Business of Motorsport for July 15, 2022-Indycar Resurgence

There is a lot to digest in this week’s Business of Motorsport. I look at the infamous Indycar “Split” and how the series is recovering and growing, the growth of the F1 brand, NASCAR racing on the streets of Chicago, racetrack good news and bad news and more. I also look as usual at the latest sponsorship deals, race team developments and the odd case of two teams signing the same driver within hours of each other, plus a whole lot more including a race team for sale.

Motorsport Industry News

• Indycar’s history will be forever blighted by “The Split” and its repercussions which are still felt to this day. In ‘The Split’: How a Maverick Launched IndyCar and Outlived Its Rival, Front Office Sports looks at How Tony George’s gambit changed open wheel racing in North America forever.

• The great thing about Indycar though is that they have been steadily recovering from “The Split” as Racer explains in IndyCar readying for grid expansion. “We’re already looking at what next year could look like and we think we might be 27 to 29 cars,” IndyCar president Jay Frye told RACER. “It looks like it’s possible and all of them are legitimate. We could be close to 29 if they all come together, so we’ll see how it plays out.”

• Jalopnik feels that this weekend’s IndyCar race in Toronto is F1’s Lost Canadian Jewel.

• “The Split” is just one example of a rival upstart challenging a long running league. We have seen on numerous occasions Formula 1 team owners and/or manufacturers threatening to launch a rival series to challenge F1 and we are seeing something similar in LIV Golf attempting to challenge the PGA and European Tour or in the mooted football (soccer) Super League that lasted 72 hours. The issues are complex but sentiments are slowly leaning towards no longer allowing global monopolies in sports. Here are a couple of articles related to both the aforementioned Super League and LIV Golf. I have quoted various cases in past Business of Motorsport columns on how it is incumbent on any sports governing body that they do not assume they are untouchable, or as in the case of Major League Baseball, that their anti-trust exemption will always remain in place. Competition, more and more people will argue, should not be just on the field but in the administration of sport as well. It will be interesting to see how this all plays out.
  • The F1 wars that threatened a Super League-style breakaway
  • European Super League case heads to ECJ in hearing that pits elite soccer clubs against Fifa and Uefa
  • Super League Clubs Accuse UEFA of Soccer Monopoly
  • LIV Is Trying To Become The F1 Of Golf
  • The DOJ Is Investigating The PGA Tour
  • Major League Baseball’s Antitrust Exemption Once Again Faces Scrutiny On Capitol Hill

• In what is starting to look like sellers remorse, Autosport reports that Formula 1 is “not a closed door” to Honda in 2026. “While the company insists that there has been no formal change of heart about an F1 programme, it has admitted to following closely how the 2026 engine rules are progressing.”

• Meanwhile, the Alfa Romeo Formula One team has partnered with Smartech Retail Group to unveil ‘The Track’, a 55 square-metre concept store inside the Selfridges department store in London. “Created in partnership with The Memento Group, The Track is designed to offer an immersive experience for Formula One fans, as well as for those who are yet to discover the sport, uniquely blending both physical and digital experiences.”

• Finally, after much complaining by primarily big budget teams, the F1 cost cap has been increased by US$4.3m to account for inflation, a figure nobody appears to be happy with. “The cost cap for the season has now increased to US$145.5 million and will also increase next season. The 2023 season was originally set to include a limit of US$135 million, but at least US$3.6 million will be added for the additional races currently planned. However, this inflation adjustment figure is not the final amount, as the International Automobile Federation (FIA) will make a further adjustment based on the G7 inflation figure in April 2023.”

• While Formula E has nowhere near the visibility of Formula 1, it’s CEO thinks that the two series can coexist and Autoweek explains why he thinks so. “Candidly, I don’t think you’ll see Formula 1 go full electric. First of all, we have an exclusive license from the FIA as an FIA World Championship. We’re the only one that can be open-wheel single-seater electric. Formula 1 cannot do that. But they’ll shift more power towards the electric component. They’ll have higher degrees, higher power in the hybrid system. And you know, they’re adopting E fuels and things like that. We view that as a positive, because they’re innovating and they’re doing things that are going to be better for for the environment.”

• Why does Formula 1 have such high visibility you may ask, especially recently? Front Office Sports breaks it all down in How Formula 1 Became an Unstoppable Brand in 6 Years. The growth, and the numbers behind them are impressive. “For F1, the past few years have played out like a Harvard Business School case study on content marketing and branding. New sports looking to build staying power can use the F1 playbook to build an unstoppable brand.”

• What about the tech that propels F1 cars? Sports Car Digest looks at the issue in Formula One: How the Power Unit of the Current Cars Works & Why It’s Important for Future Road Cars. “In the world of 2022, with fuel prices rising, the rise of electric vehicles being produced by Mercedes-Benz and other brands, the start of the electric hypercar movement for the very wealthy, and more and more hybrid vehicles being presented as the way to into the future, there has already been the start of transitioning the performance hybrid systems of the current F1 power units to road cars. Perhaps the greatest example of a car that fully embraced the technical advancements to come from F1 is the Ferrari SF90 Stradale.”

• In a similar vein, Semiconductor Engineering (I read ’em all!) explains What Formula 1 Racing Says About Auto’s High-Tech Future. “There is no doubt, however, that the technology involved is growing increasingly complex. According to Hewlett Packard Enterprise, which has partnered with several teams on design simulations and other activities, each car contains hundreds of sensors. A single season can see 30,000 design changes across teams, and each team manages 18,000 streams of data on race days. Collaborations with tech companies are now a common occurrence for individual teams and the Formula 1 organization itself.”

• The Drive looks at Why a NASCAR Street Race in Downtown Chicago Makes Sense. “Imagine stock cars zooming by the skyscrapers and high-end stores lining the iconic Michigan Avenue. The roar of the V8 engines echoing through the glass buildings as the cars cross the Chicago River. It’d be a sort of Monaco-like atmosphere but with wider streets and bigger (as well as louder) race cars. That’s the kind of event that’d make headlines not just domestically, but possibly even abroad, too.”

• Daily Sportscar has some more details on the Isotta Fraschini HyperCar I mentioned a few months back. “The programme is understood to involve an impressive group of industry technical partners including Williams Advanced Engineering, (understood to have been involved in the aero packaging and design), Michelotto (design engineering and construction) and an as-yet unconfirmed OEM engine partner for the car’s internal combustion engine.”

• With a background working with Formula 1 drivers, Finnish high-performance coaching and wellbeing service platform Hintsa Performance has raised €5.1 million in new funding from notable investors, including ex-Unilever CEO Paul Polman, K5 Global, The Late Late Show host James Corden, and Charles Plowden, former joint senior partner of Baillie Gifford & Co. 

• Dallara CEO Andrea Pontremoli says that ‘understanding the DNA’ of Cadillac and BMW has been key in the company’s work developing two stylistically different LMDh cars. In an interview with Sportscar 365, Pontremoli also reveals that they have been approached by other OEMs. “For 2023, we will stay there [with two manufacturers]. In the next years, could be [more]. It is something that we have to look forward to in 2024, 2025 and 2026.”

• NASCAR has announced an extension to its partnership with ticketing platform SeatGeek, which becomes the official ticket marketplace of the stock racing series. “Our new partners at SeatGeek did a tremendous job integrating into our ticket sales ecosystem and providing fans with a frictionless process to buy tickets best-suited for their race day needs. Expanding our partnership across all Nascar-owned and operated tracks was an easy decision.”

• Off-road electric SUV series Extreme E has announced an extension to its broadcast deal with TV Malta (TVM) while Formula 1 has reportedly finalized a multi-year agreement with Chinese state broadcaster CCTV to broadcast F1 in China.

• The SCCA Foundation is set to award grants with the goal of eliminating a significant burden for SCCA Regions that need to make an investment in a program in order to flourish. “The SCCA Foundation Region Development Grant will give Regions the opportunity to grow and evolve their programs, member experience, and equipment,” said Abby Scher, SCCA’s Region Communication, Training, and Events manager. “Many Regions are working to create positive changes in their programs, and this type of support will help them to the finish line.”

• Motorsport has always had a strong community component and has supported numerous charities and causes. Lemons of Love is just one such an example and Grassroots Motorsports looks at how Lemons of Love uses motorsports to provide a lemon-yellow ray of hope.

Track News

• News is not so great at Finland’s KymiRing as The Checkered Flag reports that the project is unraveling with bankruptcy filings and major series exits. “However, the dream seems to be going down the drain with each new development since its opening in 2019, and it appears to have hit rock bottom amid reports that construction companies Maanrakennus Pekka Rautiainen Ky and Macra oy have filed bankruptcy claims against the track. With circuit ownership unable to pay the money owed and construction therefore coming to a halt, series like the FIM Motocross World Championship and Nitro Rallycross have cancelled their races there.”

• Speed Cafe reports that a court decision has put the future of Wakefield Park in jeopardy due to the imposition of strict noise limits going forward. “Race meetings fall under the ‘Red Category’ of events, which are those where noise levels are 85 to 95 dB(A) LAeq 15min (ie noise level at frequency response of human ear, averaged over a 15-minute period). However, it should be noted that for the purpose of the development consent, an ‘event’ is in fact “considered to be a day’s riding or racing and not individual events or individual rides or races on different tracks.”

• In more positive developments, CBC News has a great feature on Rocky Mountain Motorsport Park in Long-awaited Alberta race track opens.

• G2 Motorsports Park has released a video showing the progress that they have been making on their construction. “Perimeter Lap. Last of the storm drains and utility sleeves going in, northeast 10 acres final leveling in preparation for first garage condos going up, final grading and top soil added to both east and west ponds.”

Motorsport Sponsorship News

• The Adler Group has extended their partnership agreement with Ferrari. The Italian group, a world leader in automotive components, has renewed its partnership agreement for the Ferrari Challenge Trofeo Pirelli and with Ferrari for the three years 2022-2024.

• Envision Racing have announced a multi-year partnership renewal with the Teijin Group that will see the global technology-driven chemicals company continue to partner with the team. “Envision Racing and the Teijin Group extend their agreement with a focus on driving advancements and understanding in sustainable technologies for a better planet.”

• McLaren Racing has announced K-Swiss, the Los Angeles-based footwear brand, is set to be an official partner of its Formula One team from 2023 in a multi-year deal. “McLaren and K-Swiss will create a bespoke performance-based footwear collection, designed to be worn by McLaren pit crews and engineers at race events globally. The two brands will also collaborate on a footwear and limited apparel collection which will be available to consumers.”

• The BWT Alpine F1 Team and Yahoo have extended their strategic partnership to promote both brands on F1’s global stage. The team has also partnered with CFD broker FVP Trade.

The Business of Running a Race Team

• Autosport reports that Dick Johnson Racing boss Ryan Story says the Supercars team is assessing a “strategic partnership” with a new co-owner. “He says there is no firm agreement in place as of yet, however Story admits a a partnership with a new owner is on the cards in the future. According to Story the target is a “strategic partner”, similar to the Roger Penske era, rather than an outright investor.” Speed Cafe offers further context.

• Racer reports that the A.J. Foyt Racing team has parked the No. 11 Chevy entry for this weekend’s Honda Indy Toronto event due to late sponsorship payments. “The team hopes to bring the car back if and when overdue payments from its primary sponsor are made.”

• The American boutique manufacturer Glickenhaus has opted against racing in the first WEC event in Japan since the advent of the COVID-19 pandemic due to financial reasons according to Autosport. “There’s no mystery to it – we are in the process of raising financing for our company that will enable us to expand significantly into hydrogen fuel cell trucks,” Jim Glickenhaus told Motorsport.com‘s German edition. It is unclear if they will race in the series finale in Bahrain.

• Autosport reports that Le Mans 24 Hours class winner Ferdinand Habsburg has launched plans for what he is calling the first fan-owned and run sportscar team for next year’s World Endurance Championship. Habsburg is initially looking for approximately 2000 fans to part-fund his 2023 LMP2 assault under the Rebel Team banner with the Belgian WRT squad, for which he has driven since last season when he took class honours with Robin Frijns and Charles Milesi at Le Mans and in the WEC.

• Tim Crawford, father of young American driver Jak Crawford who competes in the FIA Formula 3 Championship, has postponed his plans to assemble a new Indy Lights team for the 2023 season according to Racer. “Along with searching for Indy Lights equipment to buy, the Texas-based businessman has been active within the NTT IndyCar Series paddock in recent months in search of connection that would create a Road to Indy bridge for its drivers.”

• How can two race teams sign the same driver for a season? That is the question everyone is asking when both Chip Ganassi Racing and McLaren Racing both issued press releases indicating that Alex Palou had signed for their respective teams to race in 2023. Marshall Pruett looks at how Palou’s contractual mess was months in the making.

• Finally, if you are looking at buying a F1600 race team, Rice Race Prep is selling their team. “Greg Rice announced today that he will be retiring from racehire management on November 1st and his two cars and equipment are for sale. “I would prefer to sell all or most of the equipment to someone who will continue to support Formula F in SCCA and F1600 with FRP. At some point we will have to sell off equipment on an individual basis, but I will give some time for a new team operator to emerge. I have cars, parts, spare engines, tools, and a shock dyno, all of which can be included. It is an opportunity for someone to step in at the front of the field and not spend two or three years developing their own program.” Please contact Greg Rice at RiceRacePrep@gmail.com“

Movers & Shakers

• Michelin North America, Inc. has named Jason Anzalone director of motorsports, effective Aug. 1, succeeding Tony Ménard, who is returning to Michelin headquarters in France after three years in North America. “Tony has been instrumental to our motorsports success in North America, nurturing the heritage of Michelin and BFGoodrich racing through iconic race victories and technical leadership in endurance and desert racing,” said Matthieu Bonardel, global director for Michelin Group’s motorsports business entity.

• Elite Motorsports has named Scott “Woody” Woodruff as their new branding and Motorsports Director. In his new role, Woodruff will work closely with the organization’s various brands, including Elite Motorsports, Elite Performance, Elite HP, Patterson-Elite and Elite Cultivation.