Niki Lauda

Formula One's New Formula

  • Why it matters

    Why it matters

    The Europe-centered racing business could make inroads in the U.S. market under its new leadership.

  • Facts

    Facts

    • Formula One is an open-wheel racing car competition which generates an annual turnover of almost $2 billion.
    • American mass media company Liberty Media bought Formula One in 2016 for $4.4 billion, and has changed some of its rules for the 2017 season.
    • German racing team Mercedes is one of three major contenders for this year’s title.
  • Audio

    Audio

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Niki Lauda presents new book
Racing legend Nikki Lauda sees a bright fast future ahead for F1. Source: Picture alliance

Niki Lauda, non-executive chairman of the Mercedes Formula One racing team, told Handelsblatt that he backs the strategy of new F1 owner Liberty Media.

Mr. Lauda said that the American mass media company, led by John Malone, is on the right track to restore the sport’s former glory in Europe and potentially break into the U.S. market.

“We have to make the sport more attractive so people actually come to the races or watch them on television,” said Mr. Lauda, a three-time former Formula One world champion. “It’s unarguable that it’s not appealing for viewers if we just drive in circles for two hours,” he said.

Mr. Lauda, who drove for both Mercedes and Ferrari during his career, said Liberty Media wanted to make the races a more interesting spectacle, and he agreed with that strategy.

“One thing already worked out [which] is that we made the cars more aggressive, and that’s gone down well,” he said.

Formula One, the largely European dominated racing sport, has experienced its biggest shakeup yet when U.S. cable TV giant Liberty Media took over the business with annual turnover of nearly $2 billion last year.

This year’s season will be the first one under new ownership, and start with the Grand Prix of Melbourne, Australia on March 26.

Mr. Lauda said under this season’s new rules, Formula-One cars will have wider tires, which allows drivers to take curves at higher speed. That means more risk, but also more room for race time improvements. “Those who can handle that risk will win races,” he said.

New rules have the potential to shake up Mercedes’ recent dominance of motor racing after the German team won the last three world championships.

Changes in the cars’ aerodynamics make them 4 seconds faster per lap too, according to Mr. Lauda.

The new rules have the potential to shake up Mercedes’ recent dominance of motor racing after the German team won the last three world championships.

Mr. Lauda, who owns a 10-percent stake in the team, said it’s hard to guess how Mercedes will compare to its biggest rivals, Ferrari and Red Bull, this season.

“Mercedes cars are incredibly efficient in their aerodynamics and produce good downforce,” Mr. Lauda said, adding that Ferrari had managed to direct more air under the car and thus create suction, while Red Bull had put a hole in the tip of the car to achieve more downforce. “Every engineer is currently thinking about how to best deal with the new rules and take advantage of grey areas. Everyone’s trying to find their own way, which creates more suspense than in previous years,” he said.

Besides changing the rules for cars, Liberty Media also announced changes to the F1 marketing strategy and some smaller changes will soon take effect like bringing race track visitors closer to the cars and drivers. “They shouldn’t just be sitting up there and eating,” Mr. Lauda said.

But bigger changes, such as adding races in the United States, possibly in Las Vegas or Los Angeles, will take several years to realize because the contracts currently in place with TV stations and event organizers prevent such possibilities for the immediate future, the former driver said.

Mr. Lauda also said that the new owner has reiterated its commitment to Formula One racing in Europe. “Liberty Media asked itself what the Formula One is and how it gained its popularity. The answer is that Formula One gained a large chunk of its popularity in Europe,” he told Handelsblatt. “That’s why the new owner has come out in favor of the traditional races in Europe.”

In return, the Chinese Grand Prix in Shanghai might be cancelled, he said. “Liberty Media is right in recognizing that it doesn’t make any sense to drive somewhere that doesn’t attract any visitors because, one, there’s no interest, and two, the track is in the middle of nowhere,” he added.

Mr. Lauda said race teams received an offer by Liberty Media to buy shares in Formula One, confirming recent rumors about a similar option for Ferrari. “As far as I know there is an offer on the table that would give the teams a stake in the Formula One,” he said, adding that each team would have to decide whether that makes sense for them. “We have to check what say we would get with the share we would buy. But there haven’t been any details on that yet. We have to wait on that,” he said. The offer will not expire, according to Mr. Lauda.

The former driver said that he could see Formula One going electric in the distant future. “The manufacturers are in a race to e-mobility,” he said. Carmakers like Mercedes or Ferrari have a vested interest in combining racing with e-mobility, he added.

Mr. Lauda said for now, Mercedes’ strategy is based on hybrid engines. “We’ll drive with hybrid engines at Mercedes til 2020, and that’s a perfect fit. It’ll be a pretty similar concept up to 2025 too, a hybrid engine with maybe two turbochargers to make more noise,” he said.

Whether the team will switch to pure e-cars after that depends on whether e-mobility makes credible inroads in the automotive industry, he said, adding that the characteristic howling of race car engines could even be added as a feature in electric cars.

“I could imagine Formula One going electric. But that won’t happen in my lifetime,” Mr. Lauda said.

 

Hans-Peter Siebenhaar is Handelsblatt’s correspondent in Vienna and specializes in media and telecommunications coverage. Roman Tyborski is a trainee with Handelsblatt. To contact the authors: siebenhaar@handelsblatt.com; r.tyborski@vhb.de

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