F1 Business Diary 2017: The USA Grand Prix

Lewis Hamilton extends his drivers’ championship lead over Sebastien Vettel to an almost unsurmountable 66 points.

Lewis Hamilton’s mesmeric victory at the Circuit of The Americas (COTA) has all but secured his fourth drivers’ championship.  

The brilliant Briton picked up his 72nd career pole with sublime ease on Saturday and looked the man to beat come Sunday’s race. Despite Hamilton’s nine victories this season his title rival Sebastien Vettel – who led the world championship standings for the first 12 races – has pushed the 32-year-old all year, and the 2017 USA Grand Prix was no different. 

The German pounced on a slightly sluggish start from Hamilton and took the lead going into the wide uphill first corner at COTA. The Mercedes man bided his time behind the flying Ferrari for the next five laps and then passed him for the lead at turn 12 on lap six.

The three-time world champion expertly controlled his pace as well as his tyres and serenely stretched his lead away from the field. The German did fleetingly close the deficit to 4.5 seconds following a Hamilton pit-stop. However, the Briton soon pulled away again and completed his ninth victory in 17 races this season with relative ease.

Hamilton, who has now won all but one of the six races since the August break, is 66 points clear of Vettel, who finished second, with only 75 available in the remaining three races.

Elsewhere on the track, entertainment came from Red Bull’s Max Verstappen whose swashbuckling drive saw him rise from 16th place on the grid to take the chequered flag in third position. The Dutchman would not, however, take his place on the podium due to FIA stewards handing the 20-year old a five-second penalty, which resulted in Verstappen being unceremoniously hauled out of the pre-podium cool-down room just as he was about to walk out in front of the assembled fans.    

Verstappen was adjudged to have held an unfair advantage over Ferrari’s Kimi Raikkonen by having all four wheels off the track before overtaking the Finn on the final lap of the thrilling 56-lap contest. 

The snap-decision by the stewards – Radovan Novak, Mika Salo and Garry Connelly – was slammed by Verstappen and many observers in the paddock. 

Verstappen said of the incident: “It's a shame we miss out on the podium as they take it away again but it's just one idiot steward who always makes the decisions up there against me. With those stupid decisions you really kill the sport. 

“I really hope the fans didn't like this decision and hopefully next year they won't come.”

Red Bull boss Christian Horner maintained that the verdict was “unbelievably harsh” on his young charge and Verstappen’s father Jos – a former Formula One driver himself – took to social media to vent spleen. 

Verstappen senior’s Twitter rant included a picture referring to the FIA as the ‘Ferrari International Assistance’ and the Dutchman, famed for his fiery temper in the cockpit, branded the decision ‘bullsh*t’ and questioned whether the FIA stewards ‘know what racing is’.

Nevertheless the day belonged to the imperious Hamilton and Mercedes – with the team picking up a remarkable a fourth consecutive constructors’ championship in Austin.

Formula One in the pink 

At COTA Formula One turned pink with teams adding flourishes of the colour to outfits, cars and even tyre trims. The transformation was in support of the Susan G. Komen for the Cure, a major charity based in Texas that works on breast cancer education, research and advocacy.

Formula One also revealed itself to be in the pink financially over the past year.  Company filings from Liberty Media had revealed that ‘advertising and sponsorship revenue grew in 2016, primarily driven by a new contract with Heineken’.

The Dutch brewing giant was added to Formula One’s commercial portfolio in September 2016 when it signed a deal to become its global beer partner. According to the accounts the addition of Heineken had increased Formula One’s sponsorship revenue by around US$16.8 million.

The deal runs until 2023 with a break clause inserted in 2020.

Formula One fans seemingly not “ready to rumble”

Verstappen’s time penalty was not the only controversy to stir up fans’ emotions in Austin this weekend. 

As part of Liberty Media’s ongoing commitment to increasing fan entertainment Sean Bratches, managing director of Formula One, called in a favour from legendry American boxing ring announcer Michael Buffer “to take the spectacle to the next level”.

“This is an amazing opportunity,” said Bratches. “I've known Michael for over 30 years and there is no one better: he will elevate the driver brands and shine a light on Formula One.”

Buffer, who earns a reported US$5 million for every fight night he comperes, introduced each driver in his own inimitable way, which included a few questionable nicknames bestowed on some of the confused members of the grid. A similar pre-race procedure is undertaken by Indycar for its blue chip race the Indianapolis 500.

Despite Buffer’s trademarked “Let’s Get Ready to Rumble” ringing across the cloudless Texan sky, the overriding response from Formula One crowds on social media was of cringing embarrassment with some going as far as to ask those in control at Formula One to scrap the idea immediately. 

Retired British driver Jenson Button reacted to Buffer’s introductions on Twitter with an emoji that denoted an embarrassed face.   

Soaring team costs revealed 

In a bid to stop Mercedes’ hegemony at the top of the standings, the FIA enforced new regulations at the start of the 2016 Formula One season: increased aerodynamics and mechanical grip through the introduction of wider tyres and wings.

The racing has been marginally closer this year but with Mercedes about to complete their fourth back-to-back double championships, teams in the paddock are starting to worry about the escalating costs of the newly designed cars.

Aside from Ferrari and Swiss-based Sauber, eight of the grid’s teams have to file publicly-available accounts. UK newspaper The telegraph reports that the new regulations enforced a UK£167.6 million increase in the teams' 2016 costs, rising by 14.5 per cent to a combined UK£1.3billion.

The average team expenditure last year was UK£165.9 million, with Mercedes topping the list with a whopping investment of UK£274.9 million. US team Haas F1 spent only a third as much as the Northampton-based outfit in 2016.

Toto Wolff, Mercedes team principal, wrote in the introduction to the team’s accounts that ‘an increase of UK£27.9 million in operating costs [is] mainly due to the impact of technical regulation changes and movement in foreign exchange rates’.

The vast majority of the respective team’s income is accrued from performance and sponsorship. However, Force India – who announced a net loss of UK£11.6 million in 2016 – found a unique way of securing a cash injection ahead of 2017’s significant regulation changes.
Reserve driver Nikita Mazepin, whose billionaire father Dmitry owns the mineral fertiliser producer Uralchem, is believed to have helped the UK-based Force India with cash payments since he signed a contract with them last year.

Formula One Bowl I

Chase Carey, chief executive of Formula One, has long stated that each Grand Prix “should be Super Bowls”, and the 2017 USA Grand Prix gave fans of the global open-wheel series a first insight into what the American had meant. 

Since Liberty Media’s 2017 acquisition of Formula One the USA Grand Prix has been effectively earmarked as the home race of the sport and a great opportunity for the organisation to showcase its new product. 

A weekend of all-American razzamatazz, overblown social media activations and a visit from a former US President Bill Clinton culminated with the aforementioned introductions from Buffer to the backdrop of military flyover. 

That said, Clinton was not the only A-list celebrity shoehorned into various hospitality areas at COTA. Hollywood stars Owen Wilson, Woody Harrelson and Oscar winner Michael Douglas were seen amongst various garages, while eight-time Olympic gold medallist Usain Bolt was named as honorary starter of the formation lap.  

Bolt was, in addition, treated to a hot lap around COTA by Lewis Hamilton in a road-worthy green Mercedes. The Jamaican superstar told the UK’s channel 4 that the lap with Hamilton, which included drifting and donuts, “was stressful. That was real. I thought I was going to die.” 

With the recent addition of a New York office as well as new stateside TV and radio broadcast deals 
it is expected that at least one additional Grand Prix will be raced in the country in the near future, with cities such as New York, Miami or Los Angeles being mooted as potential venues.

“It's the size of the market,” said Carey, in an intyerview with ESPN.”The size of the market and the role the U.S. plays in the world.

“And for us it's a market where we are really just scratching the surface. It's not only the size of the market but the fact that we have only really just tried to begin developing the potential of the sport there.”

Formula One set to launch in-house streaming service in 2018

According to industry outlet Autosport, Liberty Media are aiming to expand the championship’s digital presence through a live streaming service from races at the start of next season. It will also offer content in between events providing additional data and behind-the-scenes footage. 

The championship’s head of commercial operations Sean Bratches told Autosport that the series needs to pursue an OTT offering in order to reach wider audiences. The report added that live race streams would only be available in countries where exclusive TV rights deals are not already in place.     

Bratches also confirmed last week that Liberty Media were in talks with Netflix, but added that any deal with the digital subscription platform is likely to include content, highlights and replays rather than broadcast rights, as he asserted that any live streaming would be done entirely in-house.