Never lose sight of it, or doubt the statement: Formula 1 is a sport enclosed within a business. There is no specialty more expensive, costly and prohibitive. Without the money, it would never work. The good news is that things are going in the quarterfinals, and it’s going very well.
No one knows for sure if Liberty Media, the Yankees who bought Bernie Ecclestone’s knick-knacks, they have already recovered the 8,000 million dollars that they agreed to in the agreement. What is known, and this is symptomatic, is that when the shares jumped on the Nasdaq floor (April 18, 2017) they cost $18.72 and this morning they exceeded $57. In less than six years, its value has tripled showing an extraordinary stock market performance. If the presence of Liberty Media in Formula 1 can be more or less debatable in terms of sport, financially it could never have been better. In Ecclestone’s time, the business tended to invoice 10% more than the previous year, but it never ran on the stock market, and this is an extra addition that enriches the business, a business in which all the indicators are green at despite everything.
When the organizers of the Melbourne Grand Prix, with the public queuing at the gates of their circuit, decided to suspend the event before practice started, many saw some very dark clouds on the asphalt. However, the managers, despite movement limitations, closure of borders, logistical problems and illness of pilots, technicians, and personnel of all kinds, they carried out seventeen tests in 2020 and twenty-two in 2021. It is almost forced to take off your hat to such a display of successful management. Just the worst drop in value of FWONA was the infamous March 15, 2020, the same day that Pedro Sánchez, president of the government of Spain said that “everyone locked up”. Since then the price of the shares has done nothing but rise and rise, almost tripling the 20 dollars of that fateful day.
The ad starring Matt Damon has become so popular that even the series South Park has parodied it at the beginning of its season.
Since then things have happened, all good for the business and therefore for the sport. In Australia they have had to expand the stands, with five new areas to accommodate the avalanche of ticket requests. The same circuit that has taken advantage of the pandemic stoppage and its absence from the calendar to resurface the layout and modify several curves. It is not only that there is interest on the part of the public, but that there is confidence from the organizers and this only reflects a plan, at least in the medium term. Liberty wanted three to four races on home soil. Although others come asking for passage like the one in Las Vegas, the one in Austin is going from strength to strength, and the one in Miami shoots like a rocket. It already has the paved track, the works are going like a shot and the Crypto.com company has reached an agreement with the promoters of this race.
The agreement, attention, is for nine years. Nine. Legal Americans being what they are, this only indicates that for almost a decade, no matter what happens in the world, we will see this appointment on the calendar. For its part, the company has among its plans to set up an elevated terrace with a 360-degree view of the layoutand one fan zone open to attendees. The platform ad starring actor Matt Damon has become so popular that even the series South Park has parodied it at the beginning of its season. Digital values are on the rise and it would be logical to think that this, his presence in the specialty, is going to go further.
The oil kingdoms remain a mystery to Westerners. Settled in our social democracies, we have a bad time with the foreign political order far from universal suffrage, but its oil, gas and investments are good for us, to which we can always add the adjective of multimillionaires. If it can be said of the Bahrain GP that it always offers good races, today it can be said without fear of being wrong that it also offers more, more races. So much so that it is not that “the preseason starts” there and not in «the non-preseason of Montmeló». Nor that when the Covid has tightened two tests have been disputed in one fell swoop, no. The jevimetal thing is that they have signed the longest contract in the history of Formula 1, valid until 2036, a decade and a half of speed.
Crypto.com has immersed itself fully in Formula 1.
When Liberty Media took over the reins of F1, it came across a hundred contracts in force, and among them the very sensitive ones related to the circuits. The asphalt on which the races are held may be the same, although the political environment that manages it is very different. There are full democracies, autarchies, dictatorships, kingdoms, former communist countries converted into partisan monographs with a few votes in between… The casuistry is diverse and Liberty was terrified of signing agreements with politicians who could leave the scene at the ballot box, changes of power or the whims of the boss on duty . There is a strong geopolitical component to the business and unforeseen international snubs are not the plan to send the hell out of a few events. From all this, Liberty began to make its mark by signing three-year contracts, as opposed to Bernie’s usual seven seasons. This seems to have changed and the Bahraini move certifies the confidence that the organization places in the solidity of the insular kingdom of the Persian Gulf.
The Emirates company has a daily flight between Manama and Brussels. If we take it and land on the Old Continent we will be just over an hour’s drive from the Spa-Francorchamps Circuit. The Belgians are doing things and in it they have melted the beautiful amount of 80 million euros. Modifying the mythical Eau Rouge curve very slightly is perhaps the most controversial, but the increase in safety issues, widening of loopholes, the return to gravel loopholes in several corners, and a lot of work on everything that does not occupy asphalt is very welcome. One of the most celebrated changes is going to be the spectacular grandstand where it was for decades in the Raidillon chalet.
This innovative construction will provide covered seating for almost 5,000 attendees and will leave space for the organizers to have new VIP areas. The five pozzolans added have not come at the express wish of the people of the cars, but rather of the motorcycles. The idea, or at least one of them, is to host MotoGP, which requires just this. Beware of the sand trap that they are going to have in Le Source, the radical turn that there is in the first corner after the exit. We are going to see cars stuck there on the first lap. All this fuss and consequent investment does nothing more than validate the desire of the rectors to provide a long run to their plans. No one embarks on looking for such a pot of pasta without a plan, at least in the medium term. We will see Formula 1 races at Spa for many years to come, and a long-term announcement after the end of the current agreement to host the category would not be surprising.
This firmness and confidence in the business is being transmitted vertically to the teams and an example is the Lando Norris contract. Usually the first swords tend to reach agreements for several seasons. Press officers add a very subtle but revealing nuance to their releases. It is not the same to read “Fulanito has signed a contract for so many years” than “Fulanito and the team have reached a multi-year agreement.” The difference is that the drivers, as a general rule, do not usually sign agreements for many years, but draw their name on a piece of paper that says that the current year they will race in those cars. If at the end of the season all the parties are happy, they will continue together the following season. In reality, they are annual contracts renewed through a signature on an attached document that is printed each year and that is usually very short, added to the previous agreement that is the important one and that can easily accumulate fifty pages.
Lando Norris, before even starting the current season, has already signed his contract until 2025 in a typically long-term agreement, four seasons; not a word about his Australian partner. Daniel Ricciardo, who after leaving Red Bull, and his short stint at Renault, starts his second year at McLaren. No one should doubt his quality as a driver but he is taking on a strange aspect of a temporary rider, that is, no one seems to think of him as the axis of a great winning project. If we ignore the latter, the agreement with Norris in exchange for 20 million per year (just when the salary of the team’s employees has been frozen until 2024) reflects confidence in one of the most sensitive parts of the entire structure and tells who everything is going to revolve around. It would not be surprising that similar agreements are announced in the future in other formations, just when half the grid ends its contract at the end of this year.
In the end, numbers always tell stories. F1 stocks rise, Spa expands and improves its facilities, Melbourne installs and expands grandstands, circuits are added, others that want to enter the calendar, audiences that rise, pilots that renew in abnormally long agreements. There is stability and a long-term view, things are going.