MotoGP

Lin Jarvis on Lorenzo – “It’s Business, Not Charity”

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Ever since we found out that Yamaha was only going to release Jorge Lorenzo from his contract to test at Valencia after the last race, but not at a private test at Jerez a week later, there has been much speculation as to the cause.

Had growing friction between the factory and Lorenzo led Yamaha to block the test? Was Yamaha afraid of just how competitive Lorenzo would be on the Ducati? Or, as the more conspiratorially inclined would have it, was this the invisible hand of Valentino Rossi at work?

The massed media had to wait until Motegi to find out. In the pre-event press conference, Jorge Lorenzo acknowledged that Yamaha had told him that the Jerez test was off the cards.

“Well, obviously I would like to make the Jerez test, but it is not a thing that depends on myself. For the moment, looks like I will test in Valencia. Looks like for Jerez, Yamaha is not so keen to permit that.” Lorenzo felt disappointed by the decision.

“I think that for the years we’ve spent together, and for the things we’ve won together, I deserve it. But obviously it doesn’t depend on myself and I will respect whatever decision Yamaha will make, because I am a Yamaha rider.”

Due to the large number of journalists asking to speak to Lin Jarvis to get his side of the story, Yamaha convened a press conference to allow the assembled media to ask questions.

In the space of half an hour, the Yamaha Motor Racing boss laid out in clear terms why the decision had been made. It was a masterclass in the underlying truth of MotoGP: this is a business, with millions of dollars involved, and a tangled web of interest beyond just Yamaha.

Yamaha has a duty to its shareholders and its sponsors to hold Lorenzo to the contract they both signed. Helping Lorenzo to try to beat Yamaha on a Ducati would be to fail their sponsors and Yamaha’s corporate interests.

Follow the Money

The fact is that MotoGP manufacturers spend somewhere between €40-60 million a year on the series, with the main objective of promoting their brand and associating it with high performance and success in the minds of the fans.

There is also an R&D aspect to involvement, but throughout my time in the paddock, nobody has been able to quantify how much is R&D and how much is marketing. Reading between the lines of the answers I have been given, marketing is the dominant factor.

They pay riders multiple millions of euros to help achieve that goal, as they need to compete for wins for the association to take hold.

The manufacturers make these massive investments expecting to see a return in terms of increased sales of their products, be it high end sports bikes, or cheap commuter scooters. The tools they use in this marketing effort are the image of their successful riders.

Riders appear on advertising billboards, as cardboard cutouts in motorcycle dealerships, in glossy adverts in magazines. After a rider wins a race, their photo will appear in a newspaper or a magazine, associated with a brand. If they win a championship, their image is used to promote the brand all winter.

And it’s not just the manufacturer who is using the rider’s image. When sponsors sign contracts with manufacturers, one of the things they are buying with their sponsorship money is the right to use the image of the rider to help promote their product.

So when a rider wins a championship, magazines are not just full of adverts for the bike he was on, but also for all of the products that appeared as stickers on the bike. Sponsors, too, are looking to associate their brand with the success of the riders, and ride the coattails of that success to greater profits.

All this and more Jarvis explained in the press conference. He explained Yamaha’s decision to allow Jorge Lorenzo to test at Valencia, but not at Jerez through this lens. Along the way, he offered many insights into the decisions a factory must make, and the many different factors at play.

Contract Rights

The first order of business was to address the question of the Jerez test. The perspective fans and media were viewing it from was all wrong, Jarvis explained. “Regarding the test in Jerez, I think it’s better to concentrate first on the test in Valencia.

Because by contract, no Yamaha rider has an automatic right to test for any other manufacturer, or to do anything for any other manufacturer while they are under contract to us, to Yamaha. Our rider contracts are always until December 31st, and that’s the same for Jorge’s contract.

And the reason they are until December 31st is, this is not only a sport, this is also a business. And for us, we spend a lot of money for our riders’ contracts, and we want to have a return on our investment.”

Getting a return on investment depended on having access to the rider and the rights to use them for promotional purposes after the season had ended, Jarvis said.

“Of course, you never know what the result is going to be of any season, but the last thing you want is that your right to use your rider finishes after the last race.”

“And it’s not only Yamaha and our global network, but all of our sponsors, all of our partners, they also signed up to support our team, with our riders to be able to use the image and the benefits of that association to the end of the year.”

“So what we’ve done with the Valencia test, in the spirit of cooperation among the manufacturers and the so-called ‘gentlemen’s agreement’, which I read in all sorts of quotes over the last week, we’ve allowed Jorge to be available to do the two days of testing in Valencia.”

“For us, we think that’s reasonable, and we think that’s correct, and that’s enough.”

But What About Suzuki & Ducati?

The perception of Yamaha’s position may be colored by the fact that both Ducati and Suzuki are allowing Andrea Iannone and Maverick Viñales to test with their new employers (Suzuki and Yamaha respectively).

Jarvis countered comparisons with Suzuki’s position on Viñales by pointing out that journalists did not have access to all the facts. “My first question to you is, do you know the contract of Viñales? So do you know whether Suzuki are expressly letting him be free especially to do this test?” Jarvis asked.

Jarvis then went on to give an insight into the way factories approach and structure rider contracts.

“I know a little bit about what’s going on with the contracts, and every contract is negotiated on certain conditions. So your contracts are negotiated on the condition that the rider is not free to do any other activities until the end of the term.”

“I think that some other riders’ contracts may be negotiated so that the rider maybe is free to do other things. So I think that each contract is different, and each contract needs to be understood, and each contract needs to be respected.”

The investment Yamaha has made need to be respected, Jarvis said. “In the case of Jorge, or in the case of anybody else, it would be the same with Valentino, we spent a lot of money on our rider contracts.”

“It’s a very very significant investment. So for Yamaha as an example, for our company and for our sponsors, it’s pretty difficult to explain why you would let your rider, who you are still paying, test for multiple days for one of your main competitors.”

Allowing Jorge Lorenzo to test at Valencia is what is expected. It has become standard practice for manufacturers to release riders for the post-race test when they switch. “We are willing to play the game,” Jarvis said.

“We are willing to do what we think is normal to allow the riders to have an exception to step out of their contracts for two days in Valencia. But for us, to do more than that, it would be like giving the hand and someone takes your whole arm.”

“So we think that two days is already a good concession, and we are comfortable with that. We have already discussed it with top management level inside Yamaha, and this is our decision.”

Noblesse Oblige

One journalist then put it to Jarvis that he was widely regarded as a gentleman, but that this refusal to allow Lorenzo to take part in a private test was not in line with that view of Jarvis.

“Yamaha is a global company,” Jarvis responded, “It’s very serious about what it does as well. We spend a lot of money and a lot of attention towards the sport of MotoGP. Our contracts are very fairly written and drafted, and we always respect our contracts.”

“I think a gentleman always respects a contract. And if you can tell me an occasion when we haven’t done that, then you can question whether we are gentlemen or not. But I think respecting a contract is what one should do.”

Jorge Lorenzo is not the only Yamaha rider to be switching to another manufacturer. Pol Espargaro is also contracted to Yamaha, and is set to join KTM in 2017.

Yamaha has also blocked Espargaro from testing beyond Valencia, while teammate Bradley Smith (who is contracted directly to Tech 3) will be free to go to Jerez. Jarvis drew a distinction between Lorenzo and Espargaro, but said the same rules needed to apply to both.

“I would say Pol’s condition is slightly different,” Jarvis explained. “Jorge, joining Ducati, with all respect to Jorge as three times world champion for Yamaha, he’s a top star, he’s highly competitive, Ducati is highly competitive, and so he will be one of our main competitors next year.”

“This is just a fact. So we respect that as well. Pol’s situation is perhaps a little different. He’s not a multiple world champion in MotoGP, and KTM is a newcomer. But we will apply the same policy. So we feel that if we apply the policy to one of our contracted riders, we’re obliged to apply the same policy to the others.”

2003 – Rossi Leaves Honda

The most famous instance of a factory blocking a departing rider from testing for the new factory came in 2003. At the end of that season, Honda refused to release Valentino Rossi until the end of his contract.

Rossi had to wait until January of 2004 before he could test for Yamaha. Jarvis told the press conference that Honda was completely within its rights in that case.

“At that time, we just accepted their decision. Because they were the contract holder of Valentino Rossi, he had spent multiple years with them, won multiple championships with them, but they chose to not let him test the Yamaha, because they didn’t want to give him any relative advantage.”

There was a difference with this case, however, as Rossi wasn’t even released for the Valencia test. “He didn’t test at all. He wasn’t allowed to test at Valencia, the first time he tested was in January in Sepang. So we just accepted it, as simple as that. ”

“Obviously, Valentino coming to Yamaha was a big win. So for such a big win, if we start in January, then OK. But we started in January, and we were successful in the first year.”

“So I think that in this case, you can’t compare Valentino’s situation with Honda to Jorge’s position with Yamaha. We’re allowing him to do the two days of the Valencia test. We think it’s reasonable.”

Jarvis then came to the heart of Yamaha’s objection to Lorenzo testing with Ducati: it is not the responsibility of Yamaha to help Lorenzo beat Yamaha on a Ducati. “Of course Jorge would like to be given the opportunity to test,” the Yamaha boss said.

“But he would like that opportunity is because his mission is to get up to speed as quick as possible, to be as fast as possible with the Ducati next year. But next year, he will be our main competitor.”

“So his wish and desire is different to ours. Our desire next year is to try to win the first race, and I’m sure Ducati’s mission is to try to win the first race. And we all know that Ducati for instance at Qatar is very very strong, we know Jorge at Qatar is very very strong. So he will be a serious threat from the very first race.”

“It’s Business, But It’s Not Charity”

This was the point. Yamaha wants to win the MotoGP title in 2017 with Valentino Rossi and Maverick Viñales. The tens of millions of euros Yamaha spend on racing meant they could not afford to give anything away. Sportsmanship may be admirable, but at its core, this is strictly a business, Jarvis argued.

“It’s business. It’s sport. Absolutely it’s sport. But it’s not charity. This is business. Our riders are being paid a large amount of money to perform at the ultimate level, to bring our brand to the front, and it’s the same for Ducati. I heard that Gigi Dall’Igna was talking about ‘sportiveness’, but I think that Ducati’s mission is not just about ‘sportiveness’, they want to be competitive.”

“They’ve made a major investment with Lorenzo, and they want to be as quick as possible, and they want to adjust the bike as much as possible during the winter to try to win the first race. That’s their right, to do that. But it’s not our mission to try to help Ducati or to try to help Jorge in the future.”

Jarvis was quick to dismiss the wilder theories spouted among fans and some sections of the media, saying that the decision on Lorenzo’s private test was made on purely professional grounds, solely by Yamaha management.

“I’ve read all sorts of theories on web forums and on sites about possible problems going on behind the scenes with Yamaha, but it’s not true. So you can create whatever theory you want, but there is no animosity between Lorenzo and us. He understands that we are a professional company and a professional team, we understand that he wants to leave and to get up to speed as quick as possible, and he understands that we have a contract. That’s it.”

The Spin Zone

The discussion of how Yamaha’s decision was being perceived among fans led Jarvis to point out that it was the media who were setting the tone. The anti-Yamaha sentiment was because of the way the situation was being framed.

The media and the fans were talking about Lorenzo being banned from testing at Jerez, rather than being allowed to test at Valencia.

“I think it’s a matter of how it’s positioned,” Jarvis said. “If you focus on the fact that we’re not allowing him to test in Jerez, you can turn that story around however you want. And I think that the media and all of you have a great influence in the way that this story is told and the way it is understood by people.”

“If you focus it on the other way around and say hey, he’s not allowed to do any testing in fact, and Yamaha are playing the game and they are giving him the two days, of course, logically Yamaha don’t want to help their competitors come up to speed. It’s a different angle.”

“Put yourself in the shoes of Yamaha. What would you do if you were still paying a rider for another seven weeks? Would you allow that rider to spend all of his riding time trying to improve your competitor’s performance while you are still paying the contract? You try to explain that to your shareholders or to your sponsors or to your colleagues. It’s the way it is.”

Why, Jarvis was asked, is Lorenzo being allowed to test at Valencia at all? “This is the concession,” he replied. “We think this is OK. This is the industry norm, and this is quite typical. We find it acceptable to do that.”

“So if you think that that’s wrong, then maybe we should consider that. But I don’t think that that’s in the interests of you, I don’t think that it’s in the interests of industry cooperation, so we are comfortable to do that. But not more.”

Changing Contract Terms

The simple solution, it would seem, would be to change the dates that contracts run from, making them start on the day after the last race of the year, rather than having them run for a calendar year. Jarvis was vehemently opposed to that.

“Definitely not. We will never sign a contract that does that. And the reason we won’t do that is as I mentioned, this is a professional sport. So there’s a lot of interest at stake. And if you sign a contract where the rider can leave at the end of the last race, for example, what happens if Jorge becomes world champion on the Sunday of Valencia?”

“When you sign a contract – and Jorge’s contract was signed two years ago – of course we hope that Jorge’s going to become champion, and we hope that Valentino will become champion – but you can’t imagine that you can sign a contract where if the guy leaves, all of your rights to use him and to exploit his image terminate on the next day. That’s crazy.”

Comparisons were also made to when Valentino Rossi left Yamaha to join Ducati. If Rossi hadn’t been scheduled for surgery after Valencia in 2010, would he have been allowed to test as much as he wanted?

“Two days at Valencia,” Jarvis replied. “So I can’t compare the past with the present, the only thing is the facts are these. The facts are that up until now, Valentino did a two-day test, if I remember correctly, Ben Spies did a two-day test.”

“We accept that. We think that’s reasonable. But again, I ask you, do you think that if you continue to pay a rider until the end of the year, that you should permit and allow that rider to do multiple test days to try to beat you next year.”

“Yamaha are not a small team. So this is very important. We’re a big multinational company with interests around the world. And so we have to protect those interests, we have to protect the investment, and that’s the same for all of our sponsors as well.”

“Already it’s a delicate matter letting the riders ride in Valencia. But we can defend that, we can accept that, because that’s the industry norm. But as I said, for us, that’s where the limit is.”

A Lesson on Image Rights

All of the talk of image rights and promotional rights for sponsorship led to some confusion among the journalists. Lin Jarvis had to set out exactly what Yamaha would and would not be able to do with Maverick Viñales until the first of January.

“Firstly, to correctly explain the situation: we will not use the image of Viñales until January 1st,” he said. “So every rider that switches to another manufacturer’s bike will be using neutral leathers, no color, no color on the bike, no sponsor branding other than the personal sponsors.”

None of the manufacturers could prevent photos from appearing in the media of course, and that was part of the compromise they had to accept at the Valencia test.

“Of course there’s the natural exposure that any rider gets in that test, because the reality is that it will be Lorenzo on a Ducati, it will be Viñales on a Yamaha.”

This was very different from using photos of the riders on their new bikes to help promote that manufacturer, or that team’s sponsors.

“The manufacturer and the sponsors are not allowed to use any image for any commercial purposes whatsoever,” Jarvis explained.

“So this is until the end of the contract. Now if somebody’s contract finishes on November 15th, then they can start to use it. But as far as I’m aware, all three riders, Iannone, Lorenzo, and Viñales, they all finish at the end of December for the image rights.”

That was a reason to restrict the amount of private testing a departing rider would be allowed to do. “the more times that that rider appears on another brand of bike, the more negative it is for us in the short term for the image. But we are not allowed to use the image commercially.”

No More Valencia?

The obvious solution to this dilemma would be to scrap the Valencia test and schedule a new test, but that faces obvious problems.

Everyone is already at Valencia, all of the equipment and the new bikes, and it is much cheaper and simpler to stay on for three more days rather than pack it all up and ship it off somewhere else.

But the more important reason for the Valencia test is that it has become part of the media package, part of the entertainment, building the tension towards the new season.

Jarvis was all in favor of scrapping the Valencia test, but he accepted it was part of the show, part of selling and promoting the sport of MotoGP.

“The Valencia test has become a typical thing, it’s part of the end of season activity,” he said. “To some extent it has become a show, because the reality is it is on TV. Personally, me, if you really ask me, I’m not in favor of the Valencia test.”

“Because for me, it’s too confusing that a rider steps from being a fully-branded Yamaha rider one day to immediately the next day he’s in the media on a debranded suit on a debranded bike riding for one of your competitors. So I personally don’t support the concept of the Valencia test and the rider switch.”

There was little Jarvis could do about the situation, however. The regulations allowed for testing up until the end of November, and an official IRTA test after the final race at Valencia.

“Anyway, these are the rules,” Jarvis said. “This is the way the sport is organized, and we respect that. We’re not denying any test opportunity for Jorge and Ducati. It’s just that he’ll have to use one of the five days next year.”

The point, Jarvis explained, was not that Yamaha was denying Lorenzo an opportunity to test, but merely forcing Ducati to change the timing of the private testing they are allowed to do with contracted riders.

“You have the IRTA tests and you have the private tests. Now the private tests you are allowed to use five private test days any way you want except in the test ban period. So if he doesn’t test the Ducati on November 23rd, then he will do it in February. That’s all.”

Photo: © 2016 Scott Jones / Photo.GP – All Rights Reserved

This article was originally published on MotoMatters, and is republished here on Asphalt & Rubber with permission by the author.

David Emmett

One of MotoGP's most respected journalists, David Emmett is the proprietor of the esteemed MotoMatters. We are very grateful to republish David's work here on A&R...though dread the day we ever again get in a car with him.

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