Joshua Robinson and Jonathan Clegg are sports reporters at The Wall Street Journal and co-authors of the new book The Formula: How Rogues, Geniuses, and Speed Freaks Reengineered F1 into the World's Fastest-Growing Sport.
In this podcast, Motley Fool host Ricky Mulvey caught up with them to discuss:
- How a used car dealer became a global entertainment magnate.
- Why the underdog never seems to win in racing.
- The inseparability of Ferrari and F1.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
This video was recorded on March 23, 2024.
Joshua Robinson: Ferrari has used F1 as its primary marketing tool forever and is so intrinsically linked to the sport. It's the only team that is participating in every season of Formula 1. It was Bernie who said a long time ago in conversation with Enzo, that Formula 1 is Ferrari and Ferrari is Formula 1, you cannot separate one from the other. All of that contributes to a huge amount of pressure to perform that often Ferrari collapses up there.
Mary Long: I'm Mary Long and that's Joshua Robinson, a sports reporter at The Wall Street Journal and co-author of the new book, The Formula: How Rogues, Geniuses, and Speed Freaks Reengineered F1 Into the World's Fastest-Growing Sport. My colleague, Ricky Mulvey, caught up with Joshua and his co-author, Jonathan Clegg for a deep dive into the world of motor racing. They also discuss why formula 1's parent company is happy to have you forget the sports pre-2017 history, the evolution of Ferrari's mythology, and whether the timing of Netflix's Drive to Survive was a lucky punch or a stroke of genius.
Ricky Mulvey: Joshua, Jon, I have to say I was reading your book on a flight and there's a part of me where I'm like, I'm going to read 20 pages of this book, it's a book for work, fine. I ripped through this thing, I had so much fun reading the formula. I'm delighted that you are able to join us today. I can't probably label it like this, but I think it is a excellent and entertaining, prequel-ed to drive to survive if you're a fan of the show on Netflix. Thanks for joining us on Motley Fool Money.
Joshua Robinson: Thanks for having us.
Jonathan Clegg: Yeah, thank you.
Ricky Mulvey: One of the things you write, you say, basically, Formula 1 is perfectly happy for its fans to assume that the organization started in 2017. Either one of you, why is that?
Joshua Robinson: Well, I think there's a lot of it, much of the Liberty era of Formula 1 is about rebranding it, about representing it to the world as this very polished or a glitzy entertainment product. That's one reason it's happy to look past the pre-2017 history because that was often gritty, full of some unsavory characters. They were racing in places that sometimes involved dealing with the KGB for instance, we can get into that later with Bernie Ecclestone. That was also at a time when the reality of F1 often involved extreme levels of danger and tragedy. Liberty was happy to airbrush all of that and present to the world, hey, we have this thing, there's also on Netflix, it's a modern TV epic.
Ricky Mulvey: It's one of my favorite reality show, it's one of my favorite television shows. Let's hit it now. I got an outline, but I think if I were listening and I heard Bernie Ecclestone in KGB. Bernie Ecclestone, he was the supremo, he was the boss of Formula 1 for 40 years and in getting races done, he had plenty of successes with the European Circuit, getting the races to the Middle East. Some missteps in America that I want to get to, but he had some interesting dealings with the KGB. Can you tell our listeners about that?
Joshua Robinson: Well, Bernie Ecclestone, first of all, is a former used car dealer who became a driver agent, eventually bought a team in the early '70s and realized that the product they were selling was not racing, it was a television product and they were in the TV rights business and the sponsorship business. He built up the business over the course of 40 years into a global series that was prepared to go anywhere and take pretty much anyone's dollar and so in the '70s and '80s, he got it in his head that he really wanted to race behind the iron curtain.
There were negotiations with Bridge NAV in the Soviet Union, eventually they had to settle for communist Hungary, where he says he was quite happy to deal with the KGB because as Bernie told me when I was sitting in his living room in Switzerland, they were straight shooters. He quite enjoyed that, as we were saying, he's one of those people who's been largely airbrushed from the pre-Netflix era of Formula 1.
Ricky Mulvey: Jon, you're nodding.
Jonathan Clegg: Yeah, when you talk about Liberty Media being very happy for people to believe that the series started in 2017, a large part of that is because it's pre-2017 history is inextricably tied to this small whitehead maniac named Bernie Ecclestone. They were other people who knew much less about him, the less that people knew about him the better, because he has enjoyed some rubbing shoulders with some unsavory characters and as a man of a few scruples.
Ricky Mulvey: There is a lot of controversy with Formula 1, one of the stories that your books dives into that I think has been maybe airbrushed from the official history is Crashgate. Either one of you, can you give our listeners the primer on Crashgate and how that controversy maybe changed Formula 1?
Jonathan Clegg: Crashgate was an episode that took place in 2008,at the Joshua, Miami.
Joshua Robinson: It was the Singapore Grand Prix.
Jonathan Clegg: Singapore Grand Prix, that's right. What had began like a perfectly regular Grand Prix was delayed for a safety car incident, that's when in F1 when when when someone crashes and the remnants of their car scattered over the circuit, they have to bring out what's called a safety car, which is like regular road car. The drivers all then have to do a couple of laps driving very slowly behind the safety car before the race can resume.
This particular safety guidance doesn't happen quite early in the race and at what turned out to be a very convenient time for Fernando Alonso who had qualified very low down in the high teens, and had just taken a pit stop, gotten some new tires on his car, and found himself after the safety car incidents at the front of the pack while the leading contenders had been moved to the back.
He then went on to win the race, which would have been perfectly reasonable, were it not for the fact that the car that crashed was his teammate's car and it ultimately emerged that his teammate had been ordered to drive into the wall at 100 miles an hour on purpose in order to rig the race for his teammate to win. This was something that came to light only after the race happened.
Although when we spoke to one of the team principals who was taking part in that race, he described Fernando Alonso's look on standing on the podium. Alonso had maybe a look of guilt. He's not enjoying the moment of a race when you normally expect drivers to pump their hands into the air to celebrate. Standing on the top step of the podium his only win of the season and he wore the somber look of a man who knew that he had to go to the top of the podium by nefarious means.
Ricky Mulvey: Or he's following the rules that McLaren set out which we can get to. But how did the investigators know that? Crashes happen all the time in Formula 1, people run into walls sometimes, but how do they know that this one was on purpose?
Joshua Robinson: They were able to look at the telemetry on the car, which is the set of sensors that record almost like a black box on an airplane, everything that happens in the car. What they could tell is as he came into this corner and was heading for the wall, he didn't really lift off the gas and didn't apply the brakes in the way that any normal person would if they were about to crash so they were able to determine that it was intentional.
Subsequent interviews revealed that they had been planning this in quite an intricate way to be as far away from the cranes as possible from maximum and convenience and guarantee a safety car. In the process of all of this a Brazilian driver named Felipe Massa was denied a bunch of points because he got caught behind the pack in the big reshuffle and ultimately it cost him a world championship by one point. Since then he is suing in British court to be reinstated as the 2008 world champion and for about $80 million in prize money and lost income as someone who would've been a World Champion because he never got that title.
Ricky Mulvey: It's interesting to me were Formula 1 is a sport where at its surface, it's supposed to be a pure meritocracy in some ways because whoever is the fastest wins, but it's also a sport that's named after its rulebook in one where it's incredibly hard to find justice. One recent example of that, it would have been Ferrari at Las Vegas even this year or a driver hits a drain cover during qualifying, rips out the underside and ultimately the team is punished for it because they have to use new parts over a mistake that the track made. Because there's no flexibility within the rules of this sport except when it's fought about, like at the higher-levels there's very little unintentional understanding.
Jonathan Clegg: I think that's one of the great takeaways from the book is that, as you mentioned, this is a sport literally named after the rule book. The Formula applies to the technical specifications that each team has to use each year when they build these cars. Yet, the entire history of the sport is basically about people trying to break the rules and getting away with it. Even the most successful teams and the dynastic teams that we think of as dominating the sport at various points throughout F1, most of those successes were built on identifying gray areas and loopholes in the rule book and exploiting those to maximum advantage.
Ricky Mulvey: Was anyone actually fired for Crashgate?
Jonathan Clegg: They were banned from F1 for two years.
Joshua Robinson: Yeah, the Renault team was banned from F1 for two years and Flavio Briatore, who is the team principal was suspended.
Ricky Mulvey: We've mentioned Liberty Media. It's a company that last week it was reported that Warren Buffett increased his stake in. It's not quite as opaque as Bernie Ecclestone, but it's certainly one that shies away from the spotlight. What is Liberty Media?
Joshua Robinson: It was the company started by Jon Malone, who is the telecoms and broadcast giant. It has its fingers in a lot of pies, but it's outside of Formula 1. It's got Live Nation, it owns the Atlanta Braves and it has a lot of quite diverse interests dating back to a vast cable network empire. It invested in Formula 1 because it wanted a truly global sports property that it's always undervalued and it had been held for a long time in-between the period of Bernie's total reign over F1. The business needed to be cleaned up and prepared for another sale and that was done by a private equity firm in London called CVC and they held onto it for about a decade before flipping it to Liberty Media.
Ricky Mulvey: When you talk about ownership of Formula 1 it confuses me. What do you own when you own Formula 1?
Joshua Robinson: It's a great question. You own what is often referred to as the commercial rights to F1. You are in control of the broadcast rights, in control of sponsorship, and in control of any kind of licensing. You don't own the circuits because those are done by local promoters, and you don't own the teams obviously because those were all privately held. You don't even own rules because that's done by the motorsport world governing body known as the FIA. You are the organizer and you own the commercial rights is a good way to put it.
Ricky Mulvey: Seems like a good business if you can get it. Another company that is very old company but it's really back on the come up is Ferrari right now. When we talk about branding, when we talk about marketing, I struggle to think of a company that's done a better job at this than Ferrari, actually maybe Red Bull. What were the ingredients? What created Ferrari's mythology where we think of it as this Premier Racing Car Champion?
Joshua Robinson: One thing that's really amazing about Ferrari, and I think that even we didn't realize initially was how relatively young the company is. The first Ferrari's didn't roll off the line in Maranello until 1947. Enzo had been building cars at Alfa Romeo before then, but all he really wanted to do was race and so he was selling road cars to finance more racing, and what was incredible at the time is that right in this postwar period where people were starting to have disposable income again, he built cars that won critical races in front of just the right people.
Movie stars, and the crowned heads of Europe, and suddenly Ferrari took on this idea of glamour very quickly, and it also found a group of people to appreciate Ferrari and appreciate this old-world luxury at the right time and that was Americans. Americans loved Ferrari in the '50s and '60s and that contributed a huge amount to building up the mythology.
Ricky Mulvey: In many ways, Ferrari did not love Americans, and that maybe made the love grow a little bit.
Joshua Robinson: That was the secret of selling old-world luxury in the new world that Enzo understood which was, if you mistreat Americans and make them feel like they're not good enough for this, you will own them for life.
Ricky Mulvey: I think one rule that I learned about reading your book is how Enzo allowed Ferraris to be portrayed were there's a movie where they wanted to put Ferrari's and he basically said, you can kill a driver in one of my cars, but the car cannot lose a race, and I think that rule still might be in effect with the latest Ferrari movie that came out.
Jonathan Clegg: It's amazing how Ferrari has leveraged F1 to market itself around the world. When you think this is a company that has basically never really advertised, certainly not advertised on TV. F1 is its marketing and advertising arm and one of my favorite nuggets from the book is that the whole reason that when we think of an Italian sports car, we picture the red machine is because in the early days of F1, that was the color given to all Italian cars.
They used to have different colors for different nationality, so French cars would be blue, German cars would be white or silver, which is why we think of Mercedes as the silver arrows, Italian cars were given the color red and that's when you picture a Italian sports car, you always think of it as red because that was the color they were given by F1 and really no team like you say, with the possible exception now of Red Bull, but no team has really used F1 to market itself around the world as effectively as Ferrari.
Ricky Mulvey: What's been happening with Ferrari's resurgence? Because while it did, it dominated the arts with Michael Schumacher then it falls behind. This is something that Ferrari is intensely unhappy about, where you have the dynasty of Toto Wolff and Lewis Hamilton at Mercedes and now you have two straight constructors and drivers titles with with Red Bull, MaxxForce stop in last year. What did he win? He win basically all but two races.
Joshua Robinson: Ferrari was the only known Red Bull winner of a Grand Prix last year and there was only one of them. But this is a source of intense frustration and Maranello, but also Ferrari is for all of its technical aptitude and stylistic brilliance is also the team that can't get out of its own way a lot of the time. They've been known in recent years as these bumbling guys who mess up pitstops, pick the wrong strategy, and just can't quite put all the elements you need together.
Sometimes it's just straight-up bad luck but the pressure to win at Ferrari is incredibly intense and that dates back to Enzo. I think a lot of that comes down to the fact as Jon explained, that Ferrari has used F1 as its primary marketing tool forever and is so intrinsically linked to the sport. It's the only team that has participated in every season of Formula 1 and it was Bernie who said a long time ago in conversation with Enzo that Formula 1 is Ferrari and Ferrari is Formula 1, you cannot separate one from the other. All of that contributes to a huge amount of pressure to perform that often Ferrari collapses under.
Ricky Mulvey: I think you pointed out something interesting. Your book talks about it, which is the internal culture that, that creates where you have such an intense pressure, but you also have people who are unwilling to work with each other. I think it was basically people are almost more collaborative between Britain and Japan than they were in the same hall of a Ferrari office building and then that entropy can end up collapsing in on itself.
Right now we're at a point where people are a lot more optimistic about Ferrari in 2024 and part of that has to do with the signing of Lewis Hamilton. Certainly, Ferrari's investors are really optimistic about it but from the story perspective, what's going on with the resurgence? Why are folks so much more optimistic about Ferrari today than they were five or six years ago?
Jonathan Clegg: Well, I think one of the reasons, like you say is, but they've signed Lewis Hamilton for the 2025 season and Hamilton obviously is tied for the record number of championships. Easily leadering in the most Korea F1 wins, most F1 propositions, one of the truly great drivers in F1 history. I think also they're optimistic because we're not far away from a rules change and one of the things that has characterized F1 through the years is that every four, five, six years they rip up the rule book and release a new series of specifications which has a knock-on effect of reordering the grid.
What that means is that the teams that were in the middle or at the back can sometimes get propelled to the front as they interpret the new regulations better. Whereas the teams who were on top who are trying to maximize their window and when as much as possible under the old rules, then find them find themselves move into the back. I think that's really the only thing that will end Red Bull's run at the moment is like a change of the rules because frankly, they're so far ahead that it really wouldn't be a surprise if they won every single race this year.
What the sport needs is one of these technical upheavals to reorder things and the next round of those is due for 2026 so what you're seeing is Ferrari getting closer to Red Bull. They're certainly the closest challenger to Red Bull. But I think what they're also doing is positioning themselves to really capitalize on the rules change that comes in 2026 at which time Hamilton would have had a year in the car and hopefully they'll be firing on all cylinders and able to really attack this rules change and be the team that really interprets the rules most effectively and starts out on top.
Joshua Robinson: Because this is a sport that needs rules change to stop what complete domination in a sport and that's what the history has been with. We mentioned Ferrari with Michael Schumacher then you have Mercedes and now a burgeoning dynasty. It read, not even burgeoning, give a dynasty at Red Bull. Why is F1 a sport where the underdog has such a difficult time winning or even getting to the top on any of the races.
Ricky Mulvey: Like Baseball, for example, you can have the worst team play the best team, but you know, 20-30% of the time the worst team might come out on top. Pick your sport. I think there might be some similar percentages, but in Formula 1 that's completely not the case. Why is that?
Joshua Robinson: One, there is so much that goes into building a winning car that has to go right. You have to have the right combination of driver, of car, of strategy, of performance and qualifying, and everything else. There is less variance there, but in a larger sense, the teams, as they look at every rule change, will spend a year or two years devising the right setup and finding all the right loopholes. There are some people who are just much better at that than others and Adrian Newey, for instance, who is the Technical Director at Red Bull, is one of them.
Those are the moments in that phase of development where you can really steal a March on the rest of the field and what makes it difficult to then catch up is that there are huge limitations now on budget, on wind tunnel testing time. So all of that just makes it hard to close gaps because once your car is set at the beginning of the season, there's a very minimal amount of number of things you can do to improve it. You can marginally upgrade certain parts, but you're not going to change the overall aerodynamic design in a significant way at that stage of the season.
Jonathan Clegg: I think it also gets to the balance between the human aspect of F1, what the driver and what he controls versus the engineering internet technological aspects. One car is just quicker than the other. A Baseball team can play in on their best day this player is better than another and on another day that might be completely different, but one machine is just faster than the other. Although the human aspect plays a role, sometimes it's not enough to overcome the fact that the car just isn't as fast as one of the competitors.
Ricky Mulvey: One of the main themes, in your book, is basically who has the upper hand throughout with Bernie Ecclestone? It's Bernie Ecclestone has the upper hand with pretty much every single racetrack with the exception of what? Monaco. Then you have him getting toward the end and then these new investors come in, Ecclestone getting the upper hand against the other teams that he's competing against every team in Formula 1 trying to get the upper hand on each other in any given racing season.
One company that comes in unexpectedly and cheaply is Netflix, which completely changed the sport, completely changed the fandom and then they get into the paddock, is you right about relatively cheaply? This would have been completely unheard of just a few years ago. How does Netflix gets started in Formula 1? As you say relatively cheaply.
Joshua Robinson: During the Bernie era, the paddock had been this sanctum sanctorum, he wanted to control everything and every image of Formula 1. Lewis Hamilton talks about every time he posted something on Instagram, he'd get a cease and desist from Bernie. He didn't want to let cameras in, he didn't want anyone prying because this belong to the teams, this belonged to F1 and if things were going to emerge from there, he wanted to get paid for it.
Liberty comes in as a much savvier media operation. In one of their many efforts to open things up, lands on this idea with Netflix, not knowing what it was going to turn into. It was so off the wall and many teams were suspicious of it. Ferrari and Mercedes didn't even participate in Season 1, they kept it at a safe distance.
But pretty soon it exploded and it's no coincidence that Season 2 dropped two weeks before the pandemic became what it was in 2020 and two weeks before everyone was about to spend a year sitting on the couch watching TV. Toto Wolff said to us that to this day, they don't really know if the whole Netflix experiment and the way it exploded, it just lifted the sport to new heights was a lucky punch or stroke of genius.
Ricky Mulvey: At this point, who do you think has the upper hand in the relationship? Does Formula 1 have a sport where it can say, you know what, we're going to take our reality show to Apple or to Hulu, something like that. Or is Netflix in control of those negotiations?
Jonathan Clegg: I think at the moment Netflix is in control because F1, as we discussed, I think there's still so much uncertainty around what exactly makes this show work so successfully that F1 would be very loathed to try something new. Because this has been probably the biggest single factor in the sports growth and popularity over the last five years. So Netflix certainly has that to its advantage. It also funny that we've seen them try to repeat this formula with other sports and it hasn't really worked. They've tried with tennis, they've tried with golf, they tried with cycling: ProCycling and none of them have really caught fire in the way that Drive to Survive did.
Whether that's to do with the timing aspect, the fact that the Drive to Survive dropped during COVID, or whether that's the fact that the people that make up the cost of F1 are uniquely well attuned to deliver like great reality TV because they are generally young, very good looking, smart, articulate, vicious backbiters and snipers, and constantly shit talking each other. I don't think anyone really knows exactly why Drive to Survive has worked in a way that typical fly on-the wall sports documentaries generally haven't.
F1 are pretty open about that and pretty open about the fact that they're just going to ride this wave while they can. They see this as a chance to shore up their popularity and raise the floor so that if and when Drive to Survive does go away, they've still got enough people who are willing to stick around. Like you say, I'm sure that they will find a way to put an F1 behind the scenes show somewhere else in the event that Netflix does pull the plug.
Ricky Mulvey: What do you think? Formula 1 famously on the cutting edge, you talk about how, what does it? Even the truck drivers with the best truck drivers. Liberty Media has been at the forefront of changing the way people interact with Formula 1. One example now is the virtual reality headsets where you're going to be able to look down on, essentially, a live race circuit and see where all of the cars are. That's just one example. How do you think fans will interact with Formula 1 in 3-5 years? How do you think that'll change?
Joshua Robinson: Well, I think that's the next frontier for F1. As it prepares for a post Drive to Survive future, it's throwing a lot of stuff at the wall trying to figure out what's going to stick and whether that is finding other ways for them to consume like non-race content. I'm thinking of projects like the Brad Pitt, Jerry Bruckheimer Apple movie that's due out in 2025. Whether that's also changing the live race experience, which they've been pretty good about already and giving access to much more data.
I think you real petrolheads who still watch F1 are now watching it with two or three screens where they have live timing and things like that. That was already a major step for F1, which when Liberty came in, felt, this is still too opaque. People still don't know what's happening, let's have the live list of positions on screen at all times so that you know what you're looking at.
With the rise of virtual reality and things like that, I think the one thing I've heard they want to do is create a E-Racing situation, where you in your rig at home or on your laptop can race against live positions the drivers in the race are taking up. There are a lot of options here and the technology maybe for the first time exists to do that. Whether the appetite is really there for people who primarily interact with F1 through Drive to Survive or drivers Instagrams remains to be seen.
Ricky Mulvey: I'm going to take that on easy mode first before I jump into a sim racing car against Verstappen, Sergio Perez, and Lewis Hamilton, and the bunch. Last question might be an unfair ones, so you can feel free to swat it back at me. Liberty Media got Formula 1 for about eight billion. You're right in a sequel, in 10 years, maybe it's called the Formula back and better than ever, let's get down to booging, I don't know, but you've got a sequel coming out for your Formula 1 book. How do you think we will look back on that deal and maybe Formula 1 in 2024?
Joshua Robinson: I'm not certain that Liberty Media will still own it by then in 10 years time, there was a rumored Saudi bid for about $20 billion. Liberty joke, if it were true, it was probably a little bit low, but I think there is an element of truth to it. I don't think that the way we've seen the Saudi public investment fund throw money around in global sports, that F1 is one that they can necessarily resist. They're all through Aramco, they're already one of the major sponsors of the sport. They just had a Grand Prix in Saudi Arabia and the Gulf footprint is expanding all the time in motorsport. I think that'll come back at some stage. They are perfectly capable of making it eight billion looked like a total steal.
Ricky Mulvey: Joshua, Jon, thank you so much for your time. Thank you for your book. If it's not clear, I'm happy to recommend it to readers and listeners of Motley Fool Money. I really had a good time with it. The formula, how rogues, geniuses, and speed freaks reengineered F1 into the world's fastest-growing sport. Thank you for your book, thank you for your time.
Joshua Robinson: Thanks so much for having us.
Mary Long: As always, people on the program may have interest in the stocks they talk about and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Mary Long. Thanks for listening. We'll see you tomorrow.
