NASCAR’s blockbuster new media rights deal is the highlight of the week as we look back at the Business of Motorsport.
In addition to NASCAR, you will find details about some motorsport-related litigation, whether title sponsorships work in motorsport and how Lexus Racing won the 2023 GTD Pro Manufacturers Championship.
All this plus the latest sponsorship deals and partnership news as well as global racing team developments and much more in this week’s Business of Motorsport Roundup on Motorsport Prospects. Its business news racers can use.
Motorsport Industry News
The season-ending Abu Dhabi F1 race was a welcome end to a jam-packed 22 race season that spanned the globe and it was not without its issues. A number of drivers and team personnel have voiced their concern that the schedule for 2024 and beyond is becoming unsustainable both on a human and environmental level.
Max Verstappen: “It’s probably not very sustainable, not only for the emissions but also for the human body.”
Formula One is still riding the wave of popularity that it has enjoyed in the years since Liberty Media’s takeover. The introduction of Netflix docuseries Drive to Survive brought new fans into the sport, while the addition of events like the Miami and Las Vegas Grands Prix have kept people talking about the series, but fan opinions are beginning to shift. BlackBook Motorsport has conducted an in-depth review of 2023 and highlights steady TV viewership, attendances rising, and the Andretti problem.
Red Bull Racing’s Max Verstappen is F1’s financial champion with an estimated $70 million in salary and bonus this year to lead all F1 drivers as he highlights the Forbes list of highest-paid drivers in 2023. In all, the 10 highest-paid drivers in F1 collected an estimated $258 million in 2023 before taxes, a slight dip from 2022’s $264 million.
The SportsRush goes into considerable detail in analyzing F1 Constructors Championship Prize Money for 2023 and how much do Formula 1 teams earn by competing for Liberty Media.
“The economics of F1 depend on the total prize pool based on a calculation of the total revenue generated by the sport net of all the other expenses. In 2023, the total prize pool for the 10 teams is expected to be around $2.5 Billion dollars. However, the quantum each team gets is calculated via two disbursement columns. Column 1 is roughly 23.7% of the prize pool divided equally between the 10 teams. Column 2 is the staggered prize money allocation based on the Constructors’ Championship position.”
Is there fresh hope for the Andretti-Cadillac F1 bid? Bruno Famin has revealed Alpine have re-engaged in talks with Andretti. “We are talking to Andretti and to General Motors,” interim team boss Famin said as per racingnews365.com. “We are happy to talk to them, if they have an entry we are happy to resume the talks. For the time being it’s a bit on standby but not due to us. It’s because the time and the length of the process is much longer than expected.”
I mentioned last week in the Business of Motorsport that billionaire Stephen Ross is in talks to sell a minority stake in the Miami Dolphins, Hard Rock Stadium and the F1 Miami Grand Prix with Sportico adding the name of fellow billionaire Ken Griffin as a possible buyer.
“The talks began earlier this year and are ongoing with multiple investors, said the person, who was granted anonymity because the details are private. Billionaire Ken Griffin is among those in talks with Ross, the person said. (Griffin’s involvement was first reported by FoxSports640). Nothing has been signed and the assets could eventually be pulled off the market.”
A group of FTX investors launched three proposed class actions in Florida federal court last Monday against Major League Baseball, Mercedes-Benz’s Formula One racing team, and a global sports and media talent company over their previous involvement with and promotion of the now-defunct cryptocurrency exchange.
In his latest Green Notebook, while looking at the current tensions between the F1 teams and the FIA (“I’ve not heard such things since the days of Jean Marie Balestre, 40 years ago.”), F1 journalist Joe Saward mentioned another possible legal case that the FIA may have to deal with. Apparently rejected F1 bidder Hitech Grand Prix are looking at launching legal action against the federation regarding the new team selection process.
“We do not know the nature of the claim but any legal action would likely require the FIA to provide evidence of how the Andretti decision was made, and what made it different from the Hitech application. The word is that Hitech’s package included a commitment to pay a $600 million dilution fee if required to do so by new commercial agreements. Hitech will also probably argue that its project was more advanced than that of Andretti (which was certainly a rumour at the time) and that it had a wind tunnel model of a car running in the summer and had an engine deal with Mercedes.”
In yet more motorsport-related legal news, LawinSport provides an overview of the case of the former Scuderia Ferrari driver Felipe Massa’s bid of recognizing Massa as the true Champion of the 2008 Formula One World Driver’s Championship. It is interesting how the issue of limitation on launching an action is being dealt with by Massa’s legal team.
General Motorsport Industry News
NASCAR has announced a massive 7-year media rights deal worth $7.7B with Fox and NBC while adding Warner Bros. Discovery and as rumored, a first-time streaming component that will be with Amazon. This represents an approximate 40% increase over NASCAR’s current deal.
“We are super excited about what 2025 is going to bring to us because of where the distribution that we now have across air, which is a combination of obviously broadcast, cable and streaming,” NASCAR president Steve Phelps said. “We want to meet race fans where they are or potentially where they are. We think this group does exactly that for us.”
While this is represents a large increase in revenue for NASCAR, It will be interesting to see how US fans react. They will now need to access the races on 4 different networks in order to watch the whole season, starting with Fox, then moving to Amazon for 5 races, then Warner Bros. Discovery for 5 while finally ending the season with NBC. And Amazon is not a network but a streaming platform which is sure to cause some discussion amongst the series’ faithful.
Impressively, that this deal comes at a time of declining viewership for the stock car series as well as a possible threat from an ascending Formula 1 in the United States.
Sticking with NASCAR and their competition with F1 on the domestic circuit, the series is increasingly looking abroad for growth. “At a time when F1 is coming to America to grow its brand, traditionally U.S.-centric NASCAR has conversely become focused on taking its brand global, with Chief International Officer Chad Seigler and the international team of roughly a dozen employees leading the charge.”
In announcing its 2024 calendar, the World Endurance Championship has stated that it is looking to expand the grid to 40 cars by 2025. “We will go to 40 cars in 2025, definitely,” said Series boss Frederic Lequien. “I can tell you it is a kind of obsession at the office, but it is really difficult to find the right balance. We will not have the capacity to take everyone, because we could have 43, 44, 45 cars in 2025.”
Unlike NASCAR, fellow US-based racing series IndyCar is still working on their next broadcast deal as their NBC agreement enters its final year.
“We first made the NBC deal in 2018 for ’19, ‘20 and 21, and then we extended for ‘22 and ’23 and next year, so they have our exclusive live rights through 2024 calendar year in our agreement,” Penske Entertainment CEO Mark Miles told RACER. “These things are not like here’s an RFP (request for proposal), fill in the blanks, and we’ll see who’s highest. It takes a lot of conversation around programming, scheduling, around promotion. Obviously, rights fees at the end of the day are very, very important to us. I think it’s going to be a growth opportunity.”
One thing IndyCar wants to do is add a new major event in 2025 and a race in Argentina is always a possibility. “Gracefully moving Nashville next year downtown and making it the finale, maybe that’s in between. And everybody’s anticipating (the return to) Milwaukee; we’re stoked about being back there. Saying that, we’re working on at least one that I think people would see as high impact, a very different opportunity for 2025 in the United States that it’s too early to talk about, but we’re certainly looking for big events and big partners in the process.”
In yet even more motorsport-related legal news (see the F1 section above), ESPN reports that two-time IndyCar champion Alex Palou has conceded in court documents that he breached his contract with McLaren Racing when he decided to stay at Chip Ganassi Racing instead of abiding by his contract to race for McLaren. “The bulk of Palou’s response focuses on McLaren’s loss of revenue claims and attempts to mitigate what Palou will owe in damages.”
Quick Takes on the Business of Motorsport This Week
The Bigger Sports Picture
Here are some stories from around the bigger sports world that are not motorsport-specific but will most probably affect motorsport in some way at some point.
- America May Be Closing In On ‘Peak Sports’ (John WallStreet)
- The New Battle: Sports 3.0 (Profluence Sports by Andrew Petcash)
- Corporate Crime In Sport: How The Economic Crime & Corporate Transparency Act Impacts Sports Organisations (LawInSport)
- Massive Asian Sports Alliance Formed Between China National Sports Group and White Group (Profluence Sports)
- The Future Of NFTs In Sports – The Situation After The Hype (LawInSport)
- Winning Over Gen Z : How Sports Can Get Digitally Driven Fans to Care (Sportico)
Motorsport Sponsorship & Partnership News
Here are the latest motorsport sponsorship deals, partnerships and related analysis that were announced this week.
- Do Title Sponsorships Work? (Drive Sports Marketing)
- Red Bull Racing leads F1 grid with Oracle title sponsorship deal (Sport Business Sponsorship)
- US Brands Race Into F1 as the Sport’s Popularity Soars Stateside (Sponsor United)
- How Abt Audi brought back Red Bull to the DTM (Autosport)
- McLaren poaches Monster Energy sponsorship from Mercedes (F1i)
- Monster Energy swaps Mercedes for McLaren – what does it mean for Lewis Hamilton? (Crash.net)
- ‘Alfa Romeo to exit F1 after failed negotiations’ (RacingNews365)
- MegaRide and Trident join forces for 2024 Season, aiming to Replicate F3 Success in F2 (Trident Motorsport)
- American Legion switches to Lundqvist’s car for 2024 (Racer)
- Gulf Historic Teams Up with Edmond de Rothschild for an Unforgettable 2023 Event (Global Trend Monitor)
- RM Sotheby’s announced as Event Partner (Gulf Historic)
- Ray-Ban Celebrates Formula 1 With New Ferrari Sunglasses (Maxim)
- Australian GP renews Rolex title sponsorship (BlackBook Motorsport)
- ACO signs three-year supplier deal with Kappa (BlackBook Motorsport)
- Diagonal Comms to partner Prodrive for 40th anniversary celebrations (Diagonal Comms)
- Bosch Motorsport to go around again in 2024 (Motorsport Australia)
- MotoGP signs four-year extension with Network4 in Hungary (BlackBook Motorsport)
- GM-owned parts brand backs TA2 Mustang (SpeedCafe)
- Skip Barber Racing School & MOMO Motorsport Announce Multi-Year Partnership (Skip Barber)
- SAAM Inc. To Sponsor MVM Racing (SpeedSport)
- Formula G inks partnership with MPA (iSportConnect)
The Business of Running a Race Team
Stinson Carter of Maxim looks at how Lexus Racing won the 2023 GTD Pro Manufacturers Championship.
“What we’ve achieved this year is something that people dream of—that I’ve dreamed of,” said Ben Barnicoat, also a driver in the No. 14 GTD Pro car. It’s his second year with the team, and he and Hawksworth will both be returning for 2024. “If you’d asked me three or four years ago where would I want to be now, it’d be GTD Pro Champion of IMSA,” said Barnicoat, who chalked their success up to “just doing the same thing week-in and week-out.”
Team & Manufacturer News
Here is a roundup of the latest team news from around the world of motorsport.
- Isotta Fraschini splits with Vector (Racer)
- Isotta Fraschini partners with Duqueine for 2024 WEC after Vector split (Autosport)
- Vanwall Struck Engine Deal With Pipo Before Entry Rejection (Sportscar365)
- MotoGP rejects RNF’s entry for 2024 over “repeated infractions and breaches” (Autosport)
- Trackhouse Racing ‘in talks’ to replace RNF Racing (BlackBook Motorsport)
- RNF MotoGP boss opens up on team’s collapse (Autosport)
- Red Bull faces $7.4m entry fee hangover from record breaking F1 2023 season (Autosport)
- The financial figures that show Red Bull is F1’s most efficient team (Racing News 365)
- Why P7 means more to Williams than just the $9m F1 prize boost (Autosport)
- Vowles says Williams is reaping rewards from structural changes (Racer)
- 2 Seas’ Line-Up Of Götz, Gounon & Schiller Headlines Mercedes’ Gulf 12H Attack (Daily Sportscar)
- NASCAR president: Cup Series teams ‘by and large are losing money’ (Yahoo Sports)
- McLaren renew Mercedes F1 engine partnership until 2030 (BlackBook Motorsport)
- McLaren negotiate ‘more influence’ with Mercedes engine development (SpeedCafe)
- Aston Martin F1 looking to ‘compete with best teams’ after Arctos investment (BlackBook Motorsport)
- In with a Roar: AO Racing takes stock of its first season and prepares to double down (Racer)
- Junior racing stalwart Carlin departs (SpeedCafe)
- GB4 adds Idola Motorsport and Indian Warriors Racing teams for 2024 (Formula Scout)
- “Hard decision” for WEC to turn down Vanwall’s 2024 entry (Autosport)
- Forsetti Motorsport Launched, Becomes New AMR GT4 Partner Team (Daily Sportscar)
- PONOS Racing Introduces 296 GT3 To GT300 With Cozzolino & Wadoux (Daily Sportscar)
- Hardwick: Proton, Ford Will Be ‘Winning Combination’ in LMGT3 (Sportscar365)
- RFK Racing To Field Third Car For David Ragan In Daytona 500 (SpeedSport)