Business of Motorsport for August 05, 2022-Tales From the Piranha Club

Ron Dennis once described Formula 1 to new team owner Eddie Jordan as “The Piranha Club” and it certainly seems like that description fits the business of motorsport as a whole these days. Not only was Alex Palou named to different teams for next year’s Indycar season but, unbelievably, the same thing has happened in F1 with Oscar Piastri. The sports lawyers will be busy on both fronts. Aside from that I have good news on the F1 TV ratings front in the United States, why Asian billionaires are looking to invest in F1, a feature on Corvette Racing, track news from both sides of the globe, ownership changes in Supercars and much more. All that plus more motorsport sponsorship deals, the latest movers and shakers and how various race teams are dealing with the business of motorsport in their respective series. It’s all the business of motorsport news racers can use.

Motorsport Industry News

• The Alex Palou legal drama, which I have mentioned in the last two Business of Motorsport columns is getting more and more interesting. As Palou’s legal team requests to move Ganassi lawsuit to federal court, The Race looks at the contract loophole that could allow a Palou McLaren switch. UPDATE! Ganassi lawyers accept federal move; judge named.

• For an added twist, according to Racer, Felix Rosenqvist is not under contract with McLaren Racing beyond 2022, despite McLaren issuing a Press Release indicated that he was. RACER understands that if Palou’s contract with Ganassi for 2023 is enforced by a federal judge, McLaren will keep Rosenqvist in IndyCar.

• Believe it or not, the Palou situation is not an isolated one as almost the exact same thing has happened with Oscar Piastri! Hours after Alpine announced that Piastri would be driving for them, Piastri himself issued a statement that this was not the case. Alpine are absolutely sure of their legal position but this could all end up going to the Contract Recognition Board. UPDATE! According to Racing News 365, Piastri will be racing at McLaren next year with the contract having been validated by the FIA’s Contract Recognition Board.

• If you are curious (of course you are!), Driven has published how much Formula 1 drivers earn in 2022. While we have no doubt the base salaries of F1 drivers could more than enough for some to live for a lifetime, they only paint part of the picture. The complicated world of motorsport contracts means that performance-based bonuses can determine a significant portion of the final wage.

• The Sports Business Journal has reported that Las Vegas Grand Prix is set to run the weekend before the U.S. Thanksgiving. The article also reveals some fascinating details about the race, including the fact that “the LVCVA will work with stakeholders like local casinos to avoid guerilla marketing attempts and to develop “systems to monitor the perimeter and vicinity of the circuit and any other areas within the Las Vegas region where infringements might be expected to take place during the event period.”

• Based on the TV ratings, it looks like the Vegas race will be a success as F1 US TV ratings are up 35% on ESPN. A reported 1.3 million viewers have tuned in on average heading into the 2022 campaign’s summer break, up from the average of 934,000 viewers on ESPN last year.

• With rumors of more people interested in entering teams in Formula 1, Reuters reports that Hong Kong-based billionaire Calvin Lo is considering putting more money into Formula One following his connection with F1 team Williams, Lo told Reuters in an interview, adding other Asian investors were also interested in investing in the sport. “In Asia right now, there is a lot of liquidity sitting around, it’s mind-blowing. I wouldn’t be surprised if the next news you hear…is maybe some consortium in Asia investing into some other teams.”

• While it is unclear how these developments will fit into the Monaco Grand Prix plans as they are still wrangling over a race contract with Liberty, a majority of the Monaco National Council voted in favour of a bill to decommission a plot of land at Esplanade des Pêcheurs in order to allow the construction of a real estate development. The proposed new development should free up an area of 5,800 m2, which will ensure the sustainability of the Grand Prix and which can be used for other events throughout the year. Access by the emergency services is also to be guaranteed with this new layout.

• Grassroots Motorsports has an excellent feature on Corvette Racing which they describe as once an upstart, now a cornerstone of worldwide endurance racing. This year was the end of the IMSA GT Le Mans class. Some races contained only two Corvettes and a mostly privateer Porsche. Next year, the Corvette will become a GT3 car, with one racing in IMSA and another overseas in the FIA World Endurance Championship. For the first time, Corvette will go for championships in two major series.

• The County of Monterey Board of Supervisors have approved the final funding to replace the pedestrian bridge and resurfacing at WeatherTech Raceway Laguna Seca. The County of Monterey Board of Supervisors this week voted to approve the project budget of $14,902,198 and directed staff to proceed with replacing the start/finish bridge and resurfacing the 2.238-mile road course at WeatherTech Raceway Laguna Seca. Owned by the County of Monterey, the investment represents the Supervisors’ deep commitment to ensuring the long-term future of the internationally known facility. Granite Construction was awarded the project.

• Lawrence Stroll has sold iconic Canadian racetrack Le Circuit Mont Tremblant to Holand Automotive Group. No word yet on what they plan to do with the track but seeing as how the same group purchased Ferrari Quebec two years ago and they have purchased all of the track’s assets (including the driving school), hopefully racing will continue in some form at the track North of Montreal.

• On the other side of the world, Speed Cafe has a great feature on Australian racetrack Queensland Raceway and the work that has been done to improve the facility. “The other criticism that QR always got is that there was no shade and we didn’t look after the spectators, people used to say, so that’s another thing we’ve really focused on, so we’ve added a bunch of shade and viewing decks.”

• Despite their issues on the track, Ferrari are doing solid business as they generated a quarterly record $1.3 billion in revenue in Q2 2022 — a 24.9% increase year-over-year — surpassing Wall Street analysts’ estimates of $1 billion in revenue. Huddle Up has all the details.

• Meanwhile, compatriot Lamborghini had a record first half, but Chief Executive Stephan Winkelmann said he is preparing for a challenging winter if Europe’s energy crunch gets worse.

• Speed Cafe reports that the owner of Supercars, Racing Australia Consolidated Enterprises (RACE), has confirmed that a stake in the business has recently been sold. It is understood that the stake which has changed hands is that of Australian Racing Group (ARG) co-founder Brian Boyd, whose holding was approximately 15 percent.

• Competing motocross series Lucas Oil Pro Motocross and Monster Energy Supercross have partnered to create a SuperMotocross World Championship. The announcement made on Tuesday by MX Sports Pro Racing and Feld Motor Sports, Inc., would see a new playoff series and championship with a purse of $10 million. The alliance does not affect the individual series. Both Monster Energy AMA Supercross Championship and the Lucas Oil Pro Motocross will continue to crown their champions. But in creating an alliance between the two American Motorcycle Association (AMA) sanctioned series, it becomes a more formable platform for sponsors, television, and excitement for fans.

• The business of motorsport is nothing but ingenious when it needs to be. Grassroots Motorsports gives an example in how a community in Eastern Kentucky is using motorsport tourism to boost their economy after the collapse of the coal industry.

• Not content to just diversify within motorsport, McLaren is tapping into the fashion market with the debut of its first athletic footwear line, HySpeed. The line of running-based shoes is available in five colors at a retail price of $450 and the shoes are designed with elements that mirror McLaren’s cars, including carbon fiber plates.

• In one of the latest Halftime Snacks Podcast, host Ronen Ainbinder talks with Lior Tor about NFTs in sports. In this episode, we learn about Boyo’s features and uniqueness. We then discussed the hype behind NFTs and their utility for sports companies. Lastly, we discussed the adoption and future of the NFT space in sports. Listen on Apple | Spotify | Google | Amazon

• LawinSport has an excellent report on Sport and Diplomacy in the aftermath of the Russia Ukraine war. This survey has no political goal; it exclusively aims to help sport stakeholders globally to be better equipped to address these challenges and develop a clear understanding of how sports organisations could or should react to similar situations, which we sincerely hope never to happen again.

• LIV golfers have filed an antitrust lawsuit against the PGA Tour. While not directly related to motorsport, this will be an interesting case to watch. Sports has traditionally been given wide latitude when it comes to anti-trust law but sympathy is moving away from this and towards more robust competition so how this plays out will be significant. The FIA ignores these kinds of developments at their peril.

• Finally, MotorsportDays LIVE is coming back to Silverstone on 4th and 5th of November. The show celebrates the breadth of the UK motorsport scene: from tin tops and historics to single-seaters and everything in between. Experience the opportunity to test cars, network with like-minded professionals and prepare for the 2023 motorsport calendar.

Motorsport Sponsorship News

• Paretta Autosport has secured its first primary sponsor to close its three-race program for Simona De Silvestro at Ed Carpenter Racing with Acumatica Cloud ERP. “Acumatica is a perfect company to sponsor the Paretta Autosport car at the Music City Grand Prix,” Beth Paretta said. “Like us, Acumatica is passionate about deepening its diversity, equity and inclusion initiatives. We’re proud to manifest those efforts on the racetrack to inspire others. We look forward to welcoming them to our team and to IndyCar racing.”

• Three months after finishing second at this year’s Fuji 450km during Golden Week, Drago Corse have terminated their partnership with title sponsor Busou effective immediately, and will not take part in the upcoming Fuji GT 100 Lap Race. While not mentioned in the press release, there have been rumours suggesting that Busou and parent company Creare Corporation have come upon a sudden financial hardship that made their continued participation untenable.

• Zak Brown talks to Forbes about how McLaren Racing is winning the sponsorship race. But the biggest advantage McLaren Racing may have is that all the racing teams create multiple options for companies by presenting a portfolio with which companies can choose to straddle one or more of the McLaren race efforts and different tiers within them.

• The NASCAR website explains how 3CHI’s historic partnership with Richard Childress Racing makes an impact as NASCAR’s first hemp sponsor. The partnership is significant for multiple reasons, but the obvious being it marks the first category-specific team partnership in NASCAR and first hemp-based consumer brand sponsorship across all major professional sports. That brings a lot of new eyeballs to the product.

• Camping World has announced that they are to end their primary sponsorship of Truck Series next year. “What really drove it for me — it’s going to sound odd to people, but I was watching the marketplace change and I was watching inflation take off, and I was watching the cost of housing, car payments, and everything for our 14,000 people get more expensive every day,” Lemonis, Camping World chairman and CEO, told SiriusXM NASCAR Radio. “We just issued a series of raises and not because we just wanted to hold on to people, but we realized that’s how our business works. The reality of it is, math is math.”

• South Australian lighting company Valo has been announced as the naming rights sponsor for the return of the Adelaide 500. “At Valo, we’re passionate about motorsport and we couldn’t be more excited to be the naming rights sponsor of the Valo Adelaide 500,” said Valo CEO and founder Aaron Hickman.

• Alfa Romeo has renewed its partnership with Swiss-based Formula One outfit Sauber for the 2023 season. “Every year in July we assess the situation. If in the future we realise we are not interested any more [in Formula One] or we don’t have returns on our investments, we’ll see what to do, but everything will be done in an orderly way,” continued Imparato.

• Extreme E has expanded its partnership with Neat Burger in a move which sees the fast food chain become the official vegan partner of the series. “We are delighted to extend our partnership with Neat Burger. Educating and raising awareness of issues of environmental significance is key for this Championship, and understanding what we eat and its impact on the planet is certainly one of those,” said Ali Russell, chief marketing officer at Extreme E.

The Business of Running a Race Team

• In quick succession, sportscar racing team WRT announced that they would be parting ways with Audi at the end of 2022 and running BMW’s factory Hypercar program in the WEC in 2024. “It is fantastic to see how our LMDh project has been gaining momentum in recent weeks,” said Franciscus van Meel. “First the successful rollout of the BMW M Hybrid V8, followed by the decision of the Board to approve the return to the WEC – and now the agreement with one of the best and most successful teams in endurance racing. We are proud and delighted that a top-quality team like Team WRT has agreed to take on our BMW M Hybrid V8 and compete with it at Le Mans, and at all the other WEC races. The next few years will see us in a great position in both top race programmes, with BMW M Team RLL in the IMSA series and Team WRT in the WEC.”

• The Red Bull F1 Team has been quite busy over the last week. First they signed a technical support deal with Honda through to 2025. Then word got out that Porsche is set for a 50% stake in the Red Bull F1 team. While Christian Horner has stated that the Red Bull-Porsche F1 deal is still a bit of a ‘Jigsaw’ that has yet to be concluded, Dieter Rencken looks at what’s really going on with Red Bull and Porsche. While the official decision has been delayed yet again, it has been confirmed that AlphaTauri will be using the Porsche engines as well.

• Zak Brown, CEO of McLaren Racing, and Formula 1 Driver Lando Norris discuss with Goldman Sachs McLaren’s journey back towards the top of the grid and their sustainability mission.

• Abt Sportsline has announced it will use Mahindra powertrains for its return to the all-electric Formula E series next season. “Both Mahindra Racing and Abt Sportsline were championship founding teams and its absence in the paddock has been felt hugely. We look forward to seeing the team back winning races from 2023 and we are committed to supporting them with whatever they need to succeed.”

• Dubai-based GPX Martini Racing is looking to expand their operations by potentially racing in the Gulf 12 Hours, Dubai 24 Hours and the Rolex 24. “We’re going to work on the next steps on our programme in Endurance GT3, which will be a mix of circuits we know and new experiences.”

• Exclusive Autosport has announced that they will be joining the USF Juniors series in 2023 with the goal of entering three cars in the program. “I am proud to be adding USF Juniors to the Exclusive Autosport program,” enthused Michael Duncalfe, Team Principal. “I’ve always strived to create an internal ladder system under the EA banner and adding USF Juniors will only serve to strengthen that ideology and offering. The USF Juniors provides another platform for karters and racers in other lower horsepower junior formula car series to enter the Road to Indy and gain valuable experience in the Tatuus chassis as they develop their craft in the Road to Indy. We are pleased to be part of the USF Juniors series and the debut of the new halo-equipped Tatuus JR-23.”

• Team Principal Andreas Jenzer of Jenzer Motorsport talks to F1 Feeder Series about his 30 years of running a race team and the role he has played in developing young drivers. “I am not a money-driven person and neither is my wife. We don’t have a family, we don’t have kids, we are not money people. We enjoy the sport, even if the sport gets more and more difficult. Other teams have big investors behind them that are willing to lose money, we don’t have this but I think through serious work we were able to survive for all of these years. We are very clean in terms of our financial situation and obviously this is also a part of our success which we’re very proud of. If we one day decide to walk away, we can walk away while being able to watch our own face in the mirror.”

Movers & Shakers

• Caterham Cars has announced that Bob Laishley has taken the reigns as Chief Executive Officer, assuming the position from Graham Macdonald, who is retiring after 15 years of working for the brand. Bob has amassed over 40 years of experience in all aspects of vehicle design, innovation, engineering, sourcing and project management. Culminating with six years as Program Director for NISMO road cars and sports models, including the Nissan 370z and GT-R.

• Hannes Ruoff has been appointed as the new Chief Executive Officer (CEO) of Singapore-based Porsche Asia Pacific Pte Ltd, effective 1 October 2022. Ruoff comes to the role from Porsche AG and was most recently Area Manager Asia Pacific and Australia in the Overseas and Emerging Markets sales region. He succeeds Arthur Willmann at the regional office, who has held the position since 2018 and will assume a new role within Porsche sales.