This week’s Business of Motorsport has all kinds of interesting developments that makes the business of motorsport endlessly fascinating.
From legal judgements, Vegas paddock facilities, and debates on diversity and inclusion, the width and breadth of what goes on off the track is on full display.
I also have the latest motorsport deals, team news, plus words of wisdom from Jost Capito and Rolf Michl.
All this and more in this week’s Business of Motorsport Roundup.
Motorsport Industry News
FIA president Mohammed Ben Sulayem has revealed two major challenges he faced with a court case and a $20 million financial black hole after taking the job. “Imagine yourself being elected in the role after all these years of trying, everybody having a party on the night of the 17th (December), then you go to the office on the 18th and 10 o’clock in the morning, the first thing you meet is your legal people and they say you have a big court case with the halo,” he said.
Formula 1 has unveiled their most recent progress report on their Sustainability, Diversity and Inclusion initiatives. Ellen Jones, Head of Sustainability at Formula 1, said: “We’re now three years into our journey to Net Zero by 2030 and it’s fantastic to see the progress that’s been made already. The work that’s going on behind the scenes to bring this strategy to life is tireless and we are confident that we are building strong foundations for the future of our business and sport. Thank you to everyone across Formula 1, from our fans, teams, race promoters, and many more, for your efforts this year as we build a more sustainable and inclusive business. We look forward to working with you even more in the next year.”
One interesting question I have is related to their work on the calendar according to this point in their presentation.
Started the process of looking at rationalising our race calendar for the future, by engaging with promoters to work towards a more regional approach, over time. We continue to navigate various issues (such as the climate in certain regions during specific months of the year) that restrict the extent to which certain race events can be moved.
FORMULA 1 2022 SUSTAINABILITY AND DIVERSITY & INCLUSION
PROGRESS
With Autosport recently releasing the expiration dates of the various race promoter contracts, has the issue of “rationalising” the race calendar been included in these contracts, especially the long-term ones?
The Race asks an intriguing question. Could Renault’s old boss lead Hyundai to Formula 1? “There have been rumours about Abiteboul joining Hyundai for at least a couple of months, and in that time there have been whispers in F1 about Hyundai being genuinely interested in an engine programme. The Race understands this interest is real, although such a move would be a massive undertaking given it would mark Hyundai’s first foray into grand prix racing – and it’s only interest at this stage.”
Las Vegas Grand Prix organizers have released images of their planned pit building and hospitality complex set to open in 2023.
Tim and Tom of The MotorMouth Podcast sit down with F1 broadcaster Ariana Bravo to discuss the state of diversity and inclusion in Formula One. You can watch it above.
Marshall Pruett goes into the economics of IndyCar engine leases as he discusses the reasons why the series has shied away from 2.4 litre engines in IndyCar’s made the right call, for the wrong reasons. “Additionally, and most importantly, their agreement to continue providing engines in this new 2.4-liter formula was budgeted around IndyCar finding a third manufacturer. With three brands, each could cover between eight and 10 cars and easily keep the series stocked with full-time entries at or near 30 for the season. Next year, in what would have been the 2.2’s final year, we’re looking at 27 full-time entries.”
While Gerhard Berger has explained his decision to sell the DTM to ADAC and has lobbied them to keep the existing rules, it looks like that is exactly what is going to happen. “The DTM will now sit at the top of the revamped ADAC umbrella, with GT Masters and Prototype Cup Germany occupying the space directly below it under the DTM Endurance banner.”
The Pescarolo name could return to the top flight of endurance racing in 2024 if plans to field a customer Le Mans Hypercar by its new owner come to fruition. Jocelyn Pedrono, who acquired the rights to the Pescarolo brand in 2016 explained his plans to Autosport. “Returning to endurance racing has always been the objective,” Pedrono told Autosport’s French edition. “I’m working to assemble the budget. I have an agreement in principle with two constructors in Hypercar. My heart leans more in one direction than the other, but I can’t say anything for the moment.”
Race Industry Week 2022, produced by EPARTRADE, RACER and SPEED SPORT was held November 28 – December 2, and featured five days and 55 hours of live business and technical webinars from race industry leaders, race sanctioning organizations and key industry suppliers from around the world. “We had five amazing days,” said Francisque Savinien, who along with Judy Kean are the producers of Race Industry Week and founders of EPARTRADE, the digital sourcing platform for the worldwide performance and racing industry. “The world is moving forward. We had to learn from the pandemic, and we’ve had to learn new ways of engaging and communicating and taking advantage of what’s available out there. The energy and passion that we saw this week is what this industry is all about.”
PRI’s Buyers Guide is the motorsports industry’s premier source book for new products and technology. Updated ahead of the 2023 racing season, this year’s edition showcases hundreds of the latest parts, equipment and solutions to give distributors, service providers, race teams and more a competitive edge! You can access it here.
Only 23% of sports SPACs to date have successfully closed a merger. There are still 62 sports-related blank check companies with $15.9 billion in capital seeking deals, according to Sportico data. “By rule, SPACs can’t guarantee to find a deal in any sector, though most indicate a preferred type of business, as Bull Horn did. Sparked by the stock market success of DraftKings’ SPAC merger in early 2020, another 168 SPACs with a sports connection—either with a sports preference or with the participation of an athlete or industry executive—formed in less than 24 months, according to data compiled by Sportico. They were part of a wave of 931 SPACs that held their IPOs the past three years.”
London-based marketing agency Mongoose Group, part of the MISSION Group plc, has significantly grown its sports marketing and social media offering with the acquisition of Influence Sports & Media and Populate Social. “Influence Sports & Media and Populate Social will retain their brands and identities and form an integral part of the Mongoose Group alongside Mongoose Sports & Entertainment and ALIVE Brand Experience. Influence Sports & Media, which is also based in London but with a strong presence in the US, is a specialist sports marketing agency that offers strategic consultancy, commercial sales, partnership activation, PR & communications and content creation.”
Motorsport Sponsorship & Partnership News
In Blackbook Motorsport‘s first Inside the Deal column, they take a timely look at how McLaren Racing hope their partnership with OKX can buck the crypto trend. “We’re doing our due diligence before we start working with the right partners,” Lindsey Eckhouse, director of licensing, ecommerce and esports for McLaren Racing, tells the BlackBook. “This is certainly a new and emerging category, so we understand the necessity of education and responsible messaging.”
The Nissan Formula E racing outfit have announced a technical partnership with The Woolmark Company to develop innovative team kit. The apparel will include an average of 50 per cent merino wool, an entirely renewable, biodegradable and recyclable product. The Woolmark Company will also benefit from having its logo visible on the Nissan cars during next season and be present in the race village of the 12 different host cities next year.
The Fédération Internationale de l’Automobile (FIA) has entered into a multi-year agreement with Corpay’s Cross-Border business to become the Official FX Payment Supplier of the FIA. Alexandre Gueschir, FIA Marketing and Events Director, said: “We are delighted to welcome Corpay, a global leader in business payments, as FIA’s Official FX Payment Supplier. We look forward to introducing Corpay through our corporate events and business partner network and continuing to grow this partnership in the longer term.”
The American Legion will increase its involvement with Chip Ganassi Racing and become the primary sponsor of the No. 10 Honda driven by 2021 NTT IndyCar Series champion Alex Palou. The expanded relationship which began in 2021 is designed to serve three initiatives, starting with the ongoing promotion of the American Legion’s “Be The One” campaign, which debuted last season as a call to reduce suicides by past and present members of the American military.
The British Superbike Championship (BSB) has signed a two-year extension to its existing partnership with Rock Oil until 2024. The extension will take the association between the two parties to a total of ten years, having first began in 2015. The Rock Oil brand will be present at all 11 rounds next season, in addition to a title sponsorship role at the Oulton Park round.
Formula E and ABB FIA Formula E World Championship founding partner, Julius Baer, have announced a multi-year partnership extension until the end of Season 12 (2026). “Julius Baer has been a global partner of the world’s first all-electric motorsport series since launch in 2014. The extension reinforces Julius Baer’s commitment to the series. Aligned to Formula E’s mission of accelerating sustainable human progress through the power of electric racing, Julius Baer is focused on raising awareness and action around climate change and sustainable development.”
Leaders from Pennzoil and Speedway Motorsports Incorporated (SMI) have announced a long-term continuation of the Pennzoil 400 Presented by Jiffy Lube NASCAR Cup Series (NCS) race at Las Vegas Motor Speedway (LVMS). The successful entitlement that first began in 2018, will continue to headline the 1.5-mile speedway’s NASCAR race in March.
ROKiT’s legal sagas continue as they now have lost a case brought by Williams F1 for breach of contract. The former title sponsor of Williams, ROKiT, has been ordered by a US judge to pay more than £26 million to the Formula 1 team. ROKiT must also pay £1 million to cover Williams’ legal costs.
The Jaguar Formula E team have renewed their partnership with software provider Micro Focus. The company will continue providing the electric racing outfit with real-time analytics and machine learning capabilities, as well as its AI-powered unstructured data analytics.
NASCAR and Goodyear Tire & Rubber Company have extended their partnership, announcing a new multiyear agreement last Thursday in Nashville ahead of the season-ending awards banquet. Goodyear remains the exclusive tire for all three NASCAR national series. The tire company also remains the “Official Tire of NASCAR” and the entitlement of Throwback Weekend at Darlington Raceway for the Cup Series race with the Goodyear 400.
The Sports Business Journal looks at the crypto category’s cloudy condition. “Across the globe, there were more than 300 crypto brands executing 770+ sports sponsorships over the past year. FTX had around 10% of those. Even with all those remaining deals from the category, the biggest question now is how long it will endure or whether it will be remembered in sports marketing annals as this decade’s SpongeTech, a “pump and dump” stock scam that racked up millions in unpaid sponsor and advertising bills to nearly three dozen sports entities during the mid- to late-2000s. When SpongeTech declared bankruptcy in 2010, its more than 100 creditors included MSG and the Mets.”
SportTechie has an updated timeline of cryptocurrency exchange FTX’s sports deals.
The Business of Running a Race Team
Leading GT World Challenge Europe entrant Auto Sport Promotion is actively preparing to enter the Le Mans 24 Hours in 2024 when GT3 cars are eligible for competition. “A return to Le Mans is the “next challenge” for the French outfit, Policand explained to Autosport, but he stressed it will not come at the expense of continuing to race in the SRO’s GTWCE series.”
Not content at just making the step up from F4 to F3 and F2 simultaneously, PHM Racing is also entering FRegional Middle East. “The German outfit only debuted this year in Formula 4, but is expanding quickly and previously told Formula Scout about its plans to move into FRMEC, which begins next month, to prepare for the step up to FIA F3 it will also be making.”
JR Motorsports has announced the return of Jarrett, a leading provider of logistics, transportation, warehousing and fleet services, as a primary partner on Josh Berry’s No. 8 team in 2023. Following a successful three-race stint in 2022, Jarrett has increased its partnership to six primary races next season with associate placement in the remaining events.
McLaren has launched a major recruitment campaign to boost its engineering and aerodynamic talent as part of an effort to help it push up the grid in Formula 1. “This season clearly has showed us some of the weaknesses we still have in terms of setup of the team,” said Andreas Seidl. “And thanks to the issues we were having, it became obvious to us that we didn’t have enough resources available compared to other teams, especially on the engineering side, in order to be able to deal with developments of the current car plus making sure in parallel you can have a look on next year’s car as well.”
Michael Andretti has claimed that his new F1 team bid is making good progress. Perhaps not coincidentally, he also broke ground on his massive new $290 million headquarters complex in Fishers, Indiana.
Autoweek explains how recent signing Jamie Chadwick brings more than just dollars and diversity to the Andretti IndyCar program.
Andretti said he has supported the push for women’s opportunities in racing “for I don’t know how long. We’ve had many, many women drivers. We gave a woman her first win: Danica Patrick at Motegi. So we have always supported it. But in the end, I’m still looking for the best talent to drive our cars. Jamie is showing that.” Andretti said of Chadwick, “The first thing she brings is talent. I think she’s a proven winner. We’re excited to give her a chance to move up to Indy NXT. She’s shown great potential already in the testing. She’s been right on pace. I’m expecting really good things out of Jamie this year. I think she can be a winner in the series, and if you’re going to be a winner in the Indy NXT series, you’re going to be able to go and win in the big cars. So that’s our goal with Jamie here, to do that. The commercial side then follows it, but we’ve still got to get the performance side out of it. It has to be a legitimate effort.”
In the latest edition of Forbes‘ Lessons In Leadership they feature Formula 1 Williams Racing CEO Jost Capito. “His philosophy is that to win races, everyone has to be involved and invested. This includes the janitors who make sure dirt and debris don’t gum up the car engines, and engineers, drivers, machinists and designers focused on doing their best.”
VOLT Racing will step up up IMSA WeatherTech SportsCar Championship competition with a brand-new Porsche 911 GT3 R for drivers Trent Hindman and Alan Brynjolfsson. “As previously reported by Sportscar365, the 2022 Michelin Pilot Challenge GS class champions will race a Wright Motorsports-prepared GTD class entry in a full season effort beginning with next month’s Rolex 24 at Daytona.”
For the 2023 NASCAR Cup Series season, Live Fast Motorsports has announced a partnership with Chevrolet to run the #78 Chevrolet Camaro ZL1 in 2023 with motors from ECR Engines.
Elite Motorsports is returning to its roots with the expansion of its drag racing operation through the acquisition of J.R. Carr’s Mountain Motor Pro Stock program. Gugliotta will run the operation out of his home base in Maryland while working closely with the Elite Performance team in Oklahoma. Freeman also purchased Carr’s Ford program which will move to the Elite headquarters.
Team TGM will move their entire racing program to Aston Martin for 2023 with its IMSA Michelin Pilot Challenge campaign joining its previously announced Rolex 24 at Daytona assault with the British brand.
BMW M Motorsport will contest 2023’s Intercontinental GT Challenge Powered by Pirelli campaign, which begins at the LIQUI MOLY Bathurst 12 Hour on February 3-5. Further full-season IGTC manufacturers will be confirmed in due course, while the championship’s 2022 campaign concludes this weekend at the Gulf 12 Hours.
Audi has released an update on its F1 expansion plans ahead of its 2026 entry. “With the Competence Center Motorsport, we have an ideal base for our Formula 1 project,” says Oliver Hoffmann, Board Member for Technical Development. “Audi Neuburg was designed from the outset to be able to tackle the most demanding motorsport projects. This foresight is paying off. With the existing facilities, we were able to immediately begin with the Formula 1 project. The expansion will create the necessary infrastructure for the development of our F1 power unit for the long term. With the building extension and the installation of state-of-the-art test benches, we are giving our development team the best possible conditions to be successful in the top class of motorsport.”
Alexander Winkler explains the importance of data management in motorsport. “Effective data management allows teams to share information with other departments and stakeholders. This can help improve collaboration and coordination, which is essential in the industry’s fast-paced and high-pressure world. For instance, data collected from trackside sensors can be shared with engineers and strategists to help them make real-time adjustments to the vehicle setup or race strategy.”
Motorsport Movers & Shakers
Since September 1, Rolf Michl has been responsible for motorsport at Audi and is Managing Director of Audi Sport GmbH. The 44-year-old manager talks about the Dakar Rally, the complementation of the right and left hemispheres of the brain, the emotions that motorsport arouses in him, and his expectations and goals for the desert rally.
Author: Mark Boudreau
Mark is the publisher of Motorsport Prospects. As a former lawyer, he applies his legal background and research skills to assist race drivers by showcasing the resources they need to make their motorsport careers happen.