The ABB Formula E series is already worth around $1 billion despite debuting less than five years ago, according to founder and CEO Alejandro Agag.
The electric racing series is still in its infancy and far from joining the ranks of the most popular motorsports series in the U.S. But with several auto manufacturers joining it in recent years, Formula E has seen its value skyrocket, Agag said.
Retired Formula One champion Nico Rosberg invested in the 11-team, 13-race series late last year and said at the time that Formula E was worth 750 million euros, or roughly $870 million. But Agag said last month that the series is worth more than that now, though he would not provide revenue figures or detailed valuations.
“Based off recent transactions, we haven’t made it public, but you can think of the valuation as significantly higher than what Nico Rosberg said,” Agag said when asked if Formula E has had any recent valuations. “Without going into specifics, yeah, it’s very close [to $1 billion].”
Agag says reaching the 10-figure realm has happened quicker than expected. The series is owned by a consortium that includes Agag, Discovery Communications, Liberty Global, Julius Baer and NewWave.
The series continues to lose money, Agag admitted, because it is spending so much on marketing and even spinoff series such as Extreme E. Agag said he signed off on a 400% increase in his marketing department’s budget this year.
Agag said the series could turn a profit immediately if it limited its marketing but that it’s following the “classic startup model,” so he doesn’t expect to be profitable in the near future.
While Formula E has seen growth in value, it still has a ways to go in terms of popularity in the U.S. The series is returning to Brooklyn this summer for a doubleheader for the third straight year, but TV viewership through 10 races on FS1 and FS2 has dropped sharply. With three races left, Formula E viewership is down 59% from this point last season, with an average of 42,000 viewers.
Digitally, Fox has seen 1.2 million minutes worth of Formula E action streamed this season, up 164% from 454,000 minutes last season. The 1.2 million minutes is the equivalent of 2,000 viewers per race for a 60-minute window.
Agag also said that Formula E is considering a second U.S. race on the West Coast. He didn’t reveal the cities being scouted, but the electric car industry has a major presence in Silicon Valley near San Francisco.
This season the series transitioned to its second-generation car, which for the first time allowed drivers to stay in their car the whole race rather than switch cars mid-race because the original batteries didn’t have enough power to last. Other highlights this season include the launch of a high-tech ghost racing app that allows viewers to run a virtual race that mimics the actual races in real time.
Formula E is in the midst of hunting for a new CEO to replace Agag, who will move to the role of chairman of Formula E and CEO of Extreme E. Agag said the series is down to a short list of candidates, some of whom are American. The move is being made so Agag can focus on launching Extreme E, an electric SUV series that will race in remote destinations like the Arctic starting in 2021, while still having oversight of Formula E.