PITS AND MOAN
‘Let’s get ready to grumble’ – Formula One drivers complain about showbiz elements, but the sport is thriving
Liberty Media, which purchased Formula One in 2016 for $4.4-billion, has turned it from a Eurocentric ‘old money’ sport, dominated by bank sponsors and luxury brands, to one appealing to a much younger audience.
Formula One racing drivers are no strangers to grumbling. Thanks to advances in technology through radio mics linked up to drivers and relayed to millions of viewers, we have an insight into their singular world.
And for the most part, in a sport that is both an individual pursuit and a team effort, drivers are never happy. The tyres are not working, the car has no power, there is understeer, oversteer, the other drivers are dicks, the track is unsafe, the regulations are not being applied and so on and so on.
So, it is precisely zero surprise that most drivers are complaining again. This time it’s a moan about the showiness that Formula One owners Liberty Media are imposing on the drivers.
At last weekend’s Miami Grand Prix, one of three races in the US in 2023, drivers were introduced to the crowd by appearing through a line of pom pom-waving cheerleaders as a 30-piece orchestra provided a musical backdrop.
The fans loved it, but unsurprisingly, the drivers didn’t.
“I understand the point of view of everybody but I’m not a big fan of those kinds of things just before the race,” said two-time world champion and current Aston Martin driver Fernando Alonso.
Reigning world champion Max Verstappen was also bemused: “I just hope we don’t have that every single time, because we have a very long season, so we don’t need an entry like that every time.”
“But it also depends a bit on the crowd, I think, in terms of what you want in terms of entertainment.
“Some people like to be more in the spotlight, some people don’t. I personally don’t. So, for me, I think that naturally, of course, what they did today is not necessary.”
Well, they’d better get used to it because F1 plans another seven of these types of intros this season.
Taking a Liberty
The American company that bought Formula One in 2016 for $4.4-billion has turned it from a Eurocentric “old money” sport, dominated by bank sponsors and luxury brands, to one appealing to a much younger audience.
Liberty have done it in true American showbiz style with the Netflix documentary Drive to Survive becoming a smash hit and making household names of drivers and even team principals.
And not just household names anywhere, but household names in America, which is where the largest portion of F1’s newer fans come from.
It wasn’t only the Netflix show that drove up F1’s ratings, and therefore earnings, it was other initiatives such as launching their own streaming platform, F1TV.
Liberty gave ESPN the rights to broadcast F1 in the US, after NBC withdrew its $40-million-a-year offer for seven years. NBC were reportedly scared off by the simultaneous launch of F1TV.
Read more in Daily Maverick: Nothing will stop me speaking out, says Lewis Hamilton
Instead, ESPN and F1TV have worked together to grow the sport in the US with great success. There is an average 1.2 million audience per Grand Prix in the US alone.
Liberty also targeted social media as a way of growing the sport. Besides producing more of their own content as F1 owners, they relaxed antiquated restrictions on teams and manufacturers on social media. It became a high engagement product.
In 2022, Liberty reported that F1’s overall revenue went up by 20% between 2021 and 2022. It rose from $2.136-billion to $2.573-billion, while the operating income of the business – the number left after the teams were paid and other costs taken into account – rose from $92-million to $239-million.
F1 noted that its key measure of primary revenue rose 14% from $1.850-billion to $2.107-billion, split between race promotion fees (28.6%), media rights (36.4%) and sponsorship (16.9%).
“Formula 1 saw record attendance at its races in 2022 and we were once again the fastest-growing major sport on social media,” Stefano Domenicali, Formula 1 president and CEO, wrote in Liberty’s annual report.
“We are continuing to build fan engagement through our high-quality broadcast, enhanced content on F1TV, social channels and new immersive experiences including the F1 Arcade and F1 Exhibition products.
“F1’s global relevance and sustainability efforts are enticing the entry of premier OEMs including Audi and Ford in 2026, and we are confident they will bring significant value to our sport. We look forward to a record 23-race calendar this year including, in particular, the inaugural Las Vegas Grand Prix.”
The 10 teams currently on the F1 grid are also paid out handsomely as they split a share of the sport’s income. They shared total payments of $1.157-billion between them, or roughly $110-million per team.
Considering there is an annual cost cap of $145-million per team that came into play in 2021, the Liberty group sharing model covers about 70% of the teams’ budgets.
The cost cap was another Liberty innovation to balance the field in terms of performance. Teams with huge budgets would always outdo smaller teams. This is a sporting version of socialism to balance the imbalance very much in line with other US sports.
“One of the things that we at F1, with Liberty’s help, have been trying to do is build a mentality that I’ll credit the NFL for, which is one league, that we benefit when everybody benefits,” Liberty Media Corporation CEO Greg Maffei told journalists earlier this year.
“And yes, the teams compete very hard on Sunday, but on Monday, we need to think about growing the entire ecosystem. It was critical that we have healthy teams, so that we could have a healthy league.
“It was critical that they had a prospect of making money, even the teams towards the back of the grid, so that we could have a prospect of also making money.
“They’ve seen radical increases in their value, we’ve seen pretty good increases in our value.
“But we’re here to play the long game. And it doesn’t mean we won’t have disagreements with the teams about how much of the pie is ours, and how much of the pie is theirs.
“But trying to build the mentality that as you gain, we gain, and vice versa, and that we’re playing the long game here is really part of our goal.”
While it appears F1 drivers don’t enjoy the show business side of the sport, they have little choice.
Liberty Media aren’t about to change a strategy that is working well. And in reality, it’s paying off for the drivers too.
At the top end, Verstappen earns $55-million a year from Red Bull, which excludes other endorsements. Yuki Tsunoda and Logan Sargeant are the lowest paid at $1-million, excluding endorsements.
Even at the back of the pay grid, enduring some razzmatazz introductions before a race doesn’t seem an unduly heavy burden to endure. DM