F1 Business Diary 2018: The Chinese Grand Prix

Red Bull’s Daniel Ricciardo meanders through the field to bring Ferrari’s early-season dominance to an end as Liberty Media sets wheels in motion for a permanent home in China.

F1 Business Diary 2018: The Chinese Grand Prix

Daniel Ricciardo surged to a sensational victory with a breath-taking drive in the Chinese Grand Prix on Sunday, meandering his way through the field from sixth on the grid to bring Sebastian Vettel’s early season dominance to an end.

Much of the pre-race chatter had been led by talk of a turning tide, as Ferrari once again put Mercedes to the sword in qualifying to claim a second consecutive pole position. It was Red Bull, however, who emerged from the shadows to turn what many expected to be a two-horse race this season into a three-way battle.

“It was crazy, a lot of fun,” admitted Ricciardo, who has garnered a reputation for his opportunism and aggression, and made his move during the last 20 laps of the race to pick off teammate Max Verstappen, before making his way past Kimi Raikkonen, Lewis Hamilton, Vettel and finally Valtteri Bottas.

For his part, reigning world champion Hamilton finished a frustrating fifth as his struggles to rediscover last year’s form continued. The Briton conceded that “I was in no man’s land today,” while concerns over Mercedes continue to grow as they found themselves out-paced for the second race in a row.

With Mercedes seemingly flagging and Ferrari flirting with a new era of dominance, Red Bull’s assault on the championship in Shanghai will come as a welcome addition for a series that has failed to deliver on unpredictability in recent years. Indeed, the Chinese Grand Prix has blown the 2018 campaign wide open, and might be looked back on as the race that sparked this season into life.

Open for business in China

Formula One looks set to ramp up its efforts in China by opening an office in the country.

The series’ Chinese venture will have its own marketing, licensing and media rights arms dedicated to growing the sport in what Liberty still sees as a largely untapped market, that only got its first grand prix back in 2004.

“What we will do is effectively set up a similar structure to what we have in London,” said Formula One’s commercial chief Sean Bratches, speaking to the Reuters news agency. “With a head of marketing, a head of licensing, a head of media rights, a head of sponsorship, a head of digital, and really activate the brand here like its own entity.”

Reuters added that Liberty is talking to potential local partners including Inter Milan owner Suning and La Liga rights holder DDMC to form a joint venture that would help manage business development in China.

Formula One recently announced fresh television and digital broadcasting deals with state network CCTV and Tencent, but it would appear that the effort to reach more Chinese fans doesn’t end there. Bratches admitted that he had spent the last few weeks in Shanghai and Beijing talking to “a number of entities”, and added that China remains one of the series’ biggest target markets.

“What we will be doing for the years to come in the rest of the world is developing the brand, developing the sport,” he said. “But we think there's opportunities in China to develop another grand prix, driver development schools, certainly digital."

Formula One has identified room for further growth in the Chinese market

F1 TV to be switched on in May

After a series of setbacks, Formula One has confirmed that its F1 TV over-the-top (OTT) digital broadcast service will finally be launched ahead of the Spanish Grand Prix in May.

Since unveiling the new platform at the end of February, plans to roll out the product in certain countries have regularly been put on hold in order to iron out any last-minute imperfections.

Formula One said that it would continue to run a closed beta version of the service to a small portion of fans for viewing and testing during the recent Chinese Grand Prix and the upcoming race in Azerbaijan, before taking it live in Spain.

Further details about the platform have also been released, with NBC Sports’ Playmaker Media and iStreamPlanet set to act as systems integrator and video streaming partner respectively.

Initially available on desktop, F1 TV will have two service levels at two different price points. F1 TV Pro will feature live races and all 20 driver cameras, while F1 TV Access will serve as a less expensive, non-subscription tier, providing live race timing data and radio broadcasts, as well as extended highlights of each session from the race weekend.

Formula One’s director of digital and new business, Frank Arthofer, said that F1 TV represented a “tremendous opportunity”, and moved to assure fans of “an easy to use streaming experience, rich with live and on-demand content”.

Liberty gets serious about engine regulations

Having set out its proposals for the future of Formula One at the beginning of this month, Liberty Media has now agreed on a May deadline for confirmation of the 2021 engine regulations.

Initial plans for the sport’s engines from 2021 were revealed in October last year, but an agreement is still to be reached, and the situation remains in the balance after a number of teams complained that Liberty’s plans for a new engine design would require a significant financial investment. 

The deadline was revealed by Ferrari boss Maurizio Arrivabene, who added that his team, Mercedes, Renault and Honda have all written to Formula One’s bosses to outline their position on the next power unit regulation.   

Ferrari have been the most vocal opponents to Liberty’s proposals for 2021 - namely that which aims to level the financial playing field among teams - and the Italian outfit’s chief executive Sergio Marchionne confirmed at the weekend that the threat of Ferrari leaving the series remains on the table.

“If there are any proposals that distort Formula, I think Ferrari will pull out,” said Marchionne. “We are working with Liberty Media to find acceptable solutions. We had a proposal from Liberty ten days ago; we expect to know the details and then we will make choices in the interest of Ferrari. We could look for alternative solutions, it’s not a threat, but it does not mean we stop shopping.”

Making data count

When Liberty took over at the start of last year, the company vowed to carry out more work to understand how Formula One fans engage with the sport.

Part of that effort involved a crowd-tracking project, which was trialled at last year’s US Grand Prix in Austin, and has now been expanded to include eight races this season.

The data is gathered by placing battery-powered sensors around the circuit to pick up anonymised movements of anyone using a wireless-enabled device. The figures gathered from last year’s event in the States revealed missed commercial opportunities in terms of the positioning and size of retail outlets, and also showed that more than half of all visitors didn’t venture beyond one zone.

“This has huge implications for us as a rights holder,” said Matt Roberts, Formula One’s global research director, speaking at SportsPro Live. “We’re [now] bringing the merchandise to people rather than assume they can find our one megastore in one area around the circuit.”