As faculty members in sport management departments filled with inquisitive colleagues, you can imagine the conversations we’re privileged to hear on a daily basis. One of these recent water-cooler yarns inspired today’s column.
Thank Matt Cacciato, a Syracuse alum and Ohio professor with 20-plus years of high-level experience in our industry for the topic and provocation.
He predicts Formula One is going to go “yard.” Hit it deep. Light ’em up! Smoke ’em. And do so right here in the USA.
That’s hard to believe because we’re talking about the sophisticated version of car racing traditionally known for destinations like Monte Carlo, Montreal, Singapore and Abu Dhabi.
We laughed when he told us F1 had the potential to emerge (along with esports) as the growth story of North American sport in the coming years.
How, you ask?
For one, the series’ new ownership has pledged to work toward adding more U.S.-based races beyond the United States Grand Prix (staged annually in the stunning metropolis alternately listed as either Elroy or Del Valle, Texas, … on a track known as the Circuit of the Americas).
This Austin-area race has been held five times since 2012 with Englishman Lewis Hamilton winning four of them. The next scheduled date is Oct. 22.
Cacciato, who has held senior positions at ESPN, Fox and the YES Network, said, “I’m excited about the possibilities of F1 in the U.S. because the global sports scene is growing so fast. We’re seeing younger U.S. fans developing affinities for global sports personalities, largely influenced by the size of foreign sports audiences and the superstars they fuel. These younger millennial and older Generation Z fans are embracing the worldwide sports marketplace through their digital engagement.”
What else is driving Cacciato’s confidence?
First, the series has new ownership, led by Liberty Media’s John Malone, who is aggressively seeking to improve the league’s status and presence in the U.S. Additionally, Liberty engaged all-purpose agency CAA Sports to assist in the effort.
“Malone and his team have consistently delivered profitable outcomes for their shareholders,” Cacciato explained. “They’re adept at creating operational and financial efficiencies that traditionally drive new profitability. Further, F1 senior execs Chase Carey, Sean Bratches and Yath Gangakumaran are widely respected for their ability to make sense of, and provide order to, highly complex organizations and ultimately drive revenue growth.”
That statement suggests a competent team is in place, but industry pundits will undoubtedly suggest F1 is a tough sell in the U.S. and Liberty will lose loads of upfront money. There are more than a few historical settings to support this view.
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New ownership is aiming for more F1 races beyond the U.S. Grand Prix near Austin.
Photo by: GETTY IMAGES
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The first United States Grand Prix was held more than 100 years ago, followed by four lengthy dry spells (1917-57, 1981-88, 1992-99, and 2008-11) where F1 did not visit the U.S. and the event lay dormant. Additionally, the USGP has relocated numerous times, with Watkins Glen in New York the only location to hold the event for more than 10 years (1961-80). Other sites have included Sebring, Indianapolis, Phoenix and Riverside (California).
So, why think it can work this time? What makes anyone believe Americans will start paying attention to Formula One?
To start, although F1 has never captivated Americans, motorsports (in general) remain popular. NASCAR is the largest and most popular form, with its primary Monster Energy Cup Series drawing as many as 100,000 spectators to its events and the flagship Daytona 500 attracting television audiences in excess of 10 million viewers annually.
Further, the IndyCar Series has regained some lost footing and the 2016 Indy 500, the 100th running of that event, drew 350,000 spectators on race day.
However, like many sports, NASCAR (and motorsports in general) is struggling to attract youth interest. Many motorsports leagues, including F1, are reportedly considering changing their formats and rules to make themselves more attractive to young audiences. The challenge is getting young folks off their phones or Xbox and delivering them to a track or content platform of choice.
But what if there were a very intriguing situation developing? Could F1 actually make inroads in the U.S.? Cacciato thinks so.
“Formula One’s vision for U.S. expansion will happen because they’ll recruit and secure the four essential elements required for successful new U.S. races: big corporate sponsors, influential private investors, public funding and, most important, an elevated level of competition and entertainment. If you told me F1’s new management team was executing a similar deal with NASCAR, I’d be equally bullish.”
OK, it sounds compelling, but is it realistic?
Can Formula One act like esports and garner global investors to engage the world’s young people? Can it act like the NBA and woo international sponsors to make major investments? In addition, in an era when no one wants to use tax dollars to pay for the Olympics, can Liberty convince governments and voters to put up millions to host single-weekend events?
We were skeptical but picked up the phone and argued. Then we brainstormed. Could this actually work? Is Liberty willing to play with the length of races, integrate sponsors into activation schemes, partner with cities on infrastructure investments and attract other deep pockets to invest?
We’ve gone to every kind of motorsports event, including F1, and know it’s a highbrow, high-fashion, high-roller kind of event. The whole series targets the rich and famous.
How would modern marketing segmentation work? How would experts use racing video games to set up shoulder programming? How would Amazon think about delivering an event instead of a garden hose, book and DVD? Would there be drone races?
How would Facebook use social media and Oculus Rift to socialize the idea internationally? How would Apple stream the event? How would Netflix sell it?
Big vision and leadership require bold engagements. Liberty and CAA Sports might have their hands full, but if they go to the right places with the right partners, anything is possible.
Rick Burton (rhburton@syr.edu) is the David Falk Professor of Sport Management at Syracuse University. Norm O’Reilly (oreillyn@ohio.edu) is the Richard P. & Joan S. Fox Professor of Business and chair of the Department of Sports Administration at Ohio University.
