Mark Gallagher’s “The Business of Winning” looks at F1 from financial, insider perspectives

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For more than 30 years, Mark Gallagher has been a staple in Formula One paddocks. From working with Marlboro, then onto Jordan before joining Jaguar, then Red Bull, and frequently being involved on the commercial side, Gallagher has some of the best inner understandings of how things work in terms of F1 business.

More recently, he has moved into team ownership over the last decade with Status GP, which has seen its stature grow over the last several years. The team takes over the Caterham GP2 operation for 2015, which adds to its GP3 platform. Status has also raced in A1GP, where it won the championship with A1 Team Ireland and driver Adam Carroll, and in sports cars.

The above intro is to give some insight into Gallagher’s new book, The Business of Winning: Strategic Success from the Formula One Track to the Boardroom, published by Kogan Page, released in the last month.

With F1’s financial situation one of the major story lines in the back half of the season, we had the opportunity to check in with Gallagher on that and other lessons from the book in a wide-ranging Q&A. We thank Mark for his time, and here’s the insights below:

MotorSportsTalk: The business aspect of this book is particularly timely now given the financial situation that appears to be hitting. Do you think the evolution of Caterham/Marussia owes to a lack of poor leadership, poor finances, poor branding, a poor understanding of what they were getting into or the combination of the four?

Mark Gallagher: You could pick three of those headings; Leadership, Branding and understanding of the challenge, and apply them to a greater or lesser extend in each case.  I don’t think Caterham or Marussia suffered from a lack of finance; in fact I know the shareholders concerned put a great deal of money into their teams.

This was not about a lack of investment, but either the leadership did not have a realistic business plan, or have the capability to make one work.  There was insufficient revenue – you need to develop revenue streams in any business, and be resolutely focused on being profitable.

I do think the branding did not help – Caterham lost a lot of valuable time, and money, battling over the Lotus name.  Marussia was Virgin, which started as Manor, and I think that also didn’t help them – to begin with the proposition seemed to be all about licensing the Virgin brand and trading on the fame of Richard Branson’s reputation, but that concept was never going to work.  Marussia was very ‘Russian’ – I know that’s obvious, but nationally-branded F1 teams really struggle to gain traction with global brands; F1 sponsors want to be global, not national, in my view.

Finally the challenge – F1 is very exciting for about 1% of the time, the rest of it is about knowing the sport inside out, knowing all the key people and having fantastic relationships with FOM, the FIA and all the other stakeholders.

MST: F1 has survived other roller coaster periods of transition before, but perhaps the biggest change now comes from Bernie’s potential for departure in the next few years. Considering what he has done for the sport and considering how most inside the beltway praise it, is there another individual that can carry the torch forward? Or might a collective form of leadership be a better option?

MG: F1 needs a strong CEO going forward, not matter what kind of a structure is built around him or her.  The business benefits enormously from having a clear leader, although there are significant opportunities for FOM to develop a broader-based management across the business’s various functions.

My personal view is that the new CEO of F1 should come from outside of the sport, as they will have an opportunity to start with a clean sheet of paper and not be burdened by previous associations or reputation.  Peter Brabeck, who has been Chairman of F1, would have been ideal a few years ago, but someone of his experience (he ran Nestle) who knows how to run a big, complex, multi-national business would be ideal.

source:
The Business of Winning.

MST: F1 has had distinct business eras, with the tobacco demise of course leading to the technological revolution of backers coming in to replace. Do you see the technology companies as being a viable option to sustain the teams given the increased level of investment?

MG: No.  The days of purely sponsor-funded F1 are most likely in the past; it is much better to operate to a different business model where you can develop revenues and profitability from diversifying into other areas such as McLaren and Williams have done.

F1 also need to sells itself to commercial partners in a very different way; not just ‘marketing’, but as a resource for research & development, leadership training, joint-venture businesses and so on.  F1 also has a lot of scope to develop better links with technology companies because it is a data-driven sport which creates fantastic digital content; audio, video, data.  Content is so important to tech companies, including social media, I think the sport has a huge opportunity lying ahead.

MST: Do you think budget caps are achievable in F1? Why or why not?

MG: They are difficult to police because of company structures, and also because there will always be someone pushing the system further than expected.  For example, when a team is a subsidiary of a car company, how do you apportion cost that the car company may absorb but yet benefit the F1 team?

My view is that the FIA could cap costs by creating technical regulations which make it impossible or pointless to spend more than a certain amount of money.  Everyone knew the new powertrain regs were going to triple the annual costs, so the flipside is that you could equally proscribe certain technologies to limit future spend.

One example might be having no specification changes permitted to the cars from race to race – perhaps upgrades only 4 times a year.  You could even – at the risk of upsetting the aero community – expect teams to fix their aero for a season. Radical, but an example of how you could stop development running away with budgets.

MST: Is there a company that you feel you could do what Red Bull has done – a team that had been in F1 first from just a pure sponsorship/branding element that has then brought its leadership, in the form of Dietrich (Mateschitz), and the people, (David) Coulthard, (Adrian) Newey, on down the line – and change the game in F1 once more? Or do you feel this is a once-in-a-generation type of story?

MG: Benetton did it, Red Bull replicated that and frankly any global brand who wanted to do what they have done could do so.  However in both these case they made sure they got the very best people involved – think Brawn & Byrne at Benetton, or Horner & Newey at Red Bull Racing.

There is no reason why a Samsung, Google, Tesla or Apple could not do F1 in the way Benetton and Red Bull have, but it would have to be run by people who understood the industry, and with the business plan that enjoyed the benefit of both a correct level of up-front investment as well as a clear focus on turning it into a profit-centre with third-party sponsorship attracted by the opportunity to work alongside the host company.  It has to be run like a business, otherwise if everyone thinks there is a patron writing the cheques each month the culture is wrong from the start.

MST: With good leadership and good communication so vital, which teams on the grid besides Red Bull and Mercedes are doing the best job of that now?

MG: Williams has rediscovered its capability on several fronts; technically, operationally and commercially.  Much of that is down to management changes so that the leadership is much more coherent than a few years ago.

MST: Were you at all surprised to see Mercedes win the title without Ross Brawn? How much did he and Michael Schumacher’s development over the three years play into the title, you mentioned it in the book.

MG: In my view Mercedes won because of Ross Brawn, and Bob Bell, who are responsible for this year’s car and put together the team that delivered it so magnificently.  Toto Wolff has been very clear about Ross’s contribution, and by implication Bob’s too, and no one should lose sight of the fact that the 2015 car was the result of the work done by Ross’s team in 2012-13 particularly in association with Mercedes HPE on the power train front.  A brilliant conceived and packaged car.

MST: Does it feel as though F1 is lacking for characters like an Eddie Jordan or Eddie Irvine? Part of the reason there’s a nostalgia element there is because to some outsiders, on the surface anyway, it appears many of today’s stars are corporate automatons devoid of much in the way of personality… to me anyway, it’s why Daniel Ricciardo is such a big hit because of his smile.

MG: I think there is a tendency to look at the past through rose tinted glasses.  I do it too!

I remember that in the 1980’s everyone was talking about the ’60’s, and then in the 90’s I used to meet guys telling me that the 70’s were great. Now we think the late 80’s and 90’s were a glorious time!

The drivers are very professional these days, but there are good personalities all around, and the media should maybe do more to uncover them;  it’s a relentless schedule for drivers with huge demands on their time, so it becomes very difficult to let your hair down.

I think Claire Williams is a fascinating new team boss, and looks set to carry the Williams forward as a family owned business; what a great story.  Sooner or later Ferrari will find a strong team boss to take them on to great things – maybe Christian Horner should consider it.  Why not?

I can tell you that if you had a glass or two of wine with an Eric Boullier, Bob Fearnley or Franz Tost, you would find very interested characters with a passion for F1 that burns just as brightly as it ever did in an Eddie Jordan or Colin Chapman.

Jenson Button joins NASCAR Garage 56 at Le Mans with Jimmie Johnson, Rockenfeller

Jenson Button NASCAR Le Mans
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DAYTONA BEACH, Fla. – The NASCAR Garage 56 entry in the 24 Hours of Le Mans will be driven by champions of three major-league series — Jenson Button, Jimmie Johnson and Mike Rockenfeller.

The lineup of the Hendrick Motorsports-prepared Next Gen Camaro was announced Saturday before the Rolex 24 at Daytona.

NASCAR’s Garage 56 project was announced in March 2022 as a joint effort by NASCAR, Hendrick Motorsports, Chevrolet and Goodyear. It marks the return of a NASCAR team to Le Mans for the first time in nearly 50 years with Hendrick fielding a Camaro ZL1 as the “Garage 56” entry in the 100th edition of the sports car classic.

It’s long been expected the car would include Johnson, the seven-time Cup Series champion who is returning to NASCAR’s premier series as a driver-owner in 2023. Rockenfeller, the 2013 DTM champion and 2010 Le Mans overall winner, has attended every NASCAR Garage 56 test since last year while racking up simulator testing hours.

The surprise was Button, the 2009 Formula One champion who has become a popular commentator. Rick Hendrick initially said wanted four-time Cup champion and current Hendrick Motorsports COO Jeff Gordon to drive the car, and Gordon had raced a sports car at Indianapolis last year to test his race shape.

GARAGE 56 ANSWERS, ANALYSISMore on the NASCAR-Hendrick entry for the 24 Hours of Le Mans

“Since the beginning of the Garage 56 project, it has been our goal to partner with the top racers in the world to represent us in Le Mans,” NASCAR chairman and CEO Jim France said in a release. “The lineup of Jimmie, ‘Rocky’ and Jenson is everything we could have dreamed of – three elite drivers who have won at the highest levels of motorsports worldwide. As we celebrate the 75th anniversary of NASCAR, we are honored to have these world-class champions help bring the sights and sounds of a NASCAR race car to fans in Le Mans, and across the world.”

Button had one of the most prolific careers in F1 history finishing with 15 wins and 50 podiums on top of his 2009 World Championship and is widely considered one of the top British drivers of all time.

“As a lifelong racing fan, I have always dreamed of racing certain cars, with and against certain drivers and competing in certain events,” Button said in a release. “In June, a number of those dreams will come true in one event when I get to bring NASCAR to the world stage alongside my pals Jimmie and ‘Rocky’ for the 100th anniversary of the most prestigious race in the world. I’m really looking forward to sharing this journey with NASCAR, Hendrick Motorsports, Chevrolet and Goodyear, and current and future NASCAR fans from around the world.”

Johnson will make his 24 Hours of Le Mans debut a year after starting his first Indy 500. He has 83 victories in the Cup Series, where he will return for the Daytona 500 next month with his Legacy Motor Club team.

He also has been involved with testing the Garage 56 Camaro.

“I’m super thrilled – it’s been at the top of my bucket list to compete in the 24 Hours of Le Mans someday,” Johnson said. “To have this opportunity come – and to partner with everybody and this driver lineup – is truly an incredible opportunity and one that I am thankful to be a part of.”

Rockenfeller teamed with Johnson on the No. 48 Ally Cadillac in the Rolex 24 at Daytona in 2021-22. The German driver has been the lead test driver for Garage 56 and has driven during every on-track test.

“It has been a great journey so far with the whole team and project,” Rockenfeller said. “To be involved as a driver from day one until now was already a great honor, and to now have Jimmie and Jenson alongside me as teammates in Le Mans is unbelievable.”

The car will continue testing with all three drivers next week at the Daytona International Speedway road course. Rolex 24 and four-time IMSA champion Jordan Taylor, who drives for Corvette Racing, will be the team’s backup driver and coach. Taylor also won the GTE Pro class in 2015 at Le Mans, where he has four podium finishes.

The project also is being supported by IMSA GTP team Action Express, whose general manager is former NASCAR executive and Daytona 500-winning crew chief Gary Nelson. Action Express built the first test car for the Garage 56 but since has handed off the project to Hendrick, where it’s being over seen by vice president of competition Chad Knaus (the crew chief for Johnson’s seven championships).

“Action Express got it going and built the mule car, and then Hendrick joined the program, took it from where we had it, and they’re doing a major percentage of the work,” Nelson told NBC Sports. “We just did a test a couple months ago on a wet track. We’ve done a couple of other tests as they were ramping their program up. Now their car is good, tested and running. We’re still involved and here to help. The Hendrick guys have taken the reins, and Rick Hendrick and Chad Knaus are a thrill to work with and doing a much better job. It’s more NASCAR than prototype racing.”