Magnus Carlsen, world chess champion, once said: “If you want to get to the top, there’s always the risk that it will isolate you from other people.” Great insight from the 27-year-old Norwegian, whether it applies to his sport or the world of sports-car racing. Chess is a great way to come to grips with the current state of the latter. It’s a timely subject following last weekend’s Rolex 24 Hours of Daytona and the beginning of the 2017 racing season.
I’ve written many times before about the three strongest entities in the world of sports-car racing: the Automobile Club de l’Ouest (ACO), the group that runs the Le Mans 24 Hours race; the Fédération Internationale de l’Automobile (FIA) which runs the World Endurance Championship (WEC); and the International Motor Sports Association (IMSA), North America’s sports-car sanctioning body.
These parties have been playing chess with each other for years. Handling the American rank and file are IMSA executives Ed Bennett and Scott Atherton. They are low-key, measured, confident, and determined. Across the board are two Frenchmen, Pierre Fillon, president of the ACO, and Gérard Neveu, CEO of the WEC.
For several years, Fillon and Neveu have mastered every game they have played with manufacturers, partners, sponsors, and the media. Their combined forces brought to life the current version of the World Endurance Championship and have reaped enormous financial rewards while growing sports-car racing on a global scale. However, this duo’s focus on creating a premiere series has also isolated them from seeing changes in the marketplace and being able to adapt quickly and effectively.
“Undeniably French” is a phrase I’ve heard used to describe Fillon. He is soft-spoken, polite, dignified, immaculately dressed, a trained ophthalmologist, and part of the French elite. He has been president of the ACO since 2013. He is from Le Mans and has not missed a race since the mid 1960s. Members of the European press corps and racing officials in North America praise his intellect and his integrity. His brother is Francois Fillon, the Prime Minister of France from 2007-2012, and is now the Republican nominee for the 2017 French presidential race.
We can only imagine the conversations the two brothers have these days.
Pierre: “Audi has pulled out of sports-car racing, I am trying to convince Peugeot to return, and the Americans have made a huge success out of this new DPi formula.”
Francois: “Mon Dieu! I am trying to be president of this great country. I must work on the economy, deal with Marine Le Pen, and the Americans have just elected Trump.”
Pierre: “Mon empathie”
Francois: “A toi aussi.”
“Impossibly French” is a phrase I’ve heard to describe Neveu. Along with “arrogant,” “charismatic,” “outspoken,” and the word that instantly comes out of every European journalist’s mouth when asked to describe him, “bully.” He is tall and broad, grew up near the Paul Ricard circuit, is passionate about rugby, and is responsible for running and making money for the WEC.
Make no mistake, Neveu works for Fillon. The 24 Hours of Le Mans does not need the FIA, can survive if the relationship does not, and will continue to be the greatest sports-car race in the world if the World Endurance Championship fades away. I mention this because I have seen the WEC come and go twice before in my career. And it may be headed that way again.
When this chess match began several years ago, the French and the Americans took quite opposing tactics and strategies.
The French pursued the “highest technology in all of motorsports” route with the LMP1 cars. These are amazing race cars that redefined what it takes to win overall at Le Mans. Also mind-boggling expensive, a full-season WEC program costs more than $200 million. And tens of millions of those dollars are spent on partnership and marketing deals with Le Mans and the WEC.
The Americans decided North America could not support LMP1 cars and budgets. The model was simply not sustainable in this market. Instead they decided to develop a new prototype car, the Daytona Prototype international, or “DPi,” which debuted in Florida this past weekend. A full-season campaign will cost a team less than $15 million, including marketing activation and partnerships.
Several years ago, the French decided the LMP2 (or “P2”) category should not involve manufacturers. If manufacturers want to race prototypes, they must step up to LMP1. And for most of the past decade only three manufacturers did, most recently Audi, Porsche, and Toyota.
The French also decided to have only one engine supplier power all of the P2 cars from 2017 forward. That supplier is Gibson, a U.K.-based engine builder, formerly known as Zytek. Gibson makes great racing engines, and it does not sell production cars.
The Americans welcome the P2 cars with their Gibson engines. But they also courted car manufacturers to come and race in the new DPi class. Please place your engine in one of four chassis suppliers and market the hell out of it, they said. The car that won at Daytona is a Cadillac. Most people don’t know or care that Italian chassis maker Dallara built the tub. Gibson and Dallara are suppliers, while Cadillac is a manufacturer. Guess which one has a huge marketing budget?
So as this chess match progressed, the French decided companies like Cadillac, Mazda, and any other manufacturer interested in racing in P2 where nothing more than pawns. Either step up to spend hundreds of millions of dollars each season to race LMP1 prototypes or go away. They were brushed aside, sacrificed, and wiped out in the first opening moves. The Americans took the opposite approach. They tactically placed these major car companies in key roles as bishops, rooks and knights, and strategically built alliances and a sustainable game plan. If the American side had any pawns, it was the Prototype Challenge category that will dissolve at the end of the 2017 season. Many of those PC owners have already made the move to the GTD and DPi classes.
Late in 2016 the French strategy took a massive hit when Audi’s LMP1 program announced it was leaving the WEC and would not return to Le Mans. Also leaving was the German company’s $200-million annual budget, a lot of which was spent at Le Mans each year with marketing, hospitality, and advertising programs, boosting the Le Sarthe economy. Audi also spent money at various WEC events around the globe with all of the associated fees funneled through the French racing organization.
The Volkswagen diesel scandal received much of the blame for the Audi decision, and rightly so. The scandal forced Audi to cut racing budgets to help stem its parent company’s financial hemorrhaging. Audi also announced it was moving its racing R&D to Formula E, where it will spend only 10 percent of its LMP1 budget to race electric cars in a global FIA championship. And market the hell out of it. Great timing on Audi’s part, as the European production-car market begins to shift away from diesel and toward EV, fuel cells, and other alternative forms of energy.
On the other hand, this was not great timing for Fillon and Neveu. Since Audi withdrew, the WEC has suspended its next generation of LMP1 technical regulations. Those regulations included building all-new prototypes and the option of having as many as three separate hybrid systems in future race cars. The manufacturers welcomed this news, saving tens of millions of dollars in development costs.
I’ve been told part of the contract between the FIA and Le Mans involves the number of car manufacturers that must race in the LMP1 category. The number is three. Right now, there are only two, Toyota and Porsche. Apparently the ACO can opt out of this relationship if a third marque does not join the series. And that decision would effectively end the World Endurance Championship. Neveu and Fillon are believed to have approached Peugeot, but why would this French company or any other car manufacturer join LMP1 at this stage of the game? You are immediately three years behind your competition, with zero chance of catching up, and nothing more than another pawn in the match. The smart decision is to wait for the next set of regulations to be finalized and start fresh.
The French did not see what the Americans saw, namely that it does not matter what category the money comes from. So the Americans placed Cadillac, Mazda, Nissan, and the other manufacturers joining IMSA in 2018 in positions of power. Chess pieces that can cover more than one space at a time, making large moves and resulting in huge impacts on the overall sports-car game and specifically on the marketing of their product. And, of course, at a fraction of the cost. The Americans pursued this strategy while the French simply brushed it aside.
Which brings us to the 2017 Rolex 24 at Daytona and the debut of the new DPi cars by Cadillac, Mazda, and Nissan. IMSA officials developed technical regulations that discouraged spending hundreds of hours and millions of dollars in a wind tunnel trying to extract another two-tenths of a second from a car. IMSA’s Balance of Performance formula would eventually even out that advantage. Instead, spend the money on design cues so fans and potential customers can identify with your car. Who would’ve thought?
The Mazda and Caddy broke cover during testing this past fall. They are as sleek and as beautifully designed as any LMP1 car. A non-racing enthusiast would have a difficult time telling one from another if logos and paint schemes were removed. Yes, I realize that hardcore race fans will be able to tell the difference in an instant. But that is not the point.
Car manufacturers already have your attention. However, what they really want, what they really need, is the attention and the eyes and the wallets of the potential consumer who follows the brand on social media, or reads media and sees a win advertisement celebrating a huge victory. That cool-looking race car on the social media post or in the print ad is the eye candy. The fact the car raced in France or Florida is buried in the copy and is somewhat irrelevant.
So as Fillon and Neveu moved their chess pieces, they concentrated on growing their global series and extracting as much revenue from it as possible. And they developed future technical regulations that were more sophisticated, complicated, and expensive. Only one new manufacturer (BMW) showed any real interest. And when the French pair now look across the board, they see Bennett and Atherton sitting together, carefully plotting their next move.
Each IMSA move is based around long-term affordability for their partners and teams, and can sustain unforeseen economic hurdles. Now, in 2017, IMSA has captured many of the French pawns and have several of their key power pieces surrounded. It is no coincidence Dr. Wolfgang Ulrich, head of Audi Motorsport, and Ralf Jüttner of longtime Audi partner Joest Racing, were both in attendance and very visible in the Daytona paddock. Meanwhile, a fourth major car company will join the DPi grid in 2018 and more are on the way.
The U.S. remains the most important car market in the world. The decision to race and market in North America with the IMSA series, at a fraction of what it costs to race in WEC, has become easier to make. Yes, the 24 Hours of Le Mans is still the big prize, but the present cost of hoisting that trophy overhead is simply too high. Audi realized this, and Toyota may soon follow.
Chess is a forward-thinking game. The ability to view the entire board, to see your next three, four, or five moves in advance, and then execute, is key to success. In racing, failing to do this does not necessarily mean checkmate. However, it does mean you no longer control the board. This is true with the French/American game. Fillon will always have Le Mans, the King of all races, and it will not be knocked over any time soon. Three years ago, IMSA first charted its prototype-class strategy. In January, we witnessed the plan’s brilliance. The American series has more opportunities than ever before.
As one racing veteran told me after the race in Daytona, “Moving forward the French must decide if they are in the technology business or the entertainment business.”
There is another Frenchman, one whom Fillon and Neveu are undoubtedly familiar with: Jean-Paul Sartre, who wrote about “the agony of choice.” These two gentlemen understand these words better than most. The next piece they move will either leave them more isolated, or put them back in the game.
After last weekend’s spectacular debut of the new DPi cars, an epic Rolex 24 at Daytona, and the majority of their chess pieces still in play, IMSA’s leaders should remember these words also written by the French philosopher: “To read a poem in January is as lovely as to go for a walk in June.”