Predicting the Future of Formula 1: The Current State of the Sport and Impact It Might Have on Its Future - Case Study Example

PREDICTING THE FUTURE OF FORMULA ONE: A REPORT ON THE CURRENT OF THE SPORT AND THE IMPACT IT MIGHT HAVE ON IT’S FUTURE University Affiliation: Date: Table of Contents Sub-title Page No. Executive Summary…………………………………………………………... 3 Introduction…………………………………………………………………… 4 Examination and Analysis of Issues…………………………………………. . 4 Critical Uncertainties Map……………………………………………………. 6 Recommendations to the Best and Worst Scenarios………………………… 7 Conclusion…………………………………………………………………… 9 Bibliography………………………………………………………………….. 10 Executive summary Formula one as a world sport has won the hearts of many over the years since it was started. However, the current situation in the championship seems to indicate a dark future. Issues of democracy, inequality, bribery and corruption, just to mention a few, are slowly poisoning and paralyzing the sport. In the next ten years, formula one might never be what many would wish it to be. There is the fear that sponsors and investors of the teams might vanish. There is also the possibility of the famous sport losing out on its fan-base. The Federation of International Automobile, which is the overall governing body of the sport, should move in to address these issues, so as to avoid the worst scenario. Introduction Formula one refers to a racing sport sanctioned and managed by the Federation of International Automobile. It is among the most famous world sports alongside football, rugby and cricket. The championship is the highest class of single-sit auto racing, whose season consists of a series of races known as grand prix (FIA, Nd, p. 1). The races are held throughout the world in different countries on purpose-built circuits and roads. It is worth mentioning that the cars involved in the championship, known as formula one car, are the fastest racing motor vehicles. Normally, the championship is composed of at least twenty teams, with various racing drivers participating on behalf of each team. The Federation of International Automobiles is the governing body of formula one sport, currently under the leadership and direction of Bernie Ecclestone, who is also the commercial rights holder. The purpose of this report is to examine and analyze the current situation of the sport, in a bid to predict the future and how the same can be approached. Examination and Analysis of Issues Just like other world sports, formula one has had to deal with various issues both in the past and in the present. There have been suggestions that the Federation of International Automobile, the governing body, is favoring the big teams in their administration. The governing body’s decisions work in favor of the big teams. While the world governing body would like to deny this at all costs, this is the plain truth and a true reflection of the current situation. To begin with, this has always been seen during advertisement and other promotional methods of the sport. Whenever the federation wants to attract people to witness a particular grand prix, it uses the names of the big teams and top formula one driver. Even in the midst of the world’s poorest nations, people know about Ferrari, McLaren, Mercedes, Red Bull and Williams. Some people in the world are not even aware that the formula one championship consists of more than fifteen teams, since the names of the other teams are never mentioned in the news and commercials. This goes a long way to question the equality of the teams before the eyes of the federation. As the general management body, it should work and operate to ensure equality among the teams. A culmination of this inequality was seen in the year 2013, when the federation came up with the “formula one strategy group” (Cary, 2013, p. 1). This group was formed out of the six leading teams in the sport, and yet its decisions were meant to bind all the teams in the sport. For sure, this was something that appeared unfair to the other teams. Despite an outcry from the other teams, the federation went ahead to endorse this rule-making body. It is this action that led to a widespread cry of how unethical and undemocratic the sport’s world governing body is. This inequality, coupled with the leadership issues might have a great negative impact on the sport some ten years to come. The first major problem will be the withdrawal of teams from the sport (Weaver, 2014, p. 1). Why would a team bother to belong to a sport in which it has no say? The current leadership style is busy working to lead the sport in a crisis that will prove difficult to come from. The excess focus on the top teams will only work to kill the other teams in the race. In the next ten years, there is a possibility that there will be no fans to support the other teams in the championship at the grand prix (Lauda, 2014, p. 1). This is because the federation operates in a way that the generation to come will be meant to understand that the sport only has six teams. Corruption and Bribery is another challenge facing formula one (Benson, 2014, p. 1). The situation is even made worse, when it is announced that the top leadership works to promote it. In the year 2013, a major scandal engulfed the sport to the extent of destroying its fame while tarnishing its leadership. The chief executive officer, Bernie Ecclestone was charged with involvement in corruption cases. It took the overall leader together with the federation as a whole a long time to fight the allegations. Mr. Bernie had to move in and around European courts in London and Munich, trying to prove his innocence and that of the formula one governing body at large. What however pissed many off was the way in which the governing body dealt with the situation. It did not come out openly to condemn the act. This might have the effect of scaring away investors. This is because investors are very cautious people. They carry out a detailed and in-depth analysis of a company or a sport before investing their money in it. Critical uncertainties map The issues discussed above have the potential of putting the formula one sport into jeopardy. The unequal treatment of teams might cause some teams and their sponsors to consider withdrawing from the sport in the coming years. More so, the issues of corruption and bribery might lead investors to consider doing business with other sports apart from formula one. Other factors that might put the fame and love for the sport in jeopardy include the financial crisis. Marussia team recently went into administration due to lack of sufficient funds. One would wonder how a team can be in this kind of financial situation, when the sport generates millions and millions of pounds. If such incidences are to continue in the future, there is the risk of losing on the fan base. However, the most current issue is with regard to the conservative nature and culture of the sport’s leadership. While other world sports like football have embraced and accepted the impact of technology in their sport, formula one remains quite conservative. Concerns have been raised regarding the sport’s management inflexibility, which has made it impossible for the fans to enjoy the sport from the comfort of their homes and offices. YouTube stream-living is not accepted to formula one management, and many fans seem not to be happy with this. If the issue is not addressed, fans may end up losing interest in the sport, majorly due to the general feeling that the sport’s management does not have their best interests at heart (Lauda, 2014, p. 1). Scenario Cross Increased corruption D A Inequality Equality C B Reduced corruption Increased Corruption and Increased Equality (A) In this case scenario, sponsors and other investors will withdraw their support due to increased cases of corruption and bribery within the sport. Also, the sponsors of those teams that are not among the top six will be discouraged from continuing to invest in the sport, since they and their teams do not have a say when it comes to rule making and management of the sport. Reduced corruption and Increased Equality (B) Here, the sport will attract more sponsors and investors. This is because they have the feeling that there money is safe if invested in the sport, since every cent is well accounted for, and revenues are made known to all the stakeholders. More so, those sponsors of the teams not in the top six have no worries, since them and their teams have a say in the overall management of the sport. Reduced corruption and Inequality (C) In this case scenario, investors are having no worries about their money, since there are minimal cases of corruption and bribery. However, a few will be willing to invest in a sport that does not see all teams in the championship as equal. Inequality and Increased corruption (D) Here, there are almost no investors or sponsors in the formula one sport (Benson, Marussia F1 Teen Fold, 2014, p. 1). Not only do they fear for their money, but also the fact that the teams available to invest in have no say in the management of the sport. Recommendations to the best and worst scenario The best scenario is where there is equal treatment of teams in the formula one championship, and at the same time there is reduced or no corruption. In this case scenario, there is an influx of sponsors and investors in the team. More fans will also be coming out to watch the grands prix, since there is the general feeling that all the teams in the championship are equally valued and heard. Should it reach a time when the sport will reach this scenario, the federation should prepare itself to accommodate them, and widen the scope of the championship to include teams from all over the world. The worst scenario would be when there is increased corruption and the federation segregates the teams. Here, the federation should expect investors to withdraw. Many teams will go into administration due to lack of funds. In order to bring things back to normal, the federation will have to consider altering its constitution, so as to create rule and regulations that will operate to promote equality in the championship. Furthermore, those individuals involved in cases of bribery and corruption should be expelled from the championship, so as not to continue tainting its name. Conclusion Formula one is a sport that is so dear to many people around the globe. However, the future of the sport is threatened by a variety of issues, which the federation seems not to bother to rectify at the moment. In order to save this sport from losing its fame that has been amassed over the years, the Federation of International Automobile should move swiftly to solve these issues. References Benson, A. (2014, November 5). Formula 1: Where Does All The Money Go? Retrieved December 4, 2014, from BBC Sports Formula One: http://www.bbc.com/sport/0/formula1/29905081 Benson, A. (2014, November 7). Marussia F1 Teen Fold. Retrieved December 4, 2014, from BBC Sports Formula 1: http://www.bbc.com/sport/0/formula1/29954250 Cary, T. (2013, October 18). Formula One Starategy Group Condemned as Illegal. Retrieved December 4, 2014, from Telegraph: 1. http://www.telegraph.co.uk/sport/motorsport/formulaone/10390029/Formula-One- Strategy-Group-condemned-as-illegal.html FIA. (Nd). About FIA. Retrieved December 4, 2014, from Federation International De IAuatomobile: http://www.fia.com/ Lauda, N. (2014, July 19). Is FI Losing its Buzz? Retrieved December 4, 2014, from JAonFI: 5. http://www.jamesallenonf1.com/2014/07/is-f1-losing-its-buzz-niki-lauda-offers-answer- to-sparse-german-crowd-puzzle/ Weaver, P. (2014, October 27). U.S Sounds Warning To Formula One, a Sport Teteering on the Brink of Crisis. Retrieved December 4, 2014, from The Guardian: 3. http://www.theguardian.com/sport/blog/2014/oct/27/us-grand-prix-formula-one-mario- andretti-f1 Read More