The new Formula One chief executive has chosen the United States for growth, seeking to add a second Grand Prix in the country and secure a broadcast deal, after years of struggling to break through in one of the largest sports and media markets in the world.
“Our intention is to move in the direction of a greater presence. . . in the United States, ”Stefano Domenicali told the Financial Times ahead of the start of the new F1 season.
The Italian executive was hired last year by the owners of F1 Liberty Media, the U.S. investment group controlled by billionaire John Malone, with a mandate to expand beyond the strongholds of the world series racing cars in Europe and Asia.
Cracking the United States is crucial for F1’s plans to recover from the pandemic. In 2020, annual revenues fell more than 40% year on year to $ 1.1 billion, resulting in an operating loss of $ 444 million as F1 was forced to hold a shorter season than usual to 17 races. This season, which begins in Bahrain on March 28, a record 23 races are on the program.
Facing more established motorsports in the United States, such as Nascar and IndyCar, Domenicali insisted that F1 was in a position to push for bigger deals.
“[It is] a natural evolution of a journey that starts from the fact that we were – I don’t mean zero – but very low in the United States, ”he said.
Liberty Media, which acquired F1 in an $ 8 billion deal in 2016, has sought to revitalize the championship with a budget cap aimed at preventing the biggest teams – Ferrari, Mercedes and Red Bull – from spending more than the competition.
This decision attracted American investors. Last year, MSP Sports Capital took a minority stake into the McLaren F1 team and private equity firm Dorilton Capital bought the Williams team in a 152 M € transaction.
But F1 failed to meet its long-standing goal of adding more races to its existing Grand Prix in Austin, the Texas location where Domenicali also said he was in talks with race promoters for renew a contract that expires this year.
He declined to give details on the progress of talks for new races in Miami and other American cities, saying only that “our goal will be to have two races in the United States. We are working on it. “
Each F1 Grand Prix attracted an average global TV audience of 87 million last year, down 4.5% from 2019, but online or more than in any of the previous five years. Despite the cancellation of the Austin GP last season, F1 has said its US TV audience has grown by 1% per year.
“The more races we have in America, the more popular this sport will become,” said Otmar Szafnauer, Aston Martin F1 team manager. “It would be a lot easier if you had more races in that time zone and then I think you would have more fans.”
F1’s value to US broadcasters is expected to be put to the test when its contract with ESPN, the sports television network, ends next year. ESPN paid nothing for its existing TV deal, with Liberty Media prioritizing audience expansion in the United States.
Domenicali said F1 will ask for a fee when the tender opens in the second half of the year. “In the future negotiation [we will see] how the market is reacting to our growth and see what the situation is ahead of us, ”he said.