This week I look at why IndyCar believes it has the right stuff to compete with F1 in the latest edition of the Business of Motorsport Roundup.
In addition to IndyCar, I look at how the casinos are raking it in as they get ready for the inaugural Las Vegas Grand Prix, why Porsche believes that racing still matters for modern road cars, the economic impact of motorsport, and why Chipotle is sponsoring the Haas F1 team.
I also have the latest motorsport sponsorship and partnership deals, why Maserati MSG Racing is championing diversity, inclusion and mental health, a new look for Rosberg X Racing and much more.
All this in the Business of Motorsport Roundup on Motorsport Prospects. Its business news racers can use.
Motorsport Industry News
Total Motorsport explains why the teams shouldn’t decide who is allowed into F1. “The NFL is an excellent example of growing the pie without diluting it. Since the merger of the NFL with the AFL in 1970, the league doubled in size and now plays games in Europe. Since the merger, no teams have had a say about who can and can’t enter the league, with the final decision coming through the league’s hierarchy.”
Some of the best analysis of the business of F1 is done by long-time F1 writer Joe Saward. Whether on his regular blog or in his Joe’s Business Newsletter, he breaks things down clearly and with considerable knowledge and impeccable sources. In his latest Green Notebook from the Pearl Lounge, he discusses the future of the Chinese Grand Prix, the issues surrounding the teams wanting to increase the “anti-dilution” fund as well as the future of the F1 calendar. It is required reading for anybody interested in the business of motorsport.
ESPN is taking advantage of the increased popularity in the United States of Formula 1. “But ESPN has been able to ask more from advertisers in return. The network airs live F1 races commercial free and plans to continue doing so under the new deal, but after paying a hefty rights-fee increase, it is going to commercialize the sport to a greater extent. For example, Heineken is one of the advertisers this year and its inventory is going to be around sponsoring race previews and recaps on “SportsCenter” for 23 weeks.”
Meanwhile in Vegas, the casinos are happy. Sports Business Journal reports that Caesars Entertainment is expecting an EBITDA lift that could be 5% or higher in its Q4 this year via the F1 Heineken Silver Las Vegas Grand Prix, according to comments made in a recent earnings call by CEO Tom Reeg. Reeg noted the F1 race will have a more dramatic impact on Caesars’ earning results than the Super Bowl a few months later in part because November is traditionally a softer month for the hospitality industry in Vegas than February is, so it is easier to show impact if a new event happens in November. “I’m expecting Super Bowl level activity, if not stronger. But if you lost the Super Bowl in February, you’re still going to have a strong weekend. There’s obviously incremental lift from the Super Bowl. But when you’re talking about in November, that’s our softest period of the year. So the lift is far more dramatic on a year-over-year basis So yes, I’d be looking at for us something along those lines, 5% or better in terms of EBITDA lift for the quarter that’s driven by that weekend.”
Meanwhile, MGM Resorts International says that its Bellagio fountain grandstand packages are sold out for the Grand Prix, but it’s now putting a second three-day package on sale for $11,247 per person. MGM rolled out the first package back in November, and MGM Resorts Chief Commercial Officer Steve Zanella said that demand for that package “was spectacular, and those packages sold out quickly.”
Sales of Formula One merchandise increased by 101 per cent between 2021 and 2022, according to figures released by ecommerce specialist Fanatics. Online sales have increased by 1,084 per cent since 2018 and the US and the UK are the best-selling countries, with Mexico and Italy experiencing the highest growth levels. Oli Boden, head of licensing and gaming at Formula One, said: “These record sales are another sign of the phenomenal growth Formula One has experienced around the world in recent years. We are delighted to have a fanbase that are so dedicated and invested in the drama and excitement of Formula One. We look forward to seeing their continued passion towards the drivers, team, and the sport in 2023.”
Finally, are you curious as to how much money F1 drivers are paid? Here is the full list of salaries and best-paid teams for the 2023 Formula 1 season.
All figures are in USD. 2023 F1 Driver Salaries
|Max Verstappen||Red Bull||$55M||25|
|Sergio Perez||Red Bull||$10M||33|
|Valterri Bottas||Alfa Romeo||$10M||33|
|Fernando Alonso||Aston Martin||$5M||41|
|Lance Stroll||Aston Martin||$2M||24|
|Guanyu Zhou||Alfa Romeo||$2M||23|
|Nyck de Vries||AlphaTauri||$2M||28|
General Motorsport Industry News
IndyCar faced criticism from some stakeholders over the offseason for the perception that it wasn’t being aggressive enough in the face of rising competition, but CEO Mark Miles thinks that’s set to quickly subside as the series shows off its plans for growth in 2023 according to Sports Business Journal. “To the extent that it was a thing months ago, it’s dated — now that we’re racing and we have these initiatives, you won’t be hearing that [criticism],” Miles said. “We were in this period of development and financial planning for these initiatives and we weren’t going to talk about specifics during the offseason, so we’re doing our thing and people will be impressed [by the new moves].”
NBC broadcaster and former IndyCar driver James Hinchcliffe is bullish on IndyCars plans for 2023. “I’m a firm believer that a rising tide lifts all ships. And so, if one series is getting more fans, more true genuine fans of motorsports, then they’re going to start looking at other forms of motorsport, as well. You can see F1 fans checking out NASCAR or tune into the Indy 500. I think it’s not necessarily a direct competition. We are different products in a lot of ways, even though it’s similar products in certain ways. But no, I think what’s good for one is good for all, and motorsports just seems to be in a really good spot right now.”
Does racing today still matter to a car manufacturer? Motor Trend explains that yes, racing matters for modern road cars, and Porsche explains why. “[Racing is] still the heart of the company for Porsche,” Steiner says. Cynics will dismiss this as a nice sound bite that’s on brand for a company that’s forever marketed its racing successes in service of selling more sports cars. There’s always an undeniable image/marketing component for any carmaker that races—motorsport is, historically, as much of a marketing exercise as an engineering one, depending on which side of the garage you view the proceedings from. But Steiner insists, “Motorsport still drives actual innovation. It doesn’t matter if we’re talking about e-mobility (fully electric vehicles) or mobility with hybrids, or combustion engines. Motorsport is pushing engineers to the limit, be it 800-volt technology [developed in the 919 Le Mans racer and now found in the Taycan electric road car] or be it more efficient energy regeneration and recuperation—it always, or most often, comes from motorsports.”
Porsche will not pay for customer teams to run in the Pro class of Intercontinental GT Challenge according to its GT3 project manager Sebastian Golz, who is hopeful of seeing additional cars for the remainder of the season. “The customer support side is always the same: we are supporting teams but we are not buying them. Every race we support the same for our GT3. It doesn’t matter if it’s DTM or SRO. We can just support. We support through performance support, technical support, parts support, drivers and also a little bit of money. Nothing more.”
The Race explains how the recent arrival of long-time Audi motorsport chief Dieter Gass as a sporting and technical advisor to Formula E is much more than just the consultative appointment that it appears at first glance and in fact could avert another manufacturer exodus. “We needed someone with credibility in there who could really drive that agenda for us in partnership with the FIA and make sure that we’re delivering an outstanding product.”
Autosport explains how, following a corporate buyout, the Avon brand is set to disappear from motorsport at the end of this year and with other manufacturers reassessing their ranges, the tire industry is going through a period of evolution which clubs must respond to. “The Avon situation is far more concerning because those tyres are far more niche,” he says. “For a lot of the Yokohama tyres being used there are alternatives, but there’s not always alternatives to Avons.”
American racetrack Road America has released their economic impact numbers and they are impressive. “The Total Economic Impact of Road America each year is $403 million for the entire State of Wisconsin. This is $149 million larger than Road America’s Impact on Sheboygan County due to larger indirect and induced economic multipliers relative to Sheboygan and the additional impact of out-of-County visitors. WEG added that $354 million of the $403 million in statewide impacts is due to visitor spending. Additional off-site lodging, dining, shopping, travel, and entertainment expenditures made by race fans, race competitors, and all other visitors as they shop and take advantage of different amenities throughout the local area, especially out-of-town visitors, contributed to the total figures.”
The Parliamentary Friends of Motorsport group has been formally launched at a ceremony in Canberra, Australia. “Motorsports are a massive part of Australian life, and we’ve formed this group to promote and grow this exciting sector,” Federal Member for Solomon Luke Gosling OAM said.
Meanwhile, in the lead up to the State election, Motorsport Australia has highlighted the need for New South Wales to develop a statewide motorsport strategy as a priority and has issued a statement to that effect. “The fact that the biggest Australian state in terms of participation has the least number of facilities cries out for a targeted strategy to ensure that the sport capitalises on the enormous popularity it is currently experiencing. We need more venues and more needs to be done to preserve those that exist.”
Motorsport Australia also announced that more people are enjoying the Shannons SpeedSeries than ever before, with impressive ratings for the opening round, AWC Race Tasmania. “Coverage across Stan Sport and the Nine Network saw more people watching than in 2022, with 175,000 people watching Saturday’s action on 9GEM and 9GO, a 22 per cent rise year-on-year. Stan’s extended live coverage saw a total increase in viewership of 30 per cent on the previous year.”
Finally, the Valo Adelaide 500’s comeback event delivered a record economic benefit, according to figures released by the office of the South Australian Premier. “The 2022 Adelaide 500 is claimed to have generated an economic benefit of $51.85 million for the state’s economy, 34.3 percent up on the preceding event in February 2020 ($38.61 million) and higher also than the record of $45 million which was set in 2019.”
The full 2023 Agenda for the upcoming BlackBook Motorsport Forum taking place on April 26th has now been released. “Presenting our 2023 agenda. We’ll be focusing in on the theme of Transformation, featuring expert speakers from across the industry and carefully crafted networking sessions that will enable you to maximise your connections during the event.”
Motorsport Sponsorship & Partnership News
F1’s growing profile in the U.S. and the potential to expand international reach were among the key reasons that Chipotle decided to sponsor the Haas team, writes SBJ‘s Adam Stern. California-based Chipotle talked to multiple teams before deciding on Haas, doing so in part because Haas has American ownership. The QSR chain will have digital activation all season around Haas, particularly for the three U.S. races in Miami, Las Vegas and Austin, and a sticker decal of the Chipotle logo will be on the team’s two cars. Terms were not disclosed, but a deal of this type is likely costing Chipotle in the low to mid-seven figures for the year. Chipotle is working with rEvolution on activating the deal.
Here are more of the latest motorsport sponsorship deals, partnerships and related analysis that were announced this week.
- INDYCAR, IMS Extend Retail Partnership with Legends
- IndyCar 2023 commercial guide: Every team, every sponsor, all the major TV deals
- Ferrari 499P will be partnered by Sabelt
- Hankook named as exclusive rally tire partner of the FIA Junior ERC
- Red Bull Racing Bets on Partner Renewal with Pokerstars
- McLaren Announces a New Era
- Mack Trucks becomes the Official Hauler for Skip Barber Racing School
- Automobilist to bring Formula 1® to life through art in multi-year partnership
- Qatar Airways soups up motorsport sponsorships
- Kumho takes on World Tour title sponsorship
- Formula E Ties Up Cable Partner
- Formula 1 and Liqui Moly renew and enhance partnership for 2023 season
- Reis Motorsport Insurance renew British Rally Championship partnership
- British Formula 1 team Williams Racing has announced a new partnership with Jumeirah Hotels & Resorts
- Aston Martin Agrees to Luxury Lifestyle Deal with Velocity Black
- Tech sponsors flock to F1 grid
- OAKBERRY Becomes the Official Açaí Partner to MoneyGram Haas F1 Team
- BWT Alpine F1 Team and Canel’s announce new multi-year partnership
- Formula 1 renews partnership with ESPN to broadcast F1 in Latin America and the Caribbean
- Sports World Reacts To The Tom Brady, Racing News
- Pennzoil partners with Rebelle Rally
- Veloce Racing Recommits To E.On
- ESPN to further commercialise F1 coverage
- Alfa Romeo F1 team extend Edelweiss deal
- Heineken Launches F1 Activations Across Melbourne, Sydney, Perth
- Racing Gear Manufacturer K1 RaceGear, IMS Announce New Partnership
The Business of Running a Race Team
New Williams team boss James Vowles has suggested the once all-conquering F1 team has simply “survived” for the last 15 years. “The team has, over the last 15 years, been through a tremendous amount of difficulty, financially and otherwise, and it’s survived,” Vowles told selected media, including Speedcafe.com. “But it is just survival compared to other organisations that have had finance. That’s the luxury I had prior to joining, and as a result of that you have the stark differences between where we are today, and where we need to be in the future.”
Sports Business Journal goes into details about how the Aston Martin Cognizant Aramco F1 team has gained off-track speed ahead of the 2023 season. “The team is “way ahead of where we thought we’d be” with sponsorships at this point, as it has two title sponsors with the Saudi-owned oil company having joined Cognizant last year. Cognizant joined the year before. Aston Martin is working with Aramco on sustainable fuel projects, one of the major focuses of F1 as that’s a technology that the sport feels it can help develop and which will be important to the global effort to halt climate change. Cognizant has told SBJ that it has struck several B2B deals that it attributes to the sponsorship including one worth $100M.”
Hertz Team JOTA intends to increase its FIA World Endurance Championship Hypercar operation to a pair of Porsche 963s next year, according to team co-owner David Clark. “For any team, the benefit is running a two-car team,” Clark noted. “You’ve got more strategy choices. It would give us the opportunity to maybe do some endurance races in the U.S. We’ve got [partners such as] Hertz who are global and in America, and Brady… it hasn’t really been talked about, but it will probably evolve to that.We’ve always run two cars. We know how to do it – it works.”
In an interview with Ellie Does F1, James Rossiter and Liz Brooks of Maserati MSG Racing discuss championing diversity, inclusion and mental health. “In motorsport, diversity, inclusion and mental health have been more common topics of conversation over recent years. As times are changing and more people are open about these issues and their personal experiences, the world as we know it becomes more accepting of talking and listening. Talking and listening in sports is becoming easier. It’s not perfect and there is still a long way to go, however, slowly but surely, we are breaking down these barriers. We are championing safe spaces. We are becoming more human.”
Chip Ganassi Racing is looking for a few good women racers to take part in their Women in Motorsport (WIM) program. The program offers three paid internships working with the Chip Ganassi Racing Indycar teams. The goal is both to bring attention to the importance of diversity in motorsports hiring and to act as a pipeline for women in STEM studies to graduate into full-time positions.
“For Ganassi himself, a man whose Twitter account includes posts of race results with the hashtag #ilikewinners, the Women in Motorsports initiative is not about personal feelings, it’s about building a better race team. “Listen, Elana,” he said before I’d even finished the first question, “I’ve never been one to do things because I want to check the box. And I don’t do things because it’s the cool thing to do or the current thing to do. I’m interested in one thing in our team, that’s performance. The women applying to this program are motivated, they bring innovation and influence and they just need the opportunity to shine. The women on my team, they’ve been engineers on the car that won Sebring last year, that won the Indy 500. They are here to win races and that’s what they bring to the team.”
Rosberg X Racing is rebranding for their livery for Extreme E 2023. “To adorn the 1,780-kilogram ODYSSEY 21, black was used as the predominant color of the design, covering a large part of the car in various areas (doors, hood, rear and some spaces on the roof). This color had always been present on the car, although last year it was complemented by white. Now, the light blue that was barely seen in 2022 will take greater prominence in the new season of Extreme E, taking completely the structure of the logo, the team name, touches of ornamentation in certain areas of the vehicle, which highlights a line on the rim of the tires, symmetrical with the rest of the design.”
MoneyGram Haas F1 Team has announced that it has achieved FIA Three-Star Environmental Accreditation, the highest level of recognition for its work in environmental sustainability, ahead of the 2023 FIA Formula 1 World Championship. The FIA Environmental Accreditation Program was created in 2011 to help motorsport and mobility stakeholders measure and enhance their environmental performance, driving change across the sector. The program provides stakeholders with a three-level framework against which to accredit their activities and is consistently reviewed and audited to ensure best practice is met.
Christian Horner has confirmed that McLaren CEO Zak Brown visited Red Bull Powertrains over a potential Power Unit deal in the coming years. Reports over the last week stated that Brown had been to Red Bull’s engine facility to make first noise over a contract for the new cycle of regulations. “As a powertrain manufacturer for 2026, it’s inevitable that discussions are going to be had regarding potential powertrain supply. That’s only natural that we would speak with potential customers.”
The NBC Sports website explains how Arrow McLaren attacked IndyCar hiring challenges to add its third car. “As in any industry, networking and recruiting are cornerstones to motorsports, where big-league success is predicated as much on driver and car as the countless people who support the stars and build the machines behind the scenes for any IndyCar, NASCAR or Formula One team.”
Autosport looks at Beechdean Motorsport, the GT racing powerhouse built on an ice cream empire. “Don’t underestimate the importance of teams, not just when you’re kicking a ball or when you’re driving a car, but also when you’re making ice cream,” says Howard, hinting at the reason for his success on and off the track. “All of the work that I’ve been able to do with teams and learn, all of that goes back into the ice cream as well.”
Motorsport Movers & Shakers
This month, Victoria Thomas, CFO and Owner of Kellymoss was featured in In Business Magazine. You can read the article here.