It’s not that long since the future of Formula One was a relative term.
Motorsport’s leading series completes another lap of the calendar this weekend, with the sun going down – quite literally – on the 2018 season in the now-familiar valedictory setting of Abu Dhabi’s Yas Marina Circuit. The mood beneath the distinctive glass curves of the Yas Hotel will be more reflective than usual, as a landmark year passes under the ownership of Liberty Media.
Having kept its powder relatively dry while it expanded its in-house team through 2017, the new leadership group has blitzed its way through a welter of new initiatives in the past 12 months or so. An updated logo, the first in 24 years, set the tone last November: bold, different, coherent, but not universally well-received, and reportedly hampered by a copyright claim from 3M.
That has been followed by an unprecedented marketing campaign, an official esports competition, a fantasy game, a US$100 million sports betting deal with ISG and accompanying data and integrity partnership with Sportradar, and an intriguing machine learning collaboration with Amazon Web Services. Live over-the-top (OTT) platform F1 TV has rolled out across 40 markets over the course of the season.
After efforts to stage a street race in Miami stalled, Liberty also got its first hosting agreement signed. Hanoi will stage the inaugural Vietnamese Grand Prix in 2020 – the opening step, perhaps, in a signalled plan to expand and reorganise the schedule, while reimagining what a Formula One venue can be.
Liberty aims to reignite a property whose image has been a little too readily defined in the recent past by technocracy and conspicuous, indiscriminate consumption. In industry terms, it has constructed a public-facing brand in the sport and entertainment space. Put more simply, it has asked what a potential fan – particularly a young one – would find exciting about Formula One.
There has been more openness. The executive team has been much easier for the media to get to – commercial boss Sean Bratches talks an especially good game. For fans, meanwhile, there has been greater access to the drivers and the racing community through social media and partnerships with the likes of Snap. Race weekends have continued their progression towards festival status.
Until a couple of years ago, the championship took an altogether more circumspect approach to new media and changing tastes. Its leader, by his own measured admission, was “not interested in tweeting, Facebook and whatever this nonsense is”.
“Young kids will see the Rolex brand but are they going to go and buy one?” Asked former Formula One Group chief executive Bernie Ecclestone, one assumes rhetorically, in a 2014 interview with Campaign Asia-Pacific. “They can’t afford it. Or our other sponsor, UBS – these kids don’t care about banking. They haven’t got enough money in the bloody banks anyway.
“That’s what I think. I don’t know why people want to get to the so-called ‘young generation’. Why do they want to do that? Is it to sell them something? Most of these kids haven’t got any money.
“I’d rather get to the 70-year-old guy who’s got plenty of cash.”
You could speculate why an octogenarian billionaire, partly serving the interests of an asset-flipping private equity fund, would favour a high-yield, short-term approach rather than something more agrarian. Still, that mindset was evident in just about every aspect of previous operations, whether that was the abrupt switch from sponsor-friendly free-to-air to pay-TV, or the constant brinkmanship and declining ethical standards that marked hosting negotiations. Nonetheless, Ecclestone retained a knack for keeping the show he built on the road.
By contrast, Liberty’s activities are self-consciously characterised by the idea of a strategy being seeded. Rather than sweating assets, it wants to create them. That mass of digital activities it has inaugurated will not just help reach followers, it will amass reserves of 21st century Texas tea: data. A recent tie-up with Dugout, a company founded by soccer clubs intent on retaining the value of their own digital content, hints at its thinking in that area.
The pace of development has caused some inevitable friction. F1 TV was first delayed, then hit by glitches, and has latterly underwhelmed with some of its sales figures. To borrow from the ‘move fast and break things’ tech lexicon, some of this is a feature, not a bug. Formula One chairman Chase Carey described the streaming service as a “beta project” earlier this month.
Yet while that kind of iterative trial and error is to be expected, the bigger challenge for Liberty lies in seeing through the wait for these big plays to pay off. Revenue dips in recent financial reports have been explained away by the effects of the calendar and changes in how income is recorded, but teams’ patience will be tested after they swallowed a US$23 million drop in payments in the second quarter of 2018.
Digital revenues rose 65 per cent in 2017, but that only took the total figure to US$10 million – or 0.6 per cent of overall income. Convincing the paddock of its digital vision, and the growth potential of all that innovation, is a critical next step.
This, now, is the point where the rubber hits the road. Negotiations for a competitive accord to replace the Concorde Agreement will soon intensify, with that contract set to expire in 2020. As the owners push for a championship where more teams can win, the bigger teams will want to salvage advantages from the status quo and will use any uncertainty around financial performance as leverage.
Ferrari has already made its customary threat to prance away from the series. For Liberty, the task at hand is pretty clear: make it clear in Maranello that the series can prosper without them but that both will prosper together.
Getting that conversation right will tee Liberty up to achieve what will be its fundamental goal. The brilliant Lewis Hamilton closed out his fifth world championship this year, confirming his status as an all-time great and an asset to his sport. The ease with which he did it, however, will have raised questions again about how and when Formula One will produce real title contests that can anchor season-long narratives.
High-volume, engaging content will add numbers. High drama and engrossing stories are what really will be invaluable.