Formula 1

Ben Gilbert opens the episode by describing Formula 1's arc as a business story more than a sporting one. The sport began in the 1930s out of "the pure love of auto racing, extremely dangerous auto racing". After World War II, British Air Force veterans and mechanical engineers joined to push the limits of technology and physics. It later became a hobby for rich team owners who lost "colossal sums of money" as they traveled around Europe.

Ben's evidence for how hard the economics were: since the sport began, more than 100 separate teams have entered and left the competition, "mostly because they went bankrupt." He says the sport has since been "dragged kicking and screaming into being professionally managed." Its owner today is Liberty Media, the publicly traded U.S. company that has owned the Atlanta Braves, Sirius XM and Live Nation. David Rosenthal adds that Liberty also once owned Excite@Home, a company from the hosts' Google series.

Ben calls F1 "three sports in one." It is a showcase for the world's best drivers. It is also "the World Cup of Engineering", where he argues races are now decided more by the design work of the thousand-plus people behind each car than by the drivers. F1 is the only motorsport that requires each team to design and build its own car from scratch. Listeners have offered a third label, "the World Cup of Office Politics" or "Real Housewives of the Garage", which the hosts connect to the Netflix series.

The scale figures the hosts cite: - A grid of 20 drivers racing at over 200 miles per hour, in races about 190 miles long. - Races every week or two in a different city. The whole operation of cars, teams and hospitality is flown between races on seven Boeing 777s. - 24 host cities, from Monaco to Bahrain to Melbourne. - Each car costs $20 million to build and hundreds of millions of dollars to develop, and carries "three to 600 sensors" (as transcribed). - More than 827 million viewers, which Ben says makes F1 the world's most popular annual sporting series. The Olympics and World Cup are left out because they run every two and four years.

The recording is timed to a major transition. A new season starts in five days with new regulations, which means entirely new car designs. Cadillac joins as an 11th team, Audi and Ford are also entering, and Apple TV becomes the new U.S. broadcast partner. Ben notes that the sport is now far more professional but "still owned by a bunch of rich guys who love auto racing". David adds: "They're just no longer money losing rich guys."

The hosts say up front that, like their NFL, NBA and IPL episodes, this one is about the business of F1. They will skip much of the rivalry, regulation and engine detail. They describe the show as informational and entertainment content, not investment advice, and say they may hold investments in companies they discuss. David credits Joshua Robinson and Jonathan Clegg, sports editors at The Wall Street Journal. He calls their book The Formula "the best business history book of Formula 1" and says it was a main source, and both authors helped with the research.

David notes that F1 as it is known today began in 1950, but it has no single founding moment the way a company or many sports leagues do. Its origins are "part and parcel with the beginning of motor racing itself." Soon after the modern automobile appeared, which he attributes to Carl Benz in late-1800s Germany, people started racing cars much as they raced horses. In the early 1900s, automobile clubs across Europe hosted races and sold tickets and advertising to fund prize purses. Drivers and manufacturers came from around the world to compete.

In 1906 the Automobile Club of France, then Europe's largest, held an inaugural race southwest of Paris at Le Mans. To attract spectators and entrants, the organizers chose a deliberately literal name: the Grand Prix de Le Mans, "literally translated as the big prize." Its success spread similar races across Europe in the 1910s and 1920s, all copying the same rules, or formula. Examples include Monza in Italy, the race in Monaco and the Nürburgring in Germany.

In the 1920s the major European automobile clubs met in Paris and agreed to centralize oversight of the formula in one international body. After several name changes, it became the Fédération Internationale de l'Automobile (FIA), which still administers F1's rules. David cites Robinson and Clegg's point that the sport is literally named after the rule book. Ben draws the lesson that rules disputes are built into F1, both when regulations are reset every few years and when teams protest to race stewards mid-race.

Anyone who is sort of complaining that this sport is too into the rules needs to remember it is named after them.

Even with a shared rule book, the Grand Prix races remained independent events, with one winner per race and no championship or league. Several pre-war attempts at a championship fizzled, and the war disrupted everything. Renewed interest after the war led the FIA to announce, in 1949, the inaugural Grand Prix World Championship for Formula 1 drivers. It covered seven of the most prestigious Grand Prix and started with the British Grand Prix at Silverstone on May 13, which became the first race of the first official F1 season in 1950.

David names three foundational pillars of the early sport: the UK, Monaco and Italy. Britain was and remains the heart of F1. He says 70% of teams are based in the UK today, with Ferrari as the main notable exception. Ben adds that despite their different cultures and rivalries, a large share of the teams' technical staff work within tens of miles of each other in a small area of the English Midlands.

David admits this looks random. Given the sport's pre-war history, France or Germany might have been the natural home. His explanation is a set of post-war conditions. Unlike Germany, Britain had won the war, yet the country was in bad shape and needed entertainment and redevelopment. Unlike France, it had many empty airfields and many newly unemployed fighter pilots and mechanics. Putting those people and abandoned airfields to work racing fast cars was a way to redevelop rural infrastructure.

Ben compares this to Silicon Valley's development, which the hosts covered in their Lockheed Martin episode. A positive feedback loop of universities focused on aerodynamics, engine design and mechanical engineering keeps the region the best place to hire for an F1 team. David says this is why even teams owned by companies in other countries mostly run their operations from the English countryside.

Colin Chapman embodies the British pillar. He was a former Royal Air Force pilot and a mechanical engineer, and David ranks him alongside Enzo Ferrari as having done more than anyone to shape F1's first era. Chapman founded the Lotus racing team in 1952 in empty stables in North London with £25 of startup capital. That was not enough to build an F1-capable car, so he also started a Lotus road car business, which David calls decently successful but "not Ferrari." Ben notes that the first Tesla Roadster was based on a Lotus Elise chassis.

Chapman entered his first F1 car in 1958. David compares the period to the early NFL: one or a few people often served as owner, manager, coach and sometimes driver. Ben says it is telling that there was no Constructors' Championship until 1958, only a Drivers' Championship, because the drivers and the builders were often the same people. Today there are two titles: the individual drivers' championship, and the Constructors' Championship for teams, each of which must build its own car and enter two cars with two drivers.

Chapman's engineering insight was that a winning car needs more than horsepower. Ben says horsepower was the prevailing Ferrari view at the time, and David suggests Enzo cared mainly about power until his death. Chapman emphasized low weight and better handling. Unlike oval tracks where cars "just go around in a circle," F1 circuits are full of technical corners such as hairpins, chicanes and double apexes. That makes the sport demanding for both engineers and drivers.

Adding power makes you faster in the streets. Subtracting weight makes you faster everywhere.

Chapman's other lasting contribution was commercial: sponsor logos on cars. Until then, cars were painted in colors the FIA assigned to each country. That system is the origin of Mercedes silver, British racing green and Ferrari red, which persist today. In the 1960s Chapman found a sponsor and painted his Lotuses red and white in the colors of Gold Leaf tobacco. David calls this the start of "one of the most important partnerships in F1 history, fast cars and cigarette companies."

Ben explains that the FIA had long banned sponsorship. It reversed course when it saw that teams would go out of business while companies were lining up to pay for logo space, and concluded sponsorship was what made the sport viable. David points to the irony that the EU later legislated tobacco advertising and sponsorship out of existence in the early 2000s. Before that, cigarette branding dominated. Greats such as Ayrton Senna, Michael Schumacher and Alain Prost wore Marlboro logos. Ben says brands like John Player Special overshadowed team names so much that cars looked like "Team Marlboro Racing." David adds that some cars were painted to look like cigarette boxes.

The hosts describe Chapman's story as having a strange and sad ending. In the late 1970s and early 1980s he became entangled with John DeLorean. Chapman designed the chassis for the DMC-12, the Back to the Future car. After the company collapsed, British prosecutors accused DeLorean and Chapman of each embezzling $8 million in government incentives meant for building the factory. David says Chapman died of a heart attack at 54 once this came out. DeLorean was later arrested in an FBI sting in Los Angeles while attempting to buy 220 pounds of cocaine to distribute, which David describes as an attempt to pay off his debts.

For David, Chapman's story captures the whole early era: cowboy teams, iconoclastic owner/mechanic/designer/drivers, cigarette money and "the vague or not so vague whiff of fraud." He calls it "the Wild West in Europe." Ben adds a visual reminder. Modern F1 cars are open-wheel machines with large front and rear wings, but in the 1950s and into the 1960s they looked nothing like that. David compares them to soapbox derby cars, and Ben to "little bullets."

David argues that the Wild West element alone would not have made F1 worth an episode. The second pillar came from Monaco. In 1956 the sovereign Prince Rainier III married the American actress Grace Kelly, a story the hosts covered in their Hermès episode, and she came to live in the Prince's Palace. In David's telling, the marriage joined Europe's old-world luxury, heritage and legitimacy with Hollywood glamour, a combination he says is still central to F1. He compares it to a modern celebrity crossover, calling it "the crossover event of the century."

The Monaco Grand Prix was already prestigious and predated World War II, but Princess Grace raised it to another level. Her Hollywood circle came to visit, and the race happened to fall close to the Cannes Film Festival just up the road. Frank Sinatra became a regular, along with the Beatles and the Rolling Stones. Many F1 drivers later moved to Monaco and became stars themselves. David names Lewis Hamilton, Max Verstappen, Charles Leclerc and Lando Norris as current residents, and both hosts note the tax benefits.

The hosts weigh a tension about the venue. Ben observes that Monaco's narrow, old, winding cliffside streets suited the small cars of that era. He argues there is "no chance" Monaco would be added to the calendar today given modern car sizes. David counters that there is also no chance it would ever be dropped, because Monaco is what brings luxury into the sport. He calls this "Sports League Setup Playbook 101" today, citing the IPL episode. In the 1950s it was far ahead of its time, and it happened entirely by accident.

The third pillar is Italian. David calls Enzo Ferrari the most important team, company and person of F1's first stage. Enzo founded the company before World War II purely as a racing outfit whose purpose was to race Alfa Romeo cars, painted red because the team was Italian. Ferrari did not build its own cars until after the war. Once the championship started in 1950, Enzo had to join what was now the pinnacle of racing. David says Ferrari is the only team to have competed in every F1 season since the beginning.

Ben argues that the usual direction of legitimacy runs backwards here. One might expect F1 to legitimize an automaker that takes part. Instead, Ferrari's participation legitimizes F1. If Ferrari left, people would ask which series was really the top one.

David uses this to explain an unusual structural feature. F1 joins two separate kinds of entities, teams and racetracks. Unlike most sports, they are independent of each other. His analogy is a Seattle Seahawks with no relationship to its stadium, playing wherever it could get a game. The F1 organization's role is to bring a set of teams together with a calendar of Grand Prix venues. Ben adds that early on, the lineup of teams and drivers varied from race to race and came together in a "very haphazard way."

David contrasts Enzo with Chapman and the British teams: Enzo "actually had business sense." He saw a large opportunity where fast cars, a legitimizing racing heritage and Monaco-style celebrity wealth met. That opportunity was selling fast cars to the rich and famous. David suggests Ferrari may be "the only legitimate luxury brand established in the second half of the 20th century," which he presents as an argument rather than a settled fact. Ben highlights how quickly Ferrari went from Enzo racing Alfa Romeos to a luxury brand in its own right.

The mechanism, in David's account, is that Enzo hand-built cars for the European royalty and American movie stars passing through F1 while racing at the same time. He compares it to how equestrian heritage serves as the legitimizing soul of Hermès: motor racing in F1 plays that role for Ferrari, and the two developed together in the 1950s and 1960s. The road cars also gave fans a tangible connection to the track. Most could never afford one, but they could dream of owning the cars driven by celebrities and monarchs. Ben notes that most other teams built only one to three cars and simply raced them. David says many boys around the world, himself included, had a Ferrari poster or model in their bedroom. The hosts suggest Ferrari deserves its own episode.

Ben addresses why Germany is missing from this founding story. In the 1950s Mercedes was a major player, but one of its cars crashed at Le Mans and killed 82 people. David calls it one of the worst disasters in motor racing history. Ben says Mercedes pulled out of, he thinks, all racing, and did not return to F1 for another 40 years. The accident was severe enough that four of the remaining Grand Prix were canceled.

Fatality figures Ben cites for F1: - 1950s: 14 driver deaths, about 1.4 per year, not counting other racing series or spectators. - 1960s: another 14 deaths, plus 15 spectators in the 1961 Italian Grand Prix crash. - 1970s: 12 more deaths, after which the sport began to get safer. - Overall, the first three decades ran at about one to two deaths per year.

David translates these numbers into a share of the field: "five to 10% of the entire racing field would die every year." Ben stresses that these are only fatalities, with many more crashes and injuries. He cites Niki Lauda, whose head caught fire, leaving him scarred for life. David notes that Lauda was back racing several weeks later. David argues the mortal danger was itself part of the early appeal, next to the glamour: "These guys were gladiators. They were risking their life every time they got in a car."

David returns to Ferrari as the entrepreneur who built a real business where all these forces met, though through his road car business. He cites a quote from a rival team owner of the era, a competitor to Ferrari.

Formula one is Ferrari, and Ferrari is Formula one. It's that simple.

Ben identifies the speaker as Bernie Ecclestone. David notes the irony that Ecclestone would later quite literally replace Enzo in that equation as F1's impresario. Ben refines the description: Ecclestone was owner of "some part of F1, but controller of all of F1." David then cites Robinson and Clegg's line on the relationship.

As it turned out, no one would get richer off the Ferrari Mystique than Bernie, a man who was never once employed in Maranello.

Ecclestone's early biography comes with a caveat. He was born in 1930 and grew up as a "hard scrabble kid" in Suffolk, northeast of London. According to many biographies, his father was a commercial fisherman and his mother an authoritarian homemaker. David warns that with Bernie "you never really know" what is legend, and that this is the story "at least as he wanted it told."

After the war, Ecclestone went into the "wheeler dealer" trade in London with surplus cars and motorcycles. He opened a showroom on the outskirts of London and specialized in luxury cars for the newly rich and famous. David casts him as the London celebrities' "car guy." Ben pushes back on the common label "former used car dealer" as not quite right. David replies that it is accurate as a description of how Ecclestone started, and the hosts leave that disagreement unresolved at the end of this segment.

This part of the Acquired episode turns to Bernie Ecclestone, and the hosts start with his reputation. Ben compares his business of sourcing exotic cars to calling someone else's Rolex a used watch. David describes Bernie as the man who, asked for a Ferrari or a Bugatti, would tell you to hold the phone while he made some calls.

David notes that there was long-running gossip about Bernie's "more underground activities", which Bernie himself encouraged. The best-known rumor made him the mastermind of the 1963 Great Train Robbery, in which 2.6 million pounds was taken from a British Royal Mail train. According to David, Bernie only addressed it in 2005, at 75, and he did so with a boast rather than a denial.

There wasn't enough money on that train for me to be involved. I could have done something bigger.

Ben says the line actually holds up given what Bernie went on to do. David puts the rumor aside and points to a more concrete sign of his business sense. When Bernie sold cars to London's new-money buyers, he also steered them into financing. David's understanding is that this is how car dealers really make money: a small markup on the car, then financing and servicing fees. On very expensive cars those fees add up, and they earned Bernie his first small fortune.

As Bernie went deeper into luxury cars, David says, he reached the same conclusion Enzo Ferrari had a decade or two earlier: motor racing is the heritage that legitimizes fast luxury cars. So he wanted his dealership and brand linked to Formula 1. In the mid-1960s he started spending time with F1 drivers and became the agent for several of them, negotiating better salaries with their teams "for a small fee, of course."

His star client was Jochen Rindt, who drove for Colin Chapman's Lotus. The two planned for Rindt to leave Lotus and buy a team together, making Rindt an owner as well as the talent. Rindt led the 1970 standings by a wide margin. Then he crashed and was killed in practice at the fourth-to-last Grand Prix of the season. David notes that Rindt and Chapman had argued constantly about the safety of the Lotus cars. Rindt's lead was so large that he still won the drivers' championship. David says he is the only driver ever to win it posthumously, and Ben adds that he scored zero points in every race after his death.

David tells this as "the story goes": Bernie was devastated and decided to carry out the plan the two had shared. In 1972 he bought the Brabham F1 team for 100,000 British pounds. David puts that at about $2.3 million today, and says he thinks every F1 team is now worth at least one and a half billion. Ben agrees. The hosts say Bernie didn't make much on Brabham itself. In their telling he sold it for five million a couple of years later. David still credits Bernie with the jump in team values. Ben adds a pointed caveat: the credit goes partly to Bernie and partly to Bernie leaving afterward.

Buying Brabham made Bernie a member of the Formula One Constructors Association. David calls this a very loose group of team owners, saying even "organization is being generous." Colin Chapman had led the effort to form it in 1963, and its only purpose was coordinating travel and transport to races around the world. The hosts joke that bitter rivals can still share a ride when they are going to the same place. Ben notes that Formula One Management handles these logistics today and, he thinks, makes a little profit on them. David replies that once Bernie took over, he was certainly making a profit.