Top Stories from the Business pages of the International Herald Tribune,
Thursday, August 22, 1996
Racing After Formula One Dollars
By Brad Spurgeon International Herald Tribune
There's too much money in Formula One racing. At least that is the criticism increasingly used by those in the sport who don't have enough money to be competitive.
But as the role of money has increased in the sport, especially over the past decade, the role of the business manager has emerged; and in Formula One, August has become synonymous with business deals.
Last August, Michael Schumacher signed a $25 million contract with Ferrari. That spurred a stream of contracts that decided which drivers were going where. This year, with the championship far from decided, the leader, Damon Hill, will need all his concentration to win the title, as will Jacques Villeneuve, who is close behind.
They do not want to think about business or contracts. Mr. Hill, who has not yet signed for next year, has his older sister, Brigitte, manage his affairs.
Mr. Schumacher met his current manager, Willi Weber, in 1989, when Mr. Weber hired him as a driver for his Formula 3 team, which he sold last year to concentrate on managing the talented German driver.
Mr. Weber, who negotiated Mr. Schumacher's $25 million contract, says his client is ''just responsible for the driving,'' adding, ''My part is to protect him, to leave him in peace, to give him enough time with his team to build up a car he can win with.''
Mr. Weber is known as ''Mr. 20 Percent'' for the amount of commission he receives. He also has about 20 people working under him to manage Mr. Schumacher's commercial ventures. He has five employees devoted to licensing. Ten more sell the 220 products of the Michael Schumacher Collection, which brings in 65 million Deutsche marks ($43.6 million) annually
But how does a Formula One manager differ from a manager in another sport?
''Formula One is a really complex situation,'' Mr. Weber said. ''You need a good driver to have success. If you have success, you can sell it. If you don't have it, you have no sponsor. If you have no sponsor, you don't have a good car, so you can never have success; and with no good car, you can never have a good driver. The only thing that makes this turn around is money. This scenario means that inside Formula One you work with sharks.''
Craig Pollock got into management almost by accident. Before he became Jacques Villeneuve's manager, he had never been deeply involved in auto racing or in personal management. He was director of sports at an international college in Switzerland when he met Mr. Villeneuve, who was then just a teenager. Mr. Villeneuve's father, Gilles, had just died in a Formula One accident when the boy was sent to the school.
After Mr. Villeneuve left the school and had become a successful driver in Italian Formula 3, he decided he wanted Mr. Pollock to represent him.
''I didn't know what driver management was,'' said Mr. Pollock, a Scotsman. Mr. Villeneuve eventually convinced him to try.
Mr. Pollack's first decision was to send the young man to race in Formula 3 in Japan, where he could be his own man. In Italy he was primarily known as his father's son, since Gilles Villeneuve had raced for Ferrari.
Mr. Pollock then brought him to America, into the Formula Atlantic series and eventually into IndyCar in 1994, where Mr. Villeneuve was named Rookie of the Year. Last year, he won the Indianapolis 500 and became the youngest ever IndyCar champion. This year, Mr. Pollock negotiated Mr. Villeneuve's lucrative entry in Formula One.
Mr. Pollock says the role of the manager has increased as the paychecks have grown. Referring to Formula One in its early days in the 1950s, he said: ''Back then, $10,000 was a huge amount of money. Now we're talking about millions of dollars; and the minute you're talking about millions of dollars, you're talking about having to protect the image of the driver ‹ and using the image of the driver to create more money. That never happened in the past. We're talking about the intellectual property of the driver.''
Currently second, Mr. Villeneuve could become the first person to win the drivers' title in his first year in Formula One. That would make his intellectual property worth a lot more than if he finished second.
It would also increase Mr. Pollock's take, though he refuses to say what percentage that is.
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