WHO WILL FINALLY MINE FORMULA ONE’S DATA ELDORADO?

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Is it possible that billionaire Bernie Ecclestone, the man whose drive & nous has taken Formula 1 to the top of the global sports business table, simply does not dream “big enough” any more? Somebody out there thinks so. James Murdoch (News International) and John Elkann (Fiat SpA), for example, reckon the business would do better in their hands. They want to buy it from him.

And that, folks, is an extraordinarily big idea. Firstly, because there is nothing ordinary about Formula 1 and secondly, because such a project would likely involve a fusion of business, technology and media such as has never been conceived. I happen to think that those who limit their concerns to the likely management of free-to-air TV rights are not seeing the half of it.

Bernie Ecclestone, last of the great promoters [wiki]

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Remember Krypton in a jar …

If I could have commissioned an illustration for this post, I would have borrowed from the Superman mythology of 1950s comics, with my Formula 1 race shown taking place along the streets of the city of Krypton, a city miniaturised by a lone genius and destined to live on for his amusement, sealed in a glass jar.

Like the stylized “retro” dream-scape of the comic book city, Formula 1, with its unequal parts of business, sport, gladiatorial battle and war game, changes only on the outside. Inside “the bottle”, the real thing remains a bonsai miracle, a tight-knit, self-contained community of a few hundred of the most highly trained, most well-paid, and competitive individuals on this or any other planet. The rest of us? We sit and watch.

The “special ones”

Over the years, this tiny group of engineers, managers, promoters, hustlers and drivers, has networked with the most influential capital funds and brands to generate a media halo that encircles the globe many times over and now commands audiences some say are without parallel in sport for their number and variety.

It is down to a few unique characteristics of the sport:

• Simplicity: The racing itself is a closed shop, each team with just 2 cars & drivers.
• Control: The action takes place on physical circuits where every square inch and data point is within the strict control of the commercial owner.
• Network: Each team represents a hub of unique commercial interests and brands. Together these companies represent a very select rich list.
• Technology: The best and the brightest in aerodynamics, engineering and data management are in the village.

A grand prix of data points

Those are factors that make for a unique data universe in which every aspect of every moment of every race of the Formula 1 character is represented by a data point. And every movement experienced by every key component in every vehicle as well as the response of each driver to each of these movements are more data points. 

The enthusiasts travel track-side in their hundreds of thousands while for the billion-strong majority, F1 is a television experience. But for a few geeks in the paddock and those linked to their servers from the teams’ development factories in the UK, Austria and Italy, the race is a Tron-like virtual contest, in which they can intervene at will on a variety of variables controlling key areas of the vehicle behaviour (engine, aero and driveability settings).

For every Grand Prix TV extravaganza a parallel race is already taking place; that contest is one made up of data. How to make such data come alive and monetise the process is the stuff of interactive media and gaming dreams.

Getting to know us

And that’s the half of it, the sporting half. The other, business marketing half, is the data that we represent, the billions who current follow the sport anonymously and that the investors and sponsors want to make it their business to get to know more personally. And they want to do it before all our consumer relationships become embedded with social networks or other new layers of mediation beyond their control.

For a sports business showcasing the wares of the world’s biggest automakers the years beyond “peak oil” loom ever larger. The octogenarian Bernie Ecclestone is unlikely to be too fussed by a future he will never see. But the young heirs of a struggling behemoth like Fiat SpA can’t afford to be so sanguine. Just as they are unsentimental enough to consider moving the HQ of the very Italian Fiat away from the brittle homeland and to the US, the Elkanns are looking to future-proof their empire by securing a stake in the digital future.

Their short cut, thanks to their ownership of Ferrari, is Formula 1 — the world’s most sophisticated sport with the least sophisticated eCRM or social networking infrastructure. Indeed a veritable green-field site when it comes to contemporary digital business.

What happens next?

Bernie Ecclestone’s recent track record has been mixed. The sport is living through a surge of popularity largely thanks to his masterful management of the politics of the business and its expansion into emerging territories in the Middle East and the Far East. No doubt more success will follow as India and Russia are included and South America’s confidence grows. But his adoption of digital broadcasting years back was less successful and it was the cost incurred at the time which led him to sell part-control of the sport.

Can an octogenarian autocrat without obvious heirs effectively usher in the next phase of development of the business of the sport. Can he conquer his digital doubts? I suspect he neither cares to worry about these issues nor does he need to. His concerns, whatever they might be, are likely more pragmatic and immediate. But the potential is so vast, I cannot believe his control of the business can be guaranteed for long. There is just too much digital gold in these hills for him to hold back a new generation wanting a slice of Formula 1’s virtual Eldorado.

There are a billion personal relationships to be made, the integration with gaming to be explored, the likely management of direct broadcast through personalised social media pages to help develop and cement relationships for sponsors and investors around the world. The sky, at least with a small “s”, is the limit. I have no personal animus against News International or the Elkanns for that matter. But whoever finally takes this bull by the horns … is in for a helluva ride.

PS: News International’s Wall Street Journal has just launched WSJ SafeHouse, a proprietary service for wannabe leakers. So disgruntled F1 insiders who want to spill the beans will now know precisely where to go …

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* Related: What happens when Cable TV is just another app?