:00:09. > :00:14.Mercedes and Ferrari spent hundreds of millions of dollars on their cars
:00:15. > :00:19.and drivers each year but is this good business? Here in Singapore, we
:00:20. > :00:47.are talking business. A warm welcome to the programme.
:00:48. > :00:52.From the engine to the design of the vehicle, Formula One is a lot more
:00:53. > :00:55.than just cars racing around a circuit. It is a multi`million
:00:56. > :01:02.dollar business that depends on sponsors for revenues and selling TV
:01:03. > :01:05.rights in order to fund the large investment in the cars that raged ``
:01:06. > :01:30.race each season. I have been the CEO of Lotus Formula
:01:31. > :01:35.One only since January this year. Looking at it from a business point
:01:36. > :01:39.of view, it's interesting in that we only have two forms of income, the
:01:40. > :01:44.money from our sponsors and the money from FLM, dependent on where
:01:45. > :01:49.we finish the Championship the year before. In the current market,
:01:50. > :01:54.sponsors and sponsors wanting to get as much money as they can are
:01:55. > :02:00.declining, so it is a case of managing the between money coming in
:02:01. > :02:04.and the budget going out. You have made cutbacks and tried to stem
:02:05. > :02:09.losses in your business but you have also come down in terms of the
:02:10. > :02:15.rankings in terms of fourth to eighth. How do you square that? I
:02:16. > :02:19.can't speak for anyone else but I am trying to look at the sponsors and
:02:20. > :02:24.talk to them and offer the more than just a sticker on a car. I get the
:02:25. > :02:30.perception that within Formula One, in the past, it has been very much
:02:31. > :02:35.about, there is a sticker on a car, leave us to do the racing, where as
:02:36. > :02:37.I am tried to look a return on investment and different areas we
:02:38. > :02:43.can offer something different and unique. I've racing companies are
:02:44. > :02:48.spending big money. Is it tough for a smaller team like yours? It seems
:02:49. > :02:52.as if the investment and spending on cars is like an arms race. It
:02:53. > :02:59.doesn't that is the age`old problem in Formula One but the organisers
:03:00. > :03:04.tried to curb that as much as they can. In previous years, teams could
:03:05. > :03:10.test as much as they want and spend 24 hours a day testing cars around a
:03:11. > :03:17.track. That has been curbed now. We only have four testing days a
:03:18. > :03:21.season. Just this year, they have curbed the amount of time you can
:03:22. > :03:27.spend at the factory, so only a certain amount of time to spend on
:03:28. > :03:30.that. But it is an arms race and the people who have got the deepest
:03:31. > :03:40.pockets will always find ways around things. They will spend 204I was a
:03:41. > :03:46.day in the simulator. What are your ambitions for the team? Technology
:03:47. > :03:51.has changed, engines have changed, hybrid power has come in,
:03:52. > :03:59.aerodynamics have changed, so this year has been a difficult season. We
:04:00. > :04:02.started off at a disadvantage and although we caught some of the teams
:04:03. > :04:08.ahead of us, we remained where we are. It's fair to say we will finish
:04:09. > :04:20.this season in a similar position to where we are now and we look towards
:04:21. > :04:28.next season. What happened this past season? There were three different
:04:29. > :04:31.engine suppliers and we have a long`standing relationship with one
:04:32. > :04:39.of them. It's fair to say that Renault were behind in their
:04:40. > :04:43.development. For the 11 teams have got Mercedes engines. At the start
:04:44. > :04:47.of the season, they were superior to the other cars on the track. The
:04:48. > :04:52.Renault engine was not as good as some of the other engines. It put us
:04:53. > :04:58.at a disadvantage. Within Formula everyone is developing owning `` at
:04:59. > :05:02.an incredible rate and if you are behind at the start, it's almost
:05:03. > :05:06.impossible to catch up. Whilst we have developed during the season,
:05:07. > :05:12.other teams have also developed. How much investment does it take to get
:05:13. > :05:28.your car is ready? Our budget for 2014 will be... We will spend around
:05:29. > :05:36.?130 million. And we are one of the smaller teams as well! The bigger
:05:37. > :05:40.teams will spend more money. It's a constant race, constant development.
:05:41. > :05:53.The car that finishes the season is not the same cover started the
:05:54. > :05:58.season. So, how has that `` how has this changed over the years? We hear
:05:59. > :06:10.from David Coulthard, who recalls how he started out in go`karts. I
:06:11. > :06:16.started at 11 years old but nowadays, you can start at eight
:06:17. > :06:27.years old. If you look at Lewis Hamilton and Rosberg, they started
:06:28. > :06:33.when they were eight. I was not very good at the beginning but with hard
:06:34. > :06:43.work, dedication and good support, I was able to progress through to
:06:44. > :06:47.1989. It was the first step to enable you to make your journey
:06:48. > :06:58.towards Formula One. It was a very difficult time to make a Grand Prix
:06:59. > :07:02.debut. There was a lot of nervousness around the sport at that
:07:03. > :07:06.time because of a couple of deaths but I was a test driver for
:07:07. > :07:11.Williams. When you are young, you tend to focus on the next step going
:07:12. > :07:17.forward. When I look back on it, I was given the opportunity. At 43, I
:07:18. > :07:29.would probably not want to do it, but that gave me my start in Formula
:07:30. > :07:35.One. Technology the sport has changed so much. When I started, we
:07:36. > :07:42.had three batters on the steering wheel. Nowadays, they have maybe 35
:07:43. > :07:46.buttons and dials on the wheel. The drivers are much more involved in
:07:47. > :07:51.the engineering of the car as well. That has been brought on because we
:07:52. > :07:59.have much better use of big data transfer and storage, software that
:08:00. > :08:04.the cars are able to run and that enables more parameters to be locked
:08:05. > :08:12.in data logging and also to then be adjusted by the driver. Technology,
:08:13. > :08:16.like in life, when I look like `` when I look back to when I was born
:08:17. > :08:20.in Scotland, we didn't have mobile phones and Internet back then, but
:08:21. > :08:38.for the next generation, they embrace that as an everyday part of
:08:39. > :08:45.life. The reality is, if you go back to the foundations of the first
:08:46. > :08:49.motorcar, Mercedes`Benz created the first motorcar in 1880 something,
:08:50. > :08:54.back then, someone walked in front of the flag `` in front of the car
:08:55. > :08:58.with a flag to warn people because they were not very fast. But you
:08:59. > :09:04.still need human and machine working together. The human aspect is very
:09:05. > :09:09.important in designing the machine. The car doesn't move without the
:09:10. > :09:12.driver. Although technology has improved, cars are more
:09:13. > :09:15.sophisticated today, but you still need a driver and that's the great
:09:16. > :09:31.news. You and I won't go out of fashion. How important is technology
:09:32. > :09:54.in Formula One? Is it the man or the machine that matters? Here with me
:09:55. > :10:00.to debate this are three people. Is that the man of the machine? Both.
:10:01. > :10:05.Formula One is the greatest team game in the world and like some
:10:06. > :10:11.sports where you can see the whole team on a soccer pitch all at once,
:10:12. > :10:19.with Formula One, an awful lot of the team are away from the view
:10:20. > :10:27.was's gaze. What do you think? Is it predominantly the driver skills?
:10:28. > :10:30.From a technology company, I would say the role of technology over the
:10:31. > :10:35.last few years has had a bigger influence in the sport. You just
:10:36. > :10:42.look at the volume of data these cars generate now. On your average
:10:43. > :10:47.lap, you are looking at 25 megabytes of data over a weekend, 50 gigabytes
:10:48. > :10:53.of data for each car, and a big chunk of that has been transmitted
:10:54. > :10:58.in real`time. You have guys making decisions about what to do next.
:10:59. > :11:04.They analyse this data and make decisions of what to do in the race.
:11:05. > :11:17.Technology is playing a bigger role. Is it the driver or the car for you?
:11:18. > :11:28.It is clearly a combination of both. Both on the side of how the sport
:11:29. > :11:35.runs, how you have a lot of analysts sitting back at the factory location
:11:36. > :11:40.helping to make strategy decisions, and also in terms of how do you make
:11:41. > :11:45.the sport more interesting for you make the sport more interesting are
:11:46. > :11:51.doing on the broadcast side or enabling second screen applications.
:11:52. > :11:54.That is what we are working on. It is very interesting to see how the
:11:55. > :12:01.sport has evolved over the last few years. If you had the best car on
:12:02. > :12:06.the circuit but you had so`so driver or the best driver in a so`so car,
:12:07. > :12:13.which one would end up top in the game today? In reality, the job of
:12:14. > :12:17.the driver is to drive the car as fast as it can possibly go and make
:12:18. > :12:25.the fewest number of mistakes as possible. There is nowhere to hide
:12:26. > :12:29.in Formula one. Nowhere at all. Certainly in the junior formula when
:12:30. > :12:34.these guys are learning their trade, they can get away with mistakes and
:12:35. > :12:40.people might not see it. In Formula one, 600 people see it instantly and
:12:41. > :12:44.have an opinion. And so, it is the job of the driver to drive the car
:12:45. > :12:49.as quick as they can go but if this of the wider team to make the car as
:12:50. > :12:53.quick as possible. And that reality is the best driver in the world will
:12:54. > :13:01.not be able to produce a lap time in a slower car. It is as simple as
:13:02. > :13:05.that. Describe how technology permeates the sport. You have worked
:13:06. > :13:11.a lot on making the sport much more accessible to global audiences. If
:13:12. > :13:18.you see multiple aspects of it, there are now a lot of cameras which
:13:19. > :13:25.are remotely operated. So, you actually have people sitting back,
:13:26. > :13:27.6000 miles from where you are, and ensuring that you are able to
:13:28. > :13:32.capture real`time stuff that otherwise you would not have been
:13:33. > :13:37.able to. Starting from that, to how you take the data and create some
:13:38. > :13:42.predicted stuff out of it. If you see now a lot of applications, while
:13:43. > :13:47.you are watching the race, you can access on the second screen agreed
:13:48. > :13:53.to understand what is happening. That is adding a lot of excitement
:13:54. > :13:57.to the sport. You can't really participate, there are maybe 20
:13:58. > :14:01.people who can drive it across the globe so it is something that
:14:02. > :14:07.technology can get it closer to you as a fan. You can track it little
:14:08. > :14:13.bit more. Jeremy, isn't there an aspect of this which is a little bit
:14:14. > :14:16.unlike most sport, if you invest a lot in technology and you get the
:14:17. > :14:20.fastest car in the circuit, doesn't that make it somewhat unfair because
:14:21. > :14:28.you think of Formula one as the best driver wins the race. Yes, one of
:14:29. > :14:33.the biggest trends in tech is this think all big data. The guys who
:14:34. > :14:38.really believe in big data believe they can solve any problem, it is
:14:39. > :14:44.just the matter of having enough data, enough computational powder to
:14:45. > :14:49.punch through that data. And one of the biggest factors is the
:14:50. > :14:55.aerodynamics. A lot of smart guys produced these models that can take
:14:56. > :14:58.hours to run, generate about 100 gigabytes of data and out what, to
:14:59. > :15:04.put that in perspective, Jock average PC at home, you will fill it
:15:05. > :15:09.up in a morning. These guys run about 500 of these bills every week.
:15:10. > :15:12.Think about the data collected, the competition or power required, if
:15:13. > :15:16.that was unlimited, the pace of innovation would increase
:15:17. > :15:21.dramatically. Way you are going to end up, and you start to see this
:15:22. > :15:28.little bit already, there is limited use of wind tunnels, but you will
:15:29. > :15:32.see the governing body limit the use of budget, number one, that is an
:15:33. > :15:39.indirect way of limiting technology. But I think as time goes by, if
:15:40. > :15:43.computational power comes free, they will have to limit that as well.
:15:44. > :15:49.Because all that will happen is the pace of innovation will increase. It
:15:50. > :15:52.has the potential to squeeze the driver so that is why you need a
:15:53. > :15:57.governing body. There are some amazing things that have come out in
:15:58. > :16:00.the last few years. Innovative things have actually made the sport
:16:01. > :16:08.more exciting. We have more overtaking now than at any point. I
:16:09. > :16:12.meant the `` remember watching the start and that was the finishing
:16:13. > :16:17.result, and now, look at the overtaking, that is a result of the
:16:18. > :16:21.technical innovation. You need both I think the governing body will step
:16:22. > :16:26.in and start to limit budget and use of technology to try and level the
:16:27. > :16:29.playing field. Where did you come in on this because as one of the
:16:30. > :16:34.smaller teams, this has to be an issue? Yes, I think it is a very
:16:35. > :16:41.good point. The danger in the sport is if the resources of the team can
:16:42. > :16:47.engage are limitless, if you like, and if the rules don't restrict the
:16:48. > :16:54.ability to develop the fastest car, if you like, then, we will end up in
:16:55. > :16:59.a situation where the sport becomes predictable, the fans switch off and
:17:00. > :17:07.nobody wants that. And also, the innovation actually goes... The
:17:08. > :17:11.innovation reduces. What we believe in is a sport where they should be
:17:12. > :17:18.really quite tight restrictions from the governing body in terms of the
:17:19. > :17:24.resources you can use because then it'll be a reward for really clever
:17:25. > :17:28.engineering. So, spending money is not clever engineering. Anyone can
:17:29. > :17:32.do it and it can hide a lot of the innovation, if you like. The really
:17:33. > :17:36.clever engineers, they come into their own when they are given really
:17:37. > :17:41.tight restrictions and they have to come up with the best solution. The
:17:42. > :17:43.restrictions can be technical but they can also be financial
:17:44. > :17:49.restrictions that is when you see real innovation. What we would like
:17:50. > :17:55.to see is a sport where there are really quite tight restrictions. The
:17:56. > :17:58.best teams will still win because by definition, the best definitions are
:17:59. > :18:04.but one that of the most innovative. But we think the racing will be
:18:05. > :18:09.closer and more unpredictable. So, finally, if you were per head of a
:18:10. > :18:13.racing team, which I know you are, and you got to choose, would you
:18:14. > :18:23.choose the best car of the best driver? Jeremy? The car. Without a
:18:24. > :18:31.doubt. The car. Graham. Both, please. Thank you.
:18:32. > :18:35.The business of F1 is not just cars and racing it is also sponsorship,
:18:36. > :18:47.branding and the after parties that draws in paying crowds. This party
:18:48. > :18:54.travellers with the F1 to its glitziest venues and celebrities
:18:55. > :19:08.mingled with racing fans at a price. I asked what the appeal of F1 is.
:19:09. > :19:14.F1 is the most exclusive sport there is on this planet. And, remember,
:19:15. > :19:17.there are only 22 drivers. Whenever something is so rare, people want to
:19:18. > :19:22.be part of that. There is something sexy about Formula one cars. You
:19:23. > :19:27.have the monocle race we have the boats of the cars, the F1 car is
:19:28. > :19:32.driving in front of the boat. Here, you have a stunning backdrop, it is
:19:33. > :19:39.a night race, it looks dutiful on camera, it is amazing. That is what
:19:40. > :19:51.I think is the different eminent that `` element that F1 brings. My
:19:52. > :19:58.brother was obviously an extra Rory driver and an ex`drag you `` Jaguar
:19:59. > :20:05.driver. He bought me into F1 many years ago. I was a physiotherapist
:20:06. > :20:09.so I used to be physiotherapy on him and on the Harare drivers and
:20:10. > :20:15.whenever he went to Jaguar, I wanted a change. I had lost my passion for
:20:16. > :20:18.physio. So, I decided I didn't want to do that anymore and life took me
:20:19. > :20:25.in different direction and I have ended up running this company. But,
:20:26. > :20:34.yes, I was lucky enough to be brought into F1 by him and he was
:20:35. > :20:39.definitely a great character in F1. He said many things than he probably
:20:40. > :20:43.shouldn't have said. He lived life to the full and he still lives life
:20:44. > :20:45.to the full and I think that is how a lot of people perceive the F1
:20:46. > :21:00.drivers. It is a big snooze. There is a lot
:21:01. > :21:07.of elements, whenever people come to your face, you have the perfect
:21:08. > :21:11.clubs and the parties as well. The majority of people who work in F1
:21:12. > :21:16.are very passionate about it and I know I am very passionate about it
:21:17. > :21:21.and about my company. If you lose the passion, that is the time to say
:21:22. > :21:25.enough is enough. Fortunately, I am still as passionate about as I was
:21:26. > :21:31.12 years ago when I started my company. I have been involved in F1
:21:32. > :21:34.for 19 years. There is a lot of elements to putting on a race.
:21:35. > :21:44.People just see that amorous side. There is an awful lot of hard work.
:21:45. > :21:49.That was the founder of Amber Lounge. F1 is an expensive sport
:21:50. > :21:53.where investment in technology and securing sponsors can be as
:21:54. > :21:58.important as getting the right racing car driver. With growing
:21:59. > :22:02.costs, the sport is increasingly dominated by a few teams than some
:22:03. > :22:07.have left the sport altogether. For those who remain, F1 remains the
:22:08. > :22:11.pedicle of motor racing and technology is also enabling global
:22:12. > :22:15.audiences to see more and more of what lies behind the racetrack. That
:22:16. > :22:22.is all we have time for. Check out our website and me on twitter and
:22:23. > :22:30.join us next time for more talking business me, indeed you. `` Linda
:22:31. > :22:39.Yueh. It has been another quiet day across
:22:40. > :22:44.the country. Quite a lot of cloud around today. The best of the brakes
:22:45. > :22:45.were confined to the Midlands and across to me don't hash East