The Business of Motorsport For August 19, 2022-Return of a Legend

This week in The Business of Motorsport, I look at the return of Brabham, the future of Formula E, how Porsche and Audi’s involvement in F1 could change the motorsport ecosystem, the increasing value of a NASCAR franchise and more. I also take a look at the latest motorsport sponsorship news, how various teams are running their businesses and more business news racers can use.

Motorsport Industry News

• The Brabham name was a force to be reckoned with at one time in Formula 1 but it then faded into obscurity. Autosport looks at son David’s plan for the marque now that he has wrestled control of the name back with the family in How one of F1’s greatest names was revived.

• In What Formula E needs next after saying goodbye to Gen2, Autosport Plus author Jake Boxall-Legge offers his take on the good and the bad facing Formula E as they head into the Gen3 era. “The 2021-2022 Formula E season finale brought the curtain down on the Gen2 era of the all-electric world championship. It elevated FE to new heights, fulfilling its intended directive. While it is a good launching pad for the impending Gen3 cycle, there are certain aspects the series must tackle for the new era to have the same impact as its predecessor.”

• Alejandro Agag for one is bullish on Formula E’s future as he states that Mercedes “will come back” to Formula E after its ICE swan song. “They’re racing as much as they can with gasoline until they cannot race with it anymore, and then they will come back.”

• Speed Cafe reports on the change of majority shareholding at Dick Johnson Racing as the Ralph family will become majority shareholders from January 2023. They then look into the new majority shareholders’ business credentials.

• The World Motor Sport Council has finally approved the F1 2026 Power Unit Regulations and updated the 2022-2023 Technical Regulations. With this done, expect more news from Porsche. F1nally….

• And what concessions do the new PU rules give to Porsche and Audi? Adam Cooper at Motorsport Magazine looks to answer just that question. “When you see the full extent of the PU regulations, now including the separate sporting and financial elements as well as the technical stuff, you appreciate why it took so long for it all to be agreed.”

• In Porsche and Audi will have to raise their games for F1, The Race looks at the implications of Porsche and Audi going to F1 for the entire motorsport ecosystem. “Do the LMDh plans follow Audi’s and get shelved? Will the classic boom-and-bust endurance racing cycle end up in an even deeper trough next time around? And will the crest of the F1 wave just keep peaking and mean manufacturer bean-counters keep finding it irresistible? Combine those two things and potentially the effects for other strands of the sport, Formula E included, could be very difficult indeed between 2026 and 2030, which is ironically the date where multiple governments are scheduled to hit varying EV quota targets.”

• There are reports that the MGM Casino’s in Las Vegas could be offering Formula 1 Grand Prix packages in the neighborhood of US$100k. Casino giant MGM Resorts is planning to buy US$20 million to US$25 million worth of tickets for next year’s Las Vegas Grand Prix, according to Blackbook Motorsport.

• Is Toto Wolff too powerful in F1? That apparently is what Mario Andretti thinks as his son Michael still struggles to get support for his proposed F1 team.

• Despite the closure of F1 Delta Time, Animoca Brands has stated that they may return to F1 in the future but see blockchain interoperability as their current priority. “Animoca CEO Robby Yung said greater interoperability would give all NFTs greater value, increasing prices and ensuring the whole ecosystem could benefit. However, he said it would take time for this ecosystem, the technology and demand from consumers to develop.”

• Nathan Brown looks at the contract dispute between Alex Palou and Chip Ganassi Racing with a few lawyers with some fascinating insight into the legal dispute. But as with any contract dispute involving athletes, it is not simply a matter of contractual obligation but it involves the athlete’s motivation to compete as well.

• Blackbook Motorsport reports that the value of a NASCAR charter is hitting the US $20M mark, which would represent a 48 per cent increase in just over six months. “The chief reason for the rise is the expectation that Nascar’s next TV rights deal will be more lucrative for the teams. At the moment, they receive 25 per cent of the current US$820 million deal. The teams are in talks with Nascar to receive a more sizeable chunk from 2025.”

• The Race looks at what a domestic series can teach MotoGP about fan strategy. “Much has been made in the past days of this year’s poor attendance at Silverstone for the MotoGP British Grand Prix, with only 40,000 people coming along for Sunday’s main event – the smallest crowd at the race since it moved from Donington Park for the 2010 event. But while the first port of call in addressing those figures might be to look at other races on the MotoGP calendar, there might be answers closer to home in the domestic British Superbike championship.”

• The sports betting boom has largely left motorsport on the sidelines but GridRival CEO Ross Fruin believes that motorsport fans need a dedicated betting solution. “With global fan bases in the hundreds of millions, and domestic products with a rich heritage, the betting appeal of motorsports is palpable—particularly when you consider the fact that racing fans are among the most loyal and engaged of any sports fan.”

• All Fields Sports Marketing (AFS) has been tapped by Lime Rock Park to lead the venerable race track’s sponsorship and partnership efforts. “AFS was a natural choice for us as we moved into the second year of the new ownership and management team here at the Park,” said Lime Rock Park President & CEO Dicky Riegel. “The connections they have developed over their many years in the industry are second to none and will help propel the experience at Lime Rock for our fans and participants alike as we map out the next 65 years of this storied venue.”

• Speed Cafe has revealed that Goulburn Mulwaree Council is understood to be seeking for the embattled Wakefield Park to be given special status on the basis of its economic contribution to the area. “These options include amending the existing Motor Sports Events Act 2022 to include Wakefield Park or declaring the area a new Special Activation Precinct (SAP).”

• Blackbook Motorsport discusses some of the highlights of their recent Blackbook Motorsport Forum held in London. Amongst the topics discussed were Nascar’s European plans, Drive to Survive’s future, making motorsport logistics more sustainable, and improving diversity in motorsport.

• Sports marketing agency Sport Dimensions also looks at some of their highlights from the Blackbook Motorsport Forum. “The BlackBook Motorsport Forum is the flagship business event for stakeholders in global motorsport. We enjoy this event because it is the ultimate B2B industry event bringing racing promoters, teams, circuits, brands, OEMs and key services together to discuss motorsport from all the angles required for the entire industry to succeed.”

• While this is not directly motorsport-related, Huddle Up looks at the Billionaire Investor That Wants Disney To Spin-Off ESPN. “Third Point disclosed a stake of roughly $1 billion in Disney DIS -0.52%↓ on Monday and mentioned (through a strongly worded letter) that they want the media company to make a string of changes, from spinning off their cable sports network ESPN to buying back shares and adding new board members.”

Motorsport Sponsorship News

• NASCAR has announced specialist logistics firm Worldwide Express as its official logistics partner of the US stock car racing series in a multi-year deal. “We are incredibly excited to build on our successful involvement in Nascar at the team and race level to now serve as the official logistics partner for Nascar as well as for Richmond Raceway,” said Worldwide Express president Rob Rose. We are uniquely suited to help manage the logistical complexity that Nascar and its teams deal with each week to host and compete in world-class races. We look forward to partnering with Nascar to deliver exhilarating race weekends over the coming years.”

• Sports Business Journal reports that sponsors of NASCAR teams have received increased brand exposure from paint schemes this season, thanks to a change that shifted the positioning of number decals on cars, according to a Nielsen analysis and interviews with industry executives. “SBJ surveyed roughly a dozen team and sponsor executives about the change. While a couple were neutral about the move, saying it didn’t make a big difference but wasn’t a negative, the majority agreed that it was a positive.”

• Sport Pro Media have published Part 2 of their Sport For Good Playbook. In part two they dive into how brands rationalise their purpose investments. “In business, commercial growth and sustainability have often been seen as separate things. Even today, many executives view sustainability as too complex or costly to implement, while some believe initiatives designed to help organisations become more sustainable simply aren’t profit-generating. Such myths abound, particularly in sport where short-term profitability and immediate results are paramount, yet a growing number of C-suite decision-makers are beginning to realise how sustainability can create long-term and measurable value for their business.”

The Business of Running a Race Team

• The Race looks at the history of Mercedes in Formula E, from their stealth debut to their shock exit, winning championships along the way. “We’d set ourselves an internal target, it wasn’t even communicated internally, it was almost just at board level,” reveals Team Principal Ian James. “It was securing a first championship by season 10 [2024], so to have done it in such a short space of time was pretty admirable.”

• Guenther Steiner believes Haas F1 can adopt a more American emphasis as interest in Formula 1 continues to grow in the United States. “We need to use that (American identity) more now because there is more presence (in the United States),” Steiner told RACER. “It’s what we need to do as a team, it’s not a directive. We were never told what we have to be – we are who we are. But now I think we can focus on it more because there’s more interest.”

• McLaren boss Andreas Seidl has revealed his hopes that new developments behind-the-scenes could benefit the team as soon as next year. “We plan to have the wind tunnel ready [by the] middle of next year, which means part of the ’24 car development will benefit from the new wind tunnel already,” Seidl revealed to Racing News 365.

• Formula Scout looks at how teams expect F2 and F3 will make its Australian GP trip happen. “Bruno Michel always tries to support the teams in a way that it’s affordable. He’s always looking into the situation that the championship has a financial balance and doesn’t just go out the roof. For the worldwide driver market it’s quite interesting to visit different countries and different race tracks and not spend all the time on the same racetracks. I think we need to be attractive all over the world.”

Movers & Shakers

• Former DTM racer and Williams Formula 1 tester Susie Wolff will step down as CEO of the Venturi Formula E team ahead of its tie-up with Maserati next season. “I leave with immense pride in the solid foundations we have built together, as the team begins a new chapter with Maserati.”