This week the Business of Motorsport overflows once again with business news racers can use.
While I cover the Audi-Sauber tie-up, the kerfuffle over the cost cap regulations and the success of the U.S. Grand Prix, the death of Dietrich Mateschitz reminds us that motorsport is run by human beings, and it is important to remember that motorsport is built on the passion of people who do what they do (for the most part) and for their love of racing.
I also look at Audi’s future in GT racing now that they are embarking on their F1 adventure, how IMSA manufacturers feel the adage of “Win on Sunday, Sell on Monday” still applies, a new racetrack being built in the United States with international aspirations and the issue of concussions in NASCAR and much more.
All this plus the latest motorsport sponsorship deals, the various moves by racing teams in preparation for 2023 and this week’s motorsport movers and shakers. As always, its news racers can use.
Motorsport Industry News
- Confirming what was perhaps the worst held secret in motorsport, Audi has selected Sauber as their “strategic partner” for their Formula 1 entry. “Following the announcement of its Formula 1 entry at the end of August, Audi’s confirmation of its strategic partner marks the next milestone in the company’s entry into the premier class of motorsport. With around 30 years of competitive experience, Sauber is one of the most renowned and traditional teams in Formula 1. While the power unit will be created at Audi’s Motorsport Competence Center in Neuburg an der Donau, Sauber will develop and manufacture the race car at its site in Hinwil (Switzerland). Sauber will also be responsible for planning and executing the race operations.” For those in the legal profession, Linklaters is providing comprehensive support to Audi in relation to its entry into Formula 1.
- Meanwhile, it has been rumored that spurned Red Bull partner and brand partner Porsche are on the verge of concluding a deal with Williams Racing in a deal similar to the aborted deal with Red Bull.
- As news emerges that both Red Bull and Aston Martin have agreed to Accepted Breach Agreements with the FIA, I would have to agree with Dieter Rencken that transparency in the findings are more important than what the actual penalties are. “The matter is further complicated by the fact that no precedents exist, nor do the regulations prescribe a tariff of penalties as per other transgressions. While it is de rigueur to blame the FIA for all F1’s ills, this overlooks a) the FinRegs were imposed under the previous (Jean Todt) administration and inherited by Mohammed Ben Sulayem and his team, and b) all teams and F1 had input into every step of the process.” I will update this column once the penalties have been officially announced.
- UPDATE! Red Bull have both a financial and sporting penalty for breaching last year’s budget cap, the FIA confirming an $7 million fine and the loss of 10 per cent of their wind tunnel time.
- Aston Martin have been fined 450K for their procedural breach.
- Full FIA report on Red Bull F1 cost cap breach and penalty
- Red Bull F1 cost cap penalty: The 13 errors listed by the FIA
- How catering costs contributed to Red Bull’s F1 budget cap overspend
- Here’s Where Red Bull’s $7M Sanction Ranks On The Biggest Fines In F1 History
- Rencken also mentions something that was also brought up at a recent sports business conference that I attended organized by LawinSport and the Linklaters law firm. “It is against this background combined with arguably unconstitutional (or even illegal) regulations that the current FIA’s Cost Cap Administration department is required to judge Red Bull’s alleged overspend of around $1.8m on the $145m cap (a breach of 1.2%). This despite there being, as per Mekies, “a big challenge right now to make [the regulations] equitable in all situations“. Will any of the big teams attack the cost cap regulations on the basis that they are either unconstitutional since they were developed largely by Liberty Media or illegal as being a restraint on trade? Unlikely but possible.
- After another successful United States Grand Prix, Front Office Sports looks at how Austin became America’s Formula 1 capital. COTA Chairman Bobby Epstein “expects about 65% of the visitors last weekend to come from outside Texas, a boon to the local hotels and growing airport. In 2021, the weekend generated $434 million in direct spending by racing fans and $189 million in indirect spending for businesses in the local supply chain. The lucrative events allowed the Circuit to collect nearly $200 million in reimbursements from the state between 2012 and 2020, and inspired Formula 1 to double down on its American presence.” Epstein strongly believes that the U.S. Grand Prix could hit 500k attendance as early as next year.
- Despite the presence of Miami and Las Vegas on the schedule, F1 CEO Stefano Domenicali has made it clear that they believe that Austin has a long term future on the schedule. “Austin was the first to believe in Formula One in a consistent way, so we need to respect that. The future of Austin is great, and I don’t see any problem thinking that can be the future.”
- As the Grand Prix in Austin grows from strength to strength, it wasn’t always that way in the not too distant past. Races in Las Vegas, Dallas, Detroit and Pheonix were far from successful. Jalopnik looks at how Formula 1’s American street races were doomed to fail from the start. And Racing News 365 looks at how Formula 1 left behind its troublesome past and conquered the US.
- How does Formula 1 determine where they race these days? Formula 1 CEO Stefano Domenicali believes that 24 races are not an excessive commitment for teams and drivers: “It is about the right balance between demand and the quality of what we offer. If the number of GPs were to become excessive, I would immediately reduce it. I believe that with 24 races we will have a good championship. It’s about finding balance. A third of the races should be in Europe, another third in America and the Middle East and the last third in the Far East. The financial aspect is very important in defining the calendar. There are a lot more offers than the available dates. This is why we also take into account the beauty of the track, the activities dedicated to fans and the investments that the organizers are willing to support”.
- In sad news that emerged during the U.S. Grand Prix, it was announced that Red Bull co-founder and CEO Dietrich Mateschitz had passed away at the age of 78. Described as a man who quietly wielded huge influence on F1, questions were almost immediately asked as to how his death would affect the future of Red Bull’s motorsport projects. “No, the future is set,” said Christian Horner in Autosport when asked if any changes would follow Mateschitz’s death. “He’s put in place a very strong foundation for the future. And with in 2026 Red Bull becoming a power unit manufacturer that was the missing piece of our jigsaw, and he had the vision to enable that to happen. And just as we’ve done with the chassis, we will take that same spirit, his spirit into the future engine company.”
- There were a number of media deals signed by Formula 1 over the last week. F1 TV Pro will be made available to Telcel and Telmex subscribers in Mexico and a renewal of the ServusTV broadcast partnership in Austria until 2026. But they were dwarfed by the multi-year ESPN broadcast extension in the United States worth $255 million. Huddle Up breaks down the numbers and charts Formula 1’s recent viewership rise in the United States. “This is especially interesting because F1 gave U.S. broadcasting rights to ESPN for free a few years ago. No, seriously, they let them broadcast the races for free, ESPN wasn’t even paying production costs; they simply rebroadcasted Sky Sports’ coverage.”
- The question that we have to inevitably ask about Formula 1’s growth is quite simply, how long will it last and at what cost? In Matt Kew’s Autosport Plus article The questions and concerns resulting from F1’s relentless growth plan, he asks the question: “is there a risk that too much of a good thing could end up being detrimental to the championship?” When the inevitable decline starts to happen, what will Liberty Media do to keep up the profits?
- Autosport Plus also looks at the father and son team of track designers Hermann and Carsten Tilke. “Exactly half of the 24 tracks featured on the 2023 Formula 1 calendar, in one way or another, bear the fingerprints of Hermann Tilke and his company. From clean-sheet designs to modernisation of existing layouts, Tilke – now working with his son Carsten – is F1’s go-to architect.”
- Finally, F1 driver Lewis Hamilton has launched a film and TV company by the name of Dawn Apollo Films. “Hamilton says the main ambition for the company will be to push “meaningful conversations and impactful storytelling.” The iconic sportsman is particularly keen to build opportunities for diverse voices whether they be from sports, fashion, culture, or technology backgrounds.”
General Motorsport Industry News
- Racer looks at the Penske/Porsche link that spans more than 60 years. “Penske and Porsche have a remarkable 65-year history dating to 1958, when he bought a 550 RS from Bob Holbert, a Pennsylvania Porsche dealer and racer and father of future IMSA star (and Porsche stalwart) Al Holbert.”
- Multimatic is the winner of the prestigious MIA Business of the Year (with sales over £5 million) Award. Revealed during the Motorsport Industry Association’s Business Excellence Awards dinner, held at Silverstone, the award recognizes Multimatic’s achievements in engineering, manufacturing and motorsports operations.
- Does the saying “Win on Sunday, Sell on Monday” still apply in this day and age? Absolutely according to the manufacturers involved in IMSA’s new GTP category. “Racing must be relevant for the brand – that´s really important,” said Thomas Laudenbach, Porsche’s vice president of motorsport. “The presentation of the GTP cars from BMW, Cadillac, Acura and Porsche at Road Atlanta gave us an impression of how the fans love the brand new prototypes. There was a huge crowd taking pictures, filming and talking to drivers and senior team management. It was a perfect showcase of what’s to come in 2023.”
- Autosport looks to answer the question, is Audi’s long-term future in customer racing now secure? “On the other hand, customer racing means catering the customers and if the customers ask for answers beyond 2025 it is on us to deliver, so we will try our very best to do that as soon as possible.”
- Ed Dixon at Sports Pro explains how the W Series’ abrupt halt shows women’s sport needs more than just goodwill to succeed. “The FIA and Formula One are well within their rights not to have handed out money to W Series. The championship would hardly want to be viewed as a charity case and surely wants to demonstrate that it can represent a strong business proposition for investors. Yet there are times when fiscal intervention is needed to serve the greater good. In W Series’ case, it could have been seen as a hand up rather than a handout.”
- With the continued growth of F1 in the United States, what about IndyCar? James Hinchcliffe and Zak Brown both agree that IndyCar is still an incredible racing series with plenty to offer.
- For James Hinchcliffe, he explains in Road & Track why IndyCar is still the best-kept secret in sports. “IndyCar has the best on-track product on four wheels (my unbiased opinion), healthy car counts, and seemingly increasing sponsorship, yet its fan base seems largely unchanged. The series has added many valuable official partnerships, but few have moved the needle in terms of fan growth. A high-level exec from a former IndyCar sponsor once told me that IndyCar racing was the best-kept secret in sports. That was 12 years ago. Sadly, that is still the feeling among many in the paddock.”
- For McLaren’s Zak Brown, he believes that IndyCar has a bright future and that it can co-exist with F1 after its surge in the U.S. “I think the budgets here are fantastic. The value for money in racing is the best. The racing is awesome. The schedule can be enhanced. The digital activities that we could do can be enhanced. The drivers are great. I would like to see the cars be a little faster with some more horsepower and a new, lighter chassis. I think Super Formula and Formula 2 cars are a little quicker. Refreshing the product, we would benefit from. It’s a bunch of little things, other than to come out with another Netflix documentary. Although that seemed to do the track for Formula One. In North America, we were more lucky than good in that outcome.”
- Flatrock Motorsports Park and Motorclub, a new racing circuit in Tennessee, aims to become “a world-class motorsports destination” that could host IndyCar and MotoGP in future, as ground breaking gets underway ahead of an initial 2023 opening. “Set to be constructed on a 773-acre site just off I-40, some 30 miles west of Knoxville, Flatrock Motorsports Park will feature a 3.50-mile Circuit Club track, a 2.67-mile Grand Prix track that can be linked for nearly six miles of the Endurance circuit. However, the $100 million project is also targeting entertainment options that make it attractive to those who aren’t necessarily keen to drive, as it marked its ground breaking ceremony last Wednesday morning.”
- Grassroots Motorsports has an interesting article on how the Appalachian region in the United States is using motorsport tourism to boost an economy. Due to the collapse of the coal industry and the connected ecosystem that surrounded the industry, many of the local communities have been decimated economically. “However, a contingent of proud Kentuckians seeks to turn around the plight of the region. One of those groups, Backroads of Appalachia, uses motorsport tourism to help reignite interest in the region and generate revenue to bolster the economy and its people.”
- Sports Medicine specialist Jonathan Gelber breaks down NASCAR’s concussion issues in Forbes. Dr. Gelber, analyzing the crashes of Busch and Bowman, said, “Concussions are also especially tricky because they can’t be seen, so fans, drivers, and teammates can’t always appreciate the injury. Not all concussions require a loss of consciousness, either. There are also things called sub-concussive episodes which add up over time – think about a boxer or MMA fighter’s training or long career with endless sessions in the gym being hit in the head. Or football players during practice. It’s not just the single big game or big race where one specific brain injury occurs.”
- North Carolina-based event management company QuintEvents has acquired Monaco Star Events, the company that handles corporate hospitality at Formula One’s Monaco Grand Prix. Front Office Sports explains how QuintEvents is changing the game of premium fan experiences. “What started as ‘experiential programming’ has now transformed into a global platform for event services,” said Brian Ruede, Quint’s President and COO. “We started with the idea, developed the technology, and then invested in the brick-and-mortar infrastructure to deliver the most powerful marketing, sales, and event delivery system in the world.”
- The FIA has launched their new Immersion Programme to empower its Member Clubs and nurture the next generation of motor sport leaders. “Started on October 24, the FIA Immersion Programme aims at equipping young members from Sporting Clubs across the world with the skills and mindset to become future leaders of motor sport. First introduced at the 2022 FIA Sport Conference, the FIA Immersion Programme is designed to bring capacity-building to Sporting Clubs, providing their members with the chance, over a 10-day trip, to visit the FIA Headquarters, work with the FIA staff and learn from inside the FIA, and take this experience back to their country and community.”
- Autosport looks at how the returning Motorsport Games is aiming to make their mark.
- “One day the Motorsport Games will become a must-do event,” says organizer Stephane Ratel. “Its profile will grow and it will become an important date on the international motorsport calendar every two years. Everyone will want to do it and will want to represent their country.”
- “We want these Games to create a legacy for the ASNs [the national sporting authorities who put together the teams],” says the FIA’s director of Formula E and innovative sport. “The exposure they will get by making their country proud just by participating is part of the legacy we want them to take home, so they can start programmes for the next edition. That’s really what we expect.”
- The Sports Governing Academy has launched their online Knowledge Base. “Our knowledge base is a toolkit of trusted free resources to help you get to grips with governance and start to develop good practice. Each module contains a range of materials to meet your needs in all aspects of governance.”
Motorsport Sponsorship News
- While this post from the National Motorsport Academy is from 2021, it still does a great job of contextualizing how effective F1 Sponsorship is for a brand. “Sponsorship can be seen as a symbiotic relationship between Formula 1 and the brands who choose to either sponsor one of the teams, or the sport itself. As such, this unique marketing tool can have a profound impact on how fans engage with a brand who chooses to be associated with the global phenomenon of Grand Prix racing.”
- Forbes looks at how Cognizant’s Formula 1 partnership with Aston Martin is more than just a sponsorship. “The ultimate goal is to make that car go faster,” Gaurav Chand, chief marketing officer of Cognizant, said. “The biggest reason for us to invest is because racing is a sport that is so historically conducive to technology. We’re doing it now with the Aston Martin F1 Team by delivering services across 12 different powers.”
- IMSA announced that business telecommunications provider RingSquared has become a a corporate partner of the sanctioning organization, the IMSA WeatherTech SportsCar Championship, and IMSA Michelin Pilot Challenge. “We are pleased to be partnering once again with the IMSA organization,” Alward said. “Our team, including George Giles and myself from the original TotalTel business, look forward to connecting with the close-knit group of IMSA, their racing teams, and the IMSA sponsors. We have continued to support the racing community and this partnership brings us full circle. We couldn’t be more excited about it.”
- The Circuit of the Americas (COTA) in Austin has partnered with mobile payment service Cash App, an agreement that took effect ahead of last weekend’s Formula One US Grand Prix. “COTA is really excited to partner with Cash App on this one-of-a-kind sponsorship and we’re thrilled to offer fans a seamless and instant reward on their food and beverage purchases through Cash App – the best partnerships are the ones that enhance the fan experience and this does just that,” said Scott Wessels, COTA’s vice president of commercial partnerships.
- The McLaren IndyCar team has partnered with SmartStop Self Storage for the 2023 season. “The self-storage company will be the primary sponsor on the car operated by Swedish driver Felix Rosenqvist for a selection of races during the season, including the Indianapolis GMR GP, Grand Prix of Toronto and Grand Prix of Portland. SmartStop branding will be represented on all three of the team’s cars for the 2023 season and on Arrow McLaren kit.”
- The Andretti Autosport IndyCar team have renewed their sponsorship deal with Gainbridge until 2027. “Gainbridge, which is the primary sponsor of Colton Herta, has been aligned with Andretti Autosport since 2018, and it has backed the young American driver in all his seasons in the IndyCar series.”
- Honda’s MotoGP team and Repsol have extended their title partnership until the end of 2024. “Repsol Communications and Corporate director Marcos Fraga says the company is “proud” to extend its collaboration with Honda for at least the next two seasons, adding that the two parties are working towards the “ambitious goal” of developing the best sustainable fuel as MotoGP works towards running 100% sustainable fuel for the 2024 term.”
- Dorna Sports, series promoter for MotoGP, has announced an extension with Petronas as the exclusive fuel supplier for its Moto2 and Moto3 feeder series. “For Petronas, we view Dorna’s call to reduce carbon emissions in MotoGP as key in unlocking new opportunities as we embark to redefine ourselves in the face of the energy transition. Beyond the comercial aspect, the extension of the agreement, and Petronas’ title sponsorship of the Malaysian Grand Prix, we also hope to contribute to the growth of the motorsports industry in Malaysia. This is the same reason why Petronas has continued to support grassroot Malaysian competitions over the past two decades and revive the wildcard programme.”
- Radical Motorsport has been named as the presenting partner for the ROK Cup USA ROK Vegas event. “Radical Motorsport is delighted to be announced as the Title Sponsor for one of North America’s premier karting events, now in its fifth year and expected to attract more than 300 competitors this year,” explained Jon Roach, global head of marketing. “Radical will have branding throughout the event in addition to having representatives present each day to discuss opportunities with our Radical Cup North America program.”
- 5T Sports Group has introduced the Sports Partner Score Card, a scouting report for sponsorship due diligence. “Knowing that front offices in sport do not typically have the skills in-house to assess the sustainability credentials of a prospective partner, 5T Sports Group set out to create an agile ‘triage tool’ to assess potential pairings. As such, the Vancouver, Canada-based sustainability consultancy – which advises major professional teams, leagues and events – devised the Sports Partner Score Card, a scoring framework through which the sustainability efforts and ESG-related commitments of more than 60 global brands across 15 sponsorship categories have been assessed.” To illustrate how the Score Card works in practice, researchers at 5T took a deep dive into Heineken’s data and that of three of the Dutch brewing giant’s most high-profile sports partners: Uefa, Formula One and Formula E. Heineken was chosen for this case study due to its global footprint and visibility, as well as the international nature of its sports partnership portfolio.
- Part Four of the Sport For Good Playbook has been released and focuses on how brand activism can turn purpose into action. “The first three parts of this series looked at how brands go about strategising, rationalising and communicating their purpose investments in sport. The aim has been to lay out the foundations upon which any brand can build its own sport for good strategy, secure the internal support necessary to fund and implement it, and then begin to create effective campaigns and programmes that inspire individual action and make a meaningful impact across the triple bottom line.”
- With the “crypto-winter” showing no signs of abating, Sportico looks at how demand has cooled while sports leagues plan for 2.0. “The fallout from the failure of the first crypto jersey-patch deal in the NBA exemplifies how the crypto sponsorship category, once the hottest across pro sports, continues to undergo turbulence. As the crypto market remains on a downward trajectory—further aggravated by soaring inflation—cryptocurrencies, exchanges and adjacent companies have had to reevaluate their sports marketing investments.”
- Last week in the Business of Motorsport, I mentioned the Sportico article on what has been happening with Rokit and their sports sponsorship-related litigation issues. Here is a follow-up.
The Business of Running a Race Team
- United Autosports is unlikely to enter any IMSA WeatherTech SportsCar Championship rounds next year, according to team co-owner Richard Dean. “Dean told Sportscar365 that the Anglo-American squad doesn’t want to “over-extend” its workload in 2023 when it runs two-car LMP2 programs in the FIA World Endurance Championship, the European Le Mans Series and the Asian Le Mans Series.”
- NASCAR Cup Series Team Spire Motorsports tells Racer how they have embraced the underdog role but still aims higher. “You’re trying to show not only to your people that these are real accomplishments but with [race] shops and always bringing your sponsors in, and people are always coming visit. We don’t take any of this for granted. That’s why we do it. We take none of this for granted. We’re the luckiest people in the world, and we want to celebrate the guys when they do well, and I guess my big thing is, we should have more of those.”
- Rutronik Racing will switch from Audi to Porsche for next season’s ADAC GT Masters. “We are very pleased that we can now further intensify the existing cooperation with Porsche Motorsport from the 2023 season. The entire team is going into the winter break with great anticipation and absolute motivation and is preparing optimally for the new challenge,” says team boss Fabian Plentz.
- Arrow McLaren SP is working hard to make a decision on whether or not to run an additional car for the 2023 Indianapolis 500 next May. “We’ll make a decision in the next two weeks, because I either want to be totally prepared or not do it,” said Brown. “So we’ll make a decision soon, and it’s definitely something we’re still considering. The stress on the system, so to speak, is what we’re evaluating. We’ve got the equipment; we’ve got the people. It’s whether the fourth car is additive that we’re looking at, and if it will help the other three cars which are competing for the championship.”
Movers & Shakers
- As of November 1, 2022, Eugenio Franzetti will officially be in charge of the DS Performance and will work closely with Penske Autosport as the newly branded DS Penske Formula E Team prepares for the first season with the Gen3 car.
- The Bend Motorsport Park has announced the appointment of Alistair MacDonald to the position of Chief Executive Officer at The Bend Motorsport Park.Alistair has over 20-years’ experience in senior leadership roles across the Sports and Entertainment sector, which includes General Manager of the Superloop Adelaide 500, Tournament Director of both the Sydney International and Adelaide International tennis events and as CEO of multiple sporting organisations.