The Economic Impact of the Indy 500

The economic impact of the Indy 500 and the Indianapolis Motor Speedway are part of the Business of Motorsport this week.

I also look at why billionaires are investing in F1, how IMSA’s GTP class is connecting with fans and the return of Tom Walkinshaw Racing.

All this plus the latest sponsorship deals and partnerships, team news and why the efforts of Glickenhaus should be celebrated. It’s all part of the Business of Motorsport Roundup on Motorsport Prospects. Its business news racers can use.

Motorsport Industry News

Formula 1

The Economic Impact of the Indy 500

Is Formula 1 approaching or reached its peak in the United States? This seems to be the debate of the week in the motorsport media and a number of pundits point to the fact that the US Grand Prix TV ratings fell for the third consecutive year and that there was a decline in spectator numbers at COTA. And then of course there is the related debate on how F1 can keep all these new fans from leaving.

While there are naturally going to be ebbs and flows in fan engagement, as someone who was watching F1 when the infamous Iceberg Grand Prix took to the deserted streets of Phoenix for 2 years, the sport is in such rude health in 2023 that any decline is slight. And the decline can be for any number of factors such as lack of competition this year, championship all wrapped up, too many Grands Prix in the US, etc, factors which will result in an ebb. It’s all a part of sports. The sport still has many more positives than negatives so let’s check back in 3 years and see where we are at then.

The Andretti Global saga drags on this week so here is a quick summary:

Business of Motorsport

Walmart heir Rob Walton is among a growing number of F1 investors and he is showing how the series is alluring for billionaires.

The retail scion isn’t just a hobbyist. Walton invested in Formula One team McLaren Racing through his family office in December 2020, alongside MSP Sports Capital, UBS O’Connor and the Najafi Companies, according to people familiar with the matter. The size of Walton’s investment, which hasn’t previously been reported, isn’t known. The funding round, which was in the form of warrants and loans that can be converted into equity, valued McLaren at £560 million ($682 million), the company said.”

General Motorsport Industry News

The Economic Impact of the Indy 500

A new study by the Indiana University Public Policy Institute provides a comprehensive and detailed look at the $1 billion in annual economic activity generated by events and operations at Indianapolis Motor Speedway. Of this total, more than half – $566.4 million – is attributed to the Month of May and the world-famous Indianapolis 500-Mile Race.

Notable statistics from the extensive study include:

  • A contribution of $1.058 billion to the Indiana economy
    • Brickyard Weekend 2022 accounted for $117.2 million
    • Month of May 2023 accounted for $566.4 million
      • Visitors within 100 miles of the Speedway accounted for $86 million
    • Other events and activities accounted for $375.1 million
  • Generation of 8,440 direct and indirect full-time equivalent jobs, totaling an estimated $360 million in labor income

More details and a link to download the study can be found here.

AutoWeek looks at how IMSA’s new GTP class is resonating with fans. “It’s not just hype from talking heads on TV. IMSA’s new Grand Touring Prototype hybrids have resonated with fans. The season-opening Rolex 24 at Daytona drew its largest crowd ever (like Road Atlanta it was mostly jammed into the infield). In between, crowd sizes during the nine-race schedule were noticeably increased.”

SRO America President and CEO Greg Gill is expecting “moderate growth” to the Fanatec GT World Challenge America powered by AWS grids next year amid a season of “predictability” within the overall organization.

In times’ past, people looked at World Challenge and felt that there wasn’t a great deal of predictability,” Gill told Sportscar365. “We really wanted to work on our stewardship, our race organization and everything we do to be very predictable for our customers, so they knew exactly what they were getting when they signed up for it. This year we were able to deliver on that and we plan to do more of the same. I think we’ll see an increase in the grid and that same level of stability.”

Tom Walkinshaw Racing has announced its intention to return to prominence as a ‘world-class constructor’ of low-volume performance cars.

The latest venture is the brainchild of Tom’s son, Fergus, who quietly reestablished the business back in 2020, and has evidently spent the intervening years assembling a crack engineering team, ‘including some members who were part of the original TWR’ at a Newbury-based headquarters. The latest venture is technically a separate entity from the original firm (its assets and facilities were sold off back in 2002) but the team insists that ‘the new company will share much of the DNA and spirit that helped the original TWR brand to become a world leader in performance and motorsport engineering’.”

Sports law expert Stephen Townley offers his insights to Global Sustainable Sport into why environmental, social and corporate governance (ESG) is such a significant emerging litigation risk for sport – and what industry stakeholders can do about it.

However, in this respect, sports industry stakeholders are often hamstrung by a lack of self-awareness, with Townley highlighting Abraham Lincoln’s famous quote: “Character is like a tree, and reputation is like a shadow. The shadow is what you think of it; the tree is the real thing.””

Motorsport Sponsorship & Partnership News

Here are the latest motorsport sponsorship deals, partnerships and related analysis that were announced this week.

Business of Motorsport

The Business of Running a Race Team

Business of Motorsport

The Glickenhaus team will not be back with the World Endurance Championship next year and Gary Watkins of Autosport reflects on why the tenacious privateer should be celebrated in what they were able to do against some significant motorsport giants.

I hope that in times future we’ll talk about the American entrant — with a team run out of Italy — in the same breath as other plucky privateers that built and ran their own machinery to take on the ultimate challenge in endurance racing at the Le Mans 24 Hours. I’m referring to the likes of Alain De Cadenet’s tiny operation based in a mews garage near the heart of London and Pescarolo Sport, like Glickenhaus teams good enough to get on the podium with chassis of their own construction. Or at least substantially reworked versions of someone else’s machinery.”

Team News

Here is a roundup of the latest team news from around the world of motorsport.

Business of Motorsport

Motorsport Movers & Shakers

Business of Motorsport

Shift Up Now is proud to announce the promotion of another Athlete to the leadership team, naming Sarah Montgomery as Director of Membership. In her new role, Montgomery will help to rebuild the membership website, which includes a software upgrade. From the beginning, Shift Up Now membership has been aimed at connecting supporters to Athletes, events and initiatives.

Mark Boudreau
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.