Posts Tagged ‘ Tony Fernandes

Lotus: If You Can’t Stand The Heat…

Besides being a talented and visionary engineer, Anthony Colin Bruce Chapman was as wide as the day is long. It would probably have amused him – he may even be having a giggle with Elvis Presley right now as they sip daiquiris by the poolside in Peru – to see a pair of similarly sharp businessmen handbagging each other over their conflicting claims to the Team Lotus legacy.

Lotus: a burnt offering? Photo by Darren Heath

Lotus: a burnt offering? Photo by Darren Heath

In the green corner we have Dany Bahar, a former branding wonk at Red Bull and Ferrari, who became CEO of Group Lotus last September. In the other green corner we have Tony Fernandes, a former high flyer in the music business who realised that September 11, 2001 was a great day to buy a failing airline (this he did, snapping up Air Asia from the Malaysian government for one ringgit). In the middle we have an utter failure to understand the complex nature of the Lotus business.

Team Lotus was always a separate entity from the road car business, in part because it enabled Chapman and his accountant, Fred Bushell, to play which-shell-is-the-peanut-under with HMRC and sundry other creditors. The picture was complicated after Chapman’s death in 1982, when the team carried on racing under its own auspices and the Group was sold to General Motors.

As a result of the GM sale, the Lotus brand was subjected to some hideous contortions, perhaps the nadir of which was the Isuzu Piazza, a hideous contraption that bore decals proclaiming “Handling By Lotus”. I once walked all the way round one expecting to find a similar badge advertising “Styling By David Blunkett”.

Even when Chapman was alive, ownership of a Lotus car was a labour of love in which sublime handling prowess and pleasant styling were offset by dreadful reliability – to the extent that owners joked the Lotus name actually stood for Lots Of Trouble, Usually Serious. Quality has improved in the interim, but Lotus – now owned by Proton, and still having to act as an engineering consultancy as well as a car maker to make ends meet – still has a long way to go before it can liken itself to Ferrari. Plenty of niche sportscar makers aspire to be as big as Ferrari, but most of them go bust along the way (don’t believe me? Call a medium and ask them to put you in touch with Ferruccio Lamborghini).

When Team Lotus collapsed at the end of 1994, David Hunt (brother of James) and a business partner took on the assets, such as they were. The only thing of value was the (trademarked) name, and Hunt has been trying to maintain that value ever since, including several attempts to bring it back into F1.

In 2002 David Richards let it be known that he was looking to rebrand the BAR team. As a jolly editorial wheeze, the magazine I was working on at the time invited its readers to send in their suggestions… and we were somewhat surprised to receive a high volume of identically phrased letters and emails suggesting that DR change the name to Team Lotus. Who was behind this? Step forward Mr Hunt…

(Parenthetically, by September that year we had a hot tip as to what the name was actually going to be. I was dispatched to Monza with instructions to secure an interview with DR, and then in the midst of the usual process of things hit him with our ‘scoop’ to see if it got a reaction. That it did: he hooted with laughter, told me it was a stupid name and that it sounded more like a brand of lavatory disinfectant. A couple of months later the rebrand was announced: instead of BAR it would be known as B.A.R, with the dots aligned with the centre of the letters rather than the bottom. How much do you reckon they had to pay a consultant for that piece of work?)

As Dietrich Mateschitz’s right-hand man, the ambitious Bahar had nowhere left to go in the Red Bull business. When he left for Ferrari, the word on the street was that he had been coveting Christian Horner’s position as team principal of the F1 team, and having failed to secure that he was hoping to slot into the succession at Maranello. Unfortunately he came in as Jean Todt’s man just as Todt was on his way out…

By the time Bahar’s feet were under the table at Group Lotus, in September 2009, Tony Fernandes had concluded a multi-year licencing deal to use the Lotus Racing name in F1, having failed to do a deal with Hunt to run as Team Lotus. Bahar knew that to fulfil his ambitions to turn Lotus into a properly multi-national behemoth to rival Ferrari, he needed to be in F1 – trouble is, Fernandes got there first.

So over the past few months there has been much manoeuvring behind the scenes. Bahar has been attempting to register various permutations of the Lotus name as trademarks. Fernandes, aware of his tenuous grip on the Lotus Racing name, has made sure that it was he rather than Group Lotus who clinched a deal with Hunt for the prized name – and logo – of Team Lotus. He managed it in the nick of time, for Group Lotus recently annuled the licencing deal. A more vivid picture of all the goings-on emerged when the 2011 GP2 teams were announced, featuring a Lotus-branded team run by ART in partnership with Group Lotus – and a Fernandes-owned team running as Air Asia.

Today the owner of Group Lotus, Proton, has weighed in to the battle. It issued a statement that amounts to a cease-and-desist notice, threatening dire levels of legal buggeration if Fernandes carries on using the Team Lotus name:

Tony Fernandes has no rights to use the Lotus brand in the 2011 Formula 1 season, and we will strongly resist any attempts by him to use our brand without our permission and will withdraw our sponsorship of the Lotus Racing team.

To put it simply, Group Lotus is everything Lotus. The fact that 1 Malaysia Racing Team entered into an agreement with Group Lotus to use the brand means that both Mr. Fernandes and 1 Malaysia Racing Team recognises and acknowledges Group Lotus’ rights.

Oh what a tangled web they weave. But is the brand and the badge, with the fabled intitials of Anthony Colin Bruce Chapman, really worth all the hoo-ha?

The situation bears amusing similarities with the sorry saga of Bucks Fizz, the pop act that won the Eurovision Song Contest in 1982. By the mid-1990s two of the original four members had retired from the touring scene, and the remaining pair recruited another couple to replace them.

“Musical differences” and general rancour ensued, which ultimately resulted in them going their separate ways – each recruiting two more members and attempting to tour the UK under the Bucks Fizz name. Summing up in the messy court case that followed, a weary judge attempted to amuse himself by informing the combatants that over 15 years after the heyday of Bucks Fizz, “the fizz has rather gone out of it.”

Will Bahar or Fernandes back down, or will it go to court? Well, to quote the popular maxim – also co-opted by Bucks Fizz for a minor hit – If You Can’t Stand The Heat, Stay Out Of The Kitchen…

Is Bernie holding Formula 1 back?

Having listened to what the delegates in the first session at the Motor Sport Business Forum had to say about broadcast rights in the new media age, I thought I’d set the cat loose among the pigeons. So, when Chairman Allen invited questions from the floor, I asked:

Given what was said earlier about the broadcast rights being based on a model that’s at least 15 years old, do you think that Formula 1’s rights holder is holding back the sport by clinging on to this outdated model?

I fully expected an epidemic of fence-sitting, but the responses were very interesting. Neville Wheeler of Cisco said:

The pace of change in the internet in general is so fast that unless you’re prepared to break away from the shackles of the old way of doing things, you’re rapidly left behind. You will very quickly find that the people who are passionate fans will seek out and access the content in one way or another.

The smart organisations are trying to find a way of monetising those rights, rather than trying to create a walled garden to protect them as long as possible. We have to get to a point where the audience immersion, social media and associated technologies are a key component of the way motorsport – and sport in general – is delivered to the global audience.

I like the ‘walled garden’ analogy. It speaks to everyone who has tried to access a territory-locked live feed or put up a montage of racing footage on YouTube. FOM has a marketing department of 12 and half of them must be lawyers; one probably even has ‘YouTube Grinch’ in his or her job title.

Gérard Lopez from Mangrove Capital Partners said:

To most people, the so-called MTV generation is the modern generation. To us it’s not – it’s old-fashioned. People don’t buy music any more. Kids don’t watch television as much as they used to. People consume media in a different way. Even some video game platforms are being forced out of the market by on-line gaming. Rights holders have to touch their audiences differently.

It doesn’t make sense to try to charge people for something that they will figure out how to get for free. F1 will be available on the internet and you need to be prepared for that. The challenge is not in deciding what you give away for free but in deciding what sort of value you’re going to provide on top of that – elements that people are actually willing to pay for.

New Lotus F1 boss Tony Fernandes said:

I came from the music business. I left that business because it didn’t want to embrace the internet. I told them [Time Warner] that if they didn’t embrace it, the music industry would be destroyed. They were more concerned with EBEYDL – Earnings Before Everything You Don’t Like – calling it ‘cashflow’. I quit that day.

Social media is a fantastic way of reaching an audience and keeping them excited on a day-to-day basis. There’s a massive opportunity. But whatever you do, it has to be accessible and reasonably priced. There’s a fantastic app for the iPhone that keeps you informed about timings on a race weekend, but it’s pricey. I think F1 has to look at that.

Everyone I’ve spoken to has been enormously impressed by Tony Fernandes. He seems to be exactly the kind of driven, entrepreneurial, forward-thinking businessman F1 needs, and not a flim-flam man or a Walter Mitty type.

The next panel was about sponsor value, and one or two of the representatives echoed the sentiment that FOM needs to take a more proactive approach to marketing the sport – but more about that in a separate post.