Jonnycraig wrote:The more pertinent question is what do CVC know that leads them to want to get rid of a profitable business before the end of the year..
It is not a secret. In fact it has been discussed in the F1 Technical threads many times. The business model of F1 is not sustainable. It most closely resembles a complicated pyramid scheme which depends on an annual supply of new suckers to supply fresh cash to the sports-like entertainment. The show is then marketed to egotistical leaders of nations so said leaders can show of some bling, while their citizens suffer the enormous cost of such a spectacle.
The business model has the following problems:
The enormous cost and inequitable payout scheme has created a situation where performers in the show (teams) are dropping out faster than potential replacement performers (suckers) can be found. The current formula for compensating performers cannot be maintained.
Current hosts balk at the exhorbitant price and crazy annual increases of hosting a GP, yet the group of nations that can afford to host the bling is limited. Financial growth at the current rates cannot be maintained.
Investors invest for financial growth. Even if F1 remains profitable, the rate of profit is likely to diminish as the prospect for growth is limited.
The only question I have is whether, after BE' is gone, F1 will be capable of reorganizing itself into a viable, sustainable sport?
