This week in the Business of Motorsport I look at the relationship between F1 teams and cutting-edge high technology, the business issues facing Gene Haas, a pioneering motorsport-focused DAO, the fate of Adria International Raceway and more. As always, this is business news racers can use.
- I have been following F1 since the early 80s and I don’t think I have ever seen its popularity in the United States on such an upward trajectory. According to Front Office Sports, F1 said it has over 36 million fans in the U.S., one of its fastest-growing markets. Globally, 445 million people watched at least one race in 2021, a 3% uptick year-over-year, led by China with 70.8 million unique viewers.
- With all those viewers comes commercial possibilities. Blackbook Motorsport has just released their Formula One 2022 Commercial Guide that details every team, every sponsor and all the major TV deals. “Looking to sponsorship, eight out of ten teams will enter the 2022 season with either a cryptocurrency partnership or non-fungible token (NFT) deal. Branded in some quarters as the new tobacco sponsorship, deals with brands from the crypto sector have become increasingly prevalent in Formula One over the past 12 months.”
- You have to wonder what is going through Gene Haas’ mind these days. In what can best be described as a roller coaster ride since entering F1, Gene Haas has indicated that he is likely to increase his F1 team investment according to RACER.
- I have been covering Michael Andretti’s plans to enter F1 in 2024 ever since he announced his plans (or more accurately since his dad Mario did the announcing) and he believes that opinions are changing about his potential F1 entry. “The good thing is we’ve talked now to a lot of the team owners, and we’re getting support from all the team owners now after they heard our story, so that’s a positive,” Andretti (pictured at left, above, with father Mario Andretti and McLaren’s Zak Brown) told RACER. “They’ve got to know how serious we are. I mean, we’ve been all over them, and I think there’s only going to be good fallout from Colton testing [with McLaren], and how serious this is for all of us.”
- Andretti is also supportive of the Herta/McLaren F1 deal that was recently announced. “I think it’s really important for the programs that we’re working on, obviously, and so McLaren was good enough to get him some miles in the car, which I think it’d be really good for him, plus it helps getting points towards his super license,” Andretti told Marshall Pruett at RACER. “So it was really cool of McLaren to do that.”
- Finally, Tata Communications returns to F1 which will enable the series to utilize a modern networking backbone that will deliver better user experiences, reduce costs, and lower its environmental impact. According to Blackbook Motorsport, “The Indian networking firm first entered the sport in 2012 as official connectivity provider, modernizing backend infrastructure that had previously relied on satellite technology. However, Tata ended its marketing relationship with the sport two years ago while continuing in a technical capacity. Now the company is in the partnership fold, responsible for end-to-end managed network services that will power Formula One’s broadcast and digital services at a time when it is enjoying renewed popularity.”
Motorsport Sponsorship News
- Zak Brown is a true sponsorship guru. He proved as much when he ran JMI and he is reinforcing it at McLaren as he just landed an impressive new sponsor in Google. It is a multi-year partnership that sees Google as a new Official Partner of the McLaren Formula 1 Team and the McLaren MX Extreme E Team from 2022. “The partnership will bring the best of Google products to McLaren to provide a more seamless technology experience across devices. Throughout the season, McLaren will use 5G-enabled Android devices and Chrome browser across its operations during practice sessions, qualifying and races to support the drivers and team, with the goal of improving on-track performance.” Android and Chrome branding will be carried on the engine cover and wheel covers of the MCL36 Formula 1 race cars, and on the helmets and race suits of McLaren Formula 1 drivers Lando Norris and Daniel Ricciardo from the 2022 Formula 1 season. I mean check out those wheel covers (image at the top of this post). That is brilliant branding!
- Red Bull and Oracle have developed quite the symbiotic relationship and it is interesting to see how these high tech brands are integrating with race teams. It is a natural fit for both and Forbes looks at the partnership between Oracle and Red Bull in what is now the Oracle Red Bull Racing Team. On the Blackbook Motorsport podcast, Christian Horner and Ariel Kelman discus Oracle Red Bull Racing’s data-fuelled title tilt.
- As of the time of this writing (late Thursday night) there is a report that F1 is set for a ‘US$30m-a-year’ Salesforce sponsorship. Sky News reports that the global motorsport series and the US-based company are ‘close to finalising’ a deal worth around US$30 million annually over five years. The reported value of the deal would suggest that Salesforce will join Formula One’s global sponsorship tier, which currently includes Aramco, Crypto.com, DHL, Emirates, Heineken, Pirelli and Rolex.
- Gene Haas as mentioned above is going through a heck of a time over the last few years in F1 and things are not getting easier. With him canceling the Uralkali sponsorship with immediate effect following Russia’s invasion of Ukraine, he has stated that there is “good interest” from F1 sponsors to fill big Uralkali hole.
- The BRSCC and AIRTEC Motorsport have announced an expansion to their long term supply partnership, with AIRTEC Motorsport becoming title sponsor of the BRSCC’s Fiesta Championship for the 2022 race season.
- As Mars Wrigley’s NASCAR sponsorship ends, Anton Vincent says the sport has helped the candy maker gain value. The value Nascar has brought to Mars Wrigley is exceptional, Vincent explained. But the move to shift its focus away from NASCAR is due to a change in the company’s overall marketing strategy. “We love the sport and we’ve supported the sport when the sport was going through all of its changes, through all of the ups and downs,” Vincent said. “I think we get great credit for that and deserve that credit. There’s a bit of a shift in our sports marketing strategy. Our consumer base is very distributive.
General Motorsport Industry News
- Sportico has a fascinating article on MotorDAO, a decentralized autonomous organization that sets out to finance race teams and drivers with fan backing. “Potential investment opportunities include everything from presenting a young driver to Formula 3 to owning a race team. The only mandate: 85 cents of every dollar raised must be disposed of in some format of racing. “Think of it as a mezzanine financing strategy that is going to do two things: access the commercial rights of an individual team or driver, or access those commercial rights and ask the team taking the funds for a 6% or more return on the investment.” More details can be found here.
- AVL RACING has rebranded to AVL RACETECH. AVL RACETECH, formerly known as AVL RACING, is the specialist global motorsport division of AVL and has been actively involved in all technical areas of the sport for over 20 years. AVL RACETECH works with customers in more than 17 racing series around the world, in the fields of engineering, testing, simulation and manufacturing. We are a key supplier for teams in the most respected racing series around the world, from Formula 1 and NASCAR to MotoGP, and provide state-of-the-art technology and services to the motorsport world. We believe in motorsport and use it as a platform for innovation. We transfer this know-how into road car development for future generations of mobility.
- The Della Penna Motorsports Next Gen Foundation has announced that it has established two advisory councils to support its mission to empower girls from age 5-16 with opportunities to “supercharge” a future in motorsports, whether it’s behind the wheel, in the pits, or behind a computer. The Drivers Advisory Council consists of a group of all female drivers currently on the racing circuit, while the Industry Advisory Council consists of pre-eminent leaders in the motorsports industry.
- Adria International Raceway is to be auctioned by the end of March after entering bankruptcy earlier this year. The auction of movable assets will be held in “split mode”. Vroom Kart has all the details.
- Motorsport has always been generous in contributing to charity and 2022 is no exception. Jimmie Johnson and his sponsor Carvana have launched a charity initiative called Driven to Give Back. According to Carvana, “Driven to Give Back is launching collaborations with three charity organizations to co-design the livery at select races. Fans can sign-up at Carvana.com/driven to be the first to see the new paint scheme before it hits the track. By doing so, Carvana will donate $1 on their behalf to the focus charity of that race. Each charity partner will also be at the Carvana Racing Fan Zone during their selected race to educate racing fans about their mission.”
- Meanwhile, #CheckIt4Andretti has partnered with North Carolina’s Northeast Digestive Health Center where it “will provide colonoscopies free of charge to select low-income patients from a local free and charitable clinic that serves people who have no health insurance and limited access to health care” at its Concord base.
- What can a sponsorship activation agency do for you? Sport Dimensions explains in 6 Things an Activation Agency Can Do for Your Business.
- Ikoniqa Motorsports Studio has worked directly with the Formula Race Promotions series both as a manager of their web presence, and also as a supporting series sponsor. In 2022 they are bringing a rebrand to the Formula Race Promotions Series. This is what was involved.
- Autoweek has a great article on how AMA Hall of Famer Wayne Rainey is still powering MotoAmerica at the Daytona 200. “MotoAmerica has been a labor of love for Rainey, who was paralyzed from the chest down after suffering a severe spinal injury in a racing accident in the 1993 Italian Grand Prix. While the injury ended his racing career, Rainey was determined not to let it keep him away from the sport.”
- High performance brake pad and disc specialist DIXCEL has reaffirmed its commitment to Fanatec GT World Challenge Asia Powered by AWS by extending its official partnership for another three years until the end of 2024.
- Transmission technology specialist Xtrac, based in Berkshire, United Kingdom, has launched a dedicated apprenticeship facility at its global headquarters in Thatcham. The Xtrac Academy will provide hands-on manufacturing and computer-aided engineering skills training focusing on Xtrac’s products.
- Finally, Radical Race Cars has promoted USA-based Tom Drewer to be its Global Motorsport Director. Working from his base in Atlanta, Georgia, Drewer will oversee the operation of the Radical Cup North America and the Radical Challenge and Radical SR1 Cup in the United Kingdom, using his extensive motorsport experience as a competitor and manager to drive the continued growth of these three championships. Drewer will also work with Radical’s global dealer network, and will assist them in running their own one-make Radical championships in their home markets.
The Business of Running a Race Team
- Formula Scout sat down with team principal Bob Vavrik of the Czech Republic’s Charouz Racing System at their headquarters during the winter to find out more about the team’s history and ambitions for the future. “For us it is not a question of how much of the budget is left for the owner of the team. Toni Charouz doesn’t race to make a profit. However, we are no charity, so we have a budget and it is fully spent, but not to make Toni more rich. For him, it’s to enjoy it because he’s a fanatic of motorsport and race cars. Racing is his passion.”
- Formula Scout also looked into how Van Amersfoort Racing, F2’s newest team has prepared for its debut.
- With the management change I mentioned a few weeks back, DAMS is targeting 2023 for a return to F2 title contention under its new ownership.
- Alpine Endurance Team principal Philippe Sinault views LMP2 as the “main way” for the team to go as a bridge between its LMP1 and LMDh programs next year. Sinault said it’s “too early” to confirm its 2023 program but that a move back to LMP2 for a single season remains a viable and preferred option.