Tag Archives: In the Pit Lane

In the Pit Lane – Lando Norris bucks the trend

A surprise pay driver

Lando Norris continues his impressive season with a podium in Austria leaving his expensive teammate Daniel Ricciardo scratching his head. Lando owes much of his success to his father’s deep pockets.

F1 has a trio of billionaire fathers backing their sons to various degrees of success namely Lawrence Stroll, Michael Latifi, and Dimitry Mazepin.

Stroll and Mazepin seniors have both backed their sons’ Formula 1 careers so far

The debate on a father paying for a race seat goes along the lines of is it fair or right that the sons concerned get the drive regardless of talent compared to other drivers who get a drive and financial backing due to talent.

Well, Lando Norris may be bucking the trend. Lando is a pay driver, a fact not often publicised, but his millionaire father has coughed up $44m to date to ensure Jnr’s racing career.

The good news for Norris and McLaren is the kid has the talent, witnessed by multiple karting championships, a F3 championship, and now top ten finishes in F1.

Who is Norris senior?

His dad Adam Norris made his fortune as a founder of stockbroking firm Hargreaves Landsdown and is believed to be sitting on a $200m cash pile.

Even by F1 standards, Norris Snr is a rich man

He first got the chequebook out at McLaren through his Horatio Investments fund back in 2017 to secure Lando’s role as test driver. Lando was upgraded to reserve driver in 2018 before landing the coveted race seat in 2019 in a three-year deal costing Snr $12m a year.

A true win-win

The difference from say Latifi is McLaren knew Lando was potentially the real deal, so it was a win-win for the team.

This year it was announced Lando had signed a three-year deal but not before Norris Snr had got the chequebook out again this time paying $5m a year.

2021 Austrian GP
Norris has done his talking out on-track and showed why he’s a special talent

Norris Snr knew McLaren had the upper hand as they could provide a competitive car unlike other teams who would welcome his cash and so he went in for a penny in for $59m. McLaren again scored a win-win with Norris agreeing to pay the cash-strapped team the three-year cost of $15m upfront.

Lando has always rather naively played down his father’s cash stating, “I don’t really like to talk about it, but compared to Lance Stroll my father is not nearly as wealthy.” For the Norris family, it’s worth spending big bucks matching the talent to a competitive team and avoiding the scenario that is Williams or Haas.

Uncertain future for other teams

At Williams, Nicholas Latifi brings a staggering $30m to the team in the shape of both his father’s money and sponsorship from Royal Bank of Canada and coffee giant Lavazza. Williams also tap another billionaire, Sylvan Adams who pays $6-7m for his protégé Roy Nissany’s role as test driver.

It does beg the question if Russell goes to Mercedes, will Adams write a bigger cheque to secure the race seat for Nissany in 2022?

At Haas, Mazepin Snr is backing Nikita by providing Gene Haas with $12m of sponsorship and a ‘contribution’ of $8m in what may be a ‘try before you buy’ deal.

For Mick Schumacher, the German communications company 1&1 pay $12m in sponsorship but with the caveat, Mick gets the drive.

The Schumacher family stump up another $6m.

The reality is, Haas bank $18m and Mick gets to trail around at the back of the grid!

The last council estate F1 driver

At the other end of the grid, we have Sir Lewis Hamilton resigning for Mercedes-AMG wearing his ‘loyalty’ t-shirt to match his ‘loyalty’ tattoo. Lewis did not have a rich father, but Anthony Hamilton held down three jobs and spent every penny he had on his son’s racing career.

Sir Lewis will remain at Mercedes until at least 2023.

So, the F1 world was surprised at the very public falling out in 2010 when Lewis sacked Hamilton Snr as his manager.

Questions were asked of Lewis’s loyalty but as with most events F1-related it was about money.

Lewis lost the bulk of his newly earned millions when Anthony got on the wrong end of a land deal in the Caribbean Island of Grenada waving goodbye to $20m of his son’s money – ouch!

So, the debate will continue on pay drivers which also include drivers who bring sponsorship money to the table, but the crucial difference is for these drivers’ talent was paramount in securing the funding.

Garry Sloan is an author, columnist, and podcaster more details at garrysloan.com

Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

In the Pit Lane – Nicolas Todt plays the long game

The ‘who is going where’ silly season starts early, with all sorts of speculation on F1’s game of musical chairs.

Heavily involved are the driver’s management teams and when it comes to driver management the power brokers that come to mind, are the usual suspects of Toto Wolff and Helmet Marko. In fact, one of the most powerful individuals behind the scenes is the ambitious and well-connected Nicolas Todt.

Todt Jr.’s Career

Nicolas, of course, must live with being the son of former Ferrari team principal and current FIA president Jean Todt, and all the resulting accusations of nepotism. Nicolas Todt is a serious player, managing the careers of the likes of Daniil Kvyat and Charles Leclerc through his All Road Management company, which he founded in 2003.

Todt has managed Formula 1 drivers, including Ferrari driver Charles Leclerc

His journey started when Felipe Massa asked him to become his manager and so began Todt’s rise to power. Todt’s strategy was clear, find the drivers young before they are signed up and to this end, he bought into Birel ART a big player in the karting world.

Todt explains, “I look for the best talents and need to sign them young because it’s a competitive landscape, to say the least. If they’re already in F2 and winning races, they’ll already be in discussions with F1 teams and it won’t make sense to sign with someone like me. So, I try to follow karting very closely because that’s the grassroots, where 99% of the best drivers start.”

The Present and the Future

Todt first met Charles Leclerc when he was a 13-year-old kart racer and told Corriere della Sera, “I talk to the best people in the industry and form an opinion. In karts they told me that Charles was special.”

Hoping history will repeat itself in 2018 he signed another 13-year-old, Italian driver, Gabriele Mini.

Mini could be a Formula 1 star within the next ten years. Image: ART

The signs are looking good, with Mini now competing in the lower formulae and last year he took the first three pole positions and a race win in the Italian F4 Championship. Todt like with Leclerc beforehand will have had to finance the youngster, something that does not come cheap.

READ MORE IN THE PIT LANE: WOLFF SET TO BECOME A BILLIONAIRE

Lower Formulae = Big money

Toto Wolff has been the latest to criticise the absurd wealth required to compete in the lower Formulae

Toto Wolff has recently questioned the whole system saying, “What I think we can do is make sure that grassroots racing becomes more affordable, so kids that haven’t got any financial background can actually be successful in the junior formulas.

“All the big Formula 1 teams [need to be] able to identify those kids, rather than making it so expensive that a good go-karting season costs €250,000, an F4 season €500,000, and an F3 season €1 million.

“That is totally absurd, [and] needs to stop, because we want to have access. I think we need to give access to kids that are interested in go-karting, the opportunity to race for much more affordable budgets.”

READ MORE IN THE PIT LANE: THE UAE FLASH THE CASH

For the numbers to add up for Todt, he needs a backed driver to make it into F1 as Leclerc did, and on an estimated 2021 salary of €10m, Todt will pocket €2m.

You can imagine Todt disagreeing with Leclerc when he told il Giornale last week, “I wouldn’t leave Ferrari even if he was offered double the salary.”

Before driver management

Until the end of 2018, Todt was the co-owner of the motorsport team ART Grand Prix, which he founded with current Sauber team principal Frederic Vasseur in 2004. 

Todt has excellent connections with Alfa Romeo boss Fred Vasseur

Todt confirmed in 2019 that he would have a role in Mick Schumacher’s career telling Sky Sports, “My job for Mick is to advise the family to guide them and give them some advice what I think they could do.” Adding it was his job to protect him.

Nicolas Todt acknowledged his father’s influence in an interview with Forbes Monaco back in 2019 he said, “Having a Dad like this for sure helped me to enter this industry because I was able to follow motorsport closely from a young age and develop a very good network.”

An understatement to say the least!

When it comes to Todt Snr, it would be fair to say he is not without his critics, but it says a lot about him as a human being that he still regularly visits Michael Schumacher.

Last week Todt told Corriere della Sera, “I see Michael at least twice a month. I never leave him alone. Corinna, the family: we’ve had so many experiences together. The beauty of what we have experienced is part of us and it goes on.”

A true friend can be measured in not only the good times but more importantly the bad times.

The last word goes to Nicolas who once said, “You can be a great manager but if you aren’t working with the right driver you will never make it. You can’t turn a donkey into a racehorse!”

Garry Sloan is an author, columnist, and podcaster more details at garrysloan.com

Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

In the Pit Lane – The Battle for Formula 1’s TV Rights Intensifies

The recently published Nielsen Sports’ report found interest in F1 was driven by younger audiences galvanised by F1’s social media, Netflix’s drive to survive, and esports.

The research found 77% of the growth came from the 16 to 35 age group, which is equivalent to 46% of F1’s fandom in 2021. Nielson Sports also predict a billion people will be interested in F1 by April 2022.

How Formula 1 sees itself

Stefano Domenicali told investors back in February that, “We saw only a marginal reduction in TV audiences, caused by multiple reasons but clearly driven by a shortened and limited geographical calendar compared to 2019, but something every major sport has experienced in 2020.

“We are proud of what we delivered in 2020 and know we have an incredibly strong fan base and audience platform to grow in the coming years.”

So as Liberty Media continues to pursue the promised land of digital streaming, the giants of Amazon, Apple, and Disney may have a serious competitor in DAZN the global sports subscription service and media company.

DAZN has just launched a 24/7 dedicated Spanish language channel DAZN F1 in Spain after reaching an agreement with Telefonica’s Moviestar+ to broadcast races until the start of 2024. The channel will have veteran Spanish F1 commentator Antonio Lobato and ex-F1 driver, Pedro de la Rosa, heading up the coverage.

READ MORE: WHY FORMULA 1 NEEDS TO BE FREE TO AIR

Who are DAZN?

DAZN is already covering most sports and is involved in motorsport covering Indycar, Formula E, Extreme E, the Dakar Rally, the World Endurance Championship, and the World Touring car series.

Extreme E is just one series that is already covered by DAZN. Image: Totally EV

It’s believed that DAZN have their sights on 20 Spanish-speaking countries and the next step will include a Portuguese F1 channel to cover 11 Portuguese-speaking countries.

In February, DAZN announced its sponsorship of the Scuderia AlphaTauri team for the 2021 season and signed Yuki Tsunoda as a brand ambassador in Japan. DAZN means business and in March 2020 they announced the expansion into 200 countries worldwide with its boxing coverage spearheading the growth.

READ MORE: IN THE PIT LANE – HOW FORMULA 1’S INCREDIBLE LOGISTICS WORK

How DAZN navigated the pandemic

When Covid-19 struck, DAZN suffered the loss of content and an exodus of subscribers from its service which had ironically marketed its cancel anytime policy as a selling point to fans. The service did launch in December 2020 with an aggressive starting price point of £1.99 for its boxing which will have had the likes of Sky Sports worried.

In April, The Athletic website reported boxing promoter Eddie Hearn had struck a record-breaking nine-figure deal with DAZN, ending an exclusive Sky Sports partnership.

Eddie Hearn has moved from Sky to DAZN in what could shake-up the boxing world. Image: TalkSport

DAZN is ambitious and is not hanging around, with the company securing the rights to show seven exclusive Italian Serie A football matches per week in a deal worth $987m per season.

Even with these sums of money involved, DAZN co-chief executive James Rushton told SportBusiness that DAZN would make money on the deal stating, “DAZN is a high-growth tech business but the most important thing for me is doing deals on solid and sensible unit economics.

READ MORE: IN THE PIT LANE – THE UAE FLASH THE CASH

“I’m not interested in vanity projects or making big splashes in the market that don’t make sense. We will make money on Serie A in Italy. No doubt about it.”

Rushton claims the service will be a ‘fans-first model’ by remaining ‘accessible’’ and ‘value priced’.

Not words the F1 fan who watches their sport on free-to-air TV with neither the inclination nor money to watch behind a paywall will want to hear.

Streaming killing the TV star

Rushton believes the move away from TV is inevitable telling Forbes, “There is a seminal change happening in the balance of power between linear TV and [Over the Top (OTT) providers] where rightsholders recognize the future of their sport is with platforms like DAZN,” he says. “The tipping point has happened.”

Streaming giants such as Amazon Prime Video are here to stay.

DAZN is looking to that new younger audience Liberty is cultivating hoping to attract them with flexible contracts, cheaper subscriptions, and the ability to watch on the device of their choice.

Like the other players in the market, DAZN, need to invest upfront often incurring losses witnessed by a 76% increase in subscribers pre the pandemic but a resulting $1.4 billion loss.

DAZN may not have the financial firepower of the likes of Amazon, Disney, and Apple, but it does have deep pockets as it is owned by the multinational industrial group Access Industries best known for its ownership of the Warner Music Group.

READ MORE: IN THE PIT LANE – WOLFF SET TO BECOME A BILLIONAIRE

Who else is involved?

As is often the case in F1 a billionaire is involved, step forward Ukraine-born but London-based Sir Leonard Blavatnik worth $32bn making him Britain richest man ahead of INEOS boss and Mercedes team shareholder Sir James Ratcliffe at $17bn.

Blavatnik has an estimated fortune in excess of £10bn ($13.9bn)

Blavatnick gained control of the DAZN group back in 2014, when Access Industries increased its stake in the company from 42.5% to 77%. Like fellow billionaire Dmitry Mazepin, Blavatnick made his first fortune during the ‘privatisation’ of Russian state assets selling his stake in Russian oil company TNK-BP for $7 billion back in 2013.

Blavatnick, as the 46th richest man on the planet, has all the billionaire playthings, owning the obligatory $80m 242 ft superyacht Odessa 11 and no less than 4 private jets including a $150m Boeing 767.

He is also a philanthropist having pledged over $700m mostly to universities, including Oxford, Stanford, and Harvard. Time will tell who will win the battle for F1’s coverage but no doubt as always the case in F1, cash will be king.

Garry Sloan is the author of “In the pit lane – F1 exposed” details at inthepitlane.com
Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

In the Pit Lane – How Formula 1’s Incredible Logistics Work

The season continues with Imola providing a spectacle, but F1 remains vulnerable to the effects Covid-19 may inflict.

Stefano Domenicali told Auto Motor und Sport, “That while 2020 was all about surviving the sudden crisis, F1 must now navigate a world with highly complex new rules.

“The situation this year is much more complicated than in 2020.

“Last year, everyone first had to find a way through the pandemic and learn. Now every country has its own rules and conditions. That is why we have to decide from day to day and remain flexible in case something changes at the last moment.”

What issues could be on the way?

Problems are already surfacing with the anticipated cancellation of the Canadian GP, as the promoters cannot make the sums add up without spectators.

Also, Canada’s strict COVID-19 travel restrictions requiring a 14-day quarantine upon entering the country are not feasible for the F1 travelling circus. Canada would have to accept approximately 2000 F1 personnel arriving from Azerbaijan and wanting to leave again 7 days later.

Formula 1 hasn’t raced in Canada since 2019 and might not do so again until 2022.

Potential problems are raising their head over the Belgium race at the Spa-Francorchamps circuit too.

Commercial director of the circuit Stijn de Boever toldthe Algemeen Dagblad newspaper,

“We are organising everything for a normal grand prix, but it looks difficult. Really very difficult.”

Last year, Spa hosted a ‘ghost race’ without spectators and is unlikely to do so again with Boever stating the situation in 2020 “was really not great”.

How Formula 1 will navigate this crisis

Domenicali hit the nail on the head when he said flexibility was required for last-minute changes and that’s where F1’s logistic partner DHL will be critical in ensuring F1 continues to go racing in 2021.

DHL has 16 years experience of moving cars, tyres, fuel, team equipment, hospitality, and broadcast equipment and have recently renewed their contract with Liberty Media.

1,400 tonnes will travel 120,000 km in 2021, which is enough to circle the world three times over.

DHL are very experienced when it comes to F1’s logistics, but even they will struggle

2021 sees 23 destinations on five continents, the largest number in the sport’s history which includes the logistical nightmare of three triple headers.

The first triple-header takes place in Europe, with Belgium, the Netherlands, and Italy.

READ MORE F1: FORMULA 1 TO RACE IN MIAMI FOR 2022

The second triple header to Russia, Singapore, and Japan is logistically even more challenging because significantly greater distances must be covered.

To add to the task the third tripleheader to the US, Mexico, and Brazil involves a fair old mileage.

Why the triple headers are so tough

Paul Fowler, Global Motorsport Head, DHL Global Forwarding comments, “An intercontinental triple header is when logistics are really put to the test. Even during the race, before the checkered flag is waved, the DHL team start dismantling and stowing equipment.”

Adding to the headache is the new races at Zandvoort and in particular Saudi Arabia, DHL personnel have to travel months ahead to check out the unfamiliar surroundings.

Zandvoort will hopefully host the first Dutch GP since 1985 this year

It cannot be overstated the importance of DHL’s personnel using all their experience to make sure the season can be run under such difficult circumstances.

The company will have to be able to react to fast-moving situations that may involve substitute venues coming on stream with very tight time frames.

To this end, decisions on freight shipments can be made within 12 hours and DHL have containers positions within a two-week transportation window to any circuit in the world.

READ MORE IN THE PIT LANE: Is Lawrence Stroll Cash-strapped?

Staff at race weekends are in a logistics biosphere, working in smaller teams with cargo being disinfected in the freight zone before being handed over to the teams.

DHL is committed to F1 with the new deal understood to be non-cash with DHL providing all the logistics for ‘free’ in return for trackside advertising and prominent branding in the pit lane.

Liberty Media of course get their pound of flesh by invoicing the teams for the freight.

DHL and Formula 1’s partnership

The association with F1 is an important element in DHL’s marketing as Arjan Sissing, Global Head of Brand Marketing at DHL explains, “The partnership enables us to develop specialised logistics solutions for other customers in the automotive industry, which helps also growing our core business”.

Ferrari have been partnered with UPS for a number of years

DHL’s competitors have been involved in F1 with FedEx sponsoring several teams, Benetton (1996-1999), Ferrari (1999-2001), Williams F1 (2002-2006), and McLaren (2007-2008).

Also in the frame is UPS, who has been a partner to the Ferrari F1 team since 2013.

DHL’s biggest threat came from Dubai-based DP World, which started as a port operator, but has grown into a full-service logistics company.

DP World entered the fray back in 2020 ahead of F1’s 2021 tender when they became Global Logistics Partner and Title Partner of the Renault F1 team.

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Echoing DHL’s sentiments Sultan Ahmed Bin Sulayem, Group Chairman and Chief Executive Officer, DP World, said: “One of our strategic objectives has been to develop innovative logistics solutions for the automotive sector. This partnership is a first step in the exploration of ways to make the global automotive supply chain more efficient by lowering costs, increasing speed and transparency, and mitigating the environmental impact”.

After realising DHL was to continue as the logistic partner, the company exited F1 and now concentrates on its cricket and golf sponsorships.

As the world hopefully emerges from the pandemic, F1 and its fans can only hope that DHL continues to keep the show on the road.

Garry Sloan is the author of “In the pit lane – F1 exposed” details at inthepitlane.com
Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

In the Pit Lane – Is Lawrence Stroll cash-strapped?

News broke last month that Lawrence Stroll was selling his Canadian racetrack Le Circuit Mont-Tremblant. Stroll has owned the circuit, which hosted the Canadian GP in 1968 and 1970, since 2000.

He has invested in the 2.65-mile circuit, including a new timing tower and enhanced medical facilities, valuing the venue at over $10m.

The sale comes on the back of selling his South Florida penthouse, previously owned by Oprah Winfrey, for $20m.

Citing a conflict of interest with his Aston Martin shareholding, he is in the process of selling his $220m collection of vintage Ferraris with the jewel in the crown being the $25m ex-Mark Donohue/Roger Penske Ferrari 512m.

In August 2020, several credible sources in the yachting world said Stroll’s $200m superyacht Faith had been sold to no other than one Michael Latifi!

So, is Lawrence Stroll cash-strapped?

Well, an individual’s net worth can indeed be tied up in assets and not cash, as pleaded by ex-F1 team owner billionaire Sir Richard Branson. Branson faced criticism when at the start of the pandemic, he asked for taxpayer’s help for his Virgin Atlantic airline.

Branson is obviously wealthy, but his wealth was tied up in assets rather than the bank

He responded with, “I’ve seen lots of comments about my net worth—but that is calculated on the value of Virgin businesses around the world before this crisis, not sitting as cash in a bank account ready to withdraw.”

Branson has a net worth of $4.2bn with $600m in cash and investments outside his Virgin brands.

READ MORE IN THE PIT LANE: STROLL SEALS THE BIG DEAL AGAIN

In Stroll’s case, there are substantial assets with include homes in Geneva, London, Quebec, and the Caribbean island of Mustique. Stroll amassed his fortune selling his shareholdings namely Pierre Cardin, Polo Ralph Lauren, Tommy Hilfiger, and the jewel in the crown, Michael Kors, leaving him with substantial resources.

His net worth today stands at $3.2bn, up $1.4 billion since 2012, so the selling of some of his physical assets is probably not because he needs the money.

But it’s not only Stroll that owns Aston Martin

Stroll and the word consortium go hand in hand and like Branson, he is an expert in using other people’s money. Branson’s F1 team was funded by Russian sports car manufacturer Marussia and his Formula E team by Chinese wind power company Envision Energy, and both deals substantially reduced his financial exposure.

Although Stroll’s Yew Tree consortium ploughed £182m into Aston Martin an additional £500m was raised by existing investors including fellow billionaire Juan Abello. This subsequently was not sufficient, and last October Stroll refinanced the company with a £1.3bn package.

This has left Stroll with $1bn of debt sitting on the balance sheet, and the Times newspaper estimates an average interest rate of an eye-watering 16%.

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Facing the huge challenge of both the F1 team, and in particular the car company, Stroll is in all probability selling his ‘toys’ so he can remain totally focused with no external distractions. For now, gone will be the Partying witnessed by his lavish 60th birthday party at Villa Lysis in Capri with 250 guests back in 2019.

A distant memory will be last year’s wedding to long-term girlfriend Raquel Diniz, in which he took over the whole island of Mustique for 3 days. 300 guests were flown in with the select few staying at his $100m house ironically called the Great House!

READ MORE IN THE PIT LANE: ARE THE DAYS OF BIG MONEY DRIVER CONTRACTS HISTORY?

Now Stroll realises that his reputation and legacy rest on the success of his F1 team and the Aston Martin car company, both require his absolute attention.

He may have the Midas touch, but helping him to focus will no doubt be the memories of his $100m loss he and business partner Silas Chou suffered in their investment in the Asprey jewellery business 20 years ago.

Garry Sloan is the author of “In the pit lane – F1 exposed” details at inthepitlane.com
Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

In the Pit Lane – Sponsorship Revenue in Europe Takes €7 Billion Nosedive

Sports sponsorship has taken a pounding

There has been a 23% contraction in the European sponsorship market in the past year due to the COVID-19 pandemic.

New research from the European Sponsorship Association and Nielsen Sport found the total value of Europe’s sponsorship market shrunk from a record €30.69bn in 2019 to €23.63bn in 2020 – its lowest point since 2010.

The world economy has been thrown into chaos and uncertainty. Sport has been no exception.

Analysis of the figures indicates the sports sector fared better with a fall of 9%.

F1 has been bucking the trend, with some major deals recently struck and is emerging in good shape all things considered.

‘Sponsorship’ is old hat with the new buzz words ‘commercial partners’ taking centre stage.

READ MORE IN THE PIT LANE: BRILLIANT RACING ON-TRACK MASKS TROUBLES OFF IT

Williams have been leading the charge

Williams is particularly proactive in attempting to change the narrative offering to add value through technical expertise.

Williams are being the most proactive in the modern sponsorship race

Tim Hunt, Williams Racing’s Commercial and Marketing Director told SportsBusiness, “In Formula 1, it used to be that the two choices you had when sponsoring a team were ‘how big do you want your sticker on the car?’ and ‘do you want Chablis or Chardonnay in hospitality.

“Thank God, those days are behind us. Those things are still factors and will always be part of the proposition, but the reality is that in today’s market we need to look at, how do we actually fundamentally impact a partner business’s P&L?

“It’s the reality behind the perceptions of a Formula 1 team as being a high-performance, well-oiled machine. It’s a commercial manifestation of the cliché of having 18 guys deliver a pitstop in under two seconds, which is arguably the definition of teamwork, and it is the tip of the iceberg in terms of our high-performance culture that we are now looking to apply with our partners.”

READ MORE IN THE PIT LANE: WHO REALLY OWNS WILLIAMS F1?

To highlight an example Williams used, their thermodynamics expertise to assist sponsor Unilever on two projects; changing the process they produced soap powder for the Rexona brand and making the way they make ice cream more efficient, both of which delivered considerable bottom-line benefits to Unilever.

As hunt says, “A simple manifestation from my side is that our sales deck used to say, “join our team”, where it now says, “how can we help?”

Hunt summarises the post-COVID-19 sponsorship landscape by saying: “They (partners) are not going to spend the dollars they used to on eyeballs or on brand awareness and a logo on the car. They’re going to have to grow their way out of what we’ve all been through, and I don’t think there’s any better way to position our sponsorship proposition right now than finding out how we can help our partners do that.”

Step forward, tech giants

On the other side of the coin is what a sponsor can bring to the team in particular with technical expertise, step forward the software and technology companies.

McLaren have partnered with tech giants DELL

Nielsen Sports head of rights holders Tom McCormack highlighted a “growth in the number of digital service providers joining F1’s sponsorship landscape.

“We expect to see more entrants from this sector as the 2021 season progresses.”

Well, he is not wrong, take a look at deals worth over $2m:

Mercedes – Epson $5m, Crowdstrike $4m, AMD $4m, TIBCO $4m, Pure Storage $3m, and Hewlett Packard $2m.

Red Bull – Oracle $30m, Citrix $4m, and Hewlett Packard $2m.

Ferrari – Kaspersky $4m.

McLaren – Dell $15m, Dark Trace $10m, Arrow Electrics $4m, Cisco $4m, Webex $4m, and Splunk $2m.

Aston Martin – Cognizant $15m, NetApp $2m, and Sentonel One $2m.

Alpine – Hewlett Packard $3m, 3D Systems $3m, and Microsoft $2m.

Alfa Romeo – Zadara $4m, Acer $2m, Additive Industries $2m, and Mitsubishi Electric $2m.

Haas – Ionos $2m.

Williams – Versa Integrity $4m and Acronis $3m.

READ MORE IN THE PIT LANE: AMAZON PRIME IN POLE POSITION TO TAKEOVER F1 TV RIGHTS

Interestingly, some deals consist of cash and non-cash with the latter equating to the value of goods and services supplied to the team. A good example is Red Bull’s $30m deal with Oracle which includes $10m in non-cash and McLaren’s $15m deal with Dell that includes $10m in non-cash.

So, it is good news that the big-spending and deep-pocketed technology companies have committed $147m in sponsorship sorry in commercial partnerships.

It’s not just the tech companies, though…

The F1 grid still relies upon the Car Manufacturers Renault, Honda, Ferrari, Mercedes, Alfa Romeo, and Aston Martin who pump in over a billion dollars.

In F1, money talks and the ‘dirty’ industries of Oil and Tobacco still contribute huge sums into F1’s coffers.

Mercedes’ Petronas and Ferrari’s Mission Winnow are two of the biggest sponsorship deals currently in Formula 1

The oil companies stump up $224m – Petronas $100m, Shell $42m, Exxon Mobile $37m, Castrol/BP $22m, PKN Orlen $20m, and Gulf Oil $3m.

Tobacco’s Philip Morris International and BAT cough up (excuse the pun) $130m.

Just like the good (bad) old days!

On a footnote: Williams have recently announced a new sponsor damn it commercial partner in the shape of food company Honibe, owned by Island Abbey Foods, owned by Dorilton Capital, owned by ???

Garry Sloan is the author of “In the pit lane – F1 exposed” details at inthepitlane.com
Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

In the Pit Lane – Brilliant Racing On-Track Masks Troubles off it

Liberty Media may well have had a rebrand introducing a new logo and F1 theme written by Hollywood composer Bryan Tyler, but it cannot gloss over the hard financial reality.

Aftermath of a Pandemic

In 2020, annual revenues fell 44 percent year on year to $1.1billion, resulting in an operating loss of $386 million. The group took big hits on its other businesses, with the Atlanta Braves baseball team and concert promoter Live Nation also posting losses.

There hasn’t been an Australian Grand Prix since March 2019

Not helping is Liberty’s $3.7 billion of debt sitting on its balance sheet.

As a third wave of Covid-19 spreads throughout Europe, the upcoming Imola race must be a concern and the news that international spectators will not be allowed to attend the Olympic Games held this summer in Japan must have left Liberty worried.

READ MORE IN THE PIT LANE: WHO REALLY OWNS WILLIAMS F1?

Putting a brave face on the development, Liberty president Greg Maffei told Wall Street analysts, “I think one of the things about being part of the Liberty group is we have the ability to hopefully look ahead and be thoughtful with the benefit of our operating companies.”

The problem is Liberty is banking literally on spectators returning to races and race promoter fees returning to ‘normal’ not to mention a full race calendar.

Backtracking Maffei claimed Liberty were not in the crystal ball business and commented, “We’re not here to make a forecast, in part because some of this is still up in the air, floating around. It’ll definitely be impacted, the amounts to which we’ll see.”

Liberty may need to raise cash

CEO Stefano Domenicali told Servus TV, “There is great interest in Formula 1 from the financial market. Many investors are knocking on our door. That’s a good sign.” Liberty may turn to the world’s sovereign wealth funds like it did last April, when Saudi Arabia’s sovereign wealth fund took a 5.7% stake in Liberty’s Live Nation business.

Saudi Arabia are taking an increasing interest in Formula 1

The world sports empires, which have a combined value in excess of $100 billion, are attractive to the wealth funds. No more so than Liberty which holds the No.1 position with a valuation of $13 billion (this includes their stakes in Drone Racing League and Ball Arena).

The top 10 sovereign wealth funds globally include China which runs four separate funds, Singapore, Kuwait, Qatar, Saudi Arabia, and Abu Dhabi.

READ MORE: IN THE PIT LANE – THE UAE FLASH THE CASH

It is no coincidence these wealth funds host races with Kuwait and Qatar waiting in the wings. Let us not forget the wealth funds out of the top 10, Bahrain and the United Arab Emirates, who have interests in F1.

The wealth funds have trillions of dollars looking for a home, so when China and the Middle Eastern countries face human rights criticism, but have the cash, you can see Liberty’s dilemma.

It’s not just Asian countries, though

Bucking the trend is the world’s largest sovereign wealth fund although it is actually a government pension fund. Step forward Norway, with its 1.3 trillion-dollar fund, which owns approximately 1.5% of all equities in the world.

Their portfolio includes $30 billion invested in sports-related companies.

Formula 1 has had a troubled history with Norway, just ask Bernie Ecclestone!

The Norwegian’s originally invested in F1 when CVC capital partners owned the business paying out $300 million for a 4% stake back in 2012. It was not a harmonious relationship and the Norwegian’s were incensed when the then CEO Bernie Ecclestone faced a trial for bribery.

Yngve Slyngstad, Chief Executive of the fund, launched an attack on Ecclestone, telling Norwegian newspaper Dagens Naeringsliv, he wished Mr Ecclestone had been “formally suspended” from his role as executive ahead of his forthcoming trial for bribery.

READ MORE IN THE PIT LANE: AMAZON PRIME IN POLE POSITION TO TAKEOVER F1 TV RIGHTS

“We are of course not happy with the situation that has arisen. What’s especially unfortunate are the corruption charges.”

The Norwegians remained invested with F1, but now seem to have had a change of heart and last month reduced their holdings by 20% now holding 1.27% of F1 worth about £155m.

So, as the world grapples with the ongoing pandemic F1 may need to access the resources of the sovereign wealth funds aligning them even closer with some questionable regimes.

On a footnote, Liberty’s owner John Malone may decide to be an individual wealth fund having seen his fortune rise during 2020 from $5.8 billion to $8.1billion!

Garry Sloan is the author of “In the pit lane – F1 exposed” details at inthepitlane.com
Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

Grid Talk Podcast

If you want more reaction to the Bahrain Grand Prix, Grid Talk has you covered! George Howson hosted, Phil Mathew, Owain Medford and Steve Jackson in Grid Talk’s Bahrain GP review. Both audio and video versions of the show are available below!

In the Pit Lane: Who Really owns Williams F1?

The end of an era

Back in August 2020, the F1 world learned that the historic and much-loved Williams team had been sold to American private investment company Dorilton Capital for £135m, thus ending Sir Frank Williams 43 years at the helm.

Williams had been struggling for some time, the pandemic and loss of title sponsor ROKiT were according to Claire Williams, “The final nails in our coffin.”

Williams losing their title sponsor was the straw which broke the camel’s back

All the PR noise at the time focused on Dorilton’s long-term strategy and Matthew Savage, founder and chairman, claimed his company as the “ideal partner” for Williams.

Dorilton faced competition from four ‘interested and legitimate parties’ according to Claire Williams.

READ MORE IN THE PIT LANE: AMAZON PRIME IN POLE POSITION TO TAKEOVER F1 TV RIGHTS

Much was made at the time about the value placed on William’s heritage with Claire commenting, “They had a huge amount of respect for the heritage and the legacy of Williams, a huge respect for what my dad’s achieved, and they didn’t want to rip that up.” 

This has led to speculation that the new owner of Williams is an F1 and Williams fan, and not just a ‘money’ person(s).

Who is behind Dorilton?

We know from Dorilton’s social media and websites that it invests on behalf of a single-family.

Fast forward to the upcoming start to the 2021 season, and we are still no clearer to finding out the identity of the ultimate beneficial owner (UBO) of Williams F1.

Is Bernie the man behind the new Williams ownership?

We know the purchase was through Dorilton subsidiary BCE limited which led to wild speculation it was one Bernard Charles Ecclestone, but this has been generally discredited, although with Ecclestone, never say never!

Names in the frame include David and James Mathews, who were involved in the sale with their Eden Rock Group, but now other potential owners are being mentioned in the paddock.

READ MORE IN THE PIT LANE: THE UAE FLASH THE CASH

Was Lo the highest bidder?

According to Will Nicoll, writing for Forbes magazine, the secretive Hong Kong billionaire Calvin F.Lo CEO of R.E. Lee International and R.E.Capital that manages over $8bn in assets is potentially the new owner. Lo goes to extraordinary lengths to protect his privacy, even attempting to stop the publication of photographs of him.

Various Chinese language websites last year named Lo as someone who was deciding on purchasing, “The British Formula 1 team known to be experiencing significant financial difficulties and of which this billionaire is known to support.”

READ MORE IN THE PIT LANE – WILL ALFA ROMEO AND SAUBER’S RELATIONSHIP CONTINUE?

Nicoll contacted R.E. Lee International and lawyers representing Lo declared,

“Mr. Lo is well known for his interest in Formula 1, and for the friendship he enjoys with the partner of a director of the FIA [as documented via social media channels]. At this time, we, on behalf of both R.E. Lee International and Mr. Lo, can neither confirm nor deny involvement in this acquisition, nor make any further comment at this time.”

READ MORE IN THE PIT LANE: F1 SEEING DOLLAR SIGNS

Lo’s lawyer continued, “In addition to this, we are not qualified to speculate upon the identity of the unnamed Hong Kong national who media outlets report to be purchasing [the] Williams Company.”

R.E. Lee’s reference to Lo’s friendship with a “director of the FIA” is a reference to social media posts that shows Lo with actress Michelle Yeoh. Yeoh, who is perhaps most famous in the U.S. for her role in the film Crazy Rich Asians, is the partner of FIA president Jean Todt. 

Who else could it be?

So, if it is not Ecclestone, the Mathews family or Calvin F Lo then who?

Well, it is rumoured that the UBO of Dorilton is an American tech billionaire with a passion for well the Williams team.

Could Jeff Bezos be an unlikely candidate for the man behind Dorliton

The list of tech billionaires is a long one, and all the parties privy to the individual’s identity remain tight-lipped no doubt gagged by non-disclosure agreements and the threat of a billionaire’s legal attack dogs!

Dorilton’s Chief legal officer Stephanie Dattilo is also a formidable individual who no doubt reminds everyone to keep schtum.

READ MORE IN THE PIT LANE – FORMULA 1’S CONFLICT OF INTERESTS

Possible names include Steven Ballmer ex-CEO of Microsoft with a $74 billion fortune who has already invested in a sports franchise with his $2 billion purchase of the Los Angeles Clippers back in 2014

Then there is Ernest Garcia 111 the CEO of Carvana the online used car dealer which posted sales of $5.5 billion in 2020 earning the company the nickname “Amazon of Auto”. 

READ MORE: IN THE PIT LANE – SAFETY DOESN’T HAPPEN BY ACCIDENT

Carvana is a sponsor of the National Hockey League’s Carolina Hurricanes, United Soccer League Championship’s Phoenix Rising Football Club since 2018, and IndyCar Series driver Jimmie Johnson since 2021.

Lastly, let us not forget the uber-wealthy Jeff Bezos of Amazon, who as pointed out last week, is a serious petrolhead.

Whoever emerges from behind the curtain one thing is for sure they have deep pockets which can only be a good thing for the Williams team and its loyal fans.

It is interesting to note that this season’s car has fewer sponsors logos and more of the Williams branding indicating the new owner’s emphasis on the team and the potential value as a ‘franchise’.

Jost Capito CEO of Williams points out, “If you position the brand right and work on the brand, then you become attractive.” 

Garry Sloan is the author of “In the pit lane – F1 exposed” details at inthepitlane.com
Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

In the Pit Lane: Red Bull make the bold engine & driver decisions

Red Bull’s conflict of interests

Well, on the engine front, Helmet Marko summed it up when he told reporters in a video call, “the establishment of Red Bull Powertrains Limited is a bold move by Red Bull, but it is one we have made after careful and detailed consideration.”

Christian Horner added, “Red Bull were taking a long-term view because the investment in facilities was significant.”

Christian Horner and Helmut Marko have predictably come out in support of the move

Red Bull has committed substantial funds to the project which was sanctioned by the ultimate owners of the team – the Red Bull drinks company. This is where things get tricky, with the fallout between Red Bull owners Dietrich Mateschitz and the Yoovidhya family over the sacking of Alex Albon.

Mateschitz’s original partner was the late Chaleo Yoovidhya who rose from poverty to become Thailand’s third-wealthiest person with an estimated $5bn fortune before he died at the age of 88 in 2012.

READ MORE IN THE PIT LANE: WOLFF SET TO BECOME A BILLIONAIRE

The estate was passed down to his 11 surviving family members, the most prominent being his son Chalerm and Grandson Vorayuth. Chalerm and his wife Balliric were big supporters of Albon and it is believed Chalerm went ‘ballistic’ over the dismissal of Albon.

Vorayuth was even more distraught as he had acted as a mentor to Albon and had moved to the UK to become more involved with the team. The decision to axe Albon was taken by Mateschitz, as he has the final say on team matters but it is believed that the final straw was data collated by Adrian Newey that highlighted Albon’s lack of pace.

What will happen moving forward?

Behind the scenes was Sergio Perez’s manager Julian Jakobi who realised Perez’s sponsorship money held little bargaining power with Red Bull so instead allegedly orchestrated a subtle media campaign to undermine Albon and ‘big up’ Perez.

Perez’s arrival at the team perhaps signals that things could be changing at Red Bull

The problem for Mateschitz is the potential backlash in his running of the Red Bull drinks empire as his shareholding is 49% the Yoovidhya family 49% and critically Chalerm holds 2% allowing him the casting vote.

It remains to be seen if this will derail the continued success of the company or will money take precedence?

READ MORE IN THE PIT LANE: THE UAE FLASH THE CASH

Well, Red Bull can afford the team and new engine division as its finances pre Covid-19 were in good shape with 7.5bn cans sold in 2019, almost one for each person on the planet. With revenues of $6bn, Red Bull reinvested a staggering $2b into marketing which included the F1 team.

With a can of red bull costing 9 cents and a wholesale price in western countries at $1.87, you can do the math and understand why the latest annual dividends paid out are $211m to the Yoovidhya family with Mateschitz pocketing $343m!

Time will tell on any potential repercussions but no doubt it won’t keep Mateschitz awake at night after all this is a man who is on record as saying, “I don’t believe in 50 friends. I believe in a smaller number”. 

What about Max Verstappen?

On the other side of the garage, we have Max Verstappen. 

Verstappen has gone public with his relationship with Kelly Piquet and the tabloid press has had a field day with Piquet the daughter of three-time F1 World Champion, Nelson Piquet, and mother to a child with ex-partner Daniil Kvyat

One of the biggest stories in the off-season hs been Verstappen and Piquet announcing their relationship

Piquet is portrayed as a model, but she also manages the social media and the blog writing department of Formula E’s official website. The Red Bull camp is rumoured to be worried about Verstappen’s focus and his ever-increasing lavish lifestyle.

Verstappen has purchased a private Falcon jet, from no other than Richard Branson’s Virgin Galactic. This is on the back of last year’s purchase of a $1.75m Ferrari limited-edition Monza SP2 roadster.

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It is hard to criticise a 23-year-old who now earns anything from $12.5m to Business Book GP’s latest updated forecast of $30m for not wanting to splash the cash.

Probably more of a concern to Marko and Horner is the confirmation that Verstappen has a performance clause in his contract that allows for the possibility to depart the team at the end of 2021.

Marko confirmed this to F1-Insider, “I don’t want to go into details, but it more or less says that Max can compete for race wins and the world championship on his own merits. If he can do that, his contract is extended. If not, he would be free.”

According to F1-Insider’s report, the crucial element is if the gap to the fastest car continues to be over three-tenths of a second Max could jump ship. 

So interesting times ahead for Red Bull both on and off the track.

On a footnote, Lawrence ‘coming up smelling of roses’ Stroll was no doubt pleased with the signing of Perez to Red Bull, as he dodged a bullet that was the multi-million-dollar compensation claim due to Perez over his dismissal if Perez was unable to secure a drive.

Garry Sloan is the author of “In the pit lane – F1 exposed” details at inthepitlane.com
Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

In the Pit Lane – Wolff set to become a Billionaire

As the dust settles on the Lewis Hamilton contract pantomime, it is worth remembering there was a delay in the resigning of Toto Wolff as Team Principal and CEO too.

The 3-year deal signed in December no doubt helped the Hamilton negotiations but what about Wolff’s long-term future?

Rise of the Wolff

Wolff has become one of the most powerful individuals in F1 and is flying high but like Hamilton, he recently mused about the commitment required on a personal level citing 280 hotel nights and 1,000 hours of flying in a typical season.

Toto has proclaimed for several years that he will leave F1 at some point, telling F1.com back in 2016: 

From my fundamental set-up, I like challenges and I am not attracted by the glitz and exposure of F1 at all. Probably, on the contrary, it complicates my life because there’s the risk that it sucks you in a bit, so I’m fighting that. One day, I will leave the sport and return to what I’ve done before and be a private equity person.”

READ MORE IN THE PIT LANE: WHO IS FORMULA 1’S LATEST BILLIONAIRE INVESTOR?

Before joining Mercedes

Toto is a petrolhead and racer with a relatively short career with the notable achievements of runner-up in the Austrian Rally Championship in 2006, and the top spot in the 24-hour race in Dubai. In 2009, he also became a lap-record holder on the Nürburgring Nordschleife in a Porsche RSR.

He decided to quit racing after following the rear end of fellow countryman Alexander Wurz and realising he was not at his level. Wolff focused instead on his investment companies Marchfifteen and later Marchsixteen Investments which concentrated on IT companies.

Wolff came to understand the potential opportunities in motorsport with investments in Williams F1, German HWA AG, and BRR Rallye Racing. This enabled him to fuse his racing passion with his business nous.

READ MORE IN THE PIT LANE: ARE THE DAYS OF BIG MONEY DRIVER CONTRACTS HISTORY?

He also co-owned a sports management company with Mika Häkkinen managing amongst others one Valtteri Bottas. Wolff rubs shoulders in the paddock with many billionaires and none more so than his friend Lawrence Stroll.

Wolff may harbour ambitions to join the billionaire’s club if for no other reason to finance his 4-year-old son’s future F1 career, after all the lad has the racing genes from both parents. A few years ago, Bernie Ecclestone lambasted the new crop of team bosses saying,

READ MORE IN THE PIT LANE: THE UAE FLASH THE CASH

“The trouble today is we are getting people whose intention is solely to make money. Toto Wolff is probably the best example.”

A bit rich (excuse the pun) coming from the man who ruthlessly exploited F1 to personally gain a multi-billion-dollar fortune.

How is Toto doing on the billionaire status?

Well at 49 years old is already halfway there with his net worth estimated at between $450m to $580m. Wolff no doubt has his eye on a bumper payday when INEOS founder Sir Jim Ratcliffe makes him an offer he can’t refuse for his 33.3% stake in the Mercedes F1 or Lawrence Stroll comes calling with a bucket load of cash.

In the meantime, the money keeps on rolling in with his $20m investment back in October in Aston Martin now worth $38m – a paper profit of $18m in just 8 weeks! When Daimler announced a deal giving them a 20% shareholding in Aston Martin, the share price doubled.

Analysts are sceptical about Aston Martin’s future, but speculators are it seems not deterred.

READ MORE IN THE PIT LANE: THE DILEMMA FACING SIR LEWIS HAMILTON

Rumours persist (for the lawyers reading, these are rumours and speculation, not accusations) that Wolff was privy to information prior to the Daimler announcement either through contacts at Daimler AG or indeed Stroll himself. Either way, nice work if you can get it.

So, with a 3-year deal under his belt and looking to leave a formidable legacy with Mercedes domination in the hybrid era, substantial investments, and a happy family life for the time being all looks good in the world of Toto Wolff.

On a footnote: Toto showed his human side when he told the finding mastery podcast,

“When you have cameras pointed at you there is the danger of ego running away with you and you need to realise that. You need to be able to come back into your hotel room, look in the mirror, and say I’ve been a little bit of a dick today, that I got that one wrong.”

Garry Sloan is the author of “In the pit lane – F1 exposed” details at inthepitlane.com
Copyright ©2021 Garry Sloan

[Note: The opinions expressed on this website are those of the author’s and do not necessarily reflect the opinions of the editors and/or publishers.]

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