Liberty Media has owned Formula One for five years. At the recent Financial Times / Motorsport Network Business at the F1 Forum in Monaco, we spoke with Liberty CEO Greg Maffei and F1 CEO Stefano Domenicali about the key milestones of F1 in the latest version of #ThinkingForward and their future plans.
Greg Maffe: Formula One was not healthy from all indications. The interest of the fans is incredibly high. Our track competition is great and we have helped the teams. When we entered the manor, the 11th team had just been sold on receivership for one pound. And today, I don’t think you can buy a team for less than $ 500 million, maybe $ 700 million. You can try. But it will be difficult. It’s an amazing increase in value. And partly because of the things that have been put in place to try to create something more in the track competition that also strengthens the health of those teams. Your team needs to have a healthy ecosystem for this to work. And I think all of these things are happening, and you’re seeing an increase in fan interest. On TV, personally, we have never had a big event. So pretty good.
Stefano, the key milestone in improving the quality of the teams was the cost cap, something we will never see achieve in F1.
Stefano Dominicali: Absolutely. I think the attitude that Greg had with Chase (Carrie), to whom we owe a great deal of credit, needed to be refrained from what had happened before. And breaks mean having professionalism in different ways to do sports business. It was a dream to make the Formula One business sustainable from a financial standpoint. We can talk about revenue which may be more, but cost is something that you are sure. So the only way to ensure that margins are big is to control what you spend. So this is a very big milestone that has completely changed the face of the sport and given credibility to the system. Sustainable business means teams can invest and grow. All components are now secure and financially strong. We can think of a bigger future. Thinking about a bigger future means we need to be respectful of what Formula One has become, but to enter new markets that will enable us to grow; Not only financially, but also in terms of sports awareness and passion. We are talking about a game that needs to have emotional elements; We want to focus the main focus on the track. So much great racing, ensuring that drivers, who represent jewelry for us, have the opportunity to fight among themselves, opening up the possibility of seeing them through social media. It is important to communicate with the new generation. We need to create different narratives for different types of fans.
I don’t think that’s how new sponsorship money has come into the sport since tobacco advertising was banned in the mid-2000s. With almost every F1 team you talk to, they’re now almost removing sponsors.
GM: I think they, there is just so much space in the car, to put another logo. The growing interest of those who really understand technology, a huge part of it, and how interest has grown in the Silicon Valley technology community – see how many car technology sponsors there are now, if not more than one technology sponsor. It opens up a set, but then you’ll also find fans who appreciate the more casual, perhaps driver’s story, personality. Then there are the growing youth of our fans, according to a survey (Motorsport Network Global F1 Fan Survey 2021) we bring it down to four years, the average age. So it opens up a whole bunch of consumer products and a whole bunch of other types of brands that find it interesting. So we are really very lucky to have all kinds of sponsors interested.
SD: Just think about crypto depth. We have 10 different brands of crypto. And I can tell you the software business is exactly the same. (It) is very healthy. This means that for the first time, there is no need for a loan that was normal in the past to ensure that the parties survived. So they are very tough. And it is a great reward for their investment in us. And this is why we believe that the community of the party must be respected. Having more teams today is not a problem, because we have a list; Some of them are more vocal than others, but many people and investors want to be in Formula One But we have to protect it. So this is really another sign of a very healthy system.
So now you have the right number with ten teams?
SD: I think so. Anyone who wants to come has to be really significant.
GM: As for the young audience, we credit Netflix for opening it up to so many people. But what’s interesting is how many different ways these people have come. Social media, a huge part. Gaming: You can continue and play Lando Norris and race the same track as Lando. This is very interesting to many young fans. It didn’t exist seven years ago, it wasn’t really planned. And so exposing the sport, making it more attractive. Yes, it definitely has elements of exclusivity. But there are elements that all fans can touch.
Another of your goals was to promote sports in the United States. We’ve seen Miami add this year. Next year, we’re going to have a third race in the United States in Las Vegas. What other areas do you want to push in the future?
SD: There are other areas of the world who want to keep Formula One. And I think one area that we want to develop is the African area, because it’s a world championship. So I think we’re working very hard to make sure this is an area where we’re going to have a Grand Prix soon. And then there are the interests of the Far East. And we certainly don’t want to lose interest in Europe, because we were born here. And we’ll be here because I hear a lot of voices, you know, that’s not true. The beauty of today’s situation is that we have so many options.
One of the key future strategies is that in 2026 we are going to convert to 100% sustainable energy. We will effectively demonstrate this technology at the world’s largest annual sports exhibition. And that must be the converter.
SD: I would say so. And I think we want to be realistic. We want to see things happen directly. And we believe that this is an option that will enable manufacturers to be credible to a degree that is also profitable for them. With all due respect thinking that electrification will hit the whole world in two years – we know that this is not possible. Therefore, also, from a technical point of view, a strategic choice to be sustainable with hybrid engines, we believe it is right. And that’s why we have so much interest from other manufacturers in coming with us.
GM: There are obviously many qualities in sports that are positive, we think we can be positive by expanding the audience to places like Africa and expanding the interest in motorsport around the world. This is not necessarily the place where we are going to make the most money. But if you invest for the long term, we think this is the right opportunity. Thinking of sustainability. The US case, I know quite well, has 250 million cars in the United States, of which 200 million run. They last about 11 years on average, people buy used cars. After all, we have 15 to 17 million new cars a year. If you do the math, even if a third or half is electric, it is going to take a very long time before you do anything to clean the base of the existing 200 million cars. The reality is, what we really want is a carbon attack, with other ways to fuel the existing 200 million cars. I’m not saying we’re going to cure all that. But if we can contribute to that knowledge, if we can contribute to our work with sustainable energy, I think it’s a positive.
We talked about five years of Liberty Media ownership, you delivered a lot of things that you said you were going to distribute. What will happen in the next five years?
GM: We have the stewardship of a 72-year-old enterprise. So we think about the long term and what it will do. We have a lot of interest now. We want to capture that growth in more detail. And doing things like going to Africa and doing something about sustainability is all about how we’re going to grow this 72-year-old franchise for the next five years and beyond. There is a huge amount of momentum now we want to capitalize on it. Not just financially, but for the expansion of the sport.