23/05/2009
NEWS STORY
At the end of the 1990s, F1 seemed to be set on one goal and that was floating its shares on the London stock exchange. Despite repeated attempts to do so it was not to be as an investigation by the European Commission put paid to this plan. The sport's boss, Bernie Ecclestone, never looked back as he sold stakes in the company and cashed out billions regardless. And if he has ever been envious of his counterparts at the helm of floated companies he can certainly cast that aside in light of news which has come to light today.
On the eve of the Monaco Grand Prix, the F1 race most synonymous with excess, new research has revealed that, in contrast, the sport's commercial rightsholder has a leaner and more productive workforce than any of the top 100 floated companies in the UK.
Research by F1's industry monitor Formula Money reveals that the 260 employees of the Formula One Group each generate more revenue than those at any company in the FTSE 100. The revenue generated per employee at the F1 Group is an impressive US$4.4m (£2.2m) - over half a million dollars higher than that at any FTSE 100 company.
The F1 Group's revenue per employee is also significantly higher than that of other global sports rightsholders such as the International Olympic Committee and FIFA; leading entertainment rightsholders such as Nintendo and Marvel; and any other organisation in Formula One.
According to its latest figures, the F1 Group had revenues of $1.15bn (£577.8m) in 2007. This comes from TV rights, race hosting fees, trackside advertising and corporate hospitality operations.
Over the same period the FTSE 100 company with the highest revenue per employee was private equity firm 3i, which had 765 employees and turnover of $2.8bn (£1.4bn). This equated to $3.7m (£1.8m) of revenue generated per employee.
The F1 Group's achievement against the UK's top companies is all the more remarkable given that it employs fewer people than any of its FTSE counterparts. The closest is real estate company Hammerson whose 261 staff generated revenues of just $620m (£311.5m) - around half of the F1 Group's turnover. With revenues of $1.1bn (£546.7m) Liberty International, owner of London's Covent Garden, has similar turnover to the F1 Group, but employs around three times more staff.
F1's lean workforce puts it in a strong position to weather the economic downturn. Paying staff is one of the biggest single items of expenditure for any company so, obviously, the fewer the better.
In contrast, the ten F1 teams are set to make hundreds of staff redundant as a result of cost cuts which are being introduced after years of extravagant spending. Staff numbers at F1 teams are comparatively high and last year's world champion's McLaren alone employs almost four times more staff than the F1 Group through its team and engine divisions.
F1 has history to thank for its lean workforce. Ecclestone single-handedly commercialised the sport nearly 30 years ago and personally negotiated all the sport's key contracts.
F1 was more akin to an amateur past-time in the pre-Ecclestone era with sporadic TV coverage due to transient teams but Ecclestone's master-stroke was getting them to sign the Concorde Agreement which committed them to race. He took this contract to the European Broadcasting Union and cut a TV deal which put F1 on the road to becoming the TV powerhouse that it is today. Another Concorde now needs to be signed and once again the task rests squarely on Ecclestone's shoulders. His staff keep the show on the road.
"We run a very tight ship and the staff are all focussed on maintaining F1's position as the world's most watched annual sports event," says Ecclestone. "I can't imagine anyone commercialising a sport from scratch again as I did with F1."