Exclusive interview - Whitmarsh looks to the future 15 Jul 2011
With his team under pressure to regain their winning form after a disappointing home race, McLaren boss Martin Whitmarsh would be forgiven for concentrating attentions solely on his own concerns. But the future affects everyone, particularly a Formula One stalwart like McLaren. In the second part of our exclusive interview, Whitmarsh discusses his thoughts on F1s future direction, on boosting the automotive industrys interest in the sport, and on whether television will remain the primary medium for reaching fans
Q: There's been talk over the last couple of months about the future of Formula One with some new parties professing an interest. The four top teams met to hold their own talks. Where are your discussions up to?
MW: I dont think that it was that conclusive. But what became clear is that the teams want to work together. Its the first time in 60 years that the teams are working better together. Historically, the teams have fought each other, they fought with the FIA and FOM, so it was kind of a battlefield. What we are trying now is to collaborate in a manner that promotes partnership. There are new suitors, whatever, but we think we are better off working with the partners that we have. Bernie (Ecclestone) knows the sport and has done many great things for the sport, CVC are the owners, so we have got to be respectful. But that doesnt mean that we always have to agree and doesnt mean that we will agree all the time, but I think it is better to find good and constructive ways of working together, rather than saying, Oh, here is someone new, whom we dont know, who wants to buy the sport so lets rush off in that direction. In my view that would be the wrong thing to do. We all have flaws and weaknesses, but if we can work together that would be the best option. This is a fantastic sport. There are only two global sports: soccer and Formula One. And of course we can do better and we always should be open to embrace new technologies, opportunities and new challenges, but we are better off doing this with people we know - probably - than suddenly saying we must go off in a different direction.
Q: One of the possible suitors mentioned is James Murdoch, who we know is having a tough time right now. Does what happened to one of his enterprises automatically disqualify him?
MW: Well, there are a number of issues with News Corp. There is a lot of concern over pay per view, which has been historically the Sky model and that is probably not suitable for Formula One. Yes, theyve got a lot of challenges at the moment in the UK, but nevertheless we all know that News International and News Corp will be alive and powerful in the media in 12 months time. They will move on, but there will be casualties, as theyve closed down a newspaper, which none of us would have believed two weeks ago. Its a dynamic time. But News Corp is a 20 billion or whatever turnover news corporation, so I am sure they will remain a big player. But I dont think that Formula One needs to rush into their arms. I think we should be open-minded looking at what is in the best interests of the sport in the long term. There will always be controversies in and outside our sport so we have to be balanced and look at how we can promote, develop and sustain our sport.
Q: What are the biggest fears? That you wake up one morning and nobody is there to run Formula One racing?
MW: Ha, there is a fear. Bernie is an enormously influential and powerful figure in the sport and I hope we will wake up for many years to come and Bernie is still there. I think that there is always danger in change, so the more we must work together. The sport has to change because none of us will be here in 20 years time - or not most of us - so I think we owe it to the sport that we find a positive and good way to move forward. Media is much more complex these days. If you take the young generation, they dont just watch television - they probably have the TV on, then they have probably something different running on their iPad or on their phone or laptop. We grew up with television and for a moment thought that email was cool - but kids dont email anymore. They are definitely on a much more advanced level than that. The power of these new media outlets is enormous, but how do you monetize that? Bernies great trick has been monetizing the media exposure of Formula One and we all have to be grateful for how he commercially developed the sport, but today as I said its a much more complex media environment. With fourth generation telecommunication systems, full television will be on phones soon and the phone can then Bluetooth to a monitor. So the question is how are you going to control that and how are you going to monetize it?
Q: Are we at a similar crossroads as that we saw some 30 years ago when Formula One changed from simply a fans at venues sport to a TV sport?
MW: Yes, I would say so. You can say its a threat, but just like back then it is also an opportunity. Formula One is a world sport and it is data-rich, and in this digital arena we can populate this digital environment with much more data and information than tennis, soccer or any other sport, so I think it is a huge opportunity that we have. Sure there will still be people watching terrestrial television, but for the generation below us thats not good enough any more. They want more information and they want to interact. They want to have communities going - and thats the challenge: to find ways to monetize this as Bernie has done with television. He made sure that the revenues for the sport were very high. You cant hold new developments back, so we need to bring in expertise that probably doesnt exist in Formula One today.
Q: What are the cornerstones of a sound future for Formula One racing from the McLaren viewpoint?
MW: Firstly, McLaren through FOTA do a lot to try and sustain the sport. Ferrari and ourselves, I am sure, will be here in five years time - even in 20 years time - whilst probably other teams wont. Since McLaren started in Formula One 107 teams have failed, so we are very much aware that the teams have to survive. The sport has to be sustainable, as Ferrari and ourselves cant just race each other - we need all these other teams so sustainability is an important issue. We had the tobacco era, then the automotive era, who were natural investors, and now we dont have enough of them. We have Renault half in, weve got Mercedes and Ferrari, but actually we need to create an environment of governance, of regulations, of stability and entertainment which convinces the Hondas, Toyotas and BMWs that it was wrong to pull out and I believe that in time we will get them back and probably can add the Volkswagen/Audis, the Hyundais, whatever. We need to create an environment that pulls them in. We need to make sure that we maintain the show. In previous years the complaint was always that the show was no good, but I believe that in the last two years weve responded responsibly, and actually we have had some incredible races. I think now we have a great show - and thats good so we can tick the box there. Now we have to make sure that we are relevant and maybe the new V6 engines do that. We have to work together as there is a real threat to our business model, which is this whole new world of how people use entertainment and we have to be responsive to that and not to wait until our mark is dying. We have to go out there and make it ours. I dont know personally how you are going to do that, but thats the challenge.
Q: From what you just said you seem to believe that Formula One racing and the automotive industry can create perfect partnerships
MW: Yes, I do believe that. When you look at the 60 years that Formula One has existed, the automotive industry has been in and out. Honda has been in and out three times, BMW has been there a few times. So at some points they all believe that Formula One is the perfect platform for brand exposure and differentiation. It is a fact that the automotive industry had the largest recession in its history and is now slowly coming out of that. Now we have to make sure that we have the governance and the stability that we can convince the board of big companies that the conditions are right to come back. I am sure that in the next five years well have one or two more come back in.
Q: What would such a comeback look like? As works teams or primarily as technical partners?
MW: Well, McLaren has chosen to have technical partnerships, because I think for Ferrari and ourselves, our core business is Formula One so we will be here in the long run. You have to accept that an automotive companys core business isnt Formula One, and consequently we have to accept that there will be times when their marketing budgets will make them pull out, so they will come and go and we should not criticize them for that. But we ought to make Formula One attractive enough. Then I think it could be possible to have four or five automotive companies involved. If these automotive companies go for complete team ownership, then inherently thats unstable because when they go that leaves a mess. We had that with Honda, Toyota and BMW, who came in for ownership and it has been difficult for the sport to manage that. If they come in as technical partners and then decide to quit thats an easier situation to manage. So I think the ideal model is that we create a situation where we are attractive, were relevant and we are powerful and appropriate for automotive manufacturers to be involved in, because the natural affinity is automotive.
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