Lewis Hamilton from Great Britain drives the (44) Mercedes AMG Petronas F1 Team Mercedes WO9 and leads Max Verstappen from the Netherlands who drives the (33) Aston Martin Red Bull Racing RB14 TAG Heuer during the Formula 1 Grand Prix of Great Britain in Silverstone drives on track July 8th 2018 in Northampton, England.
Charles Coates | Getty Images
It took about five years, but Formula 1 eventually landed another race in the United States.
Formula 1 will be racing in the Miami market for the next decade after securing a venue, gaining backers, and thus the parent company Liberty MediaThe US strategy is taking shape.
“Now things are coming together,” said Chris Lencheski, chairman of private equity consultancy Phenicia.
“It’s going to be huge for the series, especially here in the US,” added the legendary motorsport driver Michael Andretti.
F1 agreed with a 10 year contract to bring a second race to the USA last weekend. The financial details of the deal haven’t been released, but motorsport insiders estimate that F1 has been billed between $ 17 million and $ 20 million a year under the pact. The Miami Grand Prix will take part in the US Grand Prix in Austin and bring a total of four races to North America, while F1 also drives in Canada and Mexico.
“The US is an important growth market for us and we are very encouraged by our growing reach in the US, which will be further supported by this exciting second race,” said new F1 CEO Stefano Domenicali in a statement.
Lencheski credited former F1 CEO Chase Carey with “sticking this out” give up the role and to take a non-executive chairman title. He added that Liberty Media would benefit as the race gives access to a prominent South Florida market that favors top F1 automakers like Ferrari and Aston Martin.
But the next step in F1’s US game could be substantial.
“When I’m the CEO of Formula 1, I’ll do everything I can to get an American driver on the field and be successful,” added Lencheski.
Lenchesky served as CEO of sports and entertainment marketing company SKI & Company prior to selling the agency in 2008. The company formulated F1 sponsorship.
He said Formula 1 can be effectively marketed in the US. A local rider would be vital in a sport that is shaped by nationalism as they race around the world.
There are currently no Americans driver in F1. Michael Andretti’s father, Mario Andretti, is the most successful American driver to dominate F1 and win the championship in 1978.
Pole position qualifier Lewis Hamilton from Great Britain and the Mercedes GP watch in Parc Ferme during qualifying before the F1 Grand Prix of Emilia Romagna at Autodromo Enzo and Dino Ferrari on April 17, 2021 in Imola, Italy.
Mario Renzi | Formula 1 | Getty Images
Born in Britain, Lewis Hamilton is the most popular driver in F1. But Hamilton is 36 and the retirement chatter has started. He only signed a one-year contract to drive for Mercedes, which further fueled speculation about his future.
“I don’t feel like I’m finished, but I won’t find out whether I’m ready to quit or not for the next eight months. I don’t think I’ll do it personally, but you never know,” said Hamilton F1 website March.
As Hamilton neared the end, Lencheski nominated the American IndyCar driver Colton Herta as a driver who could convert and thrive in F1 as a future star.
“He has already proven that he can win in IndyCar,” said Lencheski. “He won the Formula 1 circuit in Austin. He trained in Europe and is the right age.”
The Andrettis agreed.
Mario Andretti continued Kyle Petty’s Show: “As a young boy his father sent him to Europe, he drove Formula 3 and on the one hand he knows most of the tracks there and he is trained. He has shown in his rookie season in IndyCar and won some premium races like (in Austin) … hit two of the best Indy deals. Throughout the race he held back Will Power and Scott Dixon. This is one kid I’d love to see when he gets a break there again – Formula One is in a sense like the Olympics. “
Colton Herta waits on the prize booth after winning the IndyCar series auto race at the Mid-Ohio Sports Car Course on Sunday, September 13, 2020 in Lexington, Ohio.
Phil Long | AP
Michael drove in the F1 world championship in 1993. He also commended F1 for building on its brand of streaming series to educate and generate new fans in the US.
“I think Liberty did a lot of good things with the F1 series, including this one Netflix show, “said Andretti.” That worked wonders for F1 and people understood more what it was about. “
Liberty, which also owns the Atlanta Braves, bought F1 in 2016 for $ 4.4 billionAccess to a global fan base of over 400 million. It acts F1 as Tracking inventory under the ticker “FWONA“on Nasdaq. Tracking stocks are used by companies to track the success of a specific line of business in their portfolio.
With participation restricted due to the pandemic, F1 revenue fell from $ 523 million to $ 485 million in 2020 Fourth quarter earnings report. Greg Maffei, CEO of Liberty, also linked F1 stock with a $ 575 million Special-purpose acquisition company looking for companies, including digital media, to be listed on the stock exchange.
An important metric for the report: an average of 87.4 million viewers are counted per race. It’s a global statistic as F1 has struggled in the US market over the years. F1 didn’t race in the US from 2008 to 2011 before returning with the US Grand Prix in 2012 after a track was built in Austin. Part of Carey’s mission was to build in the US market. So add Miami and let the media market grow.
ESPN reinstated F1 in 2018 but is paying the organization a rights fee ComcastSky Group and F1 produce the races. It is slowly growing on the front of the audience.
The start of the 2021 series, the Bahrain Grand Prix, recorded an average of 879,000 Viewers tune into the network’s ESPN2 channel on April 4th. The second race in Italy drew an average of 905,000 spectators, according to ESPN. And before the pandemic, the average was F1 671,000 Viewers on ESPN channels in 2019, up from 554,000 viewers in 2018.
But the future of F1 in Austin’s Circuit of the America is in question. The deal expires after the 2021 season. The track was sold out in the 2019 race, missed 2020 due to the pandemic and is expected to take place in October this year. This is part of a 23 race schedule.
Should it stay in Texas and thrive in Florida, Lencheski predicted further expansion in the US.
“If they bring an event to Las Vegas or the Pacific Northwest, it’ll sell out there too,” he said.
F1 did not provide an officer for this item following a CNBC request.
Teammate Mercedes AMG Petronas motorsport driver Valtteri Bottas (77) from Finland pours champagne on the head of Mercedes AMG Petronas motorsport driver Lewis Hamilton (44) from Great Britain after winning the FIA Formula 1 after the 2019 F1 US Grand Prix – Circuit of America 2019 World Cup on November 3, 2019 in Austin, Texas.
Ken Murray | Icon Sportswire | Getty Images
However, it is unclear whether the world’s leading motorsport company will benefit from the US market. Michael Andretti said the newly installed salary cap would help balance the sport.
F1 established a new one Cost cap systemLimit the team’s expenses. Think of it like the National Football League or National Basketball Association’s salary cap. For the 2021 season, it’s $ 145 million that fluctuates according to the year. Therefore, if the field is even, the teams of bigger brand cars can no longer spend to win.
Michael Andretti, who is himself part of a SPAC, Andretti Acquisition Corp., and targets the automotive industry, likes the cost cap system and believes that smaller teams will benefit from it.
“They know how to deal with a smaller budget so they don’t have to downsize while the bigger teams have to learn how to downsize,” he said. “It will be pretty interesting to see what happens a few years later. I really think the competition is getting a lot better.”
“You should be very optimistic about your future,” added Michael, “especially here in the US.”
Disclosure: Comcast is the parent company of NBCUniversal.