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New F1 owner Liberty Media hopes to add races in the U.S. beyond Circuit of the Americas.
Photo by: GETTY IMAGES |
As Formula One tries to expand its U.S. fan base, a top executive at Circuit of the Americas is calling for the sport’s new owners to commit more to marketing F1 before adding a second race stateside.
Katja Heim, a former longtime Europe-based motorsports marketer, became chief operating officer of COTA last year. In an interview this month, Heim said she has met briefly with the new owners of F1, Liberty Media, which appointed American media executives Chase Carey and Sean Bratches to run the sport alongside German managing director of motorsports Ross Brawn.
COTA has hosted the U.S. Grand Prix — F1’s only U.S. event — since 2012. But Liberty Media has stated an intention to grow the sport in America, in part through additional races. Heim said that while COTA welcomes the increased attention F1 is putting on the States, she believes the series should first focus on establishing better brand awareness in America.
“Formula One itself kind of totally left it to the promoters in the different countries [to market the sport previously], and in a geographical field like the U.S., this is a huge undertaking,” Heim said, adding that driver Lewis Hamilton is perhaps the only recognizable person in F1 to many Americans. “The most important thing actually is to build the brand, to create more awareness about it and make it more aspirational, because if you don’t do that, a second race … will kind of fall down.”
F1 industry executives noted that under the leadership of Bernie Ecclestone, who ran the series from the late-1970s until this year, F1 did little marketing or sponsorship hunting on its own. This was backed up by a recent comment from Carey, who told The Press Association, “In today’s world you need to market a sport. We were not marketing the sport [previously].” And a source familiar with F1’s prior plans to bring a race to New Jersey, which F1 is trying to revive, confirmed that F1 had not been planning to help market that race, either.
Pressed on whether a second F1 race would hurt COTA, Heim said the track is “all for building the fan base before you have the second race.” She added that COTA, whose biggest markets for F1 fans are California and the East Coast, is currently profitable.
“Bobby Epstein, who is the owner of COTA and is a very clever and smart man, always says, ‘Yes, it surely hurts us; no doubt it will hurt us,’ because the fan base at the moment is actually too small to have two races,” Heim said. “We have quite a good fan base that comes to COTA because of what COTA offers, and how cool Austin is, but you certainly would lose people here.”
The current F1 promoter model sees the promoter pay a fee — typically around $30 million annually — to host a race, while keeping revenue from ticket sales and concessions. Sponsorship, media and Paddock Club hospitality revenue goes to the sanctioning body.
One thing that could help COTA mitigate the effects of a second race would be a reduction of its promoter fee, which has an annual escalator that will see it reach close to $60 million by 2021, according to Forbes. F1’s new ownership has expressed an openness to examining ways to improve the pricey promoter’s model, and Heim made clear that a fee reduction would be huge.
“I know they’re very, very concerned to find a way to support promoters; how it works is another question because each promoter has a different challenge and is differently set up,” Heim said. “It would obviously be superb if they would cut the promoter’s fee; that would be amazingly embraced.”
