TThe weekend Formula 1 race will take place in Miami. It is a spectacle that’s full of South Beach glamour. The $2 billion racing circuit, which holds events all over the globe, is booming in America, as evidenced by seats to the May 8 Miami Grand Prix—sponsored by Crypto.com—going for in excess of $23,000 on the secondary market; one hotel in the area charging $125,000 per night for a suite on race weekend; and the dry-docked yachts sitting in fake turquoise water at the Miami International Autodrome, the 19-turn track outside Hard Rock Stadium that cost about $40 million to build. The city will be teeming with exclusive parties; celebrities expected to be in attendance include Michael Jordan, LeBron James, Tom Brady, the Williams sisters, Pharrell Williams, Snoop Dogg, Travis Scott, and Dwayne “The Rock” Johnson. Some 300,000 fans, sponsors, and partygoers are expected in Miami for the race; crowds and spending could exceed that of the city’s 2020 Super Bowl.
“It’s a level of excess you might not see in Dubai right now, ” says Matthew Harrigan, an equity research analyst who covers Formula 1 for the Benchmark Company.
Formula 1 is often called F1. It arrives in Miami riding the wave of American momentum. Netflix’s success is a testament to its popularity. You Can Survive, a behind-the-scenes look at F1’s melodramas involving teams and drivers like seven-time champion Lewis Hamilton and Max Verstappen, who took last year’s title, has drawn younger eyeballs to the sport. In March’s fourth season, the show was watched for over 57 million times in two weeks. It reached the Top 10 on Netflix in 56 countries. Formula 1 and Netflix both confirmed the news on Thursday. To Survive, DriveThe show was renewed for the fifth and sixth seasons.
An average of 949,000 viewers watched the Formula 1 races on ESPN last year, which was 54% more than 2020. It is also the most-watched F1 series ever. In 2022, the F1 race broadcasts averaged 1.12 million viewers. This 22% increase was recorded over 2021’s average of 1.1million. Barton Crockett from Rosenblatt Securities is the senior internet media analyst. He said that the average F1 racing TV audience was 32% higher in 2020 than it was in 2019, while the viewership of NASCAR (-2%) NFL (-2%) and NBA (16%) declined in comparison to 2019. For the 2021 Grand Prix in Austin, around 400,000 people packed the Circuit of the Americas. This is a new record for F1 races. Formula 1 had announced in March that it would add a Las Vegas race to its schedule for 2023.
Formula 1 has struggled for years to achieve success in America, home of NASCAR. However, the American brand has seen a rise in popularity. On Friday, Formula 1’s parent company, U.S.-based Liberty Media, released first-quarter 2022 earnings: Formula 1 revenue jumped 100%, to $360 million, compared to the first three months of last year. In 2021, revenue reached $2.136 billion, an 86.5% increase over the 2020 pandemic season and a 5.6% rise compared with 2019. F1’s social media following reached 49 million by 2021. This is 97% more than the 24.9 million that were in 2019. Global TV audiences have increased to 1.55billion. Formula 1 shares have hit an all-time high.
McLaren’s Daniel Ricciardo and McLaren are seen playing with James Corden of Great Britain in practice before the F1 Grand Prix of Miami at Miami International Autodrome (May 06, 2022).
Peter J Fox—Getty Images
Last lap drama
In 2016, Liberty Media bought Formula 1 for $8Billion. American growth was the top priority. Adding races in glam destination cities like Miami and Las Vegas will only fuel the sport’s popularity in America. F1’s old boss, Bernie Ecclestone, had run the organization with a withered iron fist. Liberty modernized F1’s digital marketing, and for the 2021 season instituted a U.S.-style budget cap on team spending to create more parity in the sport. Verstappen, who races for Red Bull, ended Hamilton’s four-year championship reign last season. Mercedes won its eighth straight “constructors championship,” but this year, Ferrari and Red Bull top the standings. F1 introduced aerodynamic rules that allow for more cars to pass each other during racing, which makes events even more thrilling for spectators. Ferrari’s Charles Leclerc and Verstappen have alternated wins in each of the first four races this season.
“It’s less of a slam dunk that Lewis Hamilton’s going to win every race,” says Crockett. “That’s good for the product. Drama is created by it. As opposed to boredom.”
F1’s ascendance coincides with the expiration of its TV deal after this season: the organization should be able to command substantially more than the $5 million or so it now receives annually from ESPN. F1 is seeking media rights worth $75 million each year. “And I think there’s a possibility it can go higher than that if things continue to trend favorably,” says Harrigan. Rosenblatt Securities predicts that Formula 1 revenue will nearly triple to $6.5 million by 2031.
F1 in America will need to overcome a troubled past. Sports IllustratedAccording to reports, more people participated in a Phoenix bird race than at the F1 1989 race. In 2005, only six out of 20 competitors participated in the Indianapolis race. Michelin advised the other 14 competitors, who were racing with the company’s tires, that the track posed a safety risk.
“Formula 1 still has a long way to go get totally mainstream,” says Crockett. “The biggest challenge is that the America consumer is chock full of sporting things to watch.”
Miami is, however, a feeling of a passing moment. F1’s gilded age will be on full display this weekend. Glitzy high-speed racing’s here to stay.
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