With the announcement that Wynn Las Vegas is offering a $1 million package for the Las Vegas Grand Prix in the midst of a cryptocurrency sports sponsorship meltdown, it has been an interesting week in the Business of Motorsport.
In addition to grandstands on the Strip, I look at the support for the upcoming Detroit Grand Prix, rumors about Ford coming back to F1 and a number of racing teams expanding their operations.
I also have in-depth features on both Zak Brown and Christian Horner in this week’s Motorsport Movers and Shakers.
All this and much more in this week’s Business of Motorsport Roundup.
Motorsport Industry News
Las Vegas is going all out for their inaugural Grand Prix in 2023. MGM Resorts unveiled concept art for the Bellagio Fountains Granndstands they intend to build for the race while Wynn Las Vegas is offering a $1 million package for the Grand Prix.
Meanwhile, F1 CEO Stefano Domenicali has defended the Qatar Grand Prix in light of the criticism being heaped on the country for their World Cup event. “We say the same thing every time,” said Domenicali. “We are a very open system. There are countries that want to change things, and we think that being there is a spotlight for things to change. We are working with the United Nations. There is no problem, we have nothing to hide. It is not my role to discuss politics but these countries want to change cultures which are thousands of years old. Do you think it’s possible from one day to the next? F1 is an accelerator for change. If we weren’t there, we would talk less about these countries, it would be more negative.”
In the latest “who is going to partner with Red Bull” rumors, GP Blog suggest either Hyundai or Ford. Based on what Bryan Herta stated recently in that Hyundai is more interested in electrification and fuel cell technology, I think Hyundai is a long shot but Ford is no stranger to F1. “Ford has long been thought to want to join Formula 1 with the entry of the new engine rules.”
Formula 1 parent company Liberty Media is splitting off the MLB team “through the redemption of Liberty Media’s existing Liberty Braves common stock in exchange for common stock of a newly formed company” called Atlanta Braves Holdings, Inc.
Less controversially, Formula One has announced plans to open its second sim racing and entertainment venue in the UK city of Birmingham with plans for expansion in the cards. “Formula One announced it had signed a five-year deal with Kindred Concepts to create 30 venues worldwide. The Birmingham destination being announced before its official opening in London suggests that multiple venues are being pursued to accelerate the rollout worldwide. Target locations outside of the UK include Asia, Europe, the Middle East and the US.”
General Motorsport Industry News
Autoweek explains Why IndyCar 2023 Detroit Grand Prix Downtown Is Worth a Double Take. “You can feel the energy,” Denker said at a recent meeting at the Renaissance Center in Detroit of nearly 170 business leaders and race supporters to update the community on the progress being made on the downtown circuit that will host major-league racing for the first time in three decades in June. “This reminds me of 2005 and the Super Bowl, it really does. In ’05, we were here downtown getting ready for the Super Bowl in Detroit with Roger Penske. You can feel the same kind of energy downtown now.”
PRI Magazine talks to the promoters of five successful race events in the United States to see what the keys are to their success. “Although exciting competition is a core pillar of any well-attended motorsports event, that alone doesn’t guarantee lasting success. In an age where an array of media is constantly vying for our attention, it takes a broader consideration of the design, format, and promotional strategies to break through the noise of everyday life and connect with the right audience.”
Meanwhile in the UK, a number of national clubs are taking various innovative approaches to their racing schedules. “Yet the tough times also present an opportunity and, by trying something different, the gamble could bring handsome rewards by standing out from the crowd. And it is therefore fascinating to assess some of the interesting developments for next year announced by organising clubs in recent weeks.”
The International Automobile Federation (FIA) and the International Motorcycling Federation (FIM) have announced a joint conference aimed at promoting gender equality across all aspects of motorsport. The Women in Motorsports Conference will take place at the Royal Automobile Club (RAC) in London on 12th December, from 10:30am until 16:30pm local time.
Professional Motorsport World Magazine reviews the recent Professional MotorSport World Expo 2022. “With over 126 exhibitors, the expo once again gave some of the industry’s biggest names the opportunity to form relationships and collaborations, supported by an impressive line-up of speakers at the Technology Presentation Stage which hosted several seminars and roundtable discussions.”
At the Professional MotorSport World Expo 2022, Italtecnica unveiled a racing V6 with 45% thermal efficiency targeting Le Mans hypercars and high-performance road car applications.
The 3rd Annual Race Industry Week keeps adding to their prestigious list of guest speakers. You can register to attend this free, web-only conference taking place November 28-December 2, 2022 here.
Motorsport Sponsorship & Partnership News
The Mercedes F1 team has been left in “disbelief” over the collapse of their sponsor, cryptocurrency exchange FTX. Mercedes is not the only team worried as Road & Track explains how Formula 1’s crypto sponsorships are crashing. “What should be alarming for F1 teams is that FTX was among the most notable names on the grid, with a huge footprint in the industry and a massive marketing spend that went well beyond the confines of auto racing. Ferrari’s crypto partner, Velas, may be most notable outside the world of cryptocurrency for having a partnership with Ferrari. The Swiss company proudly boasts the partnership (estimated at $20 million a year, per Business F1) in all of its social media bios. Velas is a blockchain technology, rather than a cryptocurrency exchange like FTX, but we can track Velas’s value through the value of a token, called VLX, tied to it in the same way. When Ferrari announced a deal with Velas on December 27th of last year, VLX was worth $0.39 per token. That quickly ballooned up to an all-time high of $0.55 on January 4th; now, the coin has spent the day floating around $0.03.”
It is not just F1 that has crypto sponsorship worries. Quartz explains how these sports deals are at risk if FTX goes bankrupt. “The fallout from the company’s financial woes may be the fate of its many sports deals. In the last couple of years, FTX has aggressively pursued a wide range of sponsorship deals in the sports world.”
Alex Harvey has some advice for Partnering with Crypto Brands: What Are the ‘Need-to-Knows’ for Sports Rights Holders? “However, for sports rights holders, partnering with a crypto brand undoubtedly brings with it significant additional risk; both from a commercial and legal standpoint, but also from a wider moral and reputational perspective. Having advised on a number of deals in the space, the Sheridans Sport team have seen first-hand some of the challenges and pitfalls. This article will look to identify some of those risks and explore ways in which rights holders across the sports and esports industries can seek to mitigate them.”
Here are some more updates on the current status of the “crypto winter”:
- FTX Faces Criminal Investigation In Bahamas After Crypto Exchange Collapses, Police Say
- Brady, Curry, FTX Founder Named in $11B Class-Action Suit
- FTX Entities, Athletes Named In Class Action Lawsuit
- The FTX Ripple
- Here Are the Sports Marketing Deals Crumbling Along With FTX
- What Sports Can Learn from FTX’s Downfall
Formula 1 team Oracle Red Bull Racing and its principal team partner Chiru Labs – the creator of cryptocurrency exchange Bybit – have collaborated to launch a Non-fungible token (NFT). “This move will see the Milton Keynes-headquartered team present a Tezos-based NFT on its team cars for the season finale in Abu Dhabi, the first time a blue-chip NFT has ever adorned a Formula 1 race car or taken part in a race. The specific NFT collection in question, Lei the Lightning Azuki, is an anime character that will appear alongside both Red Bull drivers, Max Verstappen and Sergio Perez as they chase a final victory of the season.”
An activist investor has called on a tech company to end its sponsorship deals with two of the most recognizable brands in sports. Investment firm Petrus Advisers has asked software giant TeamViewer AG to end its deals with the Premier League’s Manchester United and the Mercedes-AMG Petronas Formula 1 team. “Petrus believes the deals are too expensive and show “appalling judgment.”
Mercedes have announced a deal with Einhell that sees the power tolls and garden equipment manufacturer become the Formula One’s ‘official tool expert‘. “The contract will commence on the first day of 2023, with the German company’s tools will be provided to the Mercedes workshops in the factory and in the race garage.”
Front Office Sports explains how F1 teams Haas and Williams are looking to the United States to boost their fortunes. “Both Williams and Haas are strengthening their U.S. ties. Williams plans to add American driver Logan Sargeant to its F1 team in 2023, if he qualifies, and Haas selected MoneyGram as its new title sponsor.”
Abu Dhabi Motorsports Management (ADMM) has become the latest motorsports property to sign a deal with UK sportswear brand Castore. “Castore becomes the official apparel partner of ADMM, and the agreement includes a retail and merchandise partnership with Yas Marina Circuit, host of the Formula One Abu Dhabi Grand Prix. The pact also sees Castore become the official staff apparel provider at the circuit for next year’s race.”
Andrew Petcash asks the question, is the “Agency” model in sports dying? “I believe the sports agency/representation model is transforming right before our eyes. Endorsements aren’t going away, but they’re changing. It’s the rise of the business partner.”
The Business of Running a Race Team
Team TGM will return to the Rolex 24 at Daytona with an Aston Martin Vantage GT3 supported by TF Sport. “Although the Aston Martin is new to Team TGM, it’s obviously a car that has been very well developed and has much success in sports car racing. TF Sport has been at the forefront of the race success with Aston Martin, and we couldn’t be more pleased to have them join us for the Rolex 24.”
Danish squad GMB Motorsport has confirmed that it will run an Aston Martin Vantage GTE at the 24 Hours of Le Mans and full-time in the European Le Mans Series next year. According to Sportscar365, “It is understood that GMB has purchased a single Vantage GTE that is set to complement its continuing Honda program in the ELMS-supporting Le Mans Cup.”
Rebel Rock Racing will expand its involvement in IMSA competition next year, widening its focus to compete full-time in two championships. In addition to fielding the No. 71 Chevrolet Camaro GT4.R in a bid for the title in its fifth full season in Michelin Pilot Challenge, Rebel Rock will prepare a similar Camaro for the debut season of the VP Racing SportsCar Challenge.
Motorsport Week is speculating that Scuderia Cameron Glickenhaus may not be racing in the WEC next year based on comments from driver Ryan Briscoe. “Felt awesome to be turning laps in this beast over the weekend! It felt really strong and will be a shame for it to not compete next year! Lucky for the others I suppose.”
AO Racing, a newly formed team led by tech entrepreneur PJ Hyett and racing veteran Gunnar Jeannette, is set to take on a full season GTD class program in the IMSA WeatherTech SportsCar Championship next year with a new Type-922 Porsche 911 GT3 R.
Rahal Letterman Lanigan Racing have unveiled their new headquarters
Stefan Wilson and Don Cusick have formed a new partnership with Dennis Reinbold and the Dreyer & Reinbold Racing team for the Indianapolis 500. “I am excited about our new partnership with Cusick Motorsports and Stefan Wilson,” Reinbold said. “Stefan and Don Cusick have been enjoyable to work with and we are focused on achieving success on and off the track at the speedway. We are impressed with Stefan’s work ethic and grit which will apply well in the racecar. We are coming off top 10 finishes for the past two years and believe Stefan can replicate that and fight for the win.”
Kelly Moss Racing is steering toward a more diverse future with their recent female driver shootout. “We chose to invite women who have shown they can compete at the level necessary,’’ Thomas said. “We feel the Kelly Moss pedigree, with 35 national championships under our belt, truly gives the support necessary to break the barrier of the first female-owned-team, female-pro-driver championship in motorsports history.” Her big-picture hope is that this launches a new era in the sport, where women are viewed as more viable and valuable components of a race team.”
Bryan Herta Autosport will remain focused on its partnership with Hyundai in IMSA Michelin Pilot Challenge next year despite the team having explored multiple opportunities to be part of a manufacturer-led LMDh effort. “Team owner Bryan Herta confirmed to Sportscar365 that his TCR championship-winning organization had been in discussions with both Hyundai and a separate undisclosed OEM for an IMSA WeatherTech SportsCar Championship factory GTP class operation.”
Following the announcement that the Ford Fiesta model will end its production run in 2023, M-Sport has underlined that it will continue with the production of Fiesta-based rally cars. “Having worked in close collaboration with Ford, M-Sport was aware that production of the Fiesta was coming to a close, enabling the company to prepare by increasing its available stock of Fiesta body shells. This will ensure that M-Sport can continue producing Fiesta models in rally trim in both the UK and Poland. M-Sport will continue to develop the Fiesta model, with several updates planned for the entire portfolio over the next year.”
Motorsport Movers & Shakers
From Front Office Sports: “How a top executive in the F1 world keeps his team on track. Zak Brown always loved motorsports. From the time he was a kid in California, his dreams were filled with race cars. Decades later, he’s the boss of one of the most powerful and popular racing teams in the world — McLaren Racing. We sat down with Brown for an in-depth chat about the rise of Formula 1 in the United States, tension with other teams, and what values are most important to him as a leader. For the full conversation, check out this episode of Front Office Sports original podcast My Other Passion, presented by NetSuite.”
Forbes looks at Red Bull Racing’s Christian Horner, Formula 1’s longest-tenured Team Principal, who is about to make history. “We’ve always stuck by the principles that we’re a race team, here to go racing,” Horner said while in Brazil for the penultimate race weekend of the year. “We’re not afraid, sometimes, to take difficult and bold decisions. We’re not a corporately driven organization. We’ve always been independent and a little maverick. We’ve been non-conformist at times. We’re a challenging brand and a challenging team that embodies itself in everything we do and how we go racing.”