The Rise of F1 with Joshua Robinson and Jonathan Clegg, Wall Street Journal Reporters and Authors
Willy Walker: Welcome to another Walker Webcast. It's my great pleasure to have Jonathan Clegg and Joshua Robinson joining me to discuss their new book The Formula. First of all, Jon and Joshua, I think I should be wearing a black T-shirt here. I feel overdressed in my collared button-down. It's great to have you both in – I guess Jon you're in New York, and Joshua you're over in London.
Joshua Robinson: I'm in Paris, actually.
Willy Walker: You're in Paris? You're going to be there for the Olympics?
Joshua Robinson: Absolutely. And Jon is coming over.
Willy Walker: That's great.
Willy Walker: I'm jealous of that. That'll be really quite something. So let me do quick bios on the two of you, and then we'll dive into the book. Joshua Robinson covers European sports for the Wall Street Journal from Paris and London. Previously, he wrote features on New York sports and covered the New York Giants. He's a graduate of Columbia University. Jonathan Clegg is the Wall Street Journal sports editor based in New York. Previously, Jonathan was a senior editor on the Digital platforms team where he oversaw notifications and alerts. Before that, he was a reporter and editor on the sports desk joining the Journal as its first European-based sports reporter. Jonathan is a graduate of the London School of Economics. Jonathan and Joshua are coauthors of three books The Club: How the English Premier League Became the Wildest, Richest, Most Disruptive Force in Sports, Messi vs. Ronaldo: One Rivalry, Two GOATs, and The Era That Remade the World's Game, and the book that we're going to talk about today, The Formula: How Rogues, Geniuses, and Speed Freaks Reengineered F1 into the World's Fastest-Growing Sport. Let me start here. First of all, the book's an incredible read. As I wrote to both of you, I'm a quasi-F1 fan because of my friendship with Greg Maffei at Liberty Media. And I’ve had the opportunity to go to Miami, Vegas, and then most recently, Monaco. So I've seen the sport as a spectator in a little bit of an insider. And a lot of the people you talk about in the current chapter I've had the privilege of meeting. As I thought through all the characters that the two of you so well identify and portray and talk about their relevance to F1, I thought I'd run through and ask the two of you who's the most important person to F1 from 1950 to where we are today. If you had to pick one person who says, “Without that influence, without that change, the sport isn't where it is today.” So you have to start with Bernie Ecclestone. Then I put Enzo Ferrari and Ron Dennis from a design and sponsorship standpoint. Then you go into the drivers and the great drivers of the Senna's and the Schumacher's, the Hamilton or the Verstappen. Is any one of those so influential that you put a driver up there saying, “Without that driver, F1 isn't where it is.” Then a little bit on the money side, McKinsey and CVC coming in as money. Ross Brawn, designer of the double diffuser, which was innovative, and Adrian Newey, where he's taking design, Toto and Christian Horner as managers of the team and the way that F1 is now managed and then into the new era of the Sean Bratches, Chase Carey, Greg Maffei, David Hill from a media standpoint. And then the last one I'm going to ask you is Covid. So out of that whole list of everything that's made F1 what it is today. What's the one name that you would put as it relates to why F1 is where it is today?
Joshua Robinson: I think Jon and I would give the same answer here. And it's Bernie. You have to remember that when Bernie Ecclestone effectively took over F1, he was a team owner and he basically took his role as the junior team owner in that room to mean, “I'm actually gonna make a new way to run this circuit, run this road show more efficiently.” He said to the other team owners, “Listen, what I'll do is I'll organize the transport and the travel, and I'll negotiate with promoters, all for a very small percentage, 2% of gate receipts and everything else.” And he saw the opportunity where no others were even aware of it. He saw television as the primary revenue generator. He wrangled the promoters and the teams in a way that no one had done before. And frankly, no one had any interest in doing it. The other team owners were all kind of these boy racers who'd come out of post-World War II Britain and wanted to build fast cars and race them around the world. That was their main interest. Bernie's main interest was making money. He was a used car dealer who understood the logistical side, who understood that they needed to grow, and that you need attention at every layer of the sport to keep making money. So whether that was between team owners, between the promoters, between the broadcasters, he always had someone else lined up to drive the price north.
Willy Walker: Jon, do you agree with that?
Jonathan Clegg: Yeah, I think that's right. I think simply said, when you think about what F1 is today and what Formula 1 means and you think of the global roadshow that takes place in, like, the most glamorous spots in the world. That was Bernie's vision. Like what F1 has come to symbolize was Bernie's vision for the sport which was that it would be like I say, the most glamorous, dangerous, and technologically advanced sport possible, and through sheer force of will, most of the time, he made that happen.
Willy Walker: When Bernie tried to take F1 public in early 2000s, the value of it was $4 billion. What Morgan Stanley, I think you both reported on, was about the value that they were going to take public. Bernie's way of management, lack of transparency, and things of that nature made it so that the IPO didn't work. He then went and raised a bunch of debt, and the value would fall down accordingly. But Liberty bought the franchise for $4.4 billion, and it's now worth a minimum of $22 to $23 billion is what the quoted price is, and all rumors related to how much more it's worth. I guess my question to it is, it was this small niche business sport under Bernie's leadership, and no doubt it wouldn't exist today without all the things that he did. And yet, at the same time, I went rafting here in Idaho on Saturday, and I'm in the raft and the guide is asking me where we've been this summer. And I say that my girlfriend and I went to watch Monaco, and the kid almost fell out of the boat and he goes, “Oh my God.” And for like half an hour, he's talking about how much he loves F1. And I go, “When did you become an F1 fan?” And he goes, “Oh, Drive to Survive. I knew nothing about F1 until I watched Drive to Survive.” So I guess my question is, I get that it wouldn't be here without Bernie. But does the relevance of F1 as it relates to the overall knowledge of it, its size, and the impact of it has only come recently?
Joshua Robinson: Yes and no. There was a global, F1 sort of relevance peak in the 1990s following on from the Prost and Senna era before the Michael Schumacher prime. And at that point, it was wildly popular, almost literally everywhere but the United States. It was huge in Europe and enormous in Asia, something that I think we don't always grasp in Europe and North America. Because that was one of the huge drivers of F1 for a long period. But yes, you're right in saying that this new leap comes from the Liberty era. Bernie took F1 about as far as it could with his business chops and also his sometimes dubious business practices. The whole web of interconnected promoters and broadcasters and everything else was really only transparent inside Bernie's head, which is no way to run a modern business. As you rightly point out, when it comes time to attempt an IPO, none of that is possible to explain to investors. None of that is possible to unpack, so what the CVC era is true is really significant for cleaning up the business, streamlining a lot of processes, taking all of those responsibilities that Bernie had consolidated in his five foot two frame, and spreading them out to proper business departments, people who wrote things down on paper who didn't just operate on a wink and a handshake. And so once that business was made a true 21st-century business, it was possible for someone like Liberty to come in and take it to the next level. So those things had to happen sequentially. You couldn't have had Liberty or a company like it come in in the 1990s and take it over just because the business would have been too chaotic to do anything with at that stage.
Jonathan Clegg: Yeah, and to that point, even the remarkable success and transformation that F1 has undergone under Liberty. I don't think even Liberty envisaged this happening when they bought it. As you mentioned quite rightly, without “Drive to Survive” and COVID which made “Drive to Survive” this huge global hit. I don't think we'd be talking about F1 as a $25 billion enterprise.
Willy Walker: Yeah. So let's rewind because you spend a lot of the book, if you will, talking about the history of F1. And I think one of the very interesting things that you both point out is, as in the name of the actual league Formula One, the formula, the actual rules and regulations are in the title. And you make the point that the way to compete and win in Formula 1 is constant innovation. And that this sport is constantly reinventing itself. Unlike the rules of golf, as you point out, they were made back in the 1800's and have never changed. And there's still 18 holes and all that stuff. And you talk about tennis and it's very interesting how this sport seems to have this great premium on innovation and adaptation. And yet, at the same time, you also, throughout history see these teams that figure out how to innovate better than everyone else. They become the dominant force and then they go and change the rules so that competitive advantage doesn't exist anymore. Talk for a moment to either one of you about that because I found it to be incredible, particularly when we get into the computer era in 1992 and when Williams really brings in the first use of computers into the cars. But talk about that because it seems the moment that anyone gets a competitive advantage, they just go and take it away.
Jonathan Clegg: Yeah, that's right. The great irony of Formula 1 is as you mentioned, this is a sport that is literally named after the rule book. Formula 1, like you say, refers to the technical specifications the cars have to stick to. But success in the sport is basically all about breaking the rules or bending the rules to the furthest point that you're able to while still technically adhering to them. So this is a sport that is essentially about finding loopholes in the rulebook and then exploiting those to maximum advantage. And that has really been the history of F1. And the most successful teams in F1 have been the ones that have successfully navigated those gray areas in the rulebook. And a bunch of the people that you mentioned previously, Ross Brawn and Adrian Newey, and way back to Colin Chapman, who is the first of these innovative designers. These were men who were experts at spotting those loopholes and driving right through them. And that spirit of innovation but also of skirting the rules and really brushing up against the very edges of what's legal versus illegal. The whole sport is really imbued with that attitude that this is a sport about, like I say, trying to bend the rules as much as you possibly can without getting caught. And I think at various stages that has blown up in F1's face with some very terrible instances of cheating or spying, industrial espionage, teams crashing, making their drivers crash into the war 70 miles an hour on purpose. Sometimes that spirit has overstepped the mark. And F1 has paid the price. But also the success of the series is really in large part down to the fact that it fosters that spirit of innovation and pushing the rulebook. This, again, is also something that has attracted a bunch of the manufacturers who've come in and made these teams part of the reason that Ferrari, McLaren, Aston Martin, and those huge manufacturers are interested in being in F1 is because F1 really pushes right up against the very cutting edge of automotive design and engineering. And they're able to use some of those developments in their road cars, which is why these manufacturers are so interested in the sport. But yes, that spirit of innovation has existed in F1 right from the very beginning and is such a large part of its success. And even the success that we talk about in the Netflix era, I think it, like I said, is a very nimble, agile sport that has been able to respond to changes in the way that we consume sports over the past 50, 60, 70 years, in a way that many other sports haven't.
Willy Walker: You talk at the beginning of the book about the fact that the aerodynamics and the investment in the actual vehicles is now the name of the game, but there was a period of time where there was much less technology and much more focus on the actual drivers. And yet, if I think about the great drivers in F1, if you think about Senna really was the one who seemed to be the most gifted actual driver on a like-for-like car. When you think about someone like Schumacher and how well he did, the focus on tires and what they did with Bridgestone to make that car so fast. They then went and reverted away from it and obviously, both Senna and Schumacher had an extremely unfortunate end to their racing careers, one dying and the other one being put into a coma. But the point is that it seems you go on to Hamilton, and Hamilton seems to have a competitive advantage from the car. And when that gets changed, he backs off. And now you have Verstappen, who stepped in again and seems to have the car. One of the things that I find to be very confounding to me is that I don't want to jump all the way to the end. But as you talk that through, Jon, this leads to it as it relates to the actual drivers of the driver's capabilities. It would seem that Verstappen would be sitting in the catbird seat right now in the sense that Liberty doesn't seem concerned about one team having a dynasty. Throughout Bernie's ownership, you seem to say, “If somebody gets too far out ahead of everyone, I have to change the rules and make it a level playing field again.” Liberty doesn't seem to be saying that. And yet Max, when he went to Vegas, the world was his oyster. And he's the one who's squawking about the fact that he doesn't like the fact that it's become two primetime and for television versus all those other drivers who had to deal with the changing of the rulebooks. Talk for a moment about that, because I find it to be interesting that Verstappen seems to be the one pushing back on the new era when the playbook seems to be totally tilted towards him right now.
Joshua Robinson: There are a couple of things happening. One is, as we know in F1, nothing is forever. The rules are changing again for 2026. And it's unclear who's stolen a march on developing the next set of specs. Lewis Hamilton, for instance, has bet that it's going to be Ferrari by signing to move over there next year. Mercedes has promised that it's gonna be competitive again and is already showing signs of that in that direction. And Red Bull is Red Bull and has the Adrian Newey advantage. And as long as he sticks around and works on that 2026 car, you can bet they're going to be in the mix. But the other thing about Max is there is, I think, an understanding from Liberty that the Netflix era and that flood of new fans marked a reset in the history of F1. There were dynasties, and they're very happy to trade on that history and look at the Schumacher years and say, “This was one of the greats.” Senna and Posterior saying, “These are our heritage, but there's a recognition that you have to allow for new greatness so that in five, ten years, all these new fans can remember an era when one of these all-time greats was made.” And so if the sacrifice is a couple of years of predictable championships, Liberty and Stefano Domenicali, who is the current CEO of F1, are prepared to accept that. And what they’ll point out also is that the rest of the field is much closer than it's ever been. We recently had a qualifying session where I think the first ten cars were within a matter of tenths of a second. Those are the wins that Liberty is seeing now.
Willy Walker: And unlike Senna's Monaco 1m23.99s, which flabbergasted me, Jon, that there was absolutely no tape of it. You like to think about that. The greatest lap ever. And they don't even have a video of it.
Jonathan Clegg: I know it's one of those things that just gives it that even more of a mythic quality is the fact that we know that this was the greatest lap that ever happened around Monaco. And yet there's no footage of it. You see the Senna in the background of other camera trails, a different car. You can see Senna screaming around the corner and in the background. But yeah, that was Senna's famous lap around Monaco in 1988. But, to get back to your point about Max, even Bernie, who, as you say, didn't like Formula 1 to become formulaic, didn't like the same teams to win year after year even though he allowed Schumacher to win five in a row before he flipped the rules on Ferrari. Bernie's big fear to go back to the Williams situation that you referenced earlier. He was fine with one driver winning time at the time as long as the credit was given to the driver. His great fear was the idea that it became that the sport became all about the car and that the drivers didn't matter. And that's what Williams got very close to in the early 90s when they became the first team to really experiment with computers in the car. This was a time when computers were in pretty much every road car. But back then, computers were still big, bulky machines the size of a suitcase. And the idea of having one inside a Formula 1 racing car was completely fanciful. But Williams did figure out a way to get a very small computer in that car, and even though the computer itself was small, the impact it had on the performance of the car was astronomical. This was a system that enabled the car to differentiate its suspension as it went around each corner so that the car would remain exactly level, which improved its aerodynamic performance. That single innovation propelled Williams from far ahead of everyone else on the track. The seconds ahead per lap, which is in F1 terms, is completely crazy. And that was when Bernie really came in and jumped down hard and said, “We can't have computers driving the car.” Formula 1 can accept a certain level of dominance from one team or one driver, but it has to be the driver that's doing the thing, not a computer bolted onto the car, and overnight they outlawed computer-aided cars. The era of computer technology and F1 was essentially shut down right there and then and still hasn't been introduced even now, 20 years later.
Willy Walker: It's really quite something. It's unbelievable. The launch control that they put in, obviously, there are so many computers monitoring everything going on now. It was also interesting there, Jonathan, that you went from the focus on the computers and then they strip that out so then Ferrari turns to the tires. One of the things I thought was so interesting was the technology that went into the Bridgestone tires that made Ferrari so successful. Then the change for a safety standpoint after Senna dies, which supposedly made it so that they wanted them to have slower tires, to which Bridgestone says, “Hold on a second.” Why no, it was Goodyear. Excuse me, I got that wrong. Goodyear said, "Why would I be developing a tire that has a slogan behind it to make you slower?” And so Goodyear pulls out, and then Bridgestone steps in. Talk about that for a moment because I thought that was fascinating about the way they changed the rules to try and make it safer and, in the process, lost the biggest tire manufacturer in the world.
Joshua Robinson: This is one of the fundamental tensions at the heart of F1, which is selling. They don't talk about it, but they are trading on that illusion of danger, that threat that something could go very wrong. And it's one of the points that Bernie Ecclestone made in speaking to us was it's quite a callous point, but the idea that interest in F1 was never as high during his era as it was immediately after Senna’s death, that there's a morbid curiosity that drew people to the sport. Considering that in the back in the 70s, you had drivers dying every few weeks in fiery wrecks. The changes that they've made for safety are one of its great success stories. But that danger, that thrill of knowing that drivers are going right up against the edge of grip, potentially in a wall at every corner. There is something there.
Willy Walker: Yeah. You point out in the book that since Senna died, no Formula 1 driver has ever died since. So that's ‘94 to the current day. Am I right?
Joshua Robinson: Yeah. Jules Bianchi had a crash and then spent a long stretch in a coma. But they haven't had an on-track fatality since Senna.
Willy Walker: It's really great. And as you point out in the book, I think there were twenty-four F1 drivers who died in the first 15 years of the series, from ‘50 to ‘65. And I think I remember that. So to exactly your point, it was super dangerous at the beginning. And yet there is that sense that we watch because we've got that morbid curiosity, why people watch cage fighting, and at the same time, it's actually become a rather safe sport.
Joshua Robinson: Yeah. Completely.
Jonathan Clegg: That's right. And, I think as you mentioned, what's fascinating is that the slower tires introduced after Senna then being seized upon by Ferrari as the basis for their years of dominance is again, this is a really clear illustration of that quest for innovation and looking for loopholes around every corner. Because every scene was presented with the same problem that they had to change the tires. And then Bridgestone comes in as the F1's official tire supplier. After a couple of years, Goodyear returns, or Michelin returns rather, most of the field then joined Michelin. Ferrari decides to stick with Bridgestone and turns that relationship to its advantage. And like you say, Ferrari was the tire. Williams, it was the onboard computers. Pretty much every dynasty through F1 history can be explained by the fact that they have taken one component and really found a way to weaponize it in a way that the rest of the field has not caught up with. Right at the very beginning, Lotus, Colin Chapman was the first F1 designer who really appreciated the importance of aerodynamics. So he had this famous sort of ground effects car, which felt like it was stuck to the road so you could corner at extremely high speeds. Then you have Ron Dennis, who you mentioned earlier, the very famous McLaren team principal in the 1980s, the guy who oversaw Senna and Prost. He was the first guy who really recognized the value of sponsorship and how corporate sponsorship could sort of give a team the resources that it needed to make the absolute best possible car. Williams is the onboard computer. Ferrari then becomes a tire, and then we get back to Red Bull and again, Adrian Newey is the modern-day Colin Chapman, the guy who really understands modern aerodynamics better than anyone else. But again, that just shows which, as you mentioned, is one of the themes of the book. The theme of the book is that the spirit of innovation really has become so pervasive in F1 that even when you try and slow down the cars to prevent accidents, some teams will seize on it as a way to get ahead of the rest of the pack.
Willy Walker: You mentioned sponsorship. I want to talk for a moment about tobacco's role and then the change in sponsorship. Before I went to that, one of the things I was curious about was the Saudi investment in the Williams team, which was the first Middle Eastern investment in F1, and the only condition of that was that the drivers if they won, didn't drink champagne. I was just curious, is that why on the podium, they spray champagne rather than drinking champagne? I was just curious whether if you went back in the annals of F1 when those Williams drivers got up there instead of drinking, they started to spray. And that was the beginning of that ritual that happened in F1 subsequent to that Saudi investment.
Jonathan Clegg: I think the Williams guys didn't even spray the champagne. They wanted no part. They didn't even hold the champagne, didn't spray the champagne, certainly didn't drink it. They wanted no part of the champagne. I think the reason that they spray the champagne rather than drink it is that they are so exhausted and dehydrated after completing a race that if they next the champagne, they would be unable to walk off the podium. So, yeah, F1 has been a real innovator in so many ways, but certainly, in the realm of sponsorship, it really led the way in terms of recognizing the sponsorship value that huge TV audiences could bring. But also, like you say, in recognizing that places like the Middle East, which now has its fingers in almost every sport, F1 was decades ahead of soccer, which I guess is the other sport that has really been transformed by Middle Eastern investment recently. F1 was decades ahead of getting Saudi money in and recognizing that it provided a good platform for Saudi to advertise itself to the rest of the world.
Willy Walker: So you talk about that, and clearly, you both underpin in the book Bernie's focus, particularly in the latter years before it ended up getting sold.
Both CVC coming in and then Liberty, taking it over, that Bernie's real focus was to the east of Princes Gate, that if you talk to him about where's the future of F1, we're going east from here not west. Let's talk for two seconds about the failed entries into the US market. I thought one of the things that you both underscored, which I thought was so funny, was when the Phoenix F1 race took place and where it was. There were 15,000 people who showed up at the track to watch the F1 race on that Sunday, and there was an ostrich race on the outskirts of Phoenix, Arizona, that had 75,000 people show up to it in comparison. I don't know how you two found that data point, but I was sitting there just crying with laughter, sitting there saying 15,000 people watch F1 and 75,000 were on the outskirts watching an ostrich race. Talk for a moment about why it was so difficult for everyone to break into the U.S. under Bernie's ownership.
Joshua Robinson: Bernie will tell you that he blames the promoters. He thinks that if you can outsell an ostrich jamboree, then you really haven't done your job in advertising the race and getting people in because he would leave it up to them. But the thing is about the US, there was already a racing tradition that was tied to another brand of racing. And so if you're going to go into Detroit and places like Indianapolis, it is tough to unsee the existing culture there. It's also tough to convince them to follow this very European thing with only a handful of American drivers in its history. Of course, Andretti was a world champion in the 70s, but it still wasn't enough to really latch on, and they kept changing. Bernie would get frustrated with the promoters locally, and he would change. They went through, I think, 8 or 9 different venues for the US Grand Prix. But he eventually felt that the frustration wasn't worth it and pretty much gave up. There was a time, especially around the fiasco at Indianapolis. We mentioned tires before, but what happened was the Michelin tires were found to be unsafe, as this is Indianapolis 2007. The Michelin tires were deemed unsafe. Michelin couldn't get new tires in time for the race. And so what happened was, after a weekend of negotiation, on the first lap, nearly all of the field, all but six cars pulled into the pits because they had these unsafe tires that were likely to blow up or rip mid-race and put their drivers in danger. And you had a race with six cars going round and round on Bridgestone tires. And so that was almost the last straw. F1 came back for a little bit after that, but that was it in Bernie's mind. The US was done. He saw much more money, much more potential, much more advertising dollars, and TV revenue in Asia. That was where he was always happy to go. And he'd been working on the Middle East and even places like the Soviet Union since the 80s. Those are the places he thought he could go to do whatever he wanted. Bernie always said that he quite liked dealing with autocratic regimes because they just made it work. There was no question of having to please local officials or mayors, having to convince their potential voters that this was a good idea, “Go into an autocratic nation. Everything worked. Never mind the cost, locally to human rights or anything else.” That's what Bernie wanted.
Willy Walker: I thought it was interesting that you all pointed out that he turned down a meeting with Putin when they were talking about going to Sochi. I asked myself how many people actually turned down a meeting with Putin. He's like, “I'm not going to go negotiate against that guy because he's going to win. So send me a signed contract, and I'll go do it.” I thought that was a great anecdote in the book.
Joshua Robinson: Oh, I don't think so because he's going to win. I think just Bernie doesn't get out of bed unless everything is on his terms.
Willy Walker: The Middle Eastern influence with Saudi and then building that. You both write extensively about Bahrain and the building of the track in Bahrain. And then, obviously, the book ends in Abu Dhabi, which I want to save till the end. But I think that that's so fascinating. You couldn't have scripted it any better, but let's not jump ahead to Abu Dhabi too quickly. But it felt like Bernie was looking to the East, that he saw lots of dollars as far as sponsorship and things of that nature. But I guess it all plays into the teams and the audience the team wants to go after and then the manufacturers. And at the end of the day, we can't forget about the role the manufacturers have played. Ferrari is the only one who's been there from the very beginning. The only one who's been in every single F1 season. There was a time when there where Bernie was actually saying he didn't need them anymore, which I find to be quite incredible that there was ever a moment where he thought he didn't actually need them. But the GFC, the great financial crisis, really changed F1. Because there were all these automobile manufacturers who were going through such a tough time in 2008, 2009, and 2010, many of them pulled back, Renault pulled back, Honda pulled back, and Toyota pulled back. It really changed the way that the constructors were focused on F1, where they felt F1 went from being something that was super important to their brands and to their innovation to all of a sudden being a luxury that they could no longer afford as they were shutting down plants and pulling back. And now, all of a sudden, you have a complete food fight going on over constructors who want to get in, BMW wants to get back in, and Audi wants to get back in. Jonathan, talk for a moment there about the importance of, if you will, the big automobile manufacturers to F1. And are we now at a moment where back in the day, it was a nice luxury to have? Then it went to seemingly a liability. And today it seems to be once again a must-have for every major automobile manufacturer in the world.
Jonathan Clegg: Yeah, I think that's right. So I think the relationship that the big car manufacturers have had with F1 has changed a little bit over time. Right from the very beginning when F1 became what we sort of now think of today as F1, which was really set in the 1970s when it transformed into the kind of traveling global circus that it is today. Right from the beginning, the big car manufacturers wanted to become involved. And I think, in the early years, like you say, that whole idea of engineering and design developments from F1 finding their way into the road cars was actually true. They used Ferrari famously. Its Maranello headquarters used to have the F1 factory on one side of the street and the road car manufacturing factory on the other side of the street. And the ideas from the F1 side would filter across the street into the road cars, and I think that was true for these companies for a while. Now, the trouble is that when you start doing things like outlawing onboard computers, the design and development that's happening in F1 moves away from what's happening in the road cars. So I think in the late 1990s and early 2000, there was also a natural decoupling that happened where the R&D that was happening for F1 was no longer really finding its way into the road cars as easily. And then you get on top of that, the financial crisis that you mentioned, where F1 at that time teams were spending $250 million a year on financing these teams. And that then becomes a huge burden when you are unable to sell cars anymore. And you also have at that same period, there were, as I mentioned earlier, some of these very unsavory incidents happening, Spygate, industrial espionage, F1 become inextricably linked with this idea that everyone is cheating and stealing each other's ideas. Then following on from Spygate, this crash gate where Renault forces their driver to smash into the wall on purpose to help his teammate bring out a safety car and help his teammate win the race. So I think the combination of those things, road car design moving away from what F1 was doing, the financial crisis, and these incidents that tarnished the reputation of F1 globally made it very easy for manufacturers who have been involved in F1 for a long time to step away. We don't need this right now. F1 is not mission-critical to our business. We're going to step back and step away. Now, how F1 responded to that was to start focusing much more on installing cost caps, which had been mooted for a long time, but which the likes of Ferrari had always backed up against because, in Ferrari's idea, F1 needed to be at the very pinnacle, the very cutting edge of automotive engineering, and any cost cap that would stop them from pushing to the very limits of what they were able to do was not something they were interested in. The financial crisis and the fact that Honda and Toyota leave the sport persuaded F1 to take the issue of cost cap seriously. And over the past ten years, they have actually implemented a cost cap that sort of works. You still see some teams that seem to be able to bend the rules of the cost cap even and get away with it, but it basically works. It broadly works. And F1 teams now are much less expensive to run, relatively than they were in the early 2000s. The fact that the cost cap has happened at the same time that the sport has also undergone this huge global resurgence under Liberty. Again, it's now cheaper to become involved, and the sport is more popular than ever. So now all the car manufacturers want to come back in. So that's why the relationship between the car manufacturers and the sport has evolved a little bit over the last 20 years, where there was this period where they were less involved. It was too expensive. Costs were running out of control. Now, the cost cap and the fact that the sport is more popular than it's ever been means they all want to get back in. I can tell you there is a list of car manufacturers who are unable to get in but would dearly love to if the field expanded beyond ten teams.
Willy Walker: And one of the things that's important for people to keep in mind there is that in many, like in Monaco, there's no space for an 11th shed. So one of the big issues that F1 is facing now is, as they've grown, the number of races which Verstappen, amongst others, have said is too many and that they have to scale it back down. Sounds eerily similar to some major professional sports in the United States as far as the race of the players saying, “Hey, enough on adding two more games to the NFL season,” for example. But the other issue is that there is just a physical issue. Las Vegas was built with the ability to have 12 or 14 sheds down there on the paddock, and that would work. Whereas in places like Monaco, you literally can't fit it. It's just too tight. So that is one of the other things that they're struggling with right now they're thinking about expansion.
Joshua Robinson: I think there's also a feeling among the ten current teams that they're the ones who built the current boom. And why should anyone else who comes in to dilute their share in all of this by 9%, 10% just reap the benefits without having spent the past 5 or 10 years in the trenches with them?
Willy Walker: And isn't that the problem behind Andretti's request or desire to come in is Andretti thinks that he can buy in for 200 million bucks. And really, the value of the franchise right now is about a billion bucks a team. And so there's just a huge bid-ask spread between what Andretti and Ford think they can buy in for and what the going price of one of those sheds is right now. Is that about right, Jonathan?
Jonathan Clegg: Yeah. That's basically it. The other part of this that F1 is wrestling with as well is, and I'm sure, we're going to discuss Drive to Survive and how that works to transform F1. One of the great successes of Drive to Survive is that they've managed to make characters of all the teams and even the drivers who are right at the back of the grid great characters that people have known and have latched onto. And once you expand the cast of drivers, do you then begin to get people to care less about the guys far at the back, and then you're back to the problem that F1 had 15 years ago where people are very interested in the drivers at the front, but no one cares about the teams in the middle or the back. The great success of Drive to Survive is that they've made people care about the teams in the middle and the back, but if you keep expanding the number of teams, it's going to be harder and harder to do that.
Willy Walker: Talk for a moment about that because you have a data point in the book that underscores how Drive to Survive has changed, where the cameras on the live action go from following the front to following the middle. Talk about that for a second because it's a fascinating data point, I thought.
Joshua Robinson: Yeah. It used to be that if you were in the front, you commanded. I think it was more than a quarter of the total airtime of a Grand Prix. But because of Drive to Survive and creating that interest in the midfield and even the teams at the back, the classic example is Haas, a team that really just can't buy a good result right now but had Guenther Steiner, who became who's the team principal, this sweary Italian with an Austrian accent, who became a hero of the first 2 or 3 seasons of Drive to Survive, really raised that profile. And Haas became a Keystone Cops that entertained fans. And so people wanted to see them on the broadcast too. And then, if you look at the distribution of airtime by position now within F1 and the broadcast of the Grand Prix, you see it's much more evenly spread than that top-heavy broadcast we used to get. I remember growing up in Europe as a kid, you would never see a battle for 14th place on TV. You might hear about it. And then hear, when it happened. But we were still following Michael Schumacher going around in circles.
Willy Walker: Yeah, I think the numbers were, like, pretty Drive to Survive 35% of the coverage of it and it dropped down to 20% now. And so think about that 15% of the time is now on following number 12 because people know who Daniel Ricciardo is. As you both say, Daniel Ricciardo, no offense to him, but he's never been a terribly successful F1 driver. Yet I know his name right off the top of my head because he's a star of the series and is so fun to watch. And so the idea that the camera goes back to watch Daniel Ricciardo in 14th position in an F1 race would never happen until Drive to Survive. It makes him, to some degree, a household name.
Jonathan Clegg: Yeah. And then that has other knock-on effects on the sport, too, because now the cameras are showing more of the teams in the midfield. Well, that's great for them because they're getting much more exposure for their sponsors and so they can start charging more for sponsorships. There was a period, 15 years ago or so, when they used to think it was more valuable to be at the back than in the middle because at least if you're in the back, the camera has to show you're getting overtaken by the guy who's in the league and you're getting lapped. So it was better for the sponsors to be to sponsor a car that's right in the back, which actually is how Red Bull got in. Red Bull came into the sport trying to sponsor one of the teams in the back because they thought it was very subversive to do this thing where they would have the Red Bull name on the Samba team, which was like one of the worst teams back then. And yeah, because they would then be shown when they were getting lapped by Michael Schumacher or Lewis Hamilton, whoever it happened to be. Now, with a much more equitable distribution of airtime between the teams at the front and in the middle, at the back, everyone gets the chance to show their cars, their liveries, and their sponsors, and it works out better for everyone. And that really is the great secret of why Drive to Survive has been such a success is that every individual improvement also has all these knock-on effects that then spiral and sort of snowball into making this a big runaway hit.
Willy Walker: So double-click on that for a second, Jonathan, because I think it's super important. A lot of people sit there and say, “Oh, Liberty came in 2017 and they brought in new management, and they thought about it being a media product rather than a sports product, etc.” But the fact that Liberty brought in Chase Carey to run it. If you think about Bernie Ecclestone being a used car salesman, but all the connectivity he had and then all the other people who at various times have played a big role in F1, at F1 if you will, they have race car driving in their blood to some degree. They were a designer, they were on a team, they were in the pits, whatever the case is. And now, all of a sudden, Liberty comes in, and they pick a media executive who doesn't really know anything about F1. He doesn't know about cars, but he understands how to use new media and how to commercialize. He’d been at News Corp beforehand. I think about that decision that Maffei and Malone made to say, “We can go.” The current CEO of F1 came from Ferrari. He came from cars. He's the proper person for today. But that move in 2017 was wildly, A, I think, risky, and B, innovative. Talk about why Chase Carey turned out to be the perfect first CEO for Liberty.
Joshua Robinson: He had all that experience in reinventing other sports for broadcast and in combination with David Hill. One of the things that they had done at the Fox Sports regional networks was understanding that America is not a homogenous sports market and that if you live in Nebraska, number one sport to you might be in the fall watching your Nebraska Cornhuskers. And understanding that meant that it was just a different way of delivering a watchable product that spoke the language of the people who were watching it. And so there was that at the Fox Sports regional networks. But what they also changed was kind of the DNA itself of sports broadcasts. David Hill, in his list of achievements prior to F1, counts invented the score box in English soccer, for which he says he received death threats. Inventing the first down line that is now essential to any NFL broadcast. And at one point, he even tried highlighting the puck in hockey broadcasts. It didn't stick around.
Willy Walker: Is he the one who's responsible for their names when they're on the power play? The name of the person where they're touching the puck, and it goes. Because if he is, that one really bums me out. I wish they'd pull that one out. But to your point about following the puck, that was one technology that also didn't work that well.
Joshua Robinson: But so maybe you can understand why some people send him death threats over the other.
Willy Walker: Yeah, exactly.
Joshua Robinson: With that, they realized that they were speaking to the wrong audience, that aging petrolhead crowd that was following it because they were super into tire changes and things like that were just not working for F1 anymore. The broadcast was almost impenetrable. If you didn't know what you were watching or hadn't been watching since the beginning, you didn't really know who was where in the field. So what they did was, for instance, put the whole order of the cars on screen at all times. It seems basic, but it changes the way you watch it completely. You now see where those battles are. You see the gaps between the cars. He also very importantly realized, “Hey, these men were risking their lives every other Sunday. Are heroes. Why can't we see their faces?” So understanding that these guys were the gladiators in their arena and that they needed to be characters. Netflix didn't invent making F1 drivers into popular heroes. This was part of the F1 philosophy, under the Liberty, to expand these characters and make sure that they didn't have their helmets on unless absolutely necessary. So as soon as they were out of the car, Liberty people would tell them, take off your helmet. We want to see your face. We want to see your Hollywood good looks, and we want to make sure that fans know what you look like so that they can build this human connection with them. All of these little things that are broadcast techniques, not precisely sports techniques, are what changed the feel and vibe of watching a Grand Prix.
Jonathan Clegg: Yeah, it's funny because actually, probably Bernie Ecclestone's biggest accomplishment was recognizing that when he took over F1, he wasn't taking over a sport, he was taking over a television product. And that was his great insight and why he was able to turbocharge F1's fortunes. With Liberty, what they got is a company that knew what to do with the content that F1 was producing, and they really revolutionized what they were doing with that content.
Willy Walker: Yeah. And though the one that I thought was fascinating was when they started to put the sound between the pit crew and the drivers out, that was previously that special sauce. You don't let them understand what the pit crew is saying to the driver during it. And now we all think of that as the narrative of the race is what's going on and push and keep going. And so I thought that was another one that they pulled out that seemed somewhat heretical to Bernie, saying, “How could they possibly let that out there?” And now we all view that as the narrative of the race.
Jonathan Clegg: That's right. The whole paddock was an inner sanctum as far as Bernie was concerned. That cameras, fans, and visitors were not allowed in that was his sacrosanct place for the teams to work on that cause in secrecy. Liberty blew that wide open. They had one of their first ideas to get a mini train running through the panic that fans would like on the big Hollywood studio tours. They wanted to get a little train that would go through the paddock and take fans in and see what was happening; they had no interest in walling off what was happening behind that. The fact that they have opened all that up, and we've been able to see all the drama that happens inside the garages and in the paddock during races, is a large reason why the sport has found so many new viewers.
Joshua Robinson: Right. And so that's not a chicken or the egg thing with Netflix. That was Netflix comes out of that thinking, not the other way around.
Willy Walker: Yeah. No, I think that's a super important point to keep in mind. I did put forth this. We're talking about Netflix. Whether without COVID or whether it ever catches fire to the degree that it does. And I think it's pretty clear to say that they just had impeccable timing or luck, just like the Michael Jordan documentary, we were all locked down and that was all we were watching. And all of a sudden, people do watch. I didn't know Max Verstappen's name before Drive to Survive came out. So that says something. A couple of quick things as we wind down. One, I said we were going to talk about Abu Dhabi. I thought it was very humorous that you pulled out the quote from Toto, who was giving that speech at some Ernst and Young event, where he said, “There are three things you don't talk about Covid, Trump, and Abu Dhabi 2021.” But the ending of Abu Dhabi 2021, that race, was literally everything coming together. And I guess my question to the two of you is this, does it ever get any better? Like, if I'm Greg Maffei, I sit there, and I say, “We've got Drive to Survive. We put in all these different things. We've got viewership up across the globe, and then we get this spectacle at the final that has more eyeballs on it than ever before.” Is it ever going to get back to that? And I think you articulate in the book that it has continued to grow subsequently. But if I were the owner, I'd sit there and say, “Did I just hit peak viewership and peak drama around this? And is now the time for me to monetize this?”
Joshua Robinson: As you rightly point out, that was really everything coming together. Abu Dhabi ‘21 is not that race is not that spectacle. Unless Liberty has brought in the race radios and the communications between the race director and the pit wall, we don't have the classics. No, Michael, this is so not right. We don't have any of that without Liberty deciding long before, it could have predicted that the viewers would want to hear this. Two, most of the conversations between the pit wall and the race director used to be quite dull. And suddenly, here we are in Abu Dhabi, listening to the team principal actually lobbying the race director to interpret the rules in a different way and lobbying for their guy effectively to win the race, which is a crazy situation that calls to mind soccer players crowding around a referee never changing his mind of course. Except this time, it worked.
Willy Walker: It worked and Michael Massey lost his job.
Joshua Robinson: Exactly. I don't think we can predict seeing that kind of perfect storm again. But you couldn't have predicted it the first time, either. So all the conditions remain in place for craziness to happen. And that's what Liberty is betting on. And it's not so much the idea that there is one peak, that there was one moment, but their bet that they've created the conditions for these moments to happen on a semi-regular basis. That everything is there and that a potential investor who might take it off their hands one day sees that and wants to also bet on that succession of moments.
Willy Walker: Yeah. So my final question is this, and it has two parts to it. The first one is your next co-authored book on LIV Golf. And in answering that question, do the Saudis end up buying F1?
Jonathan Clegg: So I'm not going to be on LIV Golf. Although we have followed that saga closely. But yes, I think it seems there's still a good chance. We know Saudi Arabia was interested in buying F1. We know that they haven't stopped investing in sports. They are currently in the process of taking over professional boxing. As you mentioned, they've already got golf. They're involved in all soccer teams. They are going to have the soccer World Cup in ‘34. I don't know. Whether they end up buying F1, they are already very much invested in F1. Aramco is the main sponsor for F1. So I don't know that they will necessarily go through with buying the series. But certainly, they're going to remain heavily invested in it. And were they to buy it, it would come as no surprise.
Willy Walker: So it's clear you guys aren't going to write on LIV Golf. So then maybe my question to you after Jonathan said that is, what's the next book? What's the next piece of sports history, given your three books and how riveting the three of them are that we can think the two of you are going to dive in on?
Joshua Robinson: We're still in the process of working that out, but we'll let you know when we have it because we'd love to do this again.
Willy Walker: I am super appreciative of both of your time. The book is fantastic. It really is a fantastic read for anyone who's listening to this webcast. Go buy it. I've covered the surface of it, but there is some really incredible data in there. And the history and the way you put it all together is fantastically done. So, Josh and Jonathan, thank you so much for taking the time and everyone for joining us this week on the Walker webcast. Thank you so much, and we'll see you again next week.
Joshua Robinson: Thanks for having me.
Willy Walker: Thank you both very much. Really appreciate it.
Jonathan Clegg: Thank you.
Willy Walker: Have a great one.
Jonathan Clegg: Bye.
