Business of Motorsport for September 2, 2022

In the Business of Motorsport this week I continue to look at Audi joining F1, offer speculation on what is happening with Porsche, explain how the CRB works, look at whether crypto sponsorship of sports properties is worth it and offer details on why the Vancouver Eprix never got off the ground. I also bring you the latest sponsorship deals as well as movers and shakers. All this and much more in business news racers can use.

Motorsport Industry News

Formula 1

• The big news that Audi was set to enter Formula 1 in 2026 hit just as I published last week’s Business of Motorsport so here are a few additional details. One of the most obvious questions is why Audi has decided to enter Formula 1 separately from Porsche which Autosport details here. “But we decided, as both our brands have a lot of fans and both our brands have their special character, to keep it completely separate and do two operations.”

• For a lot of people, myself included, the fact that Audi announced their participation in F1 ahead of Porsche was a bit of a surprise as the partnership between Porsche and Red Bull seemed a mere formality, but such apparently is not the case. Christian Horner has stated that the deal still has not been completed and that a significant number of issues remain, mostly it seems centered around Red Bull Powertrains and whether this is a full-scale Porsche-designed and developed engine or just a badging exercise. The Race looks closer at how Red Bull faces a decision that could derail Porsche’s F1 return. “Horner has continued to downplay the status of a Red Bull/Porsche deal for some time. While this was initially dismissed as no more than careful, corporate PR speak, it seemed to shift before the summer break.” Dieter Rencken at Racing News 365 speculates also as to whether Honda could come back in Porsche’s place at Red Bull. Blackbook Motorsport also looks at the issue. UPDATE: Porsche F1 deal will only happen on Red Bull’s terms – Horner. Intriguing stuff.

• And why would a new manufacturer like Audi, Porsche or potentially Honda want to join the F1 circus with the chance of losing or worse yet, being humiliated? The Race answers that very question in Removing ‘humiliation’ fear has triggered F1’s engine influx.

• If you ever wondered what it took to broadcast an F1 race have a look at What Does It Take to Broadcast a Formula 1 Race? Drones, Cameras and a Helicopter. “The series installs 23 to 28 trackside cameras at each race, another 10 in the pit lane, and has a camera in a helicopter to capture aerial shots. These are complemented by small cameras on every car, facing forward, backward and looking at the face of the driver in the cockpit. The footage is broadcast live from each car along with information, such as speed and G-force, gathered from about 300 sensors.”

• While the French Grand Prix will not happen in 2023 and the South African Grand Prix will happen in 2024 at the earliest, the Belgian Grand Prix has been given a one year reprieve.

• Jalopnik argues that F1 Failed in America Before Because It Didn’t Understand its Audience. It Might Be Going Down the Same Path. “While I do think Formula 1 can succeed in America with its current format, I think that success is going to be commercial more than anything — and I don’t think it’ll be long lived. Placing events in cultural hubs like Miami and Las Vegas is economically smart, as is charging a high fee for entry and developing VIP packages that run into the hundreds of thousands of dollars. But the novelty of a glitzy, expensive event may not last. The folks who can afford the $125,000-per-night hotel room in Miami aren’t going to the Grand Prix because they’re a fan — they’re going for the party. The series isn’t gunning to get more American fans to the track; it’s focused on attracting VIPs. How long can that business model — which is largely based on novelty — sustain itself? Formula 1, for better or for worse, seems determined to find out.”

• I have talked over the last few weeks about how numerous driver contracts are being disputed both in Indycar and F1. In F1, the fate of Oscar Piastri’s contract will be decided by the Contract Review Board. Autosport explains how the CRB decision will decide Piastri’s F1 fate. “Should Alpine win the CRB case it doesn’t necessarily mean that Piastri will actually race for the Enstone team in 2023. Given the animosity surrounding his attempts to move to McLaren it’s apparent that the relationship has soured so much that in effect forcing him to drive would make little sense for either side. In that case Alpine would have the option to name its price and sell him to McLaren.” UPDATE: The CRB has ruled in McLaren’s favor in the long anticipated Alpine contract dispute with Oscar Piastri. UPDATE 2: Dieter Rencken at Racing News365 has all the details of the CRB ruling.

General Motorsport Industry News

• PITFIT founder Jim Leo sat down with AMG Denz to have a chat about an area we often see but never tend to actually ask the questions or see the importance but plays a major point not only on a driver’s performance but also in the pitstop crew. You can watch Journey Beyond the Pitstop above.

• As reported by Speed Cafe, production and supply of parts for Supercars’ new Gen3 cars remains a “major concern”, according to Erebus Motorsport CEO Barry Ryan. “That’s probably my major concern at the moment, is the 200 or so parts that aren’t released yet that we’ve got to either buy or make.”

• While year over year viewership has been increasing for NASCAR, Blackbook Motorsport reports that US viewership for the regular-season finale sliped to 1.4m viewers, but it was primarily due to the fact that the race was rain delayed.

• Blackbook Motorsport also reports that Formula E’s cancelled Vancouver race’s organisational failures have been revealed in released official documents. “OSS was set to be the promoter and organiser of all-electric series Formula E’s first race in Vancouver, Canada this year. However, the ePrix never got off the ground, with the documents highlighting various ‘risks’, ‘challenges’ and ‘concerns’ associated with the company’s proposal.”

• In what looks at being a long drawn out process, mediation is continuing between Chip Ganassi Racing and Alex Palou. “RACER understands there is no specific timeline for the current round of mediation to end which, as Palou noted, has decompressed the urgency of the talks that will likely extend into the offseason.”

• While this is a sponsored post, Radical Motorsport celebrates 25th anniversary with victories on and off track is a great look at the last 25 years of the race car manufacturer. “Dan Redpath, Group Sales and Marketing Director, says, “while our success as a business is something to celebrate at our head office in Cambridgeshire, UK, I think it’s important to note that it wouldn’t be possible without our extensive and proactive dealer network. We aim to give our customers the very best customer service, from sales and support, to vehicle storage, driver coaching and testing throughout the year, and our dealer partners around the world are at the forefront of that.”

• In track news, both Wakefield Park in Australia and Friendship Motor Speedway in the United States have been forced to close. For Wakefield Park, it was a result of zoning issues related to noise but for Friendship, it was the result of rowdy fans and uncooperative drivers.

• The SXSW Conference is working on its content for 2023 and one proposed session that caught my eye was The (Data) Science of Moneyballing Motorsports. Here is how they describe the proposed session:
  • “The recent rise of Formula 1’s popularity through Netflix’s “Drive to Survive”, plus the addition of new racing events in the USA, has quickly turned motorsports mainstream. However, despite having vast amounts of data available, racing has fallen behind traditional stick-and-ball sports at leveraging the power of AI to analyze, predict, and adapt. Scientists have recently begun to explore ways to “moneyball” motorsports, in a movement that will radically transform the field, allowing teams to uncover talent in more unbiased ways, revolutionize in-race strategies, speed up car design, and create new ways for broadcasters to interact with the public. In this panel, world renowned racing leaders and data scientists will discuss how AI will upend the way we think about racing in the future.”

Motorsport Sponsorship News

• TurnOnGreen, Inc. (“TurnOnGreen”), a green energy technology and power supply company and subsidiary of BitNile Holdings, Inc., announced that it will be the primary sponsor of the No. 16 Paretta Autosport Dallara Chevrolet for the upcoming Firestone Grand Prix of Monterey, on September 9th through September 11th.

• NASCAR has announced that Stanley Black & Decker has become the “Official Tools Partner” of the sanctioning body while its Craftsman brand will assume title sponsorship of the Truck Series, reviving a relationship that dates back to the series’ inception according to The Checkered Flag.

• The Haas F1 Team has concluded two different deals recently. The first is a multi-million pound sponsorship deal with Hantec Markets while the second is a partnership with Ziggo Sport for the Dutch Grand Prix.

• Red Bull Racing has signed a deal with Zoom Communications. “Oracle Red Bull Racing continues to prove itself as an innovator and technology leader, which is why we are excited to bring communications tools like Zoom Chat, Zoom Events and Zoom Meetings into their experience both on and off the track,” said Janine Pelosi, chief marketing officer of Zoom.

• Blackbook Motorsport has released their latest research report Driving value: The business of motorsport sponsorship in 2022. “BlackBook Motorsport’s new report shines a light on the changing face of motorsport sponsorship as series, teams and brands get to grips with a landscape increasingly shaped by new media, social issues and technology.”

• In Billions are spent marketing crypto to sports fans — Is it worth it?, Coin Telegraph looks at whether crypto sponsorship of sports properties is worth it. “This year there are 10 F1 motorsport teams, and crypto companies sponsor eight of them. It can be argued that is smart marketing. Research by global analytics company Nielsen Sports found that F1 has the potential to reach about 1 billion fans globally, with the 16–35 age group accounting for the biggest share. The market segment sponsorship logic there is apparent though whether that justifies the exorbitant cost is another matter.”

• While not directly related to motorsport (yet), could it be that the crypto-era in sport is starting to wind down? Front Office Sports looks at the latest developments in Crypto.com Backs Out of UEFA Deal in Latest Crypto Reversal.

The Business of Running a Race Team

• In Part 2 of its feature on the new Vanwall WEC team run by ByKolles, Daily Sportscar looks at the current legal status of the Vanwall name and the status of team competing in the WEC.

• Jalopnik looks at how Paretta Autosport Is Already Making a Difference for Women in Racing. “Women have always been in racing,” Paretta said. “We all know the women throughout history, like Anita Millican, but the fact that we can recite them all is the problem. I like to use the analogy that women in the paddock have been like drops of food coloring in the ocean. I’m just trying to put all the drops of food coloring in one glass. We’re not doing anything differently from the women who have already been in racing, but the visual is powerful.”

• Flying Lizard Motorsports has announced that their future headquarters will be at at the Apex Motor Club. “Sonoma has been an amazing home for us, but as our team continues to grow, our organization needs a central headquarters with room to grow, and the Apex facility perfectly fits the bill,” said Program Manager Darren Law. “Apex is really an ideal location for us because both myself and one of my business partners, Tommy Sadler, live locally. The racing community in the area is larger than one would expect, and it is rare that a race facility is in a location such as this.”

• According to Forbes, IndyCar’s Ed Carpenter wasn’t going to let Rinus VeeKay get away after losing a similar rising star in Josef Newgarden following the 2016 season. “Why did I want him back? He is an elite talent,” Carpenter said. “If you see all the crazy stuff in the paddock, it’s hard to find them, it’s hard to keep them. The process went really well between us and his team. That’s the way it’s supposed to work. There was a lot of good, actual dialogue and we were able to get a deal done.”

Movers & Shakers

• Michael Masi has been confirmed as the Supercars Commission Chair. “I view this role as continuing the amazing work already done by Neil and the Commission to lead Supercars into a brand new era with the introduction of the Gen3 Chevrolet Camaro and Ford Mustang,” said Masi. “I’m very proud to have been appointed to this role and look forward to working with the key stakeholders in the sport to ensure the future is an exciting one for our teams, partners, sponsors and most importantly the fans.”

• Liberty Media has appointed Renee Wilm, its chief legal and administrative officer, to the position of chief executive of the Las Vegas Grand Prix. “Wilm will be charged with running the commercial and operational areas of the event. The Grand Prix is set to run for at least the next five years.”

• Rolf Michl is set to succeed Julius Seebach as head of Audi Sport. “Starting in September, Seebach will be succeeded by Rolf Michl, who has been COO of Audi Sport racing since February. The management board will consist of Michl and Dr Sebastian Grams.”

• Amidst a shuffle in the front office of the DTM organizing body ITR, Abt DTM team principal Thomas Biermaier believes 2011 series champion Martin Tomczyk would be a worthy successor to series boss Gerhard Berger.