What Domenicali’s extended reign means for F1’s future

“Adapt or die” is a well-liked maxim within the enterprise world – however, to paraphrase the well-known phrases of Mandy Rice-Davies: they’d say that, wouldn’t they? Change is inherently self-justifying, particularly when one enterprise is shopping for one other and swaggering egos are in play.

Many are these in administration, notably the c-suite, who wish to cite wisdoms from Solar Tzu’s Artwork of Warfare (largely with out having learn it, in fact). Huge acquisitions subsequently play out in line with the psychology of warfare, with a winner (the acquirer) and a loser (the acquired); the ‘victor’ brings a mindset that all the things the defeated was doing is improper – in fact, as a result of they misplaced, proper? – and desires to vary.

That seemed to be the scenario taking part in out in 2017, when Liberty Media started the method of buying full management of F1’s business rights by an advanced deal involving $4.4bn of money (reportedly solely $354m), newly issued shares, and debt. When the deal was introduced, Liberty’s paperwork signalled the arrival of former Information Corp government Chase Carey as chairman, with long-time F1 ‘ringmaster’ Bernie Ecclestone remaining as CEO – and “wanting ahead to working” with the brand new regime.

Inside months Ecclestone had been booted upstairs to a ‘chairman emeritus’ non-role, in preparation for clamping the proverbial gold watch on his wrist and escorting him out of the door. Incoming business chief Sean Bratches pushed by a complete rebrand together with a controversial (on the time) new emblem, and brand-proposition documentation that included frankly baffling and largely meaningless aspirations resembling “scent the oil”.

The widespread notion on the time was that right here was a bunch of outsiders who knew nothing about System 1 or the way it labored – however weren’t going to let that cease them altering all the things anyway, as a result of they’d ‘received’.

Really, in fact, there was a lot that wanted fixing. Ecclestone had a large blind spot when it got here to the younger viewers – why trouble with individuals who couldn’t afford a Rolex? Half the grid was on the verge of insolvency due to the inequitable business settlement. TV viewing figures have been on the slide – principally as a result of F1 had been moved on to subscription platforms, although the tendency was accountable the dearth of on-track spectacle.

A lot of the above was the duty of Ecclestone and CVC Capital Companions, the non-public fairness outfit into whose arms he’d steered possession of the business rights within the expectation that it could preserve him in cost as chief wonga wangler. CVC financed the acquisition with debt and continued to counterpoint itself all through its tenure whereas loading the enterprise with extra debt.

Seasoned paddock folks subsequently anticipated extra of the identical below the brand new proprietor, and such prognostications gave the impression to be coming to move as additional calendar growth was introduced to locations resembling Saudi Arabia.

Most of the adjustments, although, proved to be prudent, undoing alternatives missed by Ecclestone as a result of he’d did not discern speedy return on funding. F1 opened up social media engagement, relaxed its zero-tolerance copyright coverage on YouTube, improved the TV broadcast, and allowed within the Netflix cameras.

Bratches left early in 2020 to “spend extra time together with his household” and Carey did likewise later within the yr. Amongst his remaining acts earlier than saying the handover to Stefano Domenicali as new chairman and CEO was to navigate the existential menace posed by the COVID-19 pandemic. This required a lot monetary engineering inside the Liberty empire and the negotiation of a price range cap and a brand new and extra equitable Concorde Settlement, one which not solely rescued a number of groups from oblivion but additionally set them on the highway to turning into profitable franchises.

On Wednesday, F1 confirmed Domenicali, whose contract was up on the finish of this yr, has signed an extension that will keep in in charge until 2030. He’s indubitably the fitting man for the job, one who has in depth hands-on expertise of F1 from the manufacturing unit ground upwards – in addition to occupying senior roles exterior the goldfish bowl of motor racing.

Throughout Domenicali’s tenure, F1’s viewers attain has elevated massively, the calendar has expanded additional into new markets (together with prized locations resembling Miami and Las Vegas), and F1 has signed profitable sponsorship offers with the likes of Aramco and LVMH. Cynics could be proper to level out that a lot of this development might be traced again to ‘the Netflix impact’, and the explosion of US curiosity that adopted Drive to Survive.

Actually a rising tide lifts all ships. However Domenicali has additionally poured vitality into agendas the place optimistic outcomes are sometimes obscured by footling political divisiveness: training, a push in direction of ‘web zero’, and better range and inclusion. Nattering nabobs may mutter about snowflakery however these are initiatives which have long-term enterprise advantages in addition to social worth.

Domenicali’s broad expertise offers him an enchantment to new traders in addition to the respect of insiders: he’s been round lengthy sufficient to understand how F1 works however isn’t afraid of change, and is ready to have interaction.

Drivers like Piastri have been filled with reward for a way open Domenicali is

Picture by: Steven Tee / Motorsport Pictures

“His door is at all times open to us as drivers and he’s very straightforward to speak to,” stated Oscar Piastri, “very receptive of our concepts and considerations if we’ve got any, so I’m very blissful that he’s sticking round for a very long time.”

“It’s nice information,” stated George Russell, “as a result of the game is in one of the best place it’s ever been. Since Stefano’s been on the helm it’s simply gone from power to power.

“He’s at all times received concepts to constantly develop the game; as I stated, the game is on the peak proper now, however he’s not trying to cease right here.

“He’s taking a look at what’s subsequent, how can we proceed this development, and in addition simply that stability and transparency from such a pacesetter. I imagine all of the groups and all of the drivers are totally behind him.”

If that endorsement from a GPDA director weren’t sufficient, Lewis Hamilton’s pithy evaluation was “thank God he’s staying, as a result of it’s good to have a impartial, good chief on the helm”.

Off the file, insiders level to Domenicali’s willingness to hearken to and work with all stakeholders to enhance the present, together with the iterative growth of the dash race format. Initially seen by opponents as an unwelcome and doubtlessly costly imposition, and dismissed as a pointless gimmick by a big part of the fanbase, it has matured to a degree the place it’s broadly accepted. Most race promoters are eager, too.

Domenicali has risen up the ranks of the collection and is a well-liked determine

Picture by: Ferrari Media Heart

Earlier than his interregnum because the FIA’s single-seater commissioner and CEO of Lamborghini, Domenicali was a well-liked determine within the paddock. He might be seen operating around the racetracks of a night, lengthy earlier than it turned in style; he got here up by the ranks of Ferrari, and respect for him solely grew when he made a principled resignation as group principal in 2014 somewhat than be pressured accountable and hearth key workers for the underperformance that season.

Amongst Domenicali’s subsequent challenges is one which cuts to the center of Liberty’s enterprise: the TV rights. Within the Ecclestone period, squeezing most worth by promoting to the best bidder was the precedence, even when that meant consigning F1 to pay-TV channels that have been too costly for mainstream tastes.

Linear broadcasting is now in a technique of decline as individuals ‘minimize the wire’ in favour of digital platforms that supply content material on demand. The youth demographic has lengthy since deserted standard TV in favour of digital media and social content material: Domenicali famous in a current earnings name that 230 million individuals watched race highlights on YouTube.

For the business rights holder, pivoting in direction of digital choices – together with its personal F1 TV service – brings it into potential battle with these organisations who’ve paid for conventional TV rights, in addition to the broader media. Within the early years of the Liberty period there was a lot harrumphing when a diktat got here down that F1 TV crews and ‘expertise’ have been to have precedence entry throughout scheduled driver interviews. Below Domenicali there was much less of a sense that F1 is making an attempt to push everybody else out.

Domenicali has additionally efficiently put relations with the FIA again on a extra steady notice after the governing physique’s president staged a number of controversial and high-profile interventions in what F1 noticed as its enterprise. For that cause alone, Liberty’s shareholders will sleep fortunately at night time…