New Formula One Boss Frowns on Ecclestone’s Far-Flung Dealmakingby
Race Circuit Moves On From ‘Deal a Day’ Push Into New Markets
Liberty Media closes $4.4 Billion Deal; Ecclestone Steps Down
The days of Formula One taking millions from deep-pocketed nations with little history in auto racing to stage Grand Prix events may be over. New owner Liberty Media Corp. wants to end a “deal of the day” mentality to focus on key markets, including the U.S. and Europe.
So says Chase Carey, who this week was named Formula One’s chief executive officer, taking over from Bernie Ecclestone, the 86-year-old billionaire who ran the sport for four decades.
“Some of the decision-making hasn’t been efficient and effective in how do we manage the sport,” Carey said in a phone interview Tuesday, a day after Liberty completed a $4.4 billion takeover that values Formula One at $8 billion.
Ecclestone, a former used-car salesman, turned a disparate collection of races into a premium global sporting property, drawing millions of television viewers and a branding opportunity for new race hosts like Bahrain, Russia and Azerbaijan.
Following the money -- Azerbaijan pays a reported $75 million per race -- has led to higher financial demands on racetracks in the sport’s European heartland. Some organizers, including those responsible for the British Grand Prix at Silverstone, have said the price is too high. Germany doesn’t have a race this year, and its contract ends after next year’s event at Hockenheim.
“Fans mean western Europe as a foundation, growth means markets like the U.S. and China where there’s obvious growth potential, real growth potential that we haven’t tapped,” said Carey, an entertainment industry veteran who was brought in to rejuvenate Formula One.
Liberty sees opportunity in the U.S., where Formula One has struggled to gain a foothold. A circuit in Austin, Texas, hosts the annual U.S. Grand Prix. Liberty plans to boost interest by taking the sport to a “destination city” like New York, Los Angeles, Miami or Las Vegas, Carey said.
Carey, a non-executive director of pay-TV provider Sky Plc, has spent the past three months learning about the racing industry and meeting team owners, sponsors and broadcasters. With television audiences slipping, Carey said he’d focus on expanding Formula One’s digital media development, which he said lagged under Ecclestone.
“We don’t really have a meaningful digital presence in a competitive sense today,” Carey said. “That’s an increasingly integral part about how you’re going to develop a broad-based television strategy.”
Ecclestone, who’s taking on a new role as chairman emeritus of Formula One, did not return a call seeking comment.
Carey said direct sales to Internet streaming outlets were “certainly” part of the plan, without naming potential partners. Amazon.com Inc. has started discussions with other sports organizations on distribution arrangements that bypass traditional television broadcasters.
“In the past, Formula One seemed to have a practice of wanting to talk before they do,” Carey said. “I’d rather do before I talk.”
(Corrects the identification of Chase Carey in the first photograph.)