on such things as image rights – a subject that has resurfaced this season, with Lewis Hamilton’s move to Mercedes. Goddard positioned his advice from a business perspective, as if he was in the race seat making the calls. “I advised that if I were already a current Formula One driver, I would probably want to own all my image rights and I wouldn’t sign a five-year contract with an agency, which was the norm at the time. It would be much more of a partnershipbased business if I was going to do it.” The partnership model he envisaged would see the ’client’, in this case Button, setting up his own company to own and control his image rights, and then have someone run that company for him. Their own partnership, however, is built on the friendship that has burgeoned since those first conversations, and on that precious and elusive pillar of business relationships – trust. So much so, in fact, that the two have never signed a contract that formally binds them together. “The sports partnership only happened about a year ago,” Goddard muses. “At that point, Jenson said ’well, come and do it for me’. I said ’yup, I’d love to get involved’. We’ve done it on a very relaxed basis. It’s still exactly the same, where we don’t have a long-term contract – we don’t actually have any contract between us at all.”

It is an eight-year relationship during which they’ve kept each other honest; each understanding that if the partnership were ever to deteriorate in value, mutually, then both parties would be free to move on. “From a legal point of view, yes, you should always have a contract and it makes everything safe, plain and obvious. But, actually, we’ve kind of muddled along and we’ve done fine.” Their muddling along has brought them here, to McLaren, where Jenson Button can happily reflect on recent achievements that have included the holiest of grails in motorsport: a Formula One Drivers’ World Championship with former team, Brawn GP. And it’s from Button’s McLaren garage that the subject of image rights has once again reared its head in 2012. Goddard’s take on the balance of ownership sees drivers able to exploit their own personal image rights as long as they are not in conflict with their teams. “The majority of drivers are allowed to sell their own image rights,” he says. “There are two areas to this: in a team context and in a personal context. A lot of drivers will be completely free to sell their own personal content as long as they don’t have a competing sponsor on the car. For instance, Jenson couldn’t sell to Lloyds or sell to HSBC. He can’t sell to anyone that’s a bank because the team already has Santander.” It is a complex area that is further muddied by the presence of team context deals and the separation of rights when drivers are in team-related clothing or situations, and when they are not. But one thing Goddard has helped to change in his eight years in Formula One is the image of Jenson Button we see and hear when in a race suit. “There was a lot of rubbish in the press and I think, from Jenson’s perspective, he had built up a negative thought process when it came to doing interviews and media. It was such a stupid, negative, vicious circle because everyone needs everyone in Formula One. It was just a case of trying to get Jenson to realise that the press weren’t all bad and he would get a lot more out of it if he put a lot more into it.” Everyone needs everyone in Formula One, and, although devoid of legal contract, the sports partnership Goddard and Button have developed is tighter than most.

We’ve done it on a very relaxed basis, it’s still exactly the same where we don’t have a long-term contract – we don’t actually have any contract between us at all.” 36

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Inside the Driver’s Mind simon fitchett The driver’s state of mind is as important a component of the race weekend as any engine or aero set-up undertaken in the garage. Simon Fitchett, the renowned mind performance coach, explains the importance of mental preparation for a driver on today’s F1 grid. Formula One is rich with characters, not least the drivers themselves. Over the last seven years, I have been privileged to work with a few of those drivers, including four years with David Coulthard (DC) and a year each with Vitaly Petrov, Jerome D’Ambrosio and Sergio Perez. Personally, working with DC was a very special time as it’s not easy to just click with someone and have that trust, respect and understanding so quickly, and with DC I had that. The compatibility of your personalities is important too; the driver’s being vital to how they approach everything on their journey to achieving success. A personality that has attention to detail, respect, and a sense of humour and understanding will find success easier to come by. Mental and physical preparation

Then there is the physical and mental side of a driver’s role. If both measured up against each other in terms of importance, then the mental side wins. Since I have qualified as a mental coach, my approach focuses significantly on the mental side, but you can only help someone mentally if they are willing to listen and work on that part of their performance. The physical part is by far the easiest, and all of the drivers will have a high level of physical fitness, but if they are not mentally prepared then this will affect their performance far more than not being physically fit. They also interlink because if you are not physically fit enough then this would, in turn, affect your mental strength on various levels, again affecting performance. Just look at Fernando Alonso this season; clearly not in the quickest car but he was still in the hunt at the last race of the season. That was not only down to the team, the car and the people around him, but also his mental strength and his ability to focus on the right things. Application

There is no particular time when the work is at its most critical – all the work you do is crucial as it is all aimed at one thing: extracting the most out of both the driver and the car and winning races. Pre-season is crucial in getting to the right level physically and preparing mentally for the long and intense season ahead. Testing is all about integrating

with the team, building confidence throughout the garage and getting to know the car and its systems. In between races, it’s about limiting energy loss and maintaining fitness levels whilst getting adequate rest, and race weekends are all about optimising the potential so that both driver and car qualify and finish the race in the best possible position they can. As their physical preparation should already be in place, the race weekend is much more about mental preparation for the drivers. My involvement over a typical race weekend is quite intense. Until all sessions are over, it is non-stop. All the kit has to be ready with all fluids and food organised, after which comes the physical and mental preparation in the form of massage, stretching, relaxation, visualisation and activation so that everything is switched on, physically, neurologically and mentally. Hypnotherapy is something I will only use if asked. It is not something to push onto someone. It has to come from them and their desire to work on a specific issue that may be troubling them, which can be anything from confidence, breaking points, fear of a past incident or result at a track, managing stress, or it can be for simple relaxation and focus. Psychotherapy, again, is used if requested, but this can be executed through talking or through the way I question or suggest something. Never underestimate the power of suggestion. In the zone

You will often hear the term being ’in the zone’. This zone does exist and, believe it or not, is a light state of hypnosis. We all go into states of hypnosis numerous times every day. Have you ever been driving down the motorway and suddenly thought you can’t remember the last mile? Well, you have been in a state of hypnosis. It’s about passing what we call the CCF (Conscious Critical Faculty), which is effectively switching off from what’s going on around you, even though your senses are more alert than in a normal state. This is the best state to be in for a driver when preparing to get in the car and once in it. The more your mind is focused on what you are doing and less on anything outside, then you will better optimise your performance. 37

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DRIVERS

Driving Fast & Driving Safely ALEX WURZ

Unlike almost any other professional sport, motor racing doesn’t traditionally have coaches, partly, I think, because it’s an old-school macho thing – to be the only man fighting – but also because the coaching role is split between the driver’s engineer, physio and manager. And yet here I am: a Formula One driver coach – or mentor – however you care to phrase it. I didn’t get this position by chance or by applying for it. In fact, I can claim to have invented it. First of all, it should be said that F1 drivers are incredible talents who consistently prove their skills under rigorous conditions, but the sport and technology is so complex that a coach with the right experience and technical understanding can really help to bring more out of a driver in terms of performance. The ’quick wins’ we had this year with all the drivers I look after was down to technical understanding and setting up the car’s balance. I call it ’quick win’ because it’s all based on facts and numbers. I am proud that, in almost all this season’s races, my drivers had good car balance and were very good with regards to tyre management. Of course, that’s mainly down to the work between the engineers and the driver, but my work here is to make sure the driver and engineer understand each other. Mainly I work by raising questions and encouraging lateral thinking, so the driver and engineer have to think and rethink, and during this process they will find the best car set-up in their own way, with their own answers. More complex, by nature, is the mental coaching. I’m not a qualified coach by any certification body, but in the last few years I’ve had feedback from some world class athletes and drivers that I have a motivating influence which makes them perform better. With Valtteri Bottas, this year’s test driver and next year’s full-time racing driver at Williams, I had real quality time to build up a trust and a relationship, and that allows me to go much deeper than technical

talk – to understand his mental situation, his moods, and find ways to support him and positively influence him. Sometimes my work can be simple stuff, but can have a powerful effect. For example, at Le Mans, in 2009, one of my teammates struggled with one particular corner. Compared to me, he lost 1/10 of a second on this one corner. We walked to this corner together and I asked him to explain to me every metre of the track and describe what his actions were at every turn. It turned out that his viewing technique was wrong. He was just focusing on a wrong part of the corner. There was a distraction for the driver’s eyes on the corner entry, a small piece of cracked asphalt. I asked him if that might be the issue. He said he would try my tip the following day. The next day he was on it, and three days later we won the Le Mans 24 Hours. At the FIA Institute Young Driver Academy, we coach our drivers in our own special way. Methods we have learned from millions of road safety training programmes all go into the workshops for the young racers. Our partner company, ESP, with founder Robert Reid, works on a similar basis as I do. We don’t tell drivers what to do, we educate them, and it’s down to them to use the information they get from us. We talk about mental training, for example, and we explain why it’s done, what effects it can have and we show them the various mental training programmes on the market. So they have to make the choice. That way, they grow up and become responsible for themselves.

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With Valtteri Bottas, this year’s test driver and next year’s full-time racing driver at Williams, I had real quality time to build up a trust and a relationship, and that allows me to go much deeper than technical talk – to understand his mental situation, his moods, and find ways to support him and positively influence him. Working with young people is very rewarding, not only sports people, but also through the road safety work we conduct. Of course, my Williams role is more about skill training, while road and safety training is behaviour-orientated, because behavioural issues are some of the biggest killers on the road. So, in short, my Williams role started rather as technical consultant for the drivers, to assist them in the process of making better set ups on their race cars and also being most efficient with tyre management over the course of the race. However, this extends to mental coaching too, and there is no clear line in between. The beauty of this work is, that if my input isn’t effective, I won’t get the trust of the drivers and their engineers. So I need to be pretty sharp on the race weekends and look for the small but important details that the driver and engineer might not have picked up. Everyone is under enormous time pressure on a race weekend, so my job is to listen and think, and jump in when I feel my ideas and observations will add something. Ideally, I will have nothing to do on a race weekend.

Alex Wurz owns global leading road safety and driver training company, Test & Training International. The company’s expertise lies in driver training and it has instructed over three million people, and an additional one million children, in road safety. All of its road safetydedicated products and training methods save lives and are considered the industry standard. Due to Test & Training International’s fundamental knowledge of road safety, as well as his own racing and testing expertise, the FIA Institute asked Wurz to co-run the FIA Young Driver Academy – a programme to support young and upcoming talent around the world. “The Young Driver Academy is an amazing success story,” says Wurz, “and it’s a very rewarding job to polish the raw talent of today into the shining stars of the future. In addition, in my recent racing job as endurance sports car racer – where one car is shared by three drivers – I have understood the power of coaching between drivers. In discussing these topics with the Williams Formula One team, it became a natural step to come into Formula One and work with the team to maximise the performance of its drivers.”

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global campaigns - UBS

The First Lady of Formula One: Maria Teresa de Filippis “She’d have to drive in earnest and there’s no way you’re covered by insurance. It was a sporting risk we needed to take. But the moment she got into the car everything fell into place and it was as if she was spinning back in time. It was amazing she didn’t actually want to let it go. “The Formula One ethos is about never resting. The moment you’ve run one race you’re already preparing for the next one. As a driver, as an owner, as a team boss, as a mechanic or as a designer, you know what could be improved. The spirit of the campaign and the film are the same… this never-resting spirit… never giving up. “Maria’s still not resting. She’s 85 years old and if she could go back in time she’d start all over again.” Paul Steentjes is Global Director of Publicis

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“I will always be the first woman to start an FIA Formula One World Championship race. Back then it was very risky but I had teammates who taught me to think like a racing driver. I’m proud of what I achieved. But I wouldn’t have been able to do it without the rest of the team. “Nowadays, everything is more perfect. From the tracks to the cars. Back then, it was very risky and there were many fatalities. But I really, really loved to race cars. Even now that I am 85, nothing throws me. I ran the risk of being injured. And risked my life. But if I could start again, I would. I was lucky enough to be mixing with drivers such as Fangio. The racers back then had the courage of lions. Fangio was like a father to me. He is the one who taught me to think like a racing driver.” Maria Teresa de Filippis

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TEAMS

Times are changing in Formula One. As the sport evolves, there will come a time when the pioneers of the modern industry will pass the baton on to the next generation of talented leaders. Monisha Kaltenborn’s rise to prominence at Sauber F1 is one of two recent moves that suggest that we are witnessing a changing of the guard. Since he first entered his team into the Formula One Championship of 1993, Peter Sauber has gone on to become synonymous with the modern day sport. And whilst Sauber the name resonates through the paddock with distinction and reverence, Sauber the brand has steadily been building, or rather enhancing a notable pedigree on the track and amongst investors. It is a pedigree that looks set to continue its upward trajectory, but from now on, the person piloting that course will no longer bear the name of the team. Peter Sauber’s decision to step back from his role as Team Principal at the tail-end of the team’s 20th season in Formula One certainly made the headlines, but it was perhaps made more significant by the person who has been elected to replace him at the helm. In truth, Monisha Kaltenborn had long been identified as the Sauber’s ultimate successor when the time came for him to step back, and already occupied the role of CEO having risen up the team’s ranks since joining to head up legal affairs in 2000. This season, she had overseen several races in Sauber’s absence and had made the most of the screen test; charming with assured live interviews on race weekend coverage and presiding over some healthy performances. Sauber has made clear that he has never been in doubt of Kaltenborn’s ability to lead the team, and added in the official statement that he was “equally certain she will ensure that the values underpinning the company live on. That is very important to me.” Indeed, this is a company – a racing team – that he built up himself, put his name to, and took an educated gamble on when deciding to go it alone after Mercedes pulled out of a joint project to enter the sport. It is all work that he will hope has left a lasting legacy for the team’s future. “He represents the racer who had a dream to set up a racing team against all odds,” reflects Kaltenborn. “It was done at a time (in 1970) when there was no supplier network and [he did it] here in Switzerland which isn’t naturally linked to motorsport. Despite this, he built up everything on his own, so I think for the team it shows us that we have to believe in what we are doing. Our team founder has always worked against the many different odds that stack against you in this business, and made it a business.” It is Sauber’s determination and “will to survive in this difficult environment” that Kaltenborn cites as the underlying foundations of

the team’s values, and helps to differentiate from other outfits in the paddock. “I think that the best and the shortest way to put it is to say that we are Swiss,” she offers. The next generation

The Saubers of this world are a dying breed in Formula One. Like Sir Richard Branson and Virgin, there are blurred lines as to where the brand starts and the personality ends, or whether they happily comingle, but unlike Branson, Sauber has never become the brand himself; he has created one. Kaltenborn observes that Sauber “is a very good example, and one of the few left, of a personality who had a certain dream and made it happen. This personality has developed into a brand. We’ve gone through that transformation, and now, of course, with Peter stepping back as the team principal, it is really a different generation representing the brand.” Perhaps a more accurate comparison would be to Sir Frank Williams, whose self-titled team became one of the most successful brands in the sport. But he too will eventually make the same step as Sauber, and the same can be said of the man at the very top, Bernie Ecclestone. The focus is now on the next generation of team principals, rights holders and decision makers; on those who will lead Formula One into the future. “I do think that there is this transformation going on in Formula One that had to come through time,” Kaltenborn agrees. “Sauber is definitely in the middle of that. There are other teams where maybe this has already happened, perhaps with Ferrari long ago. I think the way it is happening is good because it still provides the continuity and stability you need within the team. So, people know that although there is a change the values will stay the same and the basis of the team will remain. Continuity is extremely important to me. I have the same values for this team as the founder had, which is very important for the people as well; that they know the basics will not change.” The basics of Kaltenborn’s role certainly have changed; moving from the business objectives as CEO to the racing objectives of Team Principal. But are these two components inter-related within Formula One? “I think they’re very much entangled with each other,” she explains. “In a way, they are two pillars of all our activity because on one side, we are in a sport and it’s about competition; it’s about

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wanting and striving to be the best, so the performance is what we work for. But equally, the other pillar, which is as important, is that teams are business operations. In the environment we are in today, looking at the global economic environment, you have to make sure you can have your both ends meeting. You have to provide the financial parameters for your success on the performance side. Neither is more important than the other; they are two strong pillars that you really need to have to be successful in motorsports.” Business development

The real test will begin when she starts the first full season as Team Principal, but the signs are already promising for business on the track with the signing of German driver Nico Hulkenberg and promotion of Esteban Gutierrez from reserve driver. But some of the more pressing challenges that lie ahead for Sauber, and all teams in 2013, are likely to call on Monisha’s previous experience as CEO. “Our biggest challenge on the business side is to have enough funding to reach our targets, which are high,” she says.

“We have benefited from the years when we were a manufacturer team, especially with regards to our infrastructure. Having that advantage, and looking at our size today, we know that if we have enough funding, we can immediately transfer that to car performance. I think we’ve shown this year that despite the limited funding we have compared to others, our car is quite competitive. So the biggest challenge for me will be to further stabilise the finances of the team to be able to reach our targets.” As for all teams, part of that process is about attracting new sponsors and partners to reinforce financial stability over the short to medium-term, in an effort to build for long-term sustainability. Sauber’s deal with Oerlikon is an example of how evolved the relationships between race team and partner have now become. “Oerlikon is a very important and special partner to us for many reasons. What is crucial to this partnership is the technological aspect to it. We got together on the solar park project and I think it’s not only a very nice project to look at, but it also shows how, from a Formula One team’s perspective, we are trying in a credible way to take certain responsibility in environmental subjects.” There has long been discussion about the difficulty faced by Formula One teams in being taken seriously on the environmental issue, as Kaltenborn confirms: “By just hearing we’re a Formula One team and that it’s about cars, people can never really accept that we can do anything which is environmentally friendly. I think to be able to show this kind of responsibility with such a credible partner as Oerlikon is a very important aspect of this partnership.”

Another eye-catching partnership has been that with Chelsea Football Club, whose club emblem has been emblazoned on the chasses of the team’s cars since the deal was signed in April. This innovative agreement opens up potential avenues of huge intrigue for how sporting franchises can better exploit their visibility via strategic partnerships in other sporting arenas. The potential magnitude of the proposal was not lost on Kaltenborn. “When the idea came up and we got together, we knew that we were creating a gigantic platform; the two sports with the biggest amounts of global viewers coming together. With this enormous potential, what we did not want to do was limit the partnership to activities that are visible very quickly but which have no meaning. It would have been very easy to have a couple of Chelsea players come to a race or a driver go to a football match and have photographs taken and say ’look at our partnership’. That’s not the idea. “On one side, the idea is to gain mutual advantages (exchange information) on the sports sciences level. This is about athletes and we have young drivers that we have built up and have a lot of data and know-how. Chelsea has an academy with a strong emphasis on young people that they are building to become professionals, so we have a lot of common values there. On the other side, very importantly, is the commercial aspect. And that’s what we are working on; to go out and get deals done together because the big advantage about this is that normally the choice for partners is either football or Formula One, but it’s never both. With this partnership you basically have access to both sides.” There is much for Monisha Kaltenborn to consider as she readies herself for her first full season at the wheel of a Formula One team, and the signs are positive that the team’s industry and craft in engaging the innovative partnerships just mentioned are very much in-line with the core values that the team’s new principal so loyally stands by. Her predecessor can rest assured that his legacy will drive Sauber’s next generation.

“There’s a lot of understatement to our appearance, yet we are very focused on what we do – it’s about high precision.”

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TEAMS

New Breed, New Principals At 35, Frenchman Cyril Abiteboul became the youngest team principal in Formula One when he succeeded Tony Fernandes at Caterham. The former deputy chairman of Renault Sport talks to Chicane about his vision for the team and the changing face of Formula One. “To some extent Formula One is changing,” reflects Cyril Abiteboul, Team Principal at Caterham. “It’s moved from the billionaire shareholders, who also operated as team principals, to more regular employees. They are not the owners anymore; they are normal CEOs of companies who become accountable for the whole activity for the Formula One team, from budget-forecasting, reporting, making strategic decisions; the preparation of equipment, of new people.” This is certainly the state of affairs at Caterham, where Abiteboul represents the new breed; a principal who operates like a conventional business executive as the demands of management become higher. “Formula One can look extremely glamorous from outside,” he elaborates, “but inside, the teams have become big; they are large companies. This is part of the change upstairs that has been happening to Formula One over the last decade.” As his flamboyant predecessor Tony Fernandes takes a back seat to pursue the development of road cars with Renault, Abiteboul is free to focus completely on the practical challenges facing a young Formula One team still looking to make its mark. “Tony loves people,” says Abiteboul, when asked about the legacy of his predecessor. “He’s really human-centric, and that’s one of the things that I would like to carry on. “My objective is to try to bring stability to the team, to bring some vision to the team,” he says. “I have not said that I want to change everything in one day because I’m surrounded by 260 people who are full of expertise, experience, of know-how, of patience. A single man is not going to dramatically change an organisation.” Abiteboul’s job, however, is an enormous undertaking of management and logistics. The team now employs 260 people and Abiteboul spends as much time preoccupied with the wind tunnel and the technical performance of the car as he does with more prosaic matters, such as whether the canteen is functioning properly or a change in employees’ pension legislation.

We need to be realistic about our capacity to perform – we can’t look like losers and we can’t pretend to be world champions… we need all that we do to be genuine, in our interests, in our willingness to perform.

The biggest challenge, however, as is always the case in Formula One, is to develop faster than everyone else. “It’s not the next season, it’s the winter, basically, if I want to catch up,” he says. “Over the winter I need to be more efficient than Torro Rosso and Williams, which are established teams. Those teams have everything in place; they have the facilities, they have the people – a group of people who know each other, who have known how to work with each other for years – so I first have the challenge of getting the factory up to speed. It’s a new factory with huge potential. “We are a new company, set up very quickly to produce a car that’s reliable, and after that we need a car that can be competitive. That’s the next step – to produce a car that’s really competitive, that can catch up the midfield. So this is a very straightforward roadmap.” It is a roadmap that plots a determined but cautious route to higher achievement and Abiteboul is philosophical about the coming season. “This has to be part of a process that can take time, although we are all operating at Formula One speed. The thing for Caterham is – and this is why we need to be realistic about our capacity to perform – we can’t look like losers and we can’t pretend to be world champions. But, above all, we need all that we do to be genuine, in our interests, in our willingness to perform. We don’t want to be seen as the guys just filling the back of the grid.”

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Sebastian Vettel of Germany and Red Bull Racing celebrates in parc ferme as he finishes in sixth position and clinches the drivers world championship during the Brazilian Formula One Grand Prix at the Autodromo Jose Carlos Pace, Sao Paulo, Brazil, 25 November 2012. 156934321, Clive Mason/Getty Images Sport.

Felipe Massa of Brazil and Ferrari at the Brazilian Formula One Grand Prix at the Autodromo Jose Carlos Pace on November 23, 2012 in Sao Paulo, Brazil. 156890309, Getty Images/Getty Images for Shell

Fernando Alonso of Spain and Ferrari at the Abu Dhabi Formula One Grand Prix at the Yas Marina Circuit on November 3, 2012 in Abu Dhabi, United Arab Emirates. 155340175, Mark Thompson/Getty Images

Power of Sponsorship Sport The power of sponsorship is the power to elevate your brand through the people, places and action you sponsor in Formula 1. Find out how partnering with Getty Images can help you capture and deliver your Formula 1 story to the world. gettyimages.co.uk/sponsorship/sport 0800 376 7981

sponsors

The Premium Partner Oerlikon You won’t know it, but you probably had several touch points with Oerlikon technology today before you even sat down for lunch. You may know that the Swiss technology conglomerate has its branding on the Sauber F1 team cars; you may even know that it provides surface coating for F1 car parts which allows those parts to be as light as possible while being able to absorb the rigorous pressure and conditions of the F1 circuit. But the extent to which Oerlikon technology, in the Developed World, is woven into the fabric of our daily lives will be a revelation to most of you. For over 60 years, Oerlikon has provided coating solutions for tools, engines and aircraft. Currently, the strongest coatings are only a few thousandths of a millimetre thick but harder than steel. Without such coatings, the majority of F1 engines wouldn’t be able to function. But beyond that, Oerlikon DNA is everywhere. The company operates in a microcosmic world of hidden technology that is all around us – on a global scale. Everything, from plastic bottle tops, to safety belts, to Bluray Discs, touch-screens and tin cans, contains components made on Oerlikon machines. A staggering 50 percent of tyre-part production worldwide, in fact, is made from carbon fibres produced by the company. It’s natural, then, that a company – which by its very nature operates under the radar – providing these hidden but vital technologies should occasionally want to get noticed, and that’s the main drive behind the Sauber sponsorship, as Sven Jarby, Head of Global Sponsorship and Brands, explains: “For us, sponsorship is mainly the branding and the awareness,” he says. “It’s a brilliant platform on which to position ourselves as one group globally, because F1 is a global competition. It makes sense for us because of the technology aspect, of course, and also the sporting aspect, and the Swiss aspect with Sauber. But brand and awareness are key.”

The relationship with Sauber goes back over a decade. Originally, Oerlikon merely provided the surface coatings for the cars, but today the company does a lot more, contributing electronic chips, gearbox technology – even the fibres in the seatbelts. This development is part of a growing, synergistic relationship between Sauber and Oerlikon, based on an exchange of ideas and mutual research into innovation. For Buckhard Bondel, Oerlikon’s Head of Group Communications, this is the second vital benefit of the Sauber relationship. “The technology requirements for F1 are extremely high,” he explains. “Talking to engineers who deal with these challenges, and looking at how they manage those challenges, is very interesting to us. We’re very eager to work more closely with Sauber on different technology aspects. This can happen through things like ’engineering days’, where we share common interests. We can figure out how we can help Sauber with technology, but also how Sauber can help us with ours. “They are very effective in production, and we’ve already discovered some techniques that they use to maintain the pace of their development and innovation. So this is something we can learn from them. They have a technology, for example, called 3D printing,

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“Our DNA is reinventing itself each and every day. Oerlikon is about innovation. That’s what’s been driving us for more than 100 years.”

with which you can very quickly produce prototypes – much, much faster than through conventional technology – and this could really speed up our innovation production processes.” It’s also an alliance based on the shared values of environmental and corporate responsibility, achieved through technology and innovation. Sauber devotes considerable effort to being environmentally cleaner and, according to Bondel, concern for the environment is “a paradigm which is true for almost all of Oerlikon’s segments.” “Just to give you an example,” he says, “our latest textile machines for yarn production – some of them consume up to 80 percent less energy, due to innovation technology.” Bondel sees no contradiction in Oerlikon’s involvement in motorsports and its commitment to the environment. In fact, the relationship with F1 has given the company the opportunity to study sustainability more closely; to use the sport as a kind of laboratory dedicated to the development of energy efficiency. This has led to more innovation, such as the new Graziano gearbox, hailed as the lightest and most durable gearbox around. “It’s not contradictory. If you look at the new McLaren MP4 12C – for which we’ve designed the whole gearbox – for sure, it consumes a lot of fuel, but if you look at the relationship between horsepower and carbon emission, it is probably the most efficient car. You can learn a lot about efficiency from these kinds of engines. “We are going very strong into this eco market. We are in direct contact with all car manufacturers to provide them with prototypes, for instance, for gearboxes that are specialised for electric drives. The car-sharing project in Paris, for example – all these cars are equipped with gearboxes from Oerlikon.” It may be impossible to live in the Developed World and not be touched in some way by aspects of Oerlikon technology, but, as F1

moves into other regions, so does Oerlikon, as it looks to engage with new markets, particularly the BRIC countries, and the global reach of sport has allowed it to do so. The Chinese Grand Prix, for instance, has introduced Oerlikon to a growing number of partners in that country, as the company’s reach continues to spread. For now, in terms of sponsorship, Oerlikon is searching for ways to look deeper still into technology innovation – through allying with universities, technical schools and supporting projects from young start-ups. “If you look at the history of Oerlikon,” says Jarby, “our DNA is reinventing itself each and every day. Oerlikon is about innovation. That’s what’s been driving us for more than 100 years.”

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fans

From Circuit to Street How do you compete for fans against cricket mania in India, the new found love of soccer in Abu Dhabi or the voracious Indy and NASCAR following in the US? According to fan-engagement expert, Carlo Boutagy, whose F1 FanZoneTM at the 2012 Abu Dhabi GP attracted over 300,000 people, education is the key to engaging fans in emerging territories. Carlo Boutagy’s official F1 FanZone TM is back with a vengeance. It is an ambitious plan that Boutagy has unveiled for 2013, featuring new innovations in the form of off-race events, which will coincide with Grands Prix but will take place in nearby or not-so-nearby cities within the same country or even in other countries entirely. These include, for example, a planned event in Milan to coincide with the race in Monza, a New York fan zone alongside Austin, and finally a Venezuelan event to accompany the final race in Brazil. “I don’t want to jinx (Milan for the Monza GP) but it’s looking good,” he says. He’s wary, however, of talking too much about projects that aren’t 100 per cent signed, sealed and delivered but if he doesn’t let anyone know about events in the pipeline, how does he attract sponsors? “It’s like the chicken and the egg. I need the sponsorship to actually make it happen.” The first off-race fan zone will be in New York for the Austin GP in 2013, with interested clients allocating budgets in anticipation. Another fan zone innovation for next year will be events that precede the official launches of races in new, untried territories, such as a summer 2013 F1educational warm-up in Russia, which is scheduled to host a race in 2014. And that’s where the F1 FanZone TM comes in. Alongside all the escapist fun of the simulators, competitions and games, there are lessons for the new fan on how to understand what can often seem a complicated sport.

“We have live commentators that come on about 30-45 minutes before (the race) and explain the rules, the regulations, the points system, what could happen if (this driver) wins, what could happen if (this other driver) wins, the constructors championship, the fuel, the tyre changes and all that,” Boutagy continues. And it’s mainly the new races, he says, that make the most effort to organise fan engagement in their cities. In Abu Dhabi, the F1 FanZone TM is often the first point to pique the interest of prospective fans. There was even a driver education component introduced at a race this year by new sponsor, Abu Dhabi Police GHQ. A simulator, known as the Seat Belt Convincer, flipped fans upside down to show them the dangers of not wearing a seatbelt. The F1 FanZone TM is also a platform for Formula One sponsors to explain to fans exactly why they are in the sport in the first place. Opportunities for branded activities, like The Etihad Racing Challenge, which lets fans compete on 16 linked simulators featuring the Abu Dhabi circuit, allow sponsors to reach fans in a myriad of ways. “Sponsors like Shell don’t want to be seen as just a company that sells oil and gas, which may be what 98 per cent of consumers think. Instead they want fans to know that they develop Ferrari’s engines and work closely with them on research and development, which ultimately allows them to better serve their customers,” he explained. Indeed, Boutagy’s fan zone works best when the F1 experience is out-of-reach for the everyday fan, when racetracks are far outside of city limits or difficult to get to, where the races themselves are sold out or just too costly for the average aficionado, and, of course, where the fan base is massive.

“The sponsors want to show fans that, ‘We’re not here just sticking our name on the car. Our F1 partnership actually helps us in the long run. It helps us give you a better product and serve you better.’” Silverstone, Monza and Barcelona are all high on his list for future fan zones. A London fan zone would take place at Hyde Park; in Barcelona, they would set up shop at the Olympic precinct; fans would zone out in Milan at the famous Piazza Duomo and in Melbourne, F1 fans would party in front of the landmark Crown Casino. For Boutagy, the future is bright. “Having new races on the calendar means the demand is there, from the governments and the cities. It’s a great success.” There is, however, much more that could be done to promote fan engagement in Formula One, such as dedicated merchandising, social media, and a calendar of eclectic events, he says. Regardless, Boutagy’s F1 FanZone TM will keep working to drive the F1 experience out of the paddock and into the hands of the fans.

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through the looking glass

Can’t buy me love Adam Parr, former chief executive and chairman of the Williams F1 Team In the sixties my mum shared a flat with Pattie Boyd, the supermodel who went on to marry George Harrison and Eric Clapton. My mum has never admitted that I am George’s child but I sported the same haircut as him well into the 1980s. In 1964, a year before my birth, George and his friends recorded their view that money can’t buy you love. A more pressing question for me right now is to what extent it can, or should, buy you success in sport. The record is mixed. Toyota and Honda had vast budgets in Formula One and achieved what they themselves would have said was very limited success for all that. On the other hand, Ferrari, Red Bull, McLaren and Mercedes have the biggest budgets these days and are reasonably assured of being in the top five of the Constructors. I am no expert on football but Manchester City, Manchester United and Chelsea have the biggest budgets in the Premier League and as of today occupy the top three positions. That is not how they finished last season but Chelsea did win the Champions League. The answer may be that in sport money is a necessary but not sufficient condition for success. It is not a perfect guide to performance but a pretty good one. If several teams have a great deal of money then spending becomes increasingly ineffective. It also brings its own problems as the larger the team the more complex it is to manage effectively. Too many people, too many options and too much politics. But teams weigh up the benefits and then generally spend as much as they can, which in some cases is a lot and a lot more than most of their competitors. Typically the rich, successful teams have a disproportionate voice in the running of a sport. Regulators fear them and the other teams don’t want to appear bad sports or to attribute their relative lack of success to a lack of money – this line is not attractive to fans or sponsors. Since the teams won’t do it, the regulators of sports owe a duty to the fans to intervene to control spending. But they do not seem able to do so. Is it this fear of the powerful teams? Or are they happy with the status quo and the inflated salaries that it brings to everyone? In any case, it is not the regulators but the fans who (literally) pay the price: cable subscriptions, season tickets and team kits get more and more expensive. The fans may pay but they have no voice in any major sport. How long will this be tolerated? For many people, mainly men, sport is one of the most important things in their life. Times are tough but they are paying more and more to follow the sport they love and yet the players, managers and administrators are getting richer and richer. If regulators do nothing then sooner or later the fans will rebel. That moment will come when the competition has deteriorated

to such a point that the same teams dominate season after season while others go bust – and the role of money is unambiguously transparent. I predict that this will happen in the Premier League and in Formula One within a small number of years unless their respective regulators take action now. European fans are not powerless. They can take direct action or they can seek redress from the European Commission. Given the economic and social importance of sport, the European Commission has the authority to step in on behalf of the public to enforce the principles of fair competition and solidarity. The latter principle recognises that sports need to be organised in a fair and sustainable way. In my book, I try to tell the story of a revolution within Formula One. A revolution that certainly changed the landscape of the sport but was not completed. In this regard, Formula One is just one of a number of professional sports that are in desperate need of going back to their roots and structuring themselves so that talent, creativity, discipline and teamwork are the pathway to success and spending is capped at a level where money is not a decisive factor. The achievement of Williams and Lotus in winning races in 2012 was more inspiring for the fact that they had to beat the best without the advantages that money brings. We do not admire those who buy love. Should we admire those who buy sporting success?

Adam Parr’s graphic novel, The Art of War – Five Years in Formula One, is available in hardback and as an e-book

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through the looking glass

F1 Uncut: The Supplier John Bailey, bf1 systems bf1 systems components are featured on championship-winning vehicles in all top-level motorsport disciplines, including F1. chicane editor christopher joseph travelled to Diss in Norfolk to talk all things F1 and discovered that the company has also produced a very special bike. work, which is not always the right way to do it, but so far it’s worked for us. Then you can look at other forms of cost-saving such as the idea that the lower-funded teams should have access to customer cars when the new engine comes out. It means that the teams making the cars are going to get a return on their investment and the teams who can’t afford to develop their own cars get a car.

Before we even get to sit down, John, who I have always found to be very straight talking, decides to open proceedings; leading me to shuffle my prepared questions to one side for the time being. John Bailey (JB): Motorsports as a marketplace is shrinking, I don’t care what anybody tells me. I know it’s shrinking. It’s a lot harder to get business and even, some would say, to retain it, regardless of your quality.

CJ: But isn’t Formula One meant to be a constructors’ competition so if you’re not constructing the car doesn’t that undermine the ethos? JB: It’s a very fair point. I think you can attach caveats to that set-up; say, anyone who is a customer team has a reduced headcount. It’s harder for them to run the same car but make it more challenging. That way, they haven’t got the expense of buying a new engine when the regulations change in 2014. I think the manufacturers have gone so far down the line that it has to happen. Ferrari have one on a test bench already. Mercedes are getting along. CJ: And Renault are well advanced… JB: They’ll be the only three. Cosworth haven’t developed one at all and PURE seem to have come to a halt for the moment.

Christopher Joseph: That’s an interesting concept with resource restrictions still not having being agreed on… JB: One team did actually implement a programme aligned to the Resource Restriction Agreement and they used us as a extension of the department that they shaved down. And that’s worked really well.

CJ: I saw a prototype two years ago and now I believe you have a very nice machine (bike) in partnership with Aston Martin… JB: The bike is an interesting story. It was a halo project from the start to demonstrate our expertise; to show just what we are capable of doing totally in-house. We cracked on, did it, showed it to the public and it was received really well, particularly in the bicycle industry. By taking away the rule book it makes it harder.

CJ: Anybody I would know? JB: (a wry smile) I can’t say who it is. (Laughter.) As a model it works well – it’s a win-win. So we win the business at a competitive rate and they get all their products outsourced without carrying the cost or the headcount. It does work. It wouldn’t work in all cases; say, the chassis, for example. That’s a very in-house secretive activity. Outside of that there is a lot of scope. We try to get the resource in before we get the

CJ: Particularly when you are used to strict Formula One parameters. JB: Exactly. Then we thought “what shall we do next?” So, through various conversations to do with our core business, we decided to do a limited run of 77 for their Aston Martin One-77 series. It turns heads… we’ve done a few exercises in London and it pulls in crowds. Everyone who sees it says that it’s more a piece of art than a bike, which you’ve got to say is a nice thing to hear.

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Motorsports as a marketplace is shrinking, I don’t care what anybody tells me. I know it’s shrinking. It’s a lot harder to get business and even, some would say, to retain it, regardless of your quality.

CJ: Will we see components from the bike on everyday bikes? JB: You will see design cues from the original bike on more mainstream bikes. It’s a fairly radical concept. We’ve pushed it to the max so much that we haven’t shown anybody as yet and won’t until the launch next spring. We’re launching the Factor brand as a separate business – a sort of sister company to bf1 systems. There’ll be two versions of the bike: the super-expensive, fully-kitted-out, fully-instrumented bespoke version, as well as an out-of-the-box version. We’re aiming at the top end but we’re offering a better-than-top-end machine and we’re going to do it at a significantly lower price point. CJ: I remember you telling me last year that you were approached by Steve Domahidy, co-founder of Niner Bikes... JB: Yeah, Steve really liked what we were doing with the 001, and he wanted to help us design a production model. It’s something we were moving towards anyway, and Steve really understood what it was we were trying to do, so we brought him on board. CJ: Does this sort of project help your core business or is it a pleasant distraction? JB: What it has done is open a lot of very important doors. When we did the 001, the big deal about it was the integrated electronics and how powerful they were and how much data you got and what they were measuring and how they were measuring it. But when you looked at the bike, you couldn’t see any of that – it was seamless and clean. Because we applied Formula One technology it attracted the attention of professional teams outside of motorsport who make the logical assumption that if it’s done by Formula One it’s got to be the mutt’s nuts. CJ: And is it? JB: Oh yes, it is.

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THROUGH THE LOOKING GLASS

Lessons from the Fast Lane Mark Gallagher – former Head of Cosworth’s F1 Business Unit, Head of Commercial Affairs at Jaguar / Red Bull Racing and Marketing Director at Jordan Grand Prix – delivers inspirational business lessons learned from a diverse career spanning almost 30 years at the forefront of Formula One. Currently providing expert opinion and commentary on ESPN Star Sports F1 coverage, Mark also runs his own team, Status GP, which competes in GP3 and in Le Mans 24 Hours. Since launching my series of Business of Winning seminars for companies eager to access the business lessons to be learnt from Formula One, there have been a few key topics which have come up time and again, and this year’s World Championship underlined a few of them. In the face of adversity, Red Bull Racing once again proved itself to be the class of the field, winning both the World Championships for Constructors and Drivers, despite starting the season with its competitive edge blunted by the FIA’s ban on ’hot blown diffuser’ technology. This was the means by which Red Bull had turned Renault’s Formula One engine into an air pump, thus ensuring the rear of its cars remained glued to the road even at low speeds. The story of Red Bull’s success in turning the former Jaguar Racing team into the dominant force in Formula One is compelling. That Ford Motor Company and the executives at Jaguar charged with running its Formula One programme made such a hash of it was an embarrassment, although they weren’t alone in their failures as the subsequent Toyota, Honda and BMW teams demonstrated. I was fortunate to be at Red Bull Racing during the early days and recall visionary owner Dietrich Mateschitz addressing the staff in Milton Keynes with a promise to turn the team into a competitive proposition, and to have fun along the way. He certainly delivered on both counts thanks to a decent budget and the capabilities of his management team, led by Christian Horner and Adrian Newey. It’s a salutary tale of how a soft drinks company had greater vision and execution in Formula One than some of the world’s foremost car manufacturers.

Risk management

Risk management is another area of interest in Formula One; any industry which has managed to halt fatalities that were previously accepted as an inherent part of its business deserves acknowledgment. Including drivers who met their deaths in Formula One cars during testing and non-championship races, 47 were killed between 1950 and 1994. Following the deaths of Roland Ratzenberger and Ayrton Senna during the San Marino Grand Prix weekend in May 1994, the sport comprehensively changed its attitude to safety, applying as much brain power to improving the chances of a driver surviving an accident as it had previously committed to pure performance. The result has been nothing short of astonishing; not a single Formula One driver has lost his life in a subsequent accident. What the 2012 season showed, however, was that the biggest risk to drivers now comes from themselves and that most worrying of trends, complacency. High profile accidents during the early part of the season illustrated that we now have a generation who don’t remember the days when attending the funeral of a former competitor was an all-too-frequent occurrence – just ask Jackie Stewart. Ultimately, this led to the potentially horrific multi-car pile-up at the Belgian Grand Prix, an incident for which Roman Grosjean took the majority of the blame and suffered a one-race ban.

“Health and safety may be a boring and much maligned topic at times but, in F1, there remains no higher priority.” Teamwork

And finally, if there is one thing Formula One is famous for it is teamwork, and this year we saw delivery and execution taken to entirely new levels. The three-second pitstop which I had joined many in viewing as impossibly fast wasn’t merely challenged, but comprehensively beaten to the extent that McLaren managed a record 2.31-second stop at the German Grand Prix. Four wheels replaced in a faster time than it has taken to read this sentence. That’s teamwork many companies would relish.

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CTO COLUMN Graham Mitchell, CTO at HMR International Ltd, suggests Formula One should be planning for the future if it is to engineer its long-term survival. Red Bull secured the first of their Championship double titles back in 2010, winning both Constructors’ and Drivers’ Championships; a feat they were to repeat three years in succession. Throughout the paddock it’s widely acknowledged that Red Bull owe much of their continued success to their British design ace Adrian Newey. Uniquely, he can see the bigger picture, and understand what’s required to make his cars perform at their optimum pace throughout the race weekend, whether it’s with aerodynamic innovation, getting the most out of the Pirelli tyres, or working with the drivers. One of his strengths is that he listens to and hears what his drivers say, and is constantly striving to be better than the rest. Talk to any of the other teams and they’ll say he’s always exploring new boundaries, because Newey knows from the past that success depends on a number of factors that, combined, will make his cars faster, so consequently he develops his cars as a whole package. But as usual, with innovation and success comes controversy and it was during the German GP that we learnt exactly what the paddock mumblings were all about. We should not delve into the ’engine mapping’ controversy that ensued, but reiterate something many doubters had conveniently chosen to overlook. Formula One has been, and always will be a sport driven by innovation and exploitation, and by interpreting the rules to the best of one’s ability, and by optimising the grey areas within these rules a performance advantage can be gained. It is the loopholes in the regulations that all Formula One designers and technical teams worth their salt will continue to push and exploit until they are found out, and when they are eventually exposed the FIA will do its best to re-write the rule book in order to close down the grey areas. It has been happening for over 50 years in Formula One and I can’t see it changing now; it is something creative brains do, and will continue to do well into the future. Anyone can clearly see the individual and creative interpretation of the rules; just look at the variations ’on a theme’ which change from team to team. It is down to every one of them to interpret the rules to the best of their abilities to ensure they have the fastest race car possible for the coming Formula One season. Formula One is a sport that is constantly evolving, by the day, by the race, by the year. Teams will ultimately spend what it takes and what budget is available to develop the best possible race car within the regulations and will strive to exploit any potential loopholes in order to stay one step ahead of the competition. In highly competitive

seasons like 2012, this could mean the difference between winning and losing with kudos and big money prizes to play for. Unfortunately, the majority of in-season spend is now directed towards aerodynamic development. This is a highly contentious area and generates much debate, both for and against. If a design team has the budget and wherewithal, then one can continue to evolve the car race-by-race, but the dollar numbers required to win this particular technology race are truly mind-numbing. So he could leave a lasting legacy and for entirely the wrong reasons to curb this runaway spending, Max Mosley threatened to introduce a stringent budget cap of $40 million per year, like many of Max’s misguided initiatives/crusades this was done without comprehending the implications his actions might have on the ’big picture’. The best form of defence is attack, so, to counter this threat, FOTA, who had been (unusually) united at that precise moment in time, presented a document known as the RRA (Resource Restriction Agreement). On the face of it, this appeared to be a way forward which would voluntarily be adopted by the teams en masse, but as various high-profile teams deserted Formula One and others jumped off the FOTA ship, it all started to unravel. Some form of cost control is necessary if Formula One is to survive into the future, but when we bear witness to four major global automotive manufacturers conveniently leaving the sport within as many years, yet still continue with their PR and Promotional spend in other motorsport arenas, such as MotoGP, DTM, Le Mans, WRC, and sometimes unrelated sport such as golf and tennis, one must question the ’money-men’ (Bernie/CVC) as to why this smacks of car companies desperate to leave Formula One, and not necessarily for economic reasons either. It is widely accepted that ’technology drives the world’, just as much as ’the advantage is always with the innovator’, so why does Formula One not embrace the world’s automotive, aeroplane and mass-transport manufacturers? There is no other sport that can bring the benefits of T2 (Technology Transfer) to train the young engineers of the future, and the future is what we should be planning for. So whilst all this is playing out on the world’s stage, the ’money men’ continue to salt away millions, if not billions from the sport/ business like Sunday matinee magicians. We have not yet seen FOM/ CVC making provisions (or writing off millions) for ’adverse market conditions and bad debt’. Misdirection is a powerful tool in the corporate language; almost the same as Adrian Newey bending the rules? More anon. 55

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THROUGH THE LOOKING GLASS

Engineering the Future of Formula One Earlier this month, Vodafone McLaren Mercedes became the first ever Formula One team to retain the coveted Carbon Trust Standard for successfully reducing its carbon emissions. Jonathan Neale, Managing Director of McLaren Racing, tells us why sustainability is an important issue for Formula One, and why it is crucial to the sport’s long-term survival. It is fair to say that ’green’ is generally not the first word that springs to mind when thinking about Formula One. Power and speed, exceptional engineering and glamour, perhaps, but touch upon the topic of ’sustainability’ and the general reaction is one of scepticism. This is hardly a surprise given the commonly-held belief that Formula One is ensconced in some kind of petro-chemical fog, oblivious to what’s going on in the real world. However, it does demonstrate that more needs to be done to challenge this view, and to highlight the real work that is going on in the area. For while the glamour, fast cars and roaring engines are certainly factors in the sport’s enduring spectator appeal, to be successful at this level of the sport – and this also holds true for the majority of motorsports – you must address the issue of sustainability. The fact is: winning races is all about doing more with less. The aim is to complete a certain distance in the shortest possible time using a fixed set of resources, and the lightest, most aerodynamic car with the most efficient engine has the best chance of getting there first. Accordingly, teams analyse, refine and improve every aspect of their operation – not only in the quest for greater performance, but symbiotically for greater efficiency. Formula One teams have a hugely valuable in-house resource: their engineers. It is their expertise and creativity that has ensured that the sport is developing more efficient technologies and processes. At Vodafone McLaren Mercedes, we’ve fully utilised this resource to improve our environmental impact within both the racing arm and across the wider McLaren Group. Indeed, every vehicle in our fleet of race trucks and transporters is fitted with monitoring telemetry that helps to refine and develop efficient driving techniques, while a range of bespoke low-energy lamps – pioneered by a McLaren engineer – have been fitted to illuminate the access roads and car parks throughout the McLaren Technology Centre. It’s no bad thing that measures such as this also have commercial benefits; being sustainable also helps the bottom line. The steps being made to improve efficiency within individual Formula One teams are also being mirrored by the sport’s governing bodies. The Formula One Teams’ Association (FOTA) has already co-operated with the FIA to help the grid become more sustainable. The sport has limited the resources available to teams under resource restriction agreements – there are now restrictions on the use of wind tunnels and the amount of super-computing

power that we can use in CFD (computational fluid dynamics). The next chapter will come in 2014 with the introduction of a new V6 engine – direct-injected, turbo-charged and energy-recovering in a variety of forms. The aim is for the cars to use approximately 35 per cent less fuel than they currently do, while, crucially, popularising hybrid and other energy-efficient technologies to speed up their adoption in road cars. Formula One is uniquely placed to play a critical role in the definition, development and implementation of new automotive and technological solutions. The very ethos of Formula One means it not only occupies a place within sustainable culture, but uniquely for a world sport, can actually provide steps to improve it. By being at the cutting-edge of efficient technologies, the sport makes itself relevant and compelling for the car industry, because the efficient technologies that are pioneered by teams such as Vodafone McLaren Mercedes trickle down to road cars that people can buy. The shift towards more carbon efficient transport is inevitable, and for Formula One to remain relevant, it must lead that shift. Take, for example, Vodafone McLaren Mercedes’ 17-year partnership with ExxonMobil. Our cars act as high-speed laboratories, challenging our partner to produce more volumetrically efficient fuels, as well as lubricants that offer superior protection with minimal frictional losses. The techniques their scientists have developed while working with us have had a direct effect on the fuel and lubricants you can buy at your local filling station: better performance, better economy, better reliability, lower emissions and longer intervals between services. That’s what the customer wants, and the improvements are driven by Formula One. Similarly, it makes good business sense to focus on sustainability. Vodafone McLaren Mercedes prides itself on its mutually-beneficial partnerships with field-leading, blue-chip companies that share our brand values. An aligned approach to sustainability would be one facet of this relationship – allowing both companies to maximise the values of innovation and leadership. It is true that people – meaning fans, customers, partners, prospective partners and legislators – want to see evidence, not claims, and we, as a team, want to act positively and demonstrate real substance. So, while ’green’ may not be the first word that springs to mind when thinking about Formula One, we are working hard to demonstrate that perhaps they’re not really poles apart.

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F1’s POWER GAMBLE As Formula One starts to turn its attention towards the 2013 season, the future shape of power supply to the 12 teams is certain to become a hot topic. The principal reason is the impact of the decision, driven by the FIA and ratified by the World Motor Sport Council in June 2011, to introduce a radical new powertrain for 2014. BY MARK GALLAGHER. Four years after the FIA’s last President, Max Mosley, warned against the pitfalls of becoming over-reliant on car manufacturers which are prone to dipping in and out of Formula One, his successor, Jean Todt, has championed a new, greener technology which may see Mosley’s fears realised. The current formula, featuring a normally aspirated 2.4 litre V8 engine limited to 18,000rpm, has been in place since 2009, although the basic design goes back to 2006. This is set to be replaced by a tiny 1.6 litre V6 turbocharged engine with a 15,000rpm limit likely to rev to only 13 to 14,000rpm due to fuel flow regulations. More importantly, these new engines will be mated to a powerful electric motor and feature an array of highly sophisticated energy recovery systems. Ultimate performance aims to be close to current levels, but with a massive 35 percent reduction in fuel consumption. The message created by the FIA’s rule makers is positive; Formula One is investing in greener road-relevant technologies. This has created a twofold dilemma, however. One has been to drive significant cost into Formula One at a time of economic difficulty, with engine suppliers Ferrari, Mercedes and Renault investing heavily and aiming to recover their R&D costs from hardpressed customer teams. The other has been to present the only low-cost independent manufacturer, Cosworth, with a conundrum; funding an expensive, revolutionary new powertrain against a backdrop of customers unwilling to pay more. Bizarrely, it was the FIA’s last major initiative which saw Cosworth confirmed as indispensable. Founded in 1958, Cosworth is the second most successful engine supplier in Formula One after Ferrari, but its sale by Ford in 2004 was followed by an automotive manufacturerled squeeze in the Formula One marketplace which resulted in the Northampton company losing its last customer in 2006. The folly of the sport relying on car manufacturers was proven in 2008 when Honda pulled the plug, closely followed in 2009 by both BMW and Toyota. Mosley’s response to the crisis was to open the entry list to new teams, with Cosworth the only company able to supply them with competitive low-cost engines. Thanks to Cosworth’s ability to step in, teams such as Campos (HRT), Virgin (Marussia) and Team Lotus (Caterham) joined the sport, and it also filled the void at Williams left by Toyota’s dash for the exit door.

With Todt arriving at the FIA, however, priorities changed. The quest for road-relevant engine technologies started in earnest in 2010. Meanwhile, Renault Sport sold its Formula One team, now Lotus, and set about reinventing itself as an engine supplier. By the end of 2010, Renault had convinced Caterham to drop Cosworth and a further scalp was taken when it lured Williams away at the end of 2011. Considering Cosworth was part of the FIA Working Group that devised the new engine regulations for 2014, some question why it acquiesced to the rule change. The reality is that at all times, Cosworth pushed for the new regulations to be tightly cost-controlled and affordable. The new powertrains, with huge technical sophistication allied to a doubling of the engine life, should have been introduced within the context of an annual supply deal of around £8 million; comparable to a current engine plus KERS. It was also widely stated that the commercial targets of all four engine suppliers would be protected. On both these points, Cosworth was let down; there has been no effective control over development costs and a wealthy manufacturer has opted to hoover up the marketplace. The result of this is that the small teams, the teams invited into Formula One by the FIA, now face a threefold increase in powertrain costs in 2014 from car manufacturers who don’t even want their brands associated with backmarkers.

Not surprisingly, this again raises questions about the wisdom of F1 prostrating itself in front of a fickle car industry. To add to the tension, Formula One’s commercial rights holder, Bernie Ecclestone, is concerned that the new lower-revving and less noisy engines will remove a key part of Formula One’s spectacle. He has been supported in this by both Ferrari’s president and the Formula One Promoters Association. The run-up to 2014 should be interesting; the future of the smaller teams is at stake, and the wisdom of the sport potentially turning its back on the significant talents of its only independent engine producer will be questioned.

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THE NEXT LIFE: DON’T BE LATE

COUNTDOWN TO CHICANE 002 The European Space Agency’s new satellite tracking station at Malargüe, Argentina. 35º 46’33.63” (35.776º South) 69º 23’53.51” (69.398º West)

Chicane 002 will provide a unique prelude to the 2013 Formula One World Championship

“If the flywheel concept that was designed for the 2009 Formula One car is on a London bus in 2013, does it get any more relevant than that?” ALSO FEATURING:

How exactly did Kirsty Andrew of Williams Advanced Engineering end up in The Calgary Cowboy Casino?

Leading-edge Propulsion Lands in Leafield.

We ask Geoff McGrath of McLaren Applied Technology: just what is the strange sound emanating from deep below the McLaren Technology Centre?

If you would like to be part of our blueprint, then please get in touch I Email: cj@sportbusiness.com I Lights Out February 28. The clock is ticking... 58

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Until Maria Teresa de Filippis had become the first woman to successfully compete in F1™ racing, her mentors would not rest. (Monza, 2011.)

Over fifty years on, can your client advisor still learn from the first female F1™ driver? As Maria Teresa de Filippis proved in the late 1950s, with perseverance and the right people behind you, you can achieve great things. And few mentors are as well-qualified as five-time FIA Formula One™ Drivers’ World Champion, Juan Manuel Fangio. El Maestro. He was the one who encouraged Maria Teresa de Filippis to not drive beyond her limits. To listen to her head, as well as her heart. And by doing so, he helped her show future generations of female racing drivers the way forward. At UBS, we have the same dedication as we help our clients work towards their financial goals. It’s why our advisors work so closely alongside their clients. Providing them with insights and financial guidance, based on the knowledge of our network of experts. And until we’ve shown what all this know-how could mean to you ...

We will not rest The price and value of investments and income derived from them can go down as well as up. You may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. In the UK, UBS AG is authorised and regulated by the Financial Services Authority. Wealth Management · Asset Management · Investment Banking

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Names and/or references to third parties in this print advertisement are used with permission. Location and date stated in the legend indicate where and when the image was taken. © UBS 2012. The F1 FORMULA 1 logo, F1, FORMULA 1, FIA FORMULA ONE WORLD CHAMPIONSHIP, GRAND PRIX and related marks are trade marks of Formula One Licensing B.V., a Formula One group company. All rights reserved.

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13.12.12 10:01

Innovations for the Sauber F1 Team

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