What do brands get out of Formula 1? This week in the Business of Motorsport Roundup I will give you an example so you will understand better.
I also have for you the latest on a mysterious new Asian-based team looking to enter F1, how Audi may be ending their customer racing program, the data science of moneyballing motorsports, and potential real estate developments at Indianapolis Motor Speedway.
As usual I also feature the latest motorsport sponsorship deals and partnerships, details on how the FIA creates F1 regulations and a drag strip for sale at a reasonable price.
All this and more in this week’s edition of the Business of Motorsport Roundup on Motorsport Prospects. Its business news racers can use.
Motorsport Industry News
Formula 1
Over the last few days, a new prospective Formula 1 team has been announced that is aiming to join the grid. New Asian-based team LKY SUNZ has revealed their bid to join the F1 grid in 2025 and are expecting an update on their bid from the FIA in the “coming days.”
Meanwhile, Rodin Carlin is mulling an F1 entry bid with a New Zealand-based team and woman driver while General Motors is evaluating an F1 engine program.
During last weekend’s Grand Prix at Baku, Formula 1 announced that they have extended the contract for the Azerbaijan Grand Prix until 2026. One interesting thing to note about the Azerbaijan Grand Prix is that, according to Joe Saward’s latest Green Notebook, the annual Transparency International Corruption Perceptions Index rates Azerbaijan 157th out of 180 countries in terms of whether people think the country is corrupt and he wonders if the issue of compliance will start to come up in the future as part of publicly-listed Liberty Media’s stewardship of the sport.
Joe by the way is the publisher of the essential JSBM Newsletter which covers in depth the business of motorsport.
With this contract extension, Autoweek has updated their list of the contract lengths for every current F1 circuit and the chances each has of keeping its race.
Dieter Rencken from Racing News365 reports that Spa may get a reprieve as Kyalami has missed the original deadline for a deal for a South African Grand Prix.
“While there are no doubts the F1 calendar should include at least one round in Africa – and ultimately the commercial rights holder should have realised this at least five years ago and not woken up to it after activist investors asked uncomfortable questions – the bottom line is that all the uncertainty does the image of the sport no good: Fans across the world regularly have hopes raised then dashed as deadlines are elasticised.”
With this rapid expansion of the sport, there has been some interesting analysis of where this all may lead.
- iSport Connect asks is sport about to eat itself? “More races means more money for the sport. Each country or city which hosts a Formula One Grand Prix has to pay between a reported $15 million (Monaco) and $55 million (Qatar). But the increase in races means that the importance of each race as an individual event is decreased because there are more points on offer.”
- The Qualifier is wondering if this is all leading to FOMO Grand Prix (Fear Of Missing Out). “Today, we take a look at how F1 is creating FOMO moments rather than concerning themselves with passionate motorsport fans that have buoyed the sport for decades.”
Over at Sportico, Abby Rakshit from Racing Forces Media looks at Formula 1 and speculates on what’s next for the world’s most logistically complex sport.
“However, F1 now needs to ensure its share of the revenue from physical races is more significant, and the answer cannot just be more expensive tickets. Vertical integration of all components for a race weekend, like the Vegas race, could be a long-term game changer.”
With all the debates around Formula 1 rules and how they are interpreted, it is a good idea to understand how they are made. The FIA has produced an explainer piece in Writing the Rules – How the FIA develops new regulations for Formula 1.
Reuters is reporting that Spain’s antitrust watchdog said that it has started disciplinary proceedings against Telefonica over an agreement with streaming and cable TV channel DAZN to air Formula 1 races in 2021, 2022 and 2023.
Last week I mentioned his Canadian lawsuit but this week, banned former F1 driver Nikita Mazepin has announced that he is fighting to overturn his UK sanctions in pursuit of an F1 return in 2024.
He runs one of the most successful F1 teams of all time (well not at the moment), he is a billionaire and now he is a Harvard professor. Toto Wolff has been announced to lead an F1-focused course at Harvard Business School.
General Motorsport Industry News
While it was last updated in 2019 and things have changed financially since then, especially for F1 and to a lesser extent NASCAR, The Drive has a very informative article on how F1, IndyCar and NASCAR make their money.
“Racing is a performance business. Only the best, the fastest, and the smartest can survive for long. The historical, decades-long losses sustained by, say, the Cleveland Browns, would never fly in motorsports. Whether open-wheel or stock cars, the basic rules of capitalism are applied with neither mercy nor sentiment: a team with top-10 overhead can’t finish outside the top 10 and expect prime sponsors and drivers to stick around. The flashy decals will stop arriving and the talent will jump ship. And once that happens, it’s game over.”
As IndyCar extends its contract with Barber Motorsport Park through to 2027, it is hoping that its new TV series ‘100 Days To Indy’ will create a new audience for the series.
Le Mans Endurance Management (LMEM), organiser of the World Endurance Championship (WEC) and the European Le Mans Series (ELMS), has extended its contract with the Spa-Francorchamps circuit until 2028.
According to Autosport’s sister website Motorsport-Total.com, there are plans to close Audi Sport Customer Racing at the end of the current season to allow the marque to prioritize its upcoming entry into Formula 1 in 2026.
A report published by the Svenska Bilsportförbundet (SBF) has proved that, if properly maintained, motorsport arenas can have a net positive impact on biodiversity, with the FIA stating that these arenas could be considered “assets to preserve and develop ecosystems”.
“Supporting Svenska Bilsportforbundet’s project was key for the FIA,” said Robert Reid, deputy president for sport, FIA. “This knowledge-led initiative gives us a better understanding of how motorsport arenas can offer good conditions for maintaining biodiversity and lays the ground for the adoption of sustainable practices. We encourage more initiatives aiming to develop biological diversity around motorsport arenas.”
The World Rally Championship has identified three potential car manufacturers with whom it wishes to continue discussions as it aims to attract at least one new marque in the future. “As reported by Autosport last year, Skoda, Alpine and the Stellantis Group, which owns Abarth, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot and Vauxhall brands, have declared their interest in joining the WRC, if regulations are changed in the future.”
The BlackBook Motorsport Forum took place in London last week and by all accounts it was a successful event. Both Sport Dimensions and Blackbook Motorsport review the event and point out some highlights.
- Team SD Visits London for BlackBook Motorsport Forum in 2023
- F1 Academy broadcast hurdles, Red Bull’s commercial strategy and Extreme E’s OTT future at BBMF 2023
The video above is from the SXSW 2023 panel The Data Science of Moneyballing Motorsports. “This year we had the pleasure of returning to the official SXSW stage to speak on the future of the intersection of AI and Motorsports. Watch the full video to learn from our expert panel about how scientists are exploring ways to “Moneyball” motorsports, in an effort to radically transform the field.”
24H Series organizer Creventic has announced plans to stage a two-part, six-hour endurance race on the streets of Vila Real in Portugal this summer. The non-championship 6H Vila Real is scheduled to take place on July 14-16, one week after the points-paying 12H Estoril.
Motorsport Australia has released its 2023-2025 Strategic Plan, outlining key projects and initiatives to drive the future of motorsport.
Sports Business Journal is reporting that Indianapolis Motor Speedway execs are starting to think through the possibility of building a mixed-use development outside of the venue, a possible fulcrum of Roger Penske’s long-held bid to turn the cathedral of racing into a sprawling entertainment district.
SBJ is also reporting NASCAR looking to a streamer to add to potential Fox, NBC deals. The current US$8.2 billion, ten-year agreement with Fox Sports and NBC Sports ends next year, but the exclusive negotiating window for the current broadcast partners has just expired.
NASCAR is prioritizing international development, says Michael Lock who is working on Nascar’s Garage 56 project for this year’s 24 Hours of Le Mans. “Really, Nascar’s become quite nimble, which opens up opportunity internationally to do things that we never imagined we would do before.”
The FIM and Dorna Sports have announced a new project: the FIM Women’s Motorcycling World Championship. The new competition is intended to widen access to the sport of motorcycle racing for women and create a platform of representation for female riders.
On launch in 2024, the initial series will primarily run alongside the MOTUL FIM Superbike World Championship. The target for the first season is at least six rounds, with two races to take place per round. The grid will race on equal machinery, with a single motorcycle supplier to be announced in due course.
The new Championship aims to create opportunities for female riders who are already competing – providing an environment in which they can build a professional, viable career in motorcycle racing – and looks to lay the groundwork for more equal representation across all motorcycling paddocks of the future. Providing a positive example for prospective female competitors, the series will further underline that motorcycling is a sport for all to enjoy, on and off track.
The new F1 Academy will not have live coverage in its first year and this has surprised many but the reasons are due to ‘challenging’ hurdles.
Fox Sports Films will debut a five-part documentary series later this month of behind-the-scenes chronicles from dirt tracks across the country. “Dirt: The Last Great American Sport” will debut Tuesday, May 16 at 7pm ET on FS1. The series was produced by FloSports Studios.
Rogersville, Tennessee’s Cherokee Dragway (aka Cherokee Race Park), a former 1/4-mile turned 1/8-mile ‘strip, sitting on 31 acres and with a minimal number of homes in its direct surroundings, has hit the market at a price of $599,900. The track, as you’d expect, has a permanent announcer booth, concession building, restrooms, and some of the supporting equipment.
IMSA has announced that as popularity and participation surge in other classes of the IMSA WeatherTech SportsCar Championship, the exclusive IMSA home for Le Mans Prototype 3 (LMP3) will be in the IMSA VP Racing SportsCar Challenge through the current 2026 homologation period.
Euroformula Open has been forced to withdraw from 2023 Grand Prix de Pau for technical reasons. “Technical reasons have led to this decision, as it proved not possible to adjust the current engines of the Euroformula Open cars to the wishes of the organizers of the Grand-Prix, its sponsors, and the City of Pau for a low-carbon emissions event, running on ‘greener’ fuels, a requirement that was not part of the agreement signed with the GP de Pau.”
After over three decades at Kennet Road, Caterham Cars is preparing to move into a new headquarters. The state-of-the-art building will be home to Caterham’s production, engineering, motorsport and commercial teams. The multi-million-pound investment from Caterham’s owners, VT Holdings, will see Caterham increase its annual production capacity by 50%. They are also preparing a two-seater electric sports car.
Motorsport Sponsorship & Partnership News
Autosport looks at why F1 works so well for Hard Rock.
“As Hard Rock International’s President of Entertainment, Keith Sheldon explained to Motorsport.com: “Hard Rock’s brand awareness is almost second to none. But brand perception is something that we’re looking to shift with consumers. “It’s that we’re a global brand, and we are culturally relevant. We are just scratching the surface when it comes to our involvement with all the biggest and best cultural attractions. F1 certainly helps us break through to the consumer on an international level, more than really almost any other sport.”
In his recent appearance at the World Congress of Sports, F1 CEO Stefano Domenicali addressed a number of issues while talking about advancing the sport’s profile and his comments on sustainability and brands were particularly interesting.
“Domenicali said that when F1 goes to pitch brands these days, the first question F1 execs get almost without exception is their sustainability plan, underscoring how brand marketers are wary of aligning with racing properties that aren’t prioritizing plans to reduce its carbon footprint. Domenicali said that the sustainable fuels it is developing to start racing with in 2026 can help contribute to developing technology to use such fuels in not just road cars but also planes.”
Here are the latest motorsport sponsorship deals, partnerships and related analysis that were announced this week.
- NASCAR and SiriusXM agree multi-year broadcast extension
- F1’s Miami GP names Viva as founding partner
- F1’s Miami GP names Draiver as official event supporter
- Autonation Gets First Taste of Formula 1 Racing with Alpine Team Partnership
- RAFA Racing Club secures naming rights to Pro-Am championship.
- Ferrucci to race with Homes For Our Troops ABC colors at Indy
- Porsche Motorsport Asia Pacific and Persona Energy announce Technology Transfer Apprenticeship Programme (TTAP) partnership
- Verizon Drives Enhanced Connectivity at the Formula 1 Crypto.com Miami Grand Prix
- Black Circle Coffee Announced as Rokit British F4 Partner
- F1 sponsor roster stabilizes after expansion last season
- Ferrari sign technical partnership with DXC Technology
- McLaren F1 team pen Reiss deal
- Argentina football colors for Canapino at Indy 500
- Van der Steur Aston to Run “Trashboy” Livery at Laguna
- PUMA to become Official F1 Provider in new multi-year partnership
- Formula 1 and Hello Sunshine partner for docuseries on F1 Academy
- Skip Barber Partners with Adam’s Polishes
- Formula 1 and MSC Cruises extend Global Partnership in multi-year deal
- Liqui Moly to step away from Bathurst 12 Hour sponsorship
The Business of Running a Race Team
Marshall Pruett over at RACER looks at the machinations, negotiations and maneuvers in what looks to be a complicated silly season for IndyCar. Who goes where and why are the questions that need to be answered.
If Andretti Global is granted entry to F1, he says a new European training ladder would be established using the formula he’s developed to bring the likes of Colton Herta, Pato O’Ward, Kyle Kirkwood and countless others up the ladder to IndyCar.
“We would set up shop over in England where we’re going to have the engineering shop for the F1 team,” Andretti told RACER. “If the F1 deal comes through, I want to do Formula 3 and Formula 2 as well. I want to be in control of bringing our drivers up through the system, because then you know what kind of equipment they have and how they’re being treated.”
Team News
Here is a roundup of the latest team news from around the world of motorsport.
- TF Sport Eyeing Renewed Daytona Attempt in LMP2
- Legacy Motor Club makes Toyota switch for 2024
- PPM Expands to Field Six Cars in Super Trofeo
- Chinese team Climax Racing makes Asia move for 2023
- Andretti Aston Martin Set For GTD Debut At Laguna Seca
- Bringing N back to Nürburgring 24 Hours
- Watch How McLaren Racing Aims to Deepen Fan Engagement with Salesforce
- Kevin and Jan Magnussen teaming up for Rolex 24 with MDK Motorsports
- Forte by USRT Confirms Four-Car Super Trofeo Effort
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.