Building for the future - Exclusive Q&A with Chase Carey

Following the recent announcement that Liberty Media has agreed to acquire Formula One, the business has a new Chairman in the form of Chase Carey, formerly President of 21st Century Fox. We caught up with the American businessman in Singapore to get his immediate thoughts on what the deal means for the future of F1 racing…

Q: Chase, what makes an American media conglomerate like Liberty Media invest heavily in a sport that currently does not mean a great deal to many Americans?

Chase Carey: Well, it is a company that has its roots in America, yes, but it does business around the world. But now I have to speak for myself rather than for Liberty, as my career has been at Fox and News Corp more than at Liberty. And in the future I will work for Formula One and not for Liberty. As for the question of why invest in a sport that is very much European dominated, there is a simple answer: business has got global and Formula One is a global sport. So the times when you were thinking in terms of continents and regions is a thing of the past. Liberty has been investing in global businesses, so Formula One is just one asset of their global portfolio. I definitely would agree that the US is an area of opportunity for the sport in the longer term. But so is the Americas and Asia - and we certainly believe that all these are important areas of growth. But to a certain degree there for sure is a bigger untapped market in the US. Maybe it has not been tapped in the past in the right way, so we will try to grow it smartly. This, of course, is a longer-term proposition - but an important one. But of the same importance will be strengthening it in historic places like Europe. There is the foundation of the sport and we certainly will build on that historic strength.

Q: American companies are very much profit driven, so it is clear that you are not here just for the fun of it. What are Liberty Media’s plans in terms of return on investment?

CC: I certainly cannot speak for myself or for Liberty - it’s still too fresh. But, of course, profits are important - but realistically the primary goal of the business that I have been in has always been to build long-term value. So the goal is not what can be achieved in the next 12 months, but where you are going to be in three to five years. That means the willingness to make investments. And I do think that Liberty, to its credit, has a history as a long-term shareholder. They are supportive and they know their business, as they have been in the media and entertainment space.

Q: So there is no ‘take the money and run’ mentality?

CC: It sure is not ‘take the money’ with a focus on how to get the profits up in the next 12 months - it’s about how to build long-term value. So the focus will be investing and building over time. That is the mind-set that we bring and hopefully it will enable us to bring Formula One to the next level. Formula One is a great business, a great franchise and we want to build on that and I see that there is opportunity too for stepping up by investing in all sorts of areas - some of the historic areas in making the racing great, making tracks more exciting than ever; investing in marketing the sport so that it connects with fans in the right way; investing in new platforms - digital platforms - that really are able to connect to the fans with the information that they really want, taking advantage of everything that the sport has to offer.

Q: Where do you see the beauty of the purchase? F1 board member Sir Martin Sorrell said that there is a huge demand for global platforms…

CC: There is no question that one of the truly distinguishing features of Formula One is that it is a global sport. And the world is growing more and more global - people are global, companies are global and there aren’t many platforms that match that global demand. Yes, you have the World Cup and the Olympics, but they are only every four years. Formula One is unique in being a global sport recognised around the world - and one that happens every year for nine months! That is an incredible strength that Formula One has the opportunity to build on.

Q: Mr Ecclestone always says that it takes a used-car dealer to run this sport …

CC: Ha, I can’t claim I am a used-car dealer. Maybe he’ll teach me some tricks… (Laughs)

Q: … but in the future it will be a Harvard man at the top. What do you make of that?

CC: I’ve got to be a Formula One man then.

Q: So there is a bit of petrol running through your veins?

CC: What is more in my veins is sports. I have been in the media business, so I know content well - and sports are content, sports are entertainment. Sport has been an enormous part in the business we’ve built at Fox - and not just US sports, but global sports: cricket, soccer, rugby - and Formula One. Formula One has been a big part of Fox Sports. I always believed in the values of sports. They are becoming more and more important in a world that sees so much fragmentation. And think that with all the fragmentations, there is still only one Formula One! The power of really global sporting franchises is becoming more important than ever. I appreciate what sports mean to fans: it has a unique connection… Their teams, their heroes. So sports have a unique relevance.

Q: Has sport almost become like a surrogate religion?

CC: I don’t know about that, but it is great that it binds people. If you are a fan of let’s say Ferrari, or Mercedes or McLaren, you are connected with other fans - in a fun way. You enjoy competition - good healthy competition. So sport is unique.

Q: What qualities do you think you will bring to the table for Formula One?

CC: Realistically a career [‘s worth of experience]…

Q: So will you be Bernie Ecclestone’s apprentice for the time being?

CC: Ha, I am a bit too old to be an apprentice. (Laughs) I think we bring different things and hopefully by working together we can figure out how to get the best out of the sport. So what I bring is a long career in the media content business, with sport having been a big part of it. I have been involved in this media content business from a television perspective, so I understand the importance of live events. I understand how to market it - not only with old media tools, but with the new digital platforms. And I do understand managing businesses, in putting the right team in place to be working with Bernie and his team - and grow the sport. So it’s a 30-year career in media and entertainment, managing large, complex businesses and working with complicated personalities. (Laughs) Certainly Hollywood is a good training for dealing with unique personalities.

Q: The F1 calendar has 21 races - which means 21 different political and economic situations. Then you have 11 teams, 50-odd TV stations and a legion of media and sponsors. One might say that it is easier to control a flea circus than F1. There must be a strong vision regarding the future management structure to run that. What is that vision?

CC: Well, realistically what I am doing in the next few months is probably more listening to what people have to say - and adjusting that. Yes, it is a sport with a wide range of constituents, so it is important to understand what each of those constituents’ objectives are - what their issues are - and then to provide a degree of leadership that take all that into account - with a vision of where you want to go and where you want to be - something that people can align behind. You cannot make everybody happy all the time, but you’ve got to understand what everybody wants and then find a path. Sure, that is not a task for a committee, as committees tend to become bureaucratic - but there also can’t be a dictatorship - even if probably here they are used to it. They need leadership, and leadership means that you create a vision to achieve the right goals for the future. Successful businesses are built on successful leadership that understands what every party wants - and yes, there are a lot of parties involved in Formula One. There have to be compromises. You can’t make everybody completely happy, but you want hopefully make everybody happy enough to believe and ultimately sign on that it’s the right direction for the sport as a whole.

Q: What is your timeframe in F1? Five years? Ten years?

CC: The world moves so fast that I have never thought anything beyond two to three years. Yes, you have to have long-term visions, but you have to adjust them to the changing circumstances. For the first few months - call it 100 days - it is largely listening and meeting - and digesting. And then come out of that phase with a degree of visions that continue to be shaped. Nothing is ever written in stone. Bernie is the CEO, so Bernie is going to lead it and I will work with Bernie to establish some kind of strategic plan to where you want to go.

Q: Where do you see the next ‘cash cow’ of the Formula One brand right now?

CC: Well, the historic pillars are important and we will continue to grow those - make the events bigger from the promotion side of it, and with broadcast probably widen the core television experience to today’s needs. I believe that a good digital product makes the television product more rewarding. Marketing the sport, in telling the story of the stars and heroes and the incredible machines. Then strengthen it geographically. So there is not ‘the cash cow’, but there is growth possibility in every area.

Q: Speaking about strengthening F1 geographically, what about the US?

CC: It is too early to have a clear plan, but we clearly will have a plan to develop America, to be in the right market. As I said earlier, there is a big untapped audience in the US. I don’t want to criticise the efforts in the past, because I don’t know the efforts in the past. Formula One is a great premium brand and that means to me that you want to be at a location like Los Angeles, New York or Miami. Ideally in the great cities in the world!

Q: In your view what are the three biggest assets of F1? What have you personally been most impressed by?

CC: I am not sure I can break it down to three! (Laughs) Let’s give it a try: the amazing cars and technology; the stars - the world is built on heroes; the global aspect of the sport with these amazing venues. I have not been to all the venues so far, but Singapore certainly is amazing. The race is great - that’s the core - but it is really a week-long extravaganza with music and entertainment. That’s really what it is about - great events. This is it: creating a great event. So there you have the three: the cars and technology; the stars; and the events - the live experience.

Q: How long did you ponder over taking the job?

CC: When I first was asked I thought about it - for ten seconds - and then actually said yes. It sounded interesting and I thought that I could make a difference in a business that has real opportunities - there was an opportunity to do something really special. With all credit to Bernie, he’s had enormous success - the world admires Bernie for the business that he has built. But I still think that there is another level that we can take Formula One to. That is the opportunity that excited me when it was presented to me. I thought, ‘That sounds great!’ Then after saying yes, I had a few months to digest... (Laughs)

Q: What will be your next step? Moving to the UK?

CC: The UK will be my home away from home. It will be my base, aside from all the travelling. Right now I am a vagabond and hope to get settled in the next couple of months.