This week’s Business of Motorsport ranges far and wide across the motorsport spectrum. There is plenty of Formula 1 business news as usual, but I also bring you developments in motorsport related DAOs, the fine line to balance with cryptocurrency sponsorship, ORECA’s 100th race car, bringing motorsport back to New Orleans and more. As usual I have a summary of the latest motorsport sponsorship deals, general motorsport industry business news as well as the business of running a race team and more news racers can use.
Motorsport Industry News
- With all the drama of the Spanish Grand Prix over the “Green Red Bull”, Speed Cafe has a good look at Red Bull’s F1 intellectual property concerns explained. “Fundamentally, the issue surrounds whether new hires at Aston Martin, some of whom joined from Red Bull, brought with them data which was then used in the sidepod design of the AMR22B.”
- Last week in The Business of Motorsport, I mentioned that Liberty Media paid $240M for property in Las Vegas to house their pit and paddock complex for the Las Vegas Grand Prix. Details are slowly emerging as to what the plans will be. It looks like it will encompass some form of a mixed-use development according to Sports Business Journal. “Liberty and F1 are still in the planning stages, but the move would give them a year-round presence in Sin City. Liberty President & CEO Greg Maffei revealed in an earnings call in early May that the company had purchased the plot of land east of The Strip for $240M. Sources now have confirmed that the area will be used for more than the race itself. F1 and Liberty are in the design process, but an announcement is expected within months. Liberty owns SiriusXM and Live Nation, so one natural option could be a space for concerts.”
- There has been continuous chatter in the F1 paddock about the budget cap in the context of rising inflation and freight costs. Christian Horner argues that several F1 teams at risk of missing last few races if the budget cap is raised. Not all agree that this is a good idea as Alpine team principal Otmar Szafnauer points out: “When freight costs go up by 2.5m or 3.5m but your development budget is 20m, can you not make your development budget 17m and still be under the cap? You can.” That being said, Dieter Rencken looks at why the budget cap could have a crucial impact on the rest of 2022 and Edd Straw asks could the cost cap really force F1 teams to miss races?
- According to recently published documents, Aramco has the option to own 10% of the Aston Martin F1 team. “If Aramco opted to buy into Aston Martin, though, it would mark the first time the Saudi Arabian company has actually part-owned a team.”
- I have always considered the Monaco Grand Prix to be the Formula 1 equivalent of an all star game like those found in other sports leagues. Not that meaningful as a sporting event to the general public, but absolutely key to cultivating B2B relationships and impressing sponsors. Despite this and its historical and glamorous place on the F1 schedule, talk is getting louder and louder that its days are numbered. In why Monaco is losing its sheen – and time is running out to save it, Chris Medland looks at what the Principality needs to do to keep the race. Phillip Norton also offers his suggestions in Four Ways to Save the Spectacle of the F1 Monaco Grand Prix.
- According to BMW M boss Frank Van Meel the Munich-based automaker has no intention to join Formula 1. “We have no ambitions for Formula 1,” Van Meel firmly stated. Instead, the company continues to focus its motorsport efforts on the upcoming LMDh project. “For us, it’s really important to have the [electrification] story of transformation embraced as fast as possible. Formula 1 is still discussing the regulations around electrification. So for us, it was very clear. Let’s go faster into that [electrification] segment,” Van Meel says.
General Motorsport Industry News
- Sportico looks at how sports DAOs intend to harness the ‘Mob’ with blockchain tech and fans in charge. “For example, GarageXYZ, another sports-focused DAO, is looking to power community-owned motorsports. On Sunday, it will sponsor the Indy 500 ride of Scott Dixon—who is on the pole for Sunday’s race for the fifth time in his career— while also sending nearly a dozen of its supporters to the race. “Garage has only been around for three months, but we want to show how quickly and positively we can build relationships to create the next round of insiders in motorsports,” Garage co-founder Peter Miller said.”
- If the whole concept of blockchain has you confused, race driver Ellis Spiezia has a great introduction in the Motorsport Prospects article One Electric Racing Driver’s Guide To Sustainable Blockchain.
- Cool Racing is set to race ORECA 07 chassis #100 at Le Mans this June. According to Daily Sportscar, “the car is believed to be the 99th built (there is no chassis #13!) with the total including includes the chassis built for the IMSA DPi programme for the Acura ARX 05 (8 chassis) and a number (believed to be 9) of upgraded 05 chassis that started the current Gibson-powered era in 2017. The total does not though include the ‘sister’ LMP1 Rebellion / Alpine chassis.” Daily Sportscar also has a great visual guide to all the teams that have raced the 100 cars since the first one rolled off the production line.
- Radical Sportscars have rebranded to Radical Motorsport as part of their 25th anniversary. “The new name – Radical Motorsport – and its branding reaffirms the company’s mission and purpose, moving from manufacturing a blend of road and race cars into the exciting world of motorsport and racing.”
- Granted this is a promoted piece in Racer but the article Honda races to the future is a good summary of the impact that Honda Performance Developments is having both on the track and on the road for Honda. “From HPD’s standpoint, what’s really changing in the impact that racing is having on production road cars isn’t as much on the engine side, but on some other parts of the chassis,” says HPD vice president Kelvin Fu, pointing to the newly-opened HALO (Honda Auto Labs Ohio) wind tunnel, which was designed with input from both racing and road car engineers. The tunnel can switch between a five-belt rolling road system for production car development and a single wide-belt system for testing racecars or high-performance sports cars, and can generate wind speeds of more than 190mph.”
- Autosport looks at the supercharged Revolution that has piqued an Olympic legend Chris Hoy’s motorsport taste as it explains the appeal of the supercharged Revolution Sports Car for racers of all types. It also looks into why Revolution is making the supercharged move. “Commercially speaking, the Abbotts’ pursuit of power is all about chasing that lucrative American market – somewhere Radical is heavily focusing its new SR10, and where the Revolution is disrupting.”
- Daily Sportscar sits down with Arto Kazakov, Social Media and Media Marketing Manager of NOLA Motorsports Park, to find out what their plans are for the track. “Our goal is to bring motorsports back to New Orleans, and have it stay for good.”
- Ligier has unveiled their design for their Gen 2 F4 car that is to be used in America. Ligier has become the fourth manufacturer to commit to making Formula 4 cars for the category’s second generation technical ruleset, and has revealed the design of the chassis it will produce. Somewhat interestingly, the car is set to run the Ligier designed 1.65-litre V4 ‘Storm’ engine. “We’ve put a lot of work into the new Ligier Storm engine, and we’re excited to see it power the FRegional Americas and US F4 hampionships beginning in 2024.”
- Geopolitical concerns have further impacted motorsport as MotoGP has postponed their Finland race to 2023. “The race organisers cited the security issues as causing delays and putting the ongoing work at the new circuit at risk.”
- Penske has purchased a key parcel of land across from the Speedway with plans to rethink track’s ‘front door’. “No specific plans have been made regarding future uses of the property, according to Amanda Stanley, director of communications for Indianapolis Motor Speedway. “[But] the acquisition of the property does allow Penske Entertainment to think about what the ‘front door’ of IMS looks like,” Stanley said.”
- Parcel of land purchase aside, having fans in full at IMS to watch the Indy 500 will allow Roger Penske to finally get the Indianapolis 500 he’s dreamed of. “Obviously, when we signed the paper and gave them our check back in January of 2020, we had a business plan that had well in excess of 250,000 people and that didn’t happen,” Penske explained. “It meant we were going to have to provide credits to certain customers that weren’t going to be able to make it and then hunker down and look at expenses from the standpoint of where they were and where we could optimize the people, we had in our overall holding company to run the track.”
Motorsport Sponsorship News
- SponsorPulse’s State of Sponsorship 2022 report has been released which maps the various trends in sponsorship over the last year. “The 2022 State of Sponsorship report paints a positive picture of the current health and future potential of the industry. A healthy industry, poised for growth and becoming more critical to the marketing mix. The challenges? There are concerns of clutter, measuring return on investment and discrepancies between industry and consumer perspective to name a few. But in my opinion, the biggest challenge this report reveals is an overwhelming lack of transparency and trust. If most professionals don’t trust one another, how can the industry continue to grow at the current rate?” You can read the report here.
- One sponsorship trend that is obvious to even the casual observer is the growth of sports sponsorship from the cryptocurrency sector. With the various upheavals in the sector recently, the Washington Post asks the question: Sports teams love crypto. What happens when their sponsor strikes out?
- While the Washington Post article focused on sports as a whole, Autosport Plus looks at motorsport and Formula 1 specifically in the risk-laden sector at the heart of F1’s latest sponsorship arms race. “The technological principle of decentralised ledgers that underpins cryptocurrencies and their kissing cousins, non-fungible tokens (NFTs), is sound. What’s ironic is that a space that was conceived as a means for ordinary citizens to not have to deal with corrupt, venal and incompetent financial institutions has itself been colonised by crooks, shysters and mountebanks.”
Series Sponsorship News
- The World Rallycross Championship has expanded their partnership with Volvo Construction Equipment. “Volvo Construction Equipment (Volvo CE), in addition to its position as official construction equipment supplier, will play a leading role in the design and development of future World Rallycross Championship (WRX) circuits as the series’ official track building partner.”
- NASCAR has secured M&Ms as its Pocono race sponsor. The brand will continue the season-long celebration of its more than three decades in the sport by using the race to pay special tribute to NASCAR fans and Mars Associates.
- Formula 1 has signed Patrón as its official tequila partner. The partnership will debut at the yacht experience at this weekend’s Monaco Grand Prix, and further solidifies Patrón’s role in the world of Formula One following their recent collaboration with Mexican driver Sergio Pérez earlier this year.
- The Indianapolis 500 will continue to have financial services company Gainbridge as its presenting sponsor after a multi-year extension was announced by the pair. “But also we have a tremendous partnership with Penske Entertainment. It’s given us access to build relationships and partners here through other sponsors or race teams. We get a lot of brand recognition and we need that brand awareness and credibility.”
Team Sponsorship News
- Shell has extended its naming rights sponsorship of Dick Johnson Racing. A multi-year naming-rights extension has been signed with Viva Energy Australia that will see the Stapylton squad continue under the Shell V-Power Racing Team banner.
- The Alfa Romeo Formula One team and ProTech Monte-Carlo will join forces for the 2022 season through a technical partnership development program using the latest technology developed by the car care and aesthetic specialist. The partnership will focus on reducing brake dust and rubber deposits, as well as protecting the bodywork.
- Sauber Technologies and EOS, a 3D printing specialist supplier for responsible manufacturing solutions, have signed a three-year additive manufacturing (AM) technology partnership at the recent Grand Prix in Barcelona. “The partnership will initially focus on the optimisation and manufacturing of aerodynamic spoiler designs, end-use parts for race cars, as well as production aids. Both companies are bringing their respective longstanding industry expertise to the partnership – with the aim of jointly expanding the use of AM in motorsports.”
- Williams Racing have unveiled Terra Virtua as their official metaverse partner on a multi-year deal signed at last weekend’s Miami Grand Prix. “The collaboration will celebrate one of British motorsport’s most innovative and successful racing teams to date. With an absolute focus on engagement, the partnership will look to add greater depth to the fan experience on race weekends and beyond.”
- McLaren Racing have announced a new multi-year partnership with Cadence Design Systems Inc., a leader in computational software, as an Official Technology Partner of the McLaren Formula 1 Team. McLaren will use Cadence Fidelity CFD Software, a comprehensive suite of computational fluid dynamics (CFD) solutions, to investigate airflow. The team will also leverage Cadence’s computational software expertise to tackle design projects that require advanced compute power and precision.
- Timepiece maker Girard-Perregaux has launched the Laureato Absolute Chronograph AMF1 Edition. Patrick Pruniaux, Girard-Perregaux’s Chief Executive Officer, said: “From the outset, working with Aston Martin has been a joy. It has not just been a case of putting our name on a Formula One car as a sponsor – working together has led to some innovative and interesting ideas, culminating in the creation of new exciting products.”
- Juncos Hollinger Racing has partnered with The Ticket Clinic, a Law Firm, for the 106th running of the Indianapolis 500. “The Ticket Clinic, a law firm, is the nation’s largest law firm dedicated to the defense of traffic tickets nationwide with offices from Miami to Los Angeles,” said Mark Gold, CEO of The Ticket Clinic. “I can’t imagine a better way to brand the firm than in front of millions of fans who love speed! I am so excited to be a part of this incredible adventure with Ricardo (Juncos), and Brad (Hollinger), and to many podiums in the future!”
- Ransomware security experts Halcyon has joined the Steinbrenner Racing team of partners for the 2022 NTT Indycar Series. Halcyon debuted on the Andretti Steinbrenner Autosport entry of Devlin DeFrancesco at the Acura Grand Prix of Long Beach.
The Business of Running a Race Team
- Daily Sportscar talked to Hong Kong-based KCMG founder and team owner Paul Ip about their plans for this season and beyond and why he races. “I just love motorsport. I like the challenge. And I just like to do things. my way and I’m in a position to be able to do that and bring people along with me on that journey. Of course there’s a lot of people that tells me to do things this way, or that way – I genuinely don’t care about that. I will do it the way that I feel is correct. What I think is right. And I think we can have real success that way.“
- Grove Racing will send its Porsche 911 GT3 R to Europe to fly the Australian flag in the famed 24 Hours of Spa later this year despite crashing out of last weekend’s Bathurst 12 Hours. They have stated that the crash will not impact its GT program overseas. Speed Cafe understands that Porsche will loan the team a spare motor and gearbox for the test before the freshly rebuilt components will be put back in the car for the race itself. Plans to air-freight the car to Earl Bamber Motorsport’s base in Europe next week are full steam ahead, with EBM running the entry at Spa, also part of the Intercontinental GT Challenge.
- Prodrive’s David Richards talks to Autocar about world rallying, running Aston Martin and more. “You’ve got to see opportunities as they come – and they will – and then grab them with both hands. The trick is not to be risk-averse.”
- Valour Racing, a team which has enjoyed success in Radical prototypes and GT sportscar racing, will join the GB4 grid with a two-car entry at Donington Park this weekend. The Corby-based team has purchased two Tatuus F4-T014 cars for its single-seater debut, and will name its two drivers later this week.“We are thrilled to be taking the step into single-seaters as a team,” said Valour Racing’s team manager Rhys Terry.
- RACER looks at Bryan Herta Autosport and how Herta makes team ownership look easy. “Having proven its mettle with the Hyundai TCR program, Bryan Herta Autosport is well-positioned heading into what looks like could be a golden era for IMSA and worldwide sports car racing. It would come as no surprise to see BHA line up a manufacturer alliance that will allow the organization to expand into the WeatherTech Championship with a GTP prototype effort in 2023 or ’24. But for now, Herta is taking things one day at a time.”
- Key figures in Formula E’s most successful team Techeetah are confident they are forming a package to enable it to continue in the championship into the Gen3 era in 2023 after its split with manufacturer partner DS. “It has been a very tough 2022 so far but we are seeing some real traction now in getting a package together to be able to race in 2023,” Techeetah’s chief commercial officer Keith Smout told The Race.
- Sportscar 365 reports that Toksport WRT’s transition to Porsche after its split from Mercedes-AMG is “going smoothly” despite the deal coming together very recently. Team principal Seyhun Duru. Toksport explained that they plan to remain with Porsche when the brand introduces its new GT3 car next year and can be expected to increase its stable beyond the present single-car setup. “Understanding the car was not so hard for us. Porsche Motorsport has helped us a lot to understand the GT3 car, setup-wise, so everything is going smoothly.”
Movers & Shakers
- Motorsport tech company Griiip has appointed Formula E CEO Jamie Reigle to its board and has also recently closed a successful seed round which includes Porsche Ventures. ‘’It’s a very exciting time for us at Griiip! Having Jamie on our Board of Directors is another huge step propelling Griiip into the center stage of the racing industry after the successful closing of our seed round and starting our second season working with DTM.” said Tamir Plachinsky, founder and CEO, Griiip. “There is so much more ahead and we know Jamie’s experience in sport-oriented businesses, sharp critical thinking, as well as a deep acquaintance with the challenges of the motorsport industry, will go a long way to help us tackle the challenges that Griiip is intent on solving`. Griiip is a data-centric company that developed a cloud-based platform that collects various types of data inputs in real-time and analyzes them through innovative algorithms, offering various outputs ranging from insights and predictions for TV graphics, web-based applications for personalized fan experiences as well as 3rd party integrations to platforms to provide analytics tools for live fantasy leagues, free-to-play prediction games, sports betting and esports.