In these turbulent times we are living through with the closure of stadiums, circuits, pavilions, the postponements or outright cancellations of major sporting events such as MotoGP and F1 World Cup races, or the postponement or possible cancellation of sports leagues, European Championships or even Olympic Games, it is time for reflection.
It is precisely in this situation that we can appreciate in all its rawness (we remember Santa Barbara when it thunders), the immense disaster for the economy and the improvement of people's lives, the loss of a Formula 1 Grand Prix, as recently happened to the opening race of the championship in Australia and to the Barcelona race that would have been held in just a month and a half.
The virus will show in a dramatic way how fatal the loss of this type of event is and will highlight the mistakes in terms of communication that have been made in Formula 1, both by the promoter Liberty, the International Automobile Federation, as well as the governments of Barcelona City Council and the Generalitat de Catalunya.
I will try to summarise the main areas where I believe public perception would be very different, had there been good leadership in the discourse and narrative of the discourse.
Is a Formula 1 Grand Prix profitable?
Well, like everything else in life, it depends on how you analyse it.
It depends on how the accounts are done and above all on the proposed objectives. An extreme case could be the Bahrain Grand Prix. We are talking about an event that is an absolute economic ruin, if we make an exclusive balance between the costs of the 'hosting fee' to Liberty (F1 promoter) and the costs of construction and maintenance of the circuit, with respect to what is earned from ticket sales and hospitality services.
However, the Bahraini royal family is more than happy with the investment made so far and in fact, they describe it as one of the wisest and most far-reaching decisions made in the history of the small Middle Eastern kingdom.
Formula 1 has undoubtedly played a key role in placing the word 'Bahrain' on the world map, and has been essential in getting ahead of other enclaves in the region such as Saudi Arabia, Qatar, Dubai and Abu Dhabi, thus making Bahrain an interesting place for foreign investment compared to its powerful neighbours. As a result of the relations woven in the heat of Formula 1, Bahrain's sovereign wealth fund has also developed an interesting investment activity at a global level, standing out among other things for being the majority shareholder of McLaren.
In my opinion, the promoters of Formula 1 in Barcelona have failed to communicate to the public the benefits for Catalonia in general, and Barcelona in particular, of hosting a world-class event such as a Formula 1 Grand Prix.
It is not a matter of issuing a press release late and badly, saying that Circuit de Barcelona-Catalunya generates an annual impact of 340 million euros and supports 3,000 direct and indirect jobs. It is no use, either, to say when the fire is raging that Formula 1 alone generates 163 million euros for both the city and the region. But it is not the communication department of Circuit de Barcelona/Catalunya that is to blame for this situation, but the governments responsible for the investment necessary to have a date in the annual F1 calendar.
If you want peace, prepare for war, as Julius Caesar said. It is a matter of continually educating public opinion, of having a solid presence in debates in the mainstream media, of demonstrating not only with grandiose figures, but with intelligent communication techniques, of showing public opinion that without Formula 1, for example, the annual surplus of around 20 million euros in VAT revenue would never be collected, which the public coffers would never smell if the event did not take place.
The value of the 'City/Country Brand'.
But there is much more. Although this excess VAT alone would make the Spanish Grand Prix profitable, the Barcelona race, for historical reasons as our country is the sixth in the world with the most F1 races held in history, pays a fee of just 25 million euros for the rights to the event. This may seem a lot at first glance, but it really is a gift when you see that the last countries to join the club, such as Azerbaijan, Russia and Vietnam, pay a fee of around 70 million euros. And be aware that there are countries like Saudi Arabia that would be willing to pay fees in excess of 100 million euros, but for the moment they cannot enter this select club because Bahrain and Abu Dhabi have already overtaken them in that part of the world and for the moment there is no room for them.
As is so often the case, things will only be valued when you don't have them. The fact that for one week the word 'Barcelona' is the focus of world attention for 600 million people, as well as for many multinational companies, is of extraordinary value. Singapore can well attest to this, which, despite having to bear some of the highest organisational costs in the calendar, is gaining points on the global investment map every year over its neighbour and rival Hong Kong,
Just as sponsorship requires an activation budget to exponentially multiply its return, public investment must be equipped with a powerful communication plan that demonstrates on a daily basis the undoubted benefits of the investment of taxpayers' money. At the end of the day, this is what it is all about: demonstrating that it is a good investment and not a dispensable expense. A certain section of public opinion needs to be made to understand that, if you want money for quality public services, you need to allow economic activity to flourish and the revenue subsequently generated to fund those services.
Is Formula 1 a sustainable proposition in this day and age?
Here we see another glaring failure to communicate the benefits of Formula 1, but this time the culprits in my view are the car brands, the organisers and especially the International Automobile Federation (FIA).
Formula E with electric-powered single-seaters is by no means a more sustainable product than Formula 1 at the moment (we will see in the future). They use batteries with a high level of toxicity, they move their material with a carbon footprint comparable to Formula 1 and even their batteries are recharged in the back room with diesel generators.
Nothing to object to, however. On the contrary, Formula E is a much needed championship and its creator and director, Alejandro Agag, has proven to be a brilliant manager and more importantly, a great communicator in conveying the idea that they are the future, that they are more sustainable than Formula 1, that they are the 'green alternative' to Formula 1.
And while the benefits of one model over the other may be debatable, what is undeniable is that Formula E is leading a communications battle that Formula 1 is losing not because it is actually worse, but because of its virtual incomparability in the factual narrative.
Formula 1's problem in communicating the benefits of its R&D in terms of sustainability and safety contributions to society, however, is not a new problem, but arguably a chronic one that it has suffered from since time immemorial.
Formula 1, in fact, is today an absolute technological prodigy. Since 2014, with its current hybrid engines, it has managed to surpass the 50% thermal efficiency barrier more than three years ago. This technological feat forces the 100% electric propulsion, both battery and hydrogen, to improve its standards and all this technical 'competition' outside the circuits, only serves to ensure that our society has increasingly efficient and therefore more sustainable mobility models.
The contribution, however, is not limited to the spectacular improvement experienced by the internal combustion engine and its subsequent transfer to road cars. Electric cars themselves, which need the lightest possible platforms to compensate for their weight handicap, also benefit from the R&D of decades of work in Formula 1, in materials such as carbon fibre, titanium and special steels, which make their use much more common and affordable today.
The same applies to F1's leadership in energy recovery systems through braking and heat production, both of which are key elements in extending the range of batteries or fuel cells in electric cars.
The invisible technological legacy of Formula 1.
What can we also say about the advances in simulation and data acquisition technology, where so much has been achieved thanks to the enormous investments made by the F1 teams in this area. Thanks to this effort on the part of these constructors, the physical testing of the cars has now been reduced by a spectacular proportion and as a consequence, there have been enormous savings in resources, less waste of costly materials or personnel travel, etc.
And last but not least, although outside the realm of strict sustainability, Formula 1's contribution to safety is undoubtedly incomparably greater than any other sport or spectacle on a global scale. Thanks, for example, to R&D in fire and accident protection for drivers, the security forces and fire brigades now have material at their disposal that not only protects them much better, but also allows them to carry out their duties much better, thanks to its light weight. The same applies to the advances in active and passive safety in the vehicles we see on our roads today, which owe so much to motor racing in general and Formula 1 in particular. For example, advances such as disc brakes, intelligent suspensions, abs, the performance of today's tyres, driving assistance systems and many other innovations that are beneficial to our society have gone virtually unnoticed by a large part of public opinion as a result of poor or non-existent message delivery.
As the saying goes, it's never too late if it's too late. Federations, developers and builders have a very important subject: It is called 'Communication'.
Pablo de Villota
Director of Sports & Entertainment at Proa Comunicación