Business of Motorsport for September 30, 2022

This week’s Business of Motorsport is the one for you if you want to know how the business of sponsorship works in Formula 1.

Sponsorship Consultant Tim Silvey explains on the Last Lap Podcast how the nature of sponsorship in Formula 1 has evolved since 2007 and how it now encompasses more than just a logo on a race car. It is a revealing peek into the inner workings of Formula 1.

I also have an interesting stat related to the average age of an F1 fan in North America and an absolutely awesome drone tour of the Hendrick Motorsports headquarters. In addition to all that I bring you the latest motorsport industry news from across the globe, sponsorship deals and the latest plans from racing teams across the planet.

It is that time again for news racers can use. Let’s dig in.

Motorsport Industry News

Formula 1

• With three F1 races in the United States taking place in 2023, Haas F1 boss Gunther Steiner explains how differentiation will be the key to success for the races. “Three races in America, I think it comes at the right time. The sport is already popular and it’s getting even more so as we speak in America. More races are good and each of these races has got their own little thing that stands out, they’re not a copycat of each other.”

• Autosport Plus looks at how F1 has tried to avoid repeating its 2014 engine rules mistakes with engine designs dictated more by engineers and manufacturers and their needs with no thought to the sporting spectacle. “Gone is the innovative, complex and hugely expensive MGU-H spinning at 125,000rpm, which came into the sport in 2014. A piece of technology which added very little to the show but got some of those sitting around the table in Place de la Concorde terribly excited when they agreed that last set of regulations. It was road-irrelevant, as it turned out.”

• I mentioned in a previous Business of Motorsport column the new ticketing system that Silverstone has instituted for next year’s Grand Prix and how it has fueled anger amongst fans. Well now Silverstone managing director Stuart Pringle has promised that the system would be reviewed for the 2024 race and at the same time issued an apology. “I am extremely sorry for the frustration, upset, disappointment and anger this has caused,” he told The Guardian. “We are going to do a root and branch review on all of this. I am not closing the door on doing anything differently next year, we will consider anything and everything. Nothing is off the table. We have learned a lot of lessons and we can’t have a repeat of this year.”

• Planet F1 has an exclusive with Mario Andretti where he talks about the continued push for F1 2024 and ‘disrespect’ from the paddock. “We’re working every single day on this project, with the intention to be on the grid in 2024,” Mario Andretti told PlanetF1 in an exclusive interview. We’re preparing as if we were given the go-ahead. So Michael is on it, and that’s what we expect to do. We’re certainly not giving up. It’s a very serious project for us, and we’re ready to make that investment.”

• The chairman of Motorsport South Africa has blamed the local promoter for Kyalami’s absence on the 2023 F1 calendar according to Planet F1. “Anton Roux is the chairman of MSA while also sitting on the FIA senate and has pointed blame solely at the local promoter – the SA Grand Prix Association led by Warren Scheckter. “The reason the F1 event is not taking place in 2023 is that the F1-appointed local promoter was unable to deliver on the financial guarantees,” he said. They are now targeting 2024 with the preferred track being Kyalami.

• Jean-Philippe Imparato, the CEO of Alfa Romeo, says there is no rush to make a decision about its future within motorsport, and all avenues will be looked at before they announce their decision. “I’m totally open to everything,” said Imperato to Motorsport.com. “By the way, it’s a period that gives me the opportunity to study everything with no pressure. That’s what I have.“

• BMW on the other hand has no current interest in entering Formula 1. “Andreas Roos, the head of BMW M Motorsport, said being absent from F1 was “not an issue for us” because BMW was “definitely not interested at the moment. I think you also have to be realistic,” said Roos, who succeeded current Aston Martin F1 team principal Mike Krack as BMW’s motorsport boss. “You have a very high investment in Formula 1, and until that comes back, you have to be very successful for a very long time. So we’re happy with the big bouquet of projects we currently have in motorsport.”

• Dieter Rencken looks at the State of the F1 Nation focusing on the relationship between the FIA and commercial rights holder Liberty Media. “Such interdependence does not mean, though, that all is heavenly in the Garden of Formula 1, particularly given the seismic shift in the FIA/F1 dynamic in the wake of last December’s FIA presidential elections, where Emirati Mohammed Ben Sulayem was voted into office for four years.”

• With the conclusion of talks between Porsche and Red Bull Racing, Pitlane News asks the question if not Red Bull, how about a deal with Andretti or Penske? “So, what does Porsche do now? The company has very many success stories to tell in sportscar and in endurance racing, but F1 is the only thing that Porsche can really move up with. But if Red Bull Racing has failed, what about trying to make an engine deal with Andretti, or even in the future with Penske?“

• One of the interesting tidbits in the Huddle article Netflix Continues To Infiltrate Professional Sports, is the declining age of the average F1 fan. “The average age of a Formula 1 fan has dropped from 36 years old in 2017 to just 32 years old today. That’s better than the MLB (57), NFL (50), NHL (49), and NBA (42). The digital-first approach being deployed by Liberty Media continues to produce impressive results.”

Formula E

• The Race has the latest on Formula E’s postponed South Africa race. “The event has strong political backing of the city of Cape Town at a mayoral and province level and the circuit is confirmed in the sports precinct, which in addition to the DHL Stadium (home of the Cape Town Spurs and Cape Town City soccer teams), also has an international standard golf course and a watersports centre.”

• Formula E is going through some turnover in the team executive ranks and in Big names and wildcards in Formula E’s team boss silly season, The Race looks at potential candidates to replace Dilbagh Gill and Jerome d’Ambrosio. “Formula E previously had what was thought of as an immovable spine of team principals spread throughout its competitors. Now though, two new personalities are set to soon take on those key roles.”

Indycar

• For those looking for new venues on the 2023 Indycar schedule, they will be disappointed. Aside from the street race in Detroit, nothing much has changed. But IndyCar have stated that they are exploring options for new venues. “As RACER chronicled in July, the series harbors an interest in expanding its schedule to reach upwards of 19-20 races per season in an incremental fashion by adding one new event in 2024, 2025, and possibly 2026.”

• The Race explains how IndyCar needs to solve its contract rows like F1 does, something I have said as well. Arbitration/negotiation is almost always better than litigation. It is less costly, more efficient and leaves the court system free to deal with more pressing (and frankly more important) matters. Indycar should institute their own CRB process in case this situation ever rears its ugly head again. And it will.

General Motorsport Industry News

• The W Series is facing a crash crisis that could see it miss their final two races in the United States and Mexico. “The cash position of the company deteriorated during 2021, leaving it with just £212,367 in the bank at the end of the year. Despite raising additional capital, the cumulative losses of the company increased by £13.34 million in the same period and it was owed over £4.5 million by debtors.” In addition, W Series’ chief executive officer Catherine Bond Muir says she sees “no business case” in supporting female drivers through driver development programs. The deadline is next week to determine if the series can continue.

• Supercars’ Head of Motorsport, Adrian Burgess, is hopeful a key Gen3 regulation change could make it easier for new manufacturers to enter. “Burgess explained the move away from the “elitist” 5.0 litre V8 engine offers a more “de-stressed” product. “It’s what’s going to allow us to bring in other manufacturers,” he told Speedcafe.com of Gen3 overall. Speed Cafe also reports that the additional cost of producing a Gen3 car on top of the budget that was originally targeted is not a concern for Supercars. “We’re not trying to build a cheap racecar, we’re trying to build a good product that will last us for a good amount of time.”

• RACER Studio has prepared a case study on their recent work with Lime Rock Park who they hired as their new agency for the circuits’ brand, creative and strategy updates. “The efforts resulted in a new brand identity for the 66-year-old venue, “evoking the authentic and contemporary sensibilities the new track owners sought to convey while holding fast to its original purpose.” In other words, they kept a focus on Lime Rock Park as a center for road racing and automotive entertainment, but with the ability to pivot toward new directions in automotive development as well as non-automotive events taking advantage of the park’s expansive and idyllic setting.”

• Western Canada’s oldest speedway, Westshore Motorsports Park, closed down after 68 years of operation on Sept. 17, reports The Province. Founded in 1954 as Western Speedway near Victoria, British Columbia, the 4/10ths-mile oval has hosted racing royalty throughout its history, including Janet Guthrie, Bobby Allison, and Roger Ward.

• On the flip side, there is a new property owner for Southern California’s Irwindale Speedway. “The 63-acre property that houses Southern California’s Irwindale Speedway & Events Center (IS&EC) has been purchased by the IDS Real Estate Group. Home to both Irwindale Speedway and Irwindale Dragstrip, the property at 500 Speedway Drive has been leased by IS&EC since 2018, according to Speedway President Tim Huddleston.”

• If you were ever wondering why Saudi Arabia is investing billions in sport, the video above from Huddle Up gives a pretty good explanation.

• You may think that the new, 24 race Formula One calendar does not affect the series you are racing in but is that in fact the case? Daily SportsCar asks the question, is this One Sport Or Two? “There has long been a reality that in many circles there are two sports in operation – Motorsport, and Formula One, the latter operating almost exclusively in its own interests and caring little, if at all, about the interests of the wider sport. The recent debacle around super licences is the pointy sharp tip of an iceberg that could sink rather more than the Titanic!“

• Porsche successfully launched their IPO this week and things are looking good for the German manufacturer, despite not locking down (yet) a place on the Formula 1 grid for 2026. Here are what some are saying about the IPO (needless to say that with current market conditions, this information is time sensitive and for background only):
  • Porsche shares flat at close after landmark $72 bln listing
  • Porsche shares edge higher in Germany’s largest IPO in decades
  • Porsche’s blockbuster IPO is no ‘gamechanger’ for Europe’s battered markets
  • Three all-new Porsche v Ferrari blockbusters

• NASCAR is launching a new branded room inside Meta’s Horizon Worlds metaverse app for fans to watch on-demand race recaps in virtual reality through Meta’s Quest 2 headset. Starting yesterday, fans with Quest 2 can watch a 45-minute condensed stream of last weekend’s Autotrader EchoPark Automotive 500 at Texas Motor Speedway. “Guests will be able to interact with each other’s avatars in NASCAR’s room on Horizon Worlds, which will also offer race highlights and behind-the-scenes content in virtual reality. NASCAR plans to offer the same VR experiences around its Dixie Vodka 400 at Homestead-Miami Speedway on Oct. 27 and the Cup Series Championship race at Phoenix Raceway on Nov. 10.”

• Nissan/NISMO have revealed the Nissan Z GT4 which will be ready for the track in 2023. “GT4-spec racing machines are based on production vehicles, modified for severe competition use. To that end, NMC’s NISMO Racing Division took the street version of the new Z – which is receiving acclaim around the world – and tuned the VR30DDTT engine, optimized its chassis and suspension, enhanced its aerodynamics to the limit of regulations and created a cockpit that works for drivers of all types. This created a race car that is a Nissan Z in all aspects – accessible to enthusiast drivers and hard-core professionals.”

• Advanced simulator business Ansible Motion has been acquired by AB Dynamics for £31.2m (US$34.4m), consisting of a £19.2m (US$21.2m) initial consideration and a £12m (US$13.3m) payment subject to meeting performance criteria.

• Real-time motorsports strategy software Pit Rho Race Analytics – developed by the Pit Rho Corporation – has been acquired by General Motors (GM). As part of the acquisition, GM will also acquire Pit Rho’s key team members from the areas of data science, operations and software engineering.

• With sustainability, carbon neutral and future tech being the forefront of this year’s World Motorsport Symposium themes, “Pat Symonds, F1 Chief Technical Officer, and Ulrich Baretzky, Former Director, Audi Motorsport Engine Development, Audi AG will be at the helm of these hot topics across the motorsport industry. They will be covering issues such as how ultra-low carbon fuels, latest electronic technology, carbon neutral motorsport events, as well as the trending future materials across motorsport.” You can read a preview of this year’s World Motorsport Symposium which takes place in November here.

• On the Porsche website, Hermann Tilke explains what goes into making the perfect circuit. “The most important thing is the ‘third dimension’ when driving. That you feel a compression as if the car is dropping into a ‘hole’ or when you drive over a crest and feel raised up. But what’s also really important for the driver to feel that dynamism is the cross slope of the bend. For this, you have to be very detail-focused during planning when it comes to what’s happening in the car in terms of driving dynamics. So, off-camber curves – ie, curves with an ‘incorrect’ cross slope, that cause you to oversteer – or curves with ‘banking’ – the exact opposite – are just two options available in track design.”

Motorsport Sponsorship News

• Sponsorship Consultant Tim Silvey explains on the Last Lap Podcast how the nature of sponsorship in Formula 1 has evolved since 2007 and how it now encompasses more than just a logo on a race car. It is a revealing peek into the inner workings of Formula 1. You can watch part of the podcast in the video above or listen to the whole podcast on Spotify here.

• CSM, Sport Dimensions and Prism on the state of motorsport sponsorship and where it goes next. “With the Covid-19 pandemic and inflation squeezing marketing budgets across the board, the BlackBook spoke to a group of agency executives to get their take on the health of the motorsport sponsorship industry today, the current challenges facing rights holders and brands, and where the sector will go next.”

• In Red Bull Racing sponsorship news, they have announced that they will be partnering with racewear supplier Sparco for 2023 and beyond. They have also announced a Battle Cats mobile game collaboration for the Japanese Grand Prix.

• Sponsorship activation agency Sport Dimensions has a great article on their work with clients in Indycar to demonstrate when sponsorships become partnerships. “One of the greatest periods of time in motorsports is the final weekend in May. The United States celebrates Memorial Day and three of the world’s largest series all compete throughout the weekend across Monaco (F1), Indianapolis (INDYCAR) and Charlotte (NASCAR). Corresponding with all of the racing action are generally a host of announcements from organizations looking to fully leverage the weekend’s platform.”

• McLaren F1 has activated their OKX partnership with a special livery to be featured at the Singapore and Japanese Grand Prix. The livery forms part of the ‘Future Mode’ campaign, which includes the release of McLaren Racing x OXK Future Mode merchandise via the team’s store.

• Mercedes has secured the commitment of fuels and oil partner Petronas for Formula 1’s new regulations era from 2026, after opting for an early extension of its title sponsorship deal. “Today we are doing something a little bit unusual – announcing a partnership that will begin in four years’ time,” said Team Principle Toto Wolff.

• The inaugural Radical Motorsport World Finals this November has named Hankook as presenting partner of the Las Vegas-based event. The five-day racing festival will crown three world champions and send off Radical’s 25th Anniversary year in style. “Since it commenced in 2018, our partnership with Hankook has been instrumental in developing the 14 international Radical race series and becoming one of only four manufacturers to have an international single-make series,” said Radical Motorsport’s motorsport director, Tom Drewer. “Therefore, it’s only fitting that they become part of the 25th anniversary finale — the Radical World Finals.”

• Singapore Telecommunications (Singtel) has agreed a deal to become the official network partner of Formula One’s 2022 Singapore Grand Prix. “The service partnership will see Singtel apply advanced network slicing technology to support its Cast streaming platform at the Marina Bay Street Circuit. Singtel’s connectivity technology will mean Cast’s sports package subscribers will be able to stream the night race from wherever they are at the venue, even in high traffic areas of the circuit where 250,000 spectators are expected.”

The Business of Running a Race Team

• Take an extended drone tour of the Hendrick Motorsports headquarters in what is undoubtedly one of the coolest factory tours ever in the video above.

• JR Motorsports is considering a bid for a NASCAR Cup team according to the Sports Business Journal. “But despite holding talks with charter-holding teams this year, JRM hasn’t been able to find a deal to its liking yet and charter asking prices have recently spiked well above $20M – basically double their price from a year ago.”

• Racing News 365 looks at Audi’s masterplan to enter F1. “RacingNews365 can reveal that a new company, namely Audi Formula Racing GmbH, was registered on 19 July 2022, with Adam Baker, formerly the FIA’s Director of Safety who reports to Hoffmann, as CEO. The articles of incorporation of the company are: ‘Carry out activities required as a manufacturer of powertrain units for motorsport projects, in particular the development, production and sale of corresponding engines.'”

• Daily Sportscar reports that TDS Racing are on track to expand their current single car LMP2 programme in the IMSA WeatherTech Sportscar Championship in 2023. “The team currently operates the Racing Team Nederland effort in the United States but with or without that programme continuing the team look set to expand to a potential two-car effort with what a team source described as “A very encouraging level of interest, in particular from gentleman drivers.”

• Radical Motorsport went one on one with US-based Radical dealer Jonathan Scarallo of Group-A Racing to find out about their business plans both now and in the future since becoming a Radical Motorsport dealer. “For the business of Group-A Racing, I was looking for another opportunity, specifically in sports car racing. Sports car racing has been on such a tremendous rise the last ten years not only in North America, but globally, and it’s only continuing to grow. As a business, it offered us to continue to work with young drivers, the same as we did in our open wheel history but also have a more mature driver base for some more stability in the business. When I came across the Radical Cup, I was blown away to see they recently had 37 cars at Road America, plus they were a support series to the NTT INDYCAR Series. Then I realized there was a dealership opportunity for us in the North East. Our dealership just turned two years old this past week and it’s been the best decision of my life. It has transformed our business, allowing us to expand at a rate that would not have happened if we wouldn’t have made the decision to make the switch and join the Radical Cup program.”

• In the video above, watch never before seen video of the Cadillac DPi in development from 2016.

• Racer reports that Gunnar Jeannette and PJ Hyett are launching a new IMSA WeatherTech SportsCar Championship GT Daytona program that will debut at the Rolex 24 At Daytona utilizing a brand-new Porsche 911 GT3.R. “I want to be clear: I’m not doing this as a hobby,” he said. “I have every intention on winning every race we start and I’ll be doing my damnedest to try and achieve that. I’m investing a ton of money and energy and time into this and I plan on doing it for a very long time.”

• Benjamin Pedersen’s promotion to the NTT IndyCar Series from Indy Lights will mean a closer involvement with IndyCar for Global Racing Group, as the American Lights team seeks to follow in the footsteps of its partner HMD Motorsports according to F1 Feeder Series. “F1 Feeder Series has learned in recent weeks that as part of the deal that takes Benjamin Pedersen into IndyCar, GRG will be actively involved in AJ Foyt Racing at a management level as of 2023. It is expected that Christian Pedersen will leverage his wealth of experience in management, brand building and marketing to try and help the team back to its former IndyCar glory.”

• Juncos Racing is leaving Indy Pro 2000 to move to Indy Lights according to both Formula Scout and F1 Feeder Series. “We are very excited to return to Indy Lights full time with two cars,” said team principal Ricardo Juncos. “We have had great success in the past within the Indy Lights series but made the decision last year to focus on the expansion of our first full-time IndyCar program during 2022, with the plan to rejoin the Indy Lights in 2023. Instead of running in three series and stretching our resources and personnel this year, we knew that we had to take the time to build the basis of our IndyCar before returning to Indy Lights.”

• Risi Competizione is evaluating a return to top-level prototype competition with Ferrari’s Le Mans Hypercar, while confirming their presence at Daytona and Sebring next year with the new 296 GT3. “It’s a little too early for us to talk about a prototype, but we’re definitely doing GT with a 296,” Giuseppe Risi said.

Movers & Shakers

• Mooresville, North Carolina-based Dale Earnhardt Jr. has announced a series of executive-level promotions, the most significant being Kelley Earnhardt Miller’s appointment to the CEO role. Earnhardt Miller will oversee all Dale Jr. companies, including the Dale Jr. brand, JR Motorsports, Dirty Mo Media, DEJ Management, and The Dale Jr. Foundation.

• Brian Barnhart has left Andretti Autosport for Arrow McLaren SP in an undefined role.

• Amid speculation regarding his future at Chip Ganassi Racing, the team’s managing director Mike Hull says there are no plans for him to retire or to be replaced.

• Matt Braid is leaving the CEO role at the Australian Racing Group at the end of the month, Speedcafe.com has learnt. “It is believed that Liam Curkpatrick has been appointed to a newly-created role of Chief Operating Officer (COO), and will hence take over Braid’s duties but he will, however, remain involved in an advisory capacity.”