As the cryptocurrency ecosystem stumbles from one calamity to the next, the sports industry is starting to ask itself, how will this cryptocurrency chaos affect sports sponsorship? This is just one of the topics discussed in this week’s Business of Motorsport. Updated with more information regarding the collapse of FTX and Crypro.com’s position on these developments.
I also track developments elsewhere, such as the on again, off again message that F1 has sent regarding an 11th team (apparently, it’s on again), positive TV numbers for NASCAR, engaging new generations through motorsport and the proposal for a new sports world anti-corruption agency.
I highlight the latest motorsport sponsorships and partnerships, the latest news on how race teams are conducting their business as well as this week’s Motorsport Movers & Shakers.
All this in the Business of Motorsport News Roundup. Its business news racers can use.
Motorsport Industry News
Revenue increases across the Formula One Group, Braves Group, and Liberty SiriusXM Group fueled Liberty Media’s third-quarter earnings, the company announced last week. F1 reported a 7% year-over-year increase in revenue to $715 million, while operating income fell to $64 million from $68 million during the same period last year.
Despite the lack of a title showdown at the final race like last year, F1 CEO Stefano Domenicali has stated that this will not affect F1 business. “Well, actually, we don’t see any kind of risk at all,” he said when asked in a call with Wall Street analysts if the lack of a title showdown would be bad for F1’s finances. “And first of all, we have the last race with sold out tickets, and the numbers are really good. The attention will be shipped, of course, to other fights for the sporting perspective. So that’s part of racing. There is a fight for places that also for the team perspective is related to their financial position, and the financial reward if they achieve a position. So I think that there will be a lot of interest in Brazil and Abu Dhabi too, with no problem.”
F1 CEO Stefano Domenicali has also stated that having an eleventh team is “not a problem” for the championship. “It is not a problem having one more team to have better racing, therefore we will see and we will monitor the situation,” said Domenicali in an investors’ call. “If there would be a real, credible new entry that wants to discuss with us, we are ready to discuss, but we are not in a rushed position today for that.”
Christian Horner has shed light on the role design guru Adrian Newey played in Red Bull’s arguments against its Accepted Breach Agreement (ABA) Deal after exceeding the Formula 1 cost cap. “Adrian, I wanted to make sure, had the ability to explain, to ensure that our side of the story, or our side of the penalty, in this discussion through the ABA process was presented accurately.”
Bad publicity is what will stop F1 teams from breaching the cost cap again according to former World Champion Mika Hakkinen. “Red Bull’s penalty for the minor overspend is still significant. Far more than the financial or aerodynamic penalty, it has been an uncomfortable experience for the team. The good thing is that no team will want to risk repeating this next year, so although it has been a very difficult and controversial moment for Red Bull, I believe it will benefit F1 in the long term because every team boss will be determined not to have this kind of negative publicity in future.”
Following on from the news last week that Red Bull Racing has a clear path forward following the death of founder Dietrich Mateschitz, Red Bull Special Advisor Helmut Marko says there will be big changes ahead at the drinks-backed concern. “It was de facto autocracy, but Red Bull Racing is the group’s strongest and most efficient marketing tool. It was de facto autocracy, but Red Bull Racing is the group’s strongest and most efficient marketing tool. This autonomy existed with the consent of Mateschitz, but it has already leaked out that the new management wants to continue Formula 1 activities. Like now, with a relatively strong independence.” (See also Motorsport Movers & Shakers below)
The Drive to Survive phenomena has brought an increase in fans and mainstream popularity to Formula 1, but this has also brought out the ugly side of some fans as a result. As Ben Hunt points out, Netflix’s Drive To Survive has helped create football-fan vibe as toxic fanbases threaten to damage F1.
This toxicity is not relegated just to the grandstands at the circuits but online as well. So much so that FIA President Mohammed Ben Sulayem has stated that the sport must stand united against online abuse. He has outlined some of the initiatives that the FIA is engaging in to curb the abuse:
- We have entered into dialogue with social media platforms to play their part and we are beginning work with governments and fellow sports governing bodies to bring them together to make strong commitments for joint action.
- We are commissioning research via the FIA University into digital hate and toxic commentary specific to sport. This will provide a platform for knowledge sharing, education and prevention.
- We have partnered with Arwen.ai to utilise their AI software to detect and eradicate abusive content on our own channels.
NASCAR has been on a positive swing lately with news that the series has experienced 4% TV growth in 2022 and averaged over 3M viewers over 37 races this season. According to Front Office Sports, they still beat Formula 1 by a wide margin in the United States. “Competing head-to-head on Oct. 23, NBC’s coverage of the NASCAR’s Homestead race averaged 2.31 million viewers compared to 1.11 million for ABC’s telecast of F1’s U.S. Grand Prix.”
NASCAR president Steve Phelps indicated in his NASCAR State of the Sport address that other cities are looking to follow Chicago and host Cup races. “Next summer’s street race in downtown Chicago has led to interest from other cities. “Their phones (O’Donnell and NASCAR vice president Ben Kennedy) are ringing from cities saying, ‘We’d love to host a NASCAR race,’” Phelps said. “And we have calls coming from north and south of the border. Whether that happens in 2024 or not, I don’t know. What I do know is we’re going to have continued schedule variation in 2024. (Chicago) will look nothing like any NASCAR race we’ve ever had.”
NASCAR is also looking to shift away from its traditional title sponsor model for next year’s inaugural Chicago street race, instead focusing on four founding partners worth around US$2 million annually, as reported by Blackbook Motorsport. “The stock car racing series is looking for three-year commitments from potential partners, which is the same length as the current contract for the Chicago street race.”
Blackbook Motorsport have also produced a handy NASCAR Year in Review that looks back over the key off-track trends and developments from the 2022 campaign.
General Motorsport Industry News
Autosport explains how Mercedes could tackle the 2023 DTM season amid a reported spending cut to its factory support: “But according to Motorsport-Total.com, it is unlikely that Mercedes will continue to provide financial backing and spare parts for six cars in 2023. Instead, it is expected that only two to four cars will receive factory support from the marque’s AMG division and all remaining entries will have to be financed entirely by the teams.”
According to PRI Magazine, the niche motorsports markets may be tiny, but enterprising businesses are discovering there is money to be made in catering to specialty racers and series.
Speed Cafe reports that Roland Dane has made clear the priorities he sees as critical for the Queensland Government’s new Parliamentary Friends of Motorsport initiative. “We always want new facilities, it would be lovely to have another permanent circuit halfway between the Gold Coast and Brisbane – maybe it’ll happen one day – but right now, let’s get Morgan Park into a good situation and make the most of Tony Quinn revitalising Queensland Raceway and make sure that the DriveIt NQ [Townsville] circuit comes online next year.”
With sustainability, carbon neutrality 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 topics across the motorsport industry. They will be covering issues such as ultra-low carbon fuels, Hydrogen, latest electronic technology, carbon neutral motorsport events, as well as the trending future materials across motorsport. The event takes place on December 1st and 2nd 2022 and full details can be found here.
Sports marketing agency Sport Dimensions has put together some ideas on how to engage new generations through motorsport. “One of the top questions we field from our clients relates to appealing to a younger demographic. It isn’t just us, as the shift for many years has been about attracting millennials and keeping them engaged and it has become a top priority for marketing teams as they continue to set goals.”
Autoweek has the master plan for Lamborghini’s ambitious Hypercar and GTP programs. “Lamborghini has already unveiled a teaser photo of their car (see above) and announcing that it will be wholly unrelated from the 963 already revealed by their corporate partners at Porsche.”
Blackbook Motorsport have published a great review of the 2022 MotoGP season. It also takes a look at the work the series is doing in their move towards sustainability. You can read it here.
UK-based motorsport company Ginetta will supply its G56 GT Academy car to the PalmerSport to fleet in 2023 through a newly announced partnership. “Ginetta is well known for helping to hone racers’ skills as they seek to progress through a multitude of international motorsport series, and drivers of all disciplines will now be able to drive one of eight GTA vehicles at the Bedford Autodrome, UK from March 2023.”
Global sports marketing agency Right Formula has acquired London-based sports PR and content agency Patterrn. Patterrn will be integrated into Right Formula, expanding its offering in PR and communications, both in motorsport and across other sports properties.
Web design firm Ikoniqa has rebranded to Grand Prix Studio as it better suits the specialty motorsport-related work that they have been doing.
Over the course of an intensive 10-day program, the FIA Immersion Programme’s participants had the opportunity to learn from inside the FIA and take this experience back to their countries and communities. You can get more details of the program and an interview with this year’s participants here.
The track day race car Retoga Project is for sale. “This is a great opportunity for a current low volume manufacturer to step up and challenge the big boys with this high end unique track day car. Manufactured from high quality materials such as T6 aluminium and with a round tubular bird cage type chassis design by well-known and highly successful Gary Gunn of Loaded Gunn Racing.” Full details can be found here.
Three decades after the 1992 publication of the British bestseller “The Lords of the Rings”, in which investigative crime reporters Andrew Jennings and Vyv Simson became the first journalists to expose corrupt members of the International Olympic Committee (IOC), a member of the European Parliament has finally taken up the challenge and decided to try and investigate and sanction corrupt sports leaders. At an event in Strasbourg on 4 October, Viola von Cramon-Taubadel, a German member of the European Parliament for the Green Party, launched a campaign to set up a world anti-corruption agency (WACA) akin to the World Anti-Doping Agency (WADA) that was established two decades ago.
Motorsport Sponsorship & Partnership News
The collapse of cryptocurrency exchange FTX could jeopardize a number of sports sponsorships. “The cryptocurrency exchange led by billionaire Sam Bankman-Fried inked a $135 million, 19-year agreement last year for naming rights to the Miami Heat’s basketball arena. Major League Baseball umpires wear patches with the company’s logo under a sponsorship deal, and FTX has a long-term partnership with Formula 1 racing team Mercedes-AMG Petronas.”
Mercedes F1 for its part have stated that the FTX logos will remain on the cars for this weekend’s Brazilian Grand Prix. “But despite the cloud hanging over FTX, Mercedes has confirmed the company’s logos will continue to run on the car and other associated assets for this weekend’s event in Interlagos. The team will, however, keep a close eye on developments surrounding the exchange as things move forward.” UPDATE! Mercedes has now suspended its Formula 1 sponsorship deal with crisis-hit crypto exchange FTX, meaning the company’s logos will be removed from the team’s cars from the Brazilian Grand Prix.
This story is fast moving so here is some background on what has been happening as of November 10, 2022:
- Binance rescues serial sports sponsor FTX after ‘liquidity crunch’
- Binance Bails On FTX Acquisition — Here’s What Led To The FTX Crypto Crash
- The Fall of FTX: a tragedy in three acts
- Exclusive: Behind FTX’s fall, battling billionaires and a failed bid to save crypto
- Sequoia is the first—but likely not the last—to mark FTX a zero dollar investment
- Mercedes suspends FTX sponsor deal; removes logos from F1 cars
- Crypto exchange FTX files for bankruptcy as wunderkind CEO exits
- FTX, Once a High-Profile Sports Sponsor, Files for Bankruptcy
- Formula 1’s Crypto Sponsorships Are Crashing
- FTX Faces Criminal Investigation In Bahamas After Crypto Exchange Collapses, Police Say
- As regulators scrutinise FTX, rival exchanges try to reassure investors
- FTX declares bankruptcy and Sam Bankman-Fried resigns as global regulators encircle the company
- Crypto exchanges are desperate to show they’re not the next FTX
- These are the sports deals at risk if FTX goes bankrupt
- The FTX Ripple
- FTX in touch with regulators, may have 1 million creditors – filings
- Factbox: From Binance to Voyager, crypto firms’ exposure to FTX is coming to light
Crypto.com has just passed 70 million users and it says that it’s still committed to sports sponsorship. “Our sports marketing partnerships have been central to putting Crypto.com on the map and helping drive our exponential growth over the past two years,” chief marketing officer Steven Kalifowitz said. “These efforts will continue to be a focal point of our marketing strategy moving forward.”
Heineken has been announced as the title race partner for the Formula 1 Las Vegas Grand Prix 2023. Maggie Timoney, CEO, Heineken USA, said: “The Heineken Silver Las Vegas Grand Prix is the perfect culmination of our successful global partnership with F1 that has brought groundbreaking events to the tracks of Austin and Miami in the US. We are so excited to pair the most anticipated F1 race with our most anticipated innovation – Heineken Silver. Next year will be an extraordinary event which we are so thrilled to be part of.”
RacingNews365 is reporting that Formula 1 will be ending their lucrative sponsorship deal with airline Emirates at the end of 2022 and shifting it to Qatar Airways. “It is understood that Qatar Airways could be joining the top-tier list of F1 Global Partners, which already include brands like DHL and Heineken.”
The Haas F1 Team has announced a collaboration with OpenSea, a peer-to-peer marketplace for non-fungible tokens (NFTs). “As the ‘Official NFT Marketplace Partner’ of Haas F1 Team, OpenSea will work with the team and external collaborators alike in producing a collection of branded NFTs. With a shared vision for enhancing engagement and delivering unique, best in class Web3 experiences, Haas F1 Team and OpenSea will focus on developing incredible utility that helps fans get closer to the team and bringing exciting and differentiated collections to the NFT community. In addition to the opportunities ahead, the OpenSea logo will appear on the VF-22 entries of Haas F1 Team for added visibility in support of the partnership.”
McLaren Racing has announced that semiconductor manufacturing company Onsemi will be an official partner of the Arrow McLaren SP IndyCar team. The company will also hold prime sponsorship branding on Felix Rosenqvist’s car for a portion of next season. Onsemi will be the title sponsor on the #6 entry for four races, and will hold minor branding locations on all of the team’s cars throughout the season.
Aston Martin F1 has announced a multi-year partnership with XP who becomes the team’s Official Global Financial Services Partner. Lisandro Lopez, CMO at XP Inc: “As a business, we are focused on building strong, long-term relationships with companies and clients within our ecosystem. As a loved and respected brand within Brazil, we are now connected with the country’s passion for Formula One. And that will kick off a new era for our brand, connecting us to millions of Brazilians around the world. In addition, supporting Brazilian motorsport and young Brazilian drivers is one of our highest priorities for this partnership. The structure we are looking to provide absolutely aims to re-establish that hegemony and put Brazil firmly back on the F1 map.”
Organizers of the Formula 1 Australian Grand Prix have announced that Rolex will return as the title partner for next year’s event, replacing Heineken.
MotoGP has strengthened its ties with Spanish hospital group Quirónsalud, which will see a dedicated health centre open its doors in the 2023 paddock. The Quirónprevención MotoGP’s health centre will be available in full at all European Grands Prix, while the treatments, staff and services will be at every weekend of the 2023 season.
NASCAR is partnering with event management company QuintEvents to offer premium experiences to fans attending its inaugural street race in Chicago next season. “The multi-year deal will see ‘Nascar Chicago Experiences’ offered, such as driver meet and greets, pit lane walks, and trophy photos. Fans can also access NASCAR Live, which includes interactive elements like driver appearances.”
Motorsport UK Academy has unveiled GARMIN as its latest Official Partner. “Last year, Motorsport UK created and launched a Coaching Development Pathway. Often seen traditionally as a tool for elite athletes looking to enhance their individual performance, Motorsport UK now seeks to encourage and engage participants at all levels of the sport, by helping aspirational coaches to develop, on a professional and a personal front. GARMIN will also provide a dedicated offering to graduating coaches using Motorsport UK’s Coaching Development Pathway.”
The 2022 Laureus Sport for Good Index has been released. The report “applauds brands making a positive impact through sport” and highlights 29 brands who are using their partnerships in sport to make a meaningful impact on society. You can download a copy here. SportsPro has a great breakdown of the report here.
The Business of Running a Race Team
He’s back! Jimmie Johnson has officially returned to NASCAR as a part-owner and part-time driver. “I’ve had a watchful eye on the ownership part and what’s happening with NASCAR, and the opportunity that I have here, the business structure and the model with NASCAR charters is just so different from than anything else in motorsports,” Johnson told the AP. “I want to be part of it. We certainly watched Michael Jordan join, what the Trackhouse Racing folks have done, and there’s all these rumors of people who want to get into the sport.”
After a decade of working with JD Motorsports, Gary Keller will move to fellow NASCAR Xfinity Series team Mike Harmon Racing for the 2023 season. Now known as “Mike Harmon Racing with Gary Keller”, the team announced the new partnership last week.
Kyle Busch Motorsports has confirmed that it will field two full-time Chevrolet trucks next season in the Craftsman Truck Series.
Comtoyou Racing has officially confirmed plans to run four cars in the new TCR World Tour, which will be launched by the WSR Group in 2023. The Belgian squad will run four Audi RS 3 LMS cars in the nine events that will make up the World Tour, with events planned in Europe and Australia, and with events also planned for South America and Asia.
Romanian cyber hardware and software company CyptoDATA has become the majority shareholder of the RNF Yamaha squad, the team set to be known as CryptoDATA RNF Aprilia from 2023. “RNF has now signed with blockchain-based cyber hardware and software developer CryptoDATA as it searched for a new title partner, though the operation will go a step further and actually take a controlling stake in the team going forward – the squad set to renamed CryptoDATA RNF as it moves into the Aprilia camp for next season.”
Buckle up for an exclusive and revealing “1 on 1” with Bryan Herta on the Full Throttle Podcast as he discusses life after the cockpit, how he chooses the best driver, and if he misses those days behind the wheel. Special Correspondent Jamie Howe steers the conversation in this special episode of “Full Throttle: Powered by Race for RP”. You can watch the episode above.
Dale Coyne and his partners at HMD Motorsports and Rick Ware Racing have a plan in mind for next season that would see the Honda-powered team continue with two full-time entries and expand to run a third car on a part-time basis. “We’re waiting on Honda to see what they can do for a third car,” Coyne told RACER. “That’s really the piece that has us locked up right now. We’ve got drivers we’re talking to about a full-time program, and obviously, talking to a driver about an oval-only program. But until we know what Honda will allow us to do, we’re not ready to make those final decisions.”
PRI Magazine talks to Cathi and Joe Maynard the new co-owners of Don Schumacher Racing’s Top Fuel team. “I’ve been a drag racing fan since I was a teenager,” Joe told PRI in a recent interview. “About 15 years ago, I talked Cathi into going to a race at Bristol. She’s in a motorized wheelchair, and the handicapped parking at Bristol was at the finish line. I heard Top Fuelers staging. She’d never seen one in person, so I tell her to go to the fence, and as she gets there, Tony Schumacher flies by at about 330 mph. She came back wearing a huge grin and said, ‘I want one.’ But she wanted that one, that driver. That’s what got the inspiration going, and it took this long to make it happen.”
Finally, Core Autosport have ceased operations. “From towing a race car to SCCA races in 1992 to winning races in IMSA’s top prototype class with Colin Braun in 2018, I have had an amazing, dreamlike experience in the sport I love so much,” team founder and driver Jon Bennett said. “This was a tremendously difficult decision, but as life outside of racing continues to take my focus away from the driver’s seat, I recognize that it’s time to bring this wild ride to an end.”
Motorsport Movers & Shakers
Mahindra Racing has announced the appointment of Frédéric Bertrand as Chief Executive Officer. The Race revealed last week that Bertrand had recently resigned from his position as director of Formula E and innovative sporting projects at the FIA and that he was in the running for the top Mahindra job which has raised eyebrows amongst some of the teams. For his part, Lucas Di Grassi feels that there is no conflict of interest. “We’ve seen this in many different ways in motorsport; it is a very small world, so people go from one side to another,” the 2016- 17 Formula E champion told Autosport.
Former Ginetta motorsport manager Ashley Gallagher has been appointed as the person who will run the TCR UK Championship from 2023 onwards by series promoters Maximum Motorsport.
Red Bull has appointed Oliver Mintzlaff to head up the sports and media division. The energy drinks giant has appointed three new chief executives to take over leadership of its various operations following the death of founder Dietrich Mateschitz last month. Dietrich’s son Mark has now confirmed that his father’s position will be divided into three separate roles, as the company reforms its leadership structure. Mark Mateschitz will step down from his company job to manage the 49 per cent stake in Red Bull that he has now inherited from his father.
Formula 1 has hired former Universal and Studiocanal executive Isabelle Stewart as Head of Original Content. In the newly created role, Stewart will be in charge of expanding F1’s content production and creating new relationships and partnerships with creators.