A lot of news in the business of motorsport this week as a number of big F1 deals were signed and the impact on the F1 budget cap, some changes in race team ownership, various motorsport-related company finance news, and the release of an index of brands using sport to link purpose with profit.
Last week I mentioned some of the crypto-related sponsorship deals in F1 as well as why the series is embracing NFTs. Well another week has passed and more deals of this nature have been announced.
- The big news is that Red Bull has landed a record $150m cryptocurrency F1 sponsorship deal with Bybit. The plan is for Bybit to help the team grow fan engagement in its role as fan token issuance partner. The interesting part of this is the impact that the value of the deal will have on the team’s budget in this new cost-capped era. As The Race points out, “they will be covering a massively reduced spend with prize money and some commercial deals. Any leftover will go towards the costs of running the business that are exempt from the budget cap, which is something every team has to manage, and anything beyond that is the racing team making a profit.” With a lower budget, any multi-million dollar deals will have a huge knock-on effect for an F1 team allowing them to potentially become self-sufficient business’s on their own and not rely on a parent company to support their motorsport activities.
- It wasn’t just Red Bull as Alpine and Binance have agreed to a fan token partnership. As part of the deal, Alpine will join Binance’s platform and release non-fungible tokens (NFTs) for fans to purchase. Binance will also become the official fan token partner of Alpine’s Formula One and esports teams, securing branding inventory on the A522 car during the 2022 season.
- For a bit of background, here are two articles to get a sense of the how and the why:
- All that being said, the murky, unregulated world of crypto is starting to raise some eyebrows as well as potential legal concerns and not every racing team is apparently happy. McLaren Racing has ended their sponsorship deal with the Bitci.com fan token platform. In an emailed response to a query by Bloomberg News last Tuesday, McLaren Racing confirmed the termination of its relationship with Bitci.com. It did not give reasons for the termination and neither did it make mention of a fan token.
- Aston Martin racing team has entered into a content creation partnership with short-form social video platform TikTok. The deal sees Aston Martin add TikTok’s branding to the driver headrest and inner Halo of the AMR21 car, with the platform becoming the team’s ‘official creator partner’. On the content side, Aston Martin will work with both TikTok’s in-house creatives and the platform’s community to explore engagement opportunities, including exclusive social output on the team’s new account.
- It’s not return of the Pink Panthers but Alpine is set for a blue and pink F1 livery as BWT becomes a title sponsor.
- Why do all these sponsors want to get involved in Formula One? Probably because over 100 million people watched F1’s 2021 season finale, an eight year high.
Motorsport Industry News & More
- Multiple sources have told RACER.com that Ligier, the French-based constructor of LMP2, LMP3, and junior open-wheel cars, has been recruited by an auto manufacturer to build a new GTP/LMDh model which could debut as soon as 2024. The mystery is who that manufacturer is and Racer looks at some of the possibilities.
- With what many are predicting to be a golden age of sports car racing with all the new manufacturer involvement in GTP/Hypercar, the IMSA website talks about how manufacturers have applied numerous road car developments to their race cars in Cross Pollination: Technology Transfers Both Ways in IMSA Racing.
- With the Daytona 500 happening this weekend and the first true race for the new Gen 3 cars, Sportico looks at NASCAR and how this is a critical season with broadcast talks looming.
- There were a couple of ownership changes with two significant racing teams that happened this week as former F1 driver Charles Pic is set to take over the DAMS team and sports car team Kelly-Moss is under new ownership.
- Motorsports data company Griiip has closed a seed funding round led by Sharp Alpha Advisors and Porsche Ventures. Griiip’s sensor-based hardware called RedBox collects real-time data from race cars to support fan engagement offerings such as broadcast graphics and fantasy and betting applications.
- GridRival, a sports betting startup dedicated exclusively to motorsports, recently announced a seed round of $3M led by prominent Chicago-based sports-tech fund, KB Partners. Also participating were Sharp Alpha Advisors, ESPT Ventures, and other seasoned sports betting investors and executives including Lloyd Danzig, and Benjie Cherniak.
- Williams, Silverstone, and Racing Pride were among the big winners at the recent The Race Media Awards.
- While not specific to motorsport, the Laureus Sport for Good Index takes a fascinating and compelling look at brands and whether they can genuinely link purpose with profit.