Globalisation and Formula One

ABSTRACT

It is often argued whether motorsport is a 'proper' sport, and thus can be examined as such by researchers. In this essay, Formula One, for many the most important form of motorsport, is compared to established sports such as football and the Olympic Games, in terms of structure, their respective governing bodies, and their characteristics. For the latter, it has been discussed whether Formula One is a socio-cultural sport or a commercial one, as these are identified by K. Foster. Moreover, the role televison played into growing the sport's popularity is examined. Finally, there has been a comparison between two important personalities of football and Formula One, Dr Joao Havelange and Bernie Ecclestone respectively, in an attempt to examine to what extent individuals can have an influence on a sport's development.

Introduction

Ever since the replacement of post modernity with globalisation as the predominant social theory (T. Miller et al, 2001), academics of sport have taken an interest on International Sport Governing bodies and their role in an era where, (according to the hyperglobalist tradition at least (D. Held et all, 1999), nation states and their institutions are going into decline. The two most commonly mentioned (and researched) International Sport Institutions are FIFA ( J. Sugden and A. Tomlinson 1999, J. Sugden and A. Tomlinson 2003), (the International Federation of Football Associations) and the IOC  (the International Olympic Committee), (M. Roche, 2000). These are the respective governing bodies of football and the Olympic Games worldwide, and subsequently responsible of staging the world's two most popular sporting events; the FIFA World Cup and the Olympic Games. This essay will attempt to investigate in what extent does a slightly different sport, motor racing (through its most popular discipline, F1 GP racing), complies with the trademarks in world sport organisation set by the aforementioned institutions. For this purpose, I have opted to compare the structure of  FIFA and the FIA (Federation Internationale de l' Automobile), as well as the two sports (from their league structure point of view mainly),. Before that, however, I have decided to outline some of the characteristics of motor sport, which make it defer from mainstream 'bodily' sports, as well as clarify some definitions and terminology that is widely used to describe it. Moreover, I have seeked to make a comparison between the two individuals that transformed these two organisations into what they are today: Dr Joao Havelange and Bernie Ecclestone.

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The role of these individuals within the structures of the Fedrations will be examined, taking into account the existing theories concerning agency, which try to understand the role individuals can play in a social system. Specifically, the essay will focus on the impact Havelange (as FIFA president from 1974-1998) and Ecclestone (as F1's commercial rights' holder) had in what Miller refers to as 'Televisualisation (Miller et all, op. cit. p. 4)' of sport.

Televisualisation, along with Commodification (ibid, p. 4), will be further discussed, as they were the key factors that resulted in the economic growth of both FIFA and FIA, by being the marketing tools for boosting the image of football and motor racing worldwide. As a conclusion, some thoughts about the commercial future of Formula One will be outlined, mostly influenced by Sugden and Tomlinson's thoughts on the future of FIFA (J. Sugden and A. Tomlinson 2005).

Unfortunately, due to the relative lack of scholarly sources on motor racing, historical information has been gathered mostly from journalistic sources, with every attempt made to ensure these are credible ones. The same applies to information acquired from the World Wide Web, where only established sites (such as the FIA official site, the Financial Times and the European Union) have been used. Finally, as most of the original notes for this essay had been in Greek, I have used the Oxford Greek-English Learner's Dictionary as a reference (D. N. Stavropoulos, 2004).

The nature of Motor Sport

Due to its peculiarities, motor sport is not a popular participant sport, unlike football. Whereas football is easy to play, requiring minimum equipment such as a ball and two posts, and can take any place in any open space, motor sport is centred around such a sophisticated equipment as a racing car, which is very expensive to purchase and run, and it is restricted to specifically designed race tracks. Many consider it not to be a 'proper' sport; First, because a driver's ability is compromised by the competitiveness of his or her equipment, and therefore not always the most capable can challenge for victory, if they are not well-equipped. Secondly, because mainstream sport in most cases involves an athlete physically using his/her body to perform. A person sitting on a car is not considered as a true athlete, although in the higher disciplines, such as F1, a driver has to endure lateral forces of up to 4g for approximately 1 and a half hour (the average duration of a GP race), and at the same time being completely concentrated in order to achieve consecutive laps with accuracy of tenths of a second. Motor Sport has various disciplines, which, unlike many other sports, are available for representatives of both genders to participate in and compete against each other. The motor sport discipline whose structure will be compared to football will be Formula One, for many the highest echelon of motor racing (Table 1). More specifically, with 'Formula One' we refer to the Formula One World Championship, which is regulated by the FIA. 

Table  1: (Power outputs of racing categories (F1Racing magazine 2006)

Definitions

What is Formula One

The name 'Formula One' was only introduced in 1947 when racing activities resumed after the 2nd World War. Formula 1 was actually a code used to identify the technical regulations under which grand prix cars should be run at the races. Formula 1 racing began in 1947 therefore, although only in 1950 was a World Championship for Formula one cars organised (A. Cimarosti). However, F1 as a discipline exists in other sports as well, for example powerboating.

What is a Grand Prix

The first 'Grand Prix' (grand prize) for automobiles was organised as such for the first time in 1906 by the AFC (Automobile Club de France) (ibid). Ever since it has become almost synonymous with big motor sport events, and with Formula One since the inception of the World Championship in 1950. The term Grand Prix though is also used in other sports, such as motorcycle racing and some IAAF meetings.

Ownership of Formula One - the FIA

The FIA owns the name 'Formula One World Championship'(www. fia.com. 2006). In their website the FIA describe themselves as 'a non-profit making association (www.fia.com/thefia/Organisation/organisation.html 2006)' who, 'since it's birth in 1904, (it) has been dedicated to representing the interests of motor organisations and motor car users throughout the world. It is also the governing body of motor sport worldwide' (ibid).  Today it consists of 213 national motoring organisations from 125 countries (www.fia.com/thefia/Membership/index_membershtml, 2006). We should bear in mind that unlike for example FIFA, which only has authority over football, the FIA is responsible for all the types of car racing (rallying, racing, hill climbing etc), but that does not include motorcycle racing, which is the responsibility of the FIM (Federation International of Motorcycle).

The date of its foundation suggests it was conceived during a time when, according to Miller again, it was Europe's 'high point for setting in place the global governance of sport. Miller points out that most of the world's governing bodies were founded after the proclamation of the Olympic movement at the turn of the century; he also goes on to mention the establishment of equivalents for football, cricket, athletics and tennis (T. Miller et al, op. cit. p. 10 ). However, one of the peculiarities of the FIA is that it is not entirely a sporting body (see Table 2).

FIA General Assembly

FIA President

Deputy President                                   FIA Senate                                   Deputy President

(Mobility and Automobile)                                                                         (Sport)

FIA

World Council for Mobility and the Automobile                      World Motor Sport Council

Mobility and Automobile Commissions                                           Sporting Commissions

International Court of appeal

Secretariat

Table 2. The structure of the FIA (www.fia.com, 2006 ).

Instead, the FIA consists of the World council for Mobility and the Automobile, and the World Motor Sport council. The World Motor Sport Council is the world governing body of the FIA Formula One World Championship. This is the sporting branch of the FIA under whose jurisdiction come 'all forms of international motor sport involving land vehicles with four or more wheels'.   Of significant importance is the existence of the FIA International Court of Appeal, which is 'the final appeal tribunal for international motor sport. (...)Iit resolves disputes brought before it by any motor sport's National Sporting Authorities worldwide, or by the President of the FIA. It can also settle non-sporting disputes brought by national motor racing organisations affiliated to the FIA' (www.fia.com/thefia/Court_of_appeal/index.html, 2006).

The existence of the International Court of Appeal within the FIA structure points out to what Ken Foster refers to 'private justice' among global sporting organisations. He argues that 'the intent [...] is to create a zone of private justice within the sporting field of regulation that excludes judicial supervision or intervention with the decision-making process of international sporting federations. It denies athletes -[and teams]- access to national courts and leaves them dependent on the arbitrary justice of the international sporting federation themselves. Athletes can claim redress only from an arbitration panel created and appointed by the international sporting federation itself [...], (K. Foster, 2005). It appears that the FIA has followed FIFA's and the IOC's example, in taking advantage of the difficulties of monitoring INGOs. Foster underlines that 'states are unwilling or incapable of challenging the power of international sporting federations[...] (ibid. p.68). In addition, he points out alternative ways of 'avoiding legal scrutiny' by making it 'compulsory in their rules that disputes go only to private arbitration,  and by asking athletes 'to sign agreements not tot take legal action against international sporting federations'(ibid. p.69). Indeed, according to Allison, '[modern sport] has developed highly autonomous international organisations (...)' (L. Allison and T Monnington, 2005).

In the same text, Foster has previously commented on the general attitude of powerful sporting bodies: 'Historically, sport has been governed by management structures that were hierarchical and authoritarian. Their ideology, and often their legal form, was that of a private club (...). The commercialisation, and the later commodification [which will be discussed later on this essay] of sport put pressure on their legal form. Private clubs began to exercise significant economic power over sport. (...). International sporting bodies, as federations of national associations, in turn organised global sport. (...) the need for due process in decision-making and the need to prevent abuses of dominant power within the sport were two important consequences of this [the] legal intervention (K Foster, in Allison, 2005).  

So far it appears that the FIA is complying with the models of regulation of FIFA and the IOC in certain aspects, such as being an International Non-Government- Organisation (INGO). But, because of its very nature, the motor sport governing body does not entirely follow FIFA's and the IOC's patterns. For example, Sugden and Tomlinson (again), argue that 'drawing upon Archer's classification of types of international organisations, (C. Archer, 1992), (...) since its foundation in 1904, FIFA has transformed itself from and INGO (International Non-Government- Organisation) into a BINGO (Business International Non-Government Organisation (...), (J Sugden and A Tomlinson, 2005).  They go on to comment that 'FIFA's reason for existence has been increasingly profit-driven (...) and 'has become a  leading example of the professionalisation and commercialisation of modern sport (...), (Ibid. p.27). From a capitalistic point of view, one would assume that it would be normal for every organisation to seek profit. Sugden and Tomlinson, though, observe that such commercial activity coming from INGOs is illegal, and refer to Morozov's claim: 'As Morozov states, the aims and activities of an international organisation must be in keeping with the universally accepted principles of international law embodied in the charter of the United Nations and must not have a commercial character or pursue profit-making aims, ( G. Morozov, (1997).

( However, the FIA cannot be considered to belong in the category of INGOs becoming BINGOs. Like FIFA and the IOC, it has opted to locate its corresponding offices in Switzerland (www.fia.com/global/contacts .html, 2006), something which, as Sugden and Tomlinson point out, 'underlines [FIFA's] political and fiscal autonomy (and unaccountability), ( J Sugden and A Tomlinson, 1998); but it has not directly benefited economically by promoting the Formula One World Championship.

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Although it states that part of its resources 'shall be derived from income arising directly or indirectly from sporting activities, including the FIA champions (www.fia.com/thefia/statutes/Files/index, 2006), hips, it cannot benefit directly from exploiting Formula One's and other FIA championships' commercial rights. Foster, again, gives a detailed account of how the case of motor sport became a unique example of governmental intrusion into a global sporting body's self-regulation, ( K Foster, in Allison 2005). According to a European Commission principal, 'a governing body of sport needs to separate its regulation of the sport from its commercial activities in promoting events and in maximising their commercial value; a governing body must not use its regulatory functions improperly to exclude its commercial rivals from the sport (Official European Journal, 13/06/01, Cases COMP/35.163: COMP/36.638; COMP/36.776. GTR/FIA & others, 2005). It is suggested that FIA used its monopoly position by the threat of imposing sanctions to drivers, circuits, teams and promoters who wouldn't grant them exclusivity, thus rendering them unable to compete in rival series. Moreover, broadcasters who televised rival events were given least favourable agreements (K Foster in Allison, 2005).

The result of the European Commissions intervention was the change of regulations on behalf of the FIA: 'They insisted on a complete separation of the regulatory function of FIA, as the governing body of the sport, and its commercial function of exploiting the broadcasting rights to all motor sport events under its jurisdiction. The separation is (was) designed to prevent conflicts of interest. The Commission also limited the extent to which FIA, as the regulator of the sport, can take measures to prevent rival promoters of events competing with FIA's events. The Commission wanted to separate the function of the FIA in promoting events (and thereby gaining commercial benefit) from that of licensing events as part of its regulatory function. The role of a governing body, according to the Commission, is to act fairly and create a level playing field so that all promoters of events are treated equally and carefully (Ibid. p.84). Foster justifies the Commissions' decision thus: 'The different approach by the Commission can be explained because motor sport is a globalised, rather than an internationalised, sport. It had a commercial structure of management and offered no cultural or social justification of its anti-competitive behaviour. As such it was subject to normal commercial criteria in its regulation, (Ibid); and goes on to comment that 'this example may be unusual in that there was an excessive intermingling of the regulatory and commercial functions within the governing structures of international motor sport. However, it indicates that regional regulation can be effective and that the fear that globalised sport can escape all regulation and be immune from legal intervention may be exaggerated (Ibid). 

Structure of the FIA Formula One World Championship

Indeed, the structure of the FIA Formula One World Championship seems very much to resemble the American (commercial) model of sport, although being originally a European concept, as described above. Foster, once again, offers the key characteristics in American and European sport. (see Table 3.)

Table 3. (European model of sport vs American model of sport),  (Ibid. p.74).

By attempting to compare the structures of football and Formula One, we can relatively easily identify that the former belongs to the European tradition. It was indeed conceived as a sporting competition first and foremost. It is rather doubtful that there had been a plan to make profit out of football when the FA was founded in 1886. The open pyramid system is adopted, with clubs being promoted and relegated form the divisions of their national leagues, depending on their performance. Football has been conceived as a sport for all, and FIFA's initiatives such as the goal project confirm this (J Sugdan and A Tomlinson, 2003). Moreover, with the existence of events such as the FIFA World Cup which is exclusively contested for by National teams, the importance of national identity in football is displayed. Finally, the FIFA remains the only representative body for the sport.  In contrast, the structure of the FIA Formula One World Championship complies in general terms with the American (commercial one), although with few noticeable exceptions. It should be noted that, before starting to analyse Formula One racing using this model, we can identify in its nature all but one of the strands that are identified by Scholte, (A. J. Scholte, 2000). The only one absent is Internationalisation, as there are no international competitions in Formula One. Instead, it is an entirely globalised sport. There are no national Formula One championships. The only Formula One championship organised today is the World Championship. Liberalisation, universalisation and, most importantly, globalisation are all evident:

Liberalisation:

There are no cross border restrictions in Formula One, as it does not operate on a national level. The races can be held in any country, provided it has an FIA- affiliated national sporting body, and drivers and teams can come form any country as well.

Universalisation:

'(...)A global sport (...) needs to be simple in its structure and thus readily understood by those who have never played the game before, (Foster, in Allison, p. 66). This is more than evident in Formula One, whereas although most people are unlikely to have driven a Formula One car in full racing trim, unless they are professional racing drivers, they can easily understand its concept, that the faster car wins the race.          

Globalisation/ Americanisation:

Rationalisation of Formula One has been achieved since its conception in 1950. Written rules were adopted and a championship was organised in order to 'rationally identify' (Ibid), the best driver, (and the best team in 1958 with the introduction of the Constructors' championship). In addition, it also complies with imperialism and westernization. Foster comments that 'Developing countries are excluded because they have fewer facilities (...). Sports like motor racing require massive technical capital that excludes them' (Ibid).

De-Territorialisation:

Foster observes that 'we have global broadcasting of sport and global fans; (Ibid. p.67), and goes on to quote Giulianotti: 'Globalisation brings with it a disembedding of local social and political ties between club [-in Formula One's case, team] and community (R. Giulianotti, 2005). This is again present in the case of Formula One.

As races are not contested in the teams' home grounds, but rather, in race tracks scattered throughout the world,  there is not much connection between their national identity (with the exception of Ferrari, who still carries some sense of 'Italian-ness'). Re-location for Formula One teams is usual, provided this gives them a better chance of winning. Hence, Renault are based in Enstone, UK, Toyota in Cologne, Germany, etc. Furthermore, the ease with which teams can change their identity overnight is unique: The tartan-liveried team of former Scottish triple World Champion Jackie Stewart, founded in 1997 was turned into Jaguar in 2000, proudly painted in British Racing Green colour, and Red Bull in 2005, after the name of an Austrian-made energy drink.

The globalised nature of Formula One (especially in its difference to internationalised sport) has also been identified by Houlihan: 'Globalised sport (...) has rootless teams, with multi national or nationally ambiguous teams' ( B. Houlihan, 2005), [for example McLaren are a British team, founded by a New Zealander (Bruce McLaren), have a German engine provider (Mercedes) and their drivers come from Finland (Kimi Raikkonen) and Colombia (Juan Pablo Montoya)]. 'These rootless, de-territorialised sports are often typified by their identification with commercial sponsors'. [for example 'Scuderia Ferrari Marlboro', and 'Mild Seven Benetton Renault F1 Team']. 'Formula One teams are defined by their manufacturers, such as Ferrari' (Ibid).   

Going back to the American vs European model, we have already argued that although Formula One racing was conceived in Europe on the turn of the 20th century, its current management has rendered it a primarily profit-making sport. One could argue that until 1968, when cigarette advertising (and generally corporate advertising) appeared in Formula One, (http://8w.forix.com/love.html, see also http://8w.forix.com/myths.html, 2005), the sport belonged to the European tradition. Up until then, any profit made was incidental, not central. Only starting and prize money was available to the competitors. In the 1970s, with sponsorship cash and television money heavily influencing the sport (P. Menard, 2004), Formula One became a profit-making sport. The role of television coverage in that will be discussed later in the essay.

As for the league structure of Formula One, it is totally commercial. As mentioned before, there is only one Formula One contest, the World Championship. Entry to it is not based on a promotion system, but strictly on capitalistic values. In other words, only those who can afford it can enter. A recent example was that of the new Super Aguri racing team. Although the rules state  that 'applications to compete in the Championship may be submitted to the FIA (...) two years prior to the Championship in which the applicant wishes to compet (...),  (www.fia.com /resources/documents/, 2006), the team applied in autumn 2005. However, the application was successful. On January 2006, FIA issued the following statement: 'Following receipt of the necessary financial guarantee and with the unanimous support of the competing teams, the FIA has accepted the late entry of the Super Aguri F1 Team to the 2006 Formula One World Championship, (http://www.motorsport.com/news/article.asp?ID=208865&FS=F1, 2006). This incident is characteristic of an American-type closed league, as Foster describes it: 'The entry [to the league] is controlled by the incumbents. There is a fixed number of teams in the league [in Formula One's case, the highest number of cars that can take part in the Championship is 24] with no relegation. New teams cannot break into the closed shop unless the league decides that its overall economic wealth will be improved by expansion franchises. The economic risks of sporting failure are reduced and this makes capital investment in a team franchise more attractive' (K. Foster, in Allison (2005), p. 75).

In terms of the Governing body's role, it is also an occasion where F1 follows the American model. Vertical solidarity is non-existent, as there are no lower Formula One leagues. Even for motor sport in general, Formula One revenues are not redistributed to lower formulae, and there is no effort to make motor racing a 'sport for all'. Only whoever can afford motor racing can enter it. Formula One seeks to maximise its profits by commodificating itself. Elite stars are promoted as celebrities. For example, an attempt to present Jenson Button as a star has taken place in Britain, while in the case of Germany, Lincoln Allison and Terry Monnington comment: '(Lotthar Matthaus), Michael Schumacher, (and Bernhard Langer) have been more importantly formative of young people's images of Germany in the last generation that have Fichte, Hegel and Bismark, (L. Allison and T.  Monningtonin, 2005). 

The American model seems to suit Formula One best again when questions about its relation to national identity arise. What Foster observes as a characteristic of the American model, is that 'there is little sense of national identity (...). The leagues identification of its supporters is one of commercial customers rather than fans. The business can and will be moved whenever commercial considerations dictate, more like a supermarket chain than a sports team, (Foster, in Allison p. 75).

This is partly true for Formula One and relevant to de-territorilisation. Most teams can relocate, as mentioned, and race venues can be changed, as was the case in recent years, with traditional European races (like the Austrian GP) being dropped from the calendar in favour of new venues in Asia (Bahrain, Malaysia, Turkey, China). However, when the sport was conceived, (prior to advertising) the racing cars would be usually painted in their national colours (green for Britain, blue for France, silver for Germany, Red for Italy etc). Today only Ferrari maintains some sense of national identity, being the only team remaining of those who took part in the inaugural 1950 World Championship; and they are still carrying the traditional racing colours ('Rosso Corse'). It is the only team that has fans (usually fans support drivers, not teams), the tifosi, and the race tracks of Imola and Monza are considered their 'home'. In a lesser extent, that could apply to British teams and the Silverstone circuit. Few customs that refer to the presence of nationalism in past years still remain. One such example is the playing of the national anthem for both winning driver and constructor during the award-giving ceremony. At the same time, the hoisting of the flags in honour of the first, second and third drivers takes place. Another is the existence of a small flag next to the name of the driver, to indicate his or her nationality, on their racing overalls and on the sides of the car's cockpit.  Finally, there are no national teams competitions in Formula One, (In 2006, a rival series to F1, A1GP appeared), and, as mentioned before, the FIA is the only regulating sporting body. 

Televisualisation

However, we have seen that in practice, because of the aforementioned intervention of the European Commission in the governing of Formula One, many key decisions about the sport are taken by the person who administrates its commercial rights and not the governing body.  This person could be considered the equivalent of a commissioner in a commercial model.

In the case of Formula One, he is Bernie Ecclestone, through his FOM company. FOA/FOM, companies controlled by (...) Ecclestone, are engaged in the promotion of the FIA Formula One Championship.

The 1998 Concorde Agreement provides that FOA is the Commercial Rights Holder to the FIA Formula One Championship. FOA is thus responsible for televising and generally commercializing the Championship. On 28 May 1999, FOA changed its name to Formula One Management Limited (FOM) which manages the rights. The commercial rights themselves were taken over by an associated company, now also named FOA, (http://europa.eu.int/eur-lex/pri/en/oj/dat/2001/c_169/c_16920010613en00050011.pdf).

Miller underlines the importance of televisualisation in sport: 'Television was the prime motor in the development of post-war sport(...) helping to constitute a sports/media complex or media-sports-culture complex of sports organisation, media/marketing organisations, and media personnel (broadcasters and journalists). Dependency of sports organi