ISLAMATRON wrote:Cost is real, "value" is subjective... the BS marketing firm is selling a load of crap... The "value" of Brawn's "marketing" is exactly what they were paid for it(Virgin paid about 400K per race). If the value was any more than that the BS marketing firm(all of them are BS actually) sure did miss out on a huge commission. Instead of making up imaginary numbers they should have been lining up sponsors.
The Budget cap would have in no way "taken value out" of F1... that is just more marketing BS... 18 or less car grids is what would have taken value out of F1.
A billboard facing the highway holds the same marketing "value" regardless of what the person paid to advertise their product on it, the same number of eyes fall upon it. Same for F1, the winning car holds the same number of eyeballs regardless of how much it cost to be made/developed, anyone argueing any different is a liar, most probably a professional one, in the field of marketing.
It's a common mistake to equate value and cost; but they aren't the same, and are not necessarily even related. If a shirt costs $50, that doesn't mean it has a $50 value to me. If it does and I have the money, I might buy it; but if it doesn't I won't. The guy next to me however might value the shirt at $70, so for him its quite a bargain. Cost can certainly affect perceived value, of course. I know a little about wine, for example; but not enough to properly value the wines offered on a restaurant's wine list, especially if I don't recognize any of those offered. So I default to the optimistic belief that the price of the wines accurately reflects their quality. That, or I'll sheepishly admit my ignorance to the waiter, in the slightly-less-irrational belief that he will point me to the best value for my money rather than to the wine the restaurant bought too much of or gets the best margin from.
An object's value is also affected by things with which it is associated. A shirt sold at Wal Mart will have less perceived value than the exact same shirt sold at Ralph Lauren. Likewise, a brand of wine will have less perceived value when advertised on a billboard in a poor neighborhood than when advertised on one in a fancy shopping district. It's irrational, but we're all victims - marketers might trade in BS, but their industry is far from being BS itself.
And it's frightfully easy to destroy value. Levi's jeans is the great example of that. They used to be considered the epitome of what a pair of jeans was supposed to be, and had everything going for them - so much so that the only real competitors they had were in the lower end of the market. Then some bright MBA piped up and said that they would all be sailing magayachts if they cut costs and allowed Wal Mart to carry their products. They did, and long story short, practically overnight their brand's value was utterly destroyed and it almost took the company with it. Today, they are considered a low end commodity product, while countless others have sprung up to fill the void at the top.
Almost every market has a structure like this. If a company wants to enter a market, it has to decide how to position itself based on where it thinks the best profits are to be found - is it low-margin, high volume; or high margin, low volume? Do you want to be Nokia, with 26% of the smartphone market; or Apple, with just 8%? (answer: Apple)
F1 is obviously one of those elite brands. It's value in that respect depends on both concrete and ethereal factors. Sure, there's the direct value of the sheer number of eyes watching, but there is also the value that each set of eyes assigns to what they see. Because F1 is considered the pinnacle of motorsport, those who participate in it - be they a sponsor, competitor, or venue - take on the same cachet. And the more elite we perceive the sport itself, the more elite we perceive those who participate. Obviously, there is a perfect synergy then between the sport and sponsors like TAG, competitors like Ferrari, and venues like Monaco or Abu Dhabi - products that trade almost entirely on their exclusivity. Then there are those who want to capitalize on the sport's ravenous competition that all that money fosters - brands like BMW or Bridgestone for example, who want their products to be perceived as technically superior. The flip side is that there are brands which would gain little from associating themselves with the sport.
Here's an interesting set of stats to ponder.
Surveys of NASCAR show that 72% of the fans would 'almost always' or 'frequently' purchase brands that are associated with the sport. The same survey of F1 fans? 28% In fact, more F1 fans would 'almost never' choose the F1 sponsor (32%) than would choose it! The reason for this isn't that NASCAR fans are somehow more loyal than F1 fans, but rather that F1 sponsors are advertising to a smaller, wealthier percentage of their audience. The rest of us are just voyeurs. Someday, right?
So this is why I'm bewildered at the FIA's stance on lowering the cost of the sport. When you lower the cost and reduce the technology, you eliminate the two primary factors in setting the sport's perceived value. The same number of people might watch and attend - perhaps even more - but they won't perceive the sport and those who participate in the same way. You've screwed the sport's fundamental economy. If F1 isn't the most expensive, technologically advanced and therefore competitive form of racing, then what is it? Just another series like any other. Take it down market, and be ready to suffer a similar fate as Levi's. It would survive, of course; and the sport that emerged might be the same or even more enjoyable to many of us. But it's position as the best of the best will be threatened.
Think about it. If right now, Ferrari, Mercedes, McLaren and Renault left F1 and instead focused entirely on LeMans prototypes, spending outrageous amounts, hiring the best drivers, etc., leaving F1 with budget caps and spec Cosworth engines, would you still consider F1 to be the pinnacle of motor racing? Hardly.
I'll count on you to let us know when our exchanges start to spoil the atmosphere of the place. 
