F1 must avoid past errors in USA as it seeks to capitalise on ‘Netflix effect’

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If a country has a tempestuous relationship with Formula 1 it is the United States of America. Here’s a clue: To sweet-talk the USA into buying into its newly-founded World Drivers Championship (as the series was known from 1950-1980 before changing to F1 World Championship) the FIA included the Indianapolis 500 as a qualifying round, despite the event having a vastly different format.

Here’s another: The USA has hosted more rounds of the world championship than any other country bar Italy, Britain and Germany. Yet its 70 races were hosted across a total of 10 circuits and under a variety of titles, with as many as three events in some seasons, then none for five years or more.

In 1959 the championship included both the Indy ‘Brickyard’ – its penultimate inclusion – and a United States Grand Prix, the latter run on an airfield circuit outside Sebring, Florida. Since then F1 has visited Riverside on the West Coast, Watkins Glen in New York State, Long Beach (California), Las Vegas, Detroit, Dallas, Phoenix, Indianapolis (the road course) and Austin.

The USA’s average of seven grands prix per circuit further attests to its on-off affair with F1, for Italy hosted the most rounds (101) at four circuits (the next highest tally). After F1 and Indianapolis fell out in 2007 in the wake of 2005’s Michelin debacle the sport went into limbo until F1 decamped at the Circuit of the Americas in Austin, Texas in 2012 and has raced there since, aside from last year’s interruption due to the pandemic.

1950 Indianapolis 500
The Indy 500 was the third round of the first world championship
In the interim an attempt at staging a race in New Jersey – a circuit in Port Imperial was approved and a 2013 date granted – was aborted after sustainable funding failed to materialise. Similar problems befell an attempt at resurrecting a grand prix at Long Beach, California during the mid-2010s.

However, F1 was expected to gain traction after Liberty Media acquired F1’s commercial rights in 2017 from CVC Capital Partners, who had managed the sport very much for their own account.

Liberty immediately listed the entity on the NASDAQ. The subsequent visibility for F1 at investor and financial media levels spread the word, with numerous investment funds buying into FWONK. Since then New York-based fund Dorilton Capital acquired Williams and MSP Sports Capital inked a deal which provides options of up to 33% in McLaren.

An announcement about the staging of a Miami Grand Prix followed shortly after Liberty’s takeover; still it took intensive lobbying by Liberty and Miami Dolphins (and Hard Rock Stadium) owner Stephen Ross before agreement was reached with Miami Gardens councillors, with a May 8th date on the 2022 F1 calendar confirmed by the FIA for the city’s inaugural race.

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Already the chatter is that a third race will follow. Speaking during last weekend’s US Grand Prix in Austin, Aston Martin team principal Otmar Szafnauer – born in Romania but schooled in Detroit and employed by Ford Motor Company in management roles before joining F1 with Honda – called for a return to the country’s west coast.

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“We have one in Texas and now we have one on the east coast of the United States in Florida, so it would be good to have something a little bit further west if we could manage that,” he said.

“Three races in the United States would be great,” he continued. “The fan base could absolutely sustain having three races here,” adding, “Either [street or track], if it is a city race it would be nice to be somewhere people could go for something other than just the race, make it some kind of destination.

Long Beach is one, but anyway, if you can combine things like that then it’s even better. Austin’s a great city, Miami’s a world-famous great city, but for three races in the States, geographically I would move it further west.”

Szafnauer has a point, particularly given the west coast’s love for all things automobile and its high-roller, hi-tech, culture – F1’s primary target market. Now, though, comes news that F1 is in talks with Las Vegas about a return. A source suggested that a deal for a street race in Nevada could be the next addition.

This could potentially happen before an African race, wherever it may be held, if at all – Kyalami, Cape Town or Morocco. The latter is said to be fast moving into pole position to tick Liberty’s ‘African continent’ box.

If all planning permissions for Las Vegas, whose visitor numbers have flatlined in recent years, are issued – an easier process than in Miami given that the gaming city is effectively a commercial enterprise, with hoteliers holding massive sway – and a circuit approved, a Las Vegas Grand Prix could be reality within two years, certainly by 2024. That makes it three in the USA, four if a West Coast race comes to fruition.

The COTA crowd was huge but not record-breaking
Don’t bet against a quartet of grands prix in the USA (population 330m), either – if the Gulf can stage four rounds in a region of 57m spread amongst seven states (one per 15m inhabitants), why not four in the USA, which is effectively a union of states. On that basis, the USA qualifies for 20.

COTA’s sell-out crowd of 380,000 over the three days – around 20% up on the previous (2019) race – provides solid pointers to F1’s burgeoning popularity despite the massive distances and the rip-off local prices many fans faced simply to be part of the weekend.

“This is a historic event,” Epstein told local newspaper Austin-American Statesman during the event. “This is the equivalent of four Super Bowls [in terms of attendance], and we’re doing it all in one weekend.

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“The economic impact of that, the attention it draws from the world, I mean, we’re going to have six hours of global coverage to over 100 million people. That’s a wonderful commercial for our community. And the fans, they’re going to have a blast.”

He claims the race could pump $900m (per year) into the local economy – something Las Vegas is sure to take note of – and while the number could well be inflated the overall value of a grand prix is significant after all multipliers have come into play.

The race attendance was impressive, around 20% up on 2019’s numbers, though contrary to some claims, it was not the best-attended F1 race ever, even within the USA. Domestic TV ratings were also strong, up 42% on the last race at COTA in 2019 with a peak of 1.6m viewers.

While modest for a country with a population of 330m – the UK’s Sky (pay) F1 channel pulls around 2.0m viewers from 70m inhabitants – the ratings are certainly heading in the right direction, with the race attendance underscoring the upward trend. US year-on year average ratings per race are up 55% over 2020.

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Why, though, this sudden popularity for a Euro-centric activity that less than a decade ago had no foothold in the country, few US-based sponsors, no Detroit representation, and battled to sell its TV rights, ultimately giving them away for a relative pittance?

There are no doubts that the Netflix series Drive to Survive – albeit considered by many in the paddock to be overly dramatised – has been crucial to F1’s soaring popularity in the USA, particularly amongst more casual fans. This has, in turn, driven awareness of the sport, particularly amongst emerging generations.

Ironically, here the ‘don’t-do-what parents-did’ attitude prevalent amongst Generation Z – who believe it is uncool to partake in their parents’ activities – could play a decisive role in this regard, for their (US) parents were not hardcore F1 fans, primarily watching, if any four-wheeler sports, IndyCar and NASCAR.

F1’s “We Race as One” initiative focuses on sustainability, diversity and inclusion, all of them highly valued issues amongst the Z generation, particularly in the USA. That Max Verstappen and Lando Norris outscored Lewis Hamilton during a recent popularity survey speaks volumes, that Ferrari dropped from top of pops behind McLaren and ‘edgy’ Red Bull even more so. That is youth speaking.

“[Netflix has] got to be the single most important impact in North America,” McLaren Racing’s Californian CEO Zak Brown said. “Almost every comment you get out of someone out of the US, they reference Drive to Survive.”

Brown credits F1’s owners Liberty Media for bringing the sport to a new audience,” saying, “I think that’s a great thing that Liberty did very early on, which is recognising that we have this great sport, that we’ve not looked at people into what goes on in the paddock, effectively. Because Drive to Survive is a little bit less about the on-track action and it’s a little bit more about the off-track action.”

Carlos Reutemann, Nelson Piquet, Mario Andretti, Caesar's Palace, Las Vegas, 1981
F1 left Vegas after two races in the eighties
He does, though, believe that New York should be the next US venue, telling RaceFans: “The market could definitely handle a third race.

“It’s very complicated to put these races together, so the obvious wish list would be New York would be great, Las Vegas would be great, any of the big markets so I hope a third race happens.”

Thus it can be no coincidence that Wall Street giants Amazon, Cognizant, Oracle and Workday recently joined F1 and/or its teams as partners, with cyber payment platform Crypto being the latest addition to the roster. Indeed, it is the fastest-growing partner sector, and others are sure to follow – and not only from the USA.

Epstein should though also receive credit, but issued a thinly-veiled warning for Liberty to not take growth for granted: “There’s only one hurdle, and that’s the price tag,” he said, adding that Liberty knows that the sport makes “a pretty big economic impact everywhere it goes, and they demand a pretty big price for that. They have a lot of suitors, and that makes it hard. There’s not a lot of events like this.”

This is Liberty’s US challenge – to grow F1 more sustainably than ever before, better than former F1 tsar Ecclestone did and certainly better than CVC ever managed in its 10-plus years at the helm, without devaluing the product. The Gulf region stages grands prix for political reasons and thus sustainability is of little concern to those promoters.

By contrast, US events need to be commercially viable, or the plug get pulled without a backwards glance – as happened variously for 50 years, between 1960 and 2010. That is why the sport wandered all over the North American continent, from Watkins Glen outside New York to Long Beach outside Los Angeles and several places in-between for five decades. Cash in too fast and promoters jump faster than F1 cars get to 100mph.

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There are no doubts that the entire continent is under-served by having just three F1 races spread across Canada, Mexico and the USA, but where does the optimum balance lie? Four, possibly five or even six, three or four of in the USA?

Additional events create additional interest, but oversaturation could harm the current trend – as had happened during the pre-Liberty era. Equally, Netflix needs to maintain a fine balance between reality and entertainment – Verstappen, F1’s most popular driver according to a recent survey, refuses to participate due to concerns over his representation – to ensure it maintains interest without switching off loyal viewers.

The same applies to gimmicks versus tradition: reverse grids and sprint races may appeal to Gen Z, but could harm the sport longer term. One gets the feeling that a number of these initiatives are aimed at US audiences, but what if F1 for some reason again goes into a downward spiral? It happened (many time) before and could just as easily happen again. Thus, Liberty cannot afford to alienate traditional markets.

Ultimately Liberty, Epstein and Netflix – aided no end by the likes of Brown – have done a superb job of rebuilding F1 in the USA, but consolidation should be the next step, not a flurry of additional races. Otherwise interest could implode.

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Dieter Rencken
Dieter Rencken has held full FIA Formula 1 media accreditation since 2000, during which period he has reported from over 300 grands prix, plus...

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31 comments on “F1 must avoid past errors in USA as it seeks to capitalise on ‘Netflix effect’”

  1. I still think a team that isn’t rooted to the back of the grid while painted like a Russian flag and a driver to support and get behind would be more beneficial to drumming up American support for F1 than a third race would be. I also think very few countries should have a ‘third race’ when we’re talking of getting rid of historical GP’s and leaving countries that have supported F1 for a long time with none. But admittedly I don’t see why F1 is making an effort to court American viewership rather than consolidating and improving it’s existing fanbase anyway. They’re not needed.

    1. If you don’t see why they are courting the US market, you need to put your Gla$$e$ on.

      1. It depends on what your goal is to determine whether or not they are “needed”. If your goal is to maximize profits, then they are needed.

        1. Which is the goal of Liberty and reason they bought the circus

      2. There is a pump and dump mentality with the tracks. FIA enslave a region with entry fees etc to make an entirely new GP. After the first race the authorities realise it isn’t sustainable, they pull out which leaves FIA with no future commitments, an open calender date for another region and bags of cash.

      3. Fair, I $ee what you’re $aying.

  2. The more I think about it, the more I believe Liberty will cash out soon (within 3-4 years). They show little love for the sport but have seen Ecclestone leaving so many improvement areas (so many opportunities for revenue left on the table) that this simply was a business case they couldnt refuse. Ecclestone failed to understand the power of digital and consumer engagement, two areas where Liberty does have experience. I bet the original plan was to buy, boost with digital (read: addressable base) and sell. Almost any initiative from Liberty so far has a revenue motivation. Lets hope the party it is being sold to does so for a bit of love as well.

    1. Attributing any human emotion to a corporation is a very strange concept. That might have flown in the era of single owners, but no group of shareholders for any corporation that can afford to but F1 feels *love*.

      1. I am afraid you are right and touch upon a big challenge we have as a society. All the people friendly narratives/actions (going green, inclusion.. you know the buzz words) that come out of todays corporation is there to safeguard profitability rather than sincerely wanting to do good or give something back. Sad.

  3. Drive to Survive has certainly done a lot to increase interest in F1 in the US, but one can’t dismiss the bump that comes with having ESPN televise the races. In the past you’d be lucky to see 3 or 4 F1 races on TV each year. That changed when Speed came along and they broadcasted every race. The problem with Speed was it was a channel that one usually only got with an additional paid package on their cable or satellite package so they were never going to bring F1 to the masses. NBC then came along and they did a decent job but it was on NBCSN which again required an additional sports package for people to get it. For me it wasn’t until ESPN came along that things really changed. ESPN is usually available as a part of a primary cable or satellite package so it gets to far more homes that Speed or NBCSN. Additionally they chose to a/use the Sky broadcast and b/show the races commercial free.
    In my opinion, if ESPN chose not to renew their contract and it falls to a network that again is in the “fringes” F1 in the US will probably experience a sharp decline in viewership and interest.

    1. I’ve been watching in the US since 2000, and ESPN’s coverage would have been a mad dream if you’d have told me about it twenty years ago. Complete commercial-free race coverage with no *time shifting* of races? Impossible! I must admit I did grow to like the commentary crew over those years of hungover Sunday mornings with the sound of V10s and V8s droning while lightly dozing during ad breaks.

      1. I also found myself endeared to the old US Speed team of Varsha, Matchett, & Hobbs

        If Sky would just get rid of Crofty — I mute every lap 1 so I don’t have to listen to his manufactured lap 1 shouting. And I’d vote Jenson as a permanent Brundle replacement.

    2. @velocityboy @kerrymaxwell It will be interesting to see what happens with ESPN’s coverage once the current deal expires as if they actually have to start paying for it they may be less willing to keep the depth & ad-free nature of current coverage.

      NBC wanted to retain the coverage beyond 2017 but weren’t willing to compete with F1TV as they wanted to push there own streaming service. When Liberty refused to drop the F1TV mandate (Something which frustrated/angered NBC given how Liberty were allowing F1TV exceptions elsewhere) NBC decided the offer on the table was unviable & pulled out.

      Sean Bratches who was handling the commercial side of F1 at the time had joined Liberty from ESPN offered them the coverage for free. They showed ad’s initially & fans complained since Sky’s coverage didn’t include natural ad bumpers (They took Sky’s coverage/commentary as ESPN didn’t want to spend money producing there own coverage) so Liberty offered them a financial incentive to cover the cost of lost commercial revenue.

      The issue from Liberty’s side is that if they continue to give it to ESPN for free or do some other ‘cheap’ deal with them it’s going to have other broadcasters who are paying millions a year asking questions when future deals need to be worked out with them.

  4. They would be welcome back in Phoenix. Just don’t go head to head with the ostrich festival/races this time.

  5. Netflix/Verstappen effect !!!!!

  6. It shouldn’t be ignored that this is the first time we’ve had an exciting title battle for years – for most new fans (and that includes many from the US), this is the first time they’ve ever seen two drivers fighting to win a title towards the end of the season.

    If the next generation of cars results in another team easily cruising to wins and racking up uncontested championships for the next decade, US viewers will quickly switch off. American sports are designed to stop this from happening so they remain competitive and close – the hybrid generation of F1 hasn’t been either of those things.

    1. I completely agree, F1 is more popular today than 5 years ago because of how competitive this season has been. I also want to speculate that COVID has turned more people to F1 because it was one of the first global events to start back up last year so F1 got something off a “first mover advantage” further to credit COVID is the delay in the new formula to next season which is what has given us this competitive season we are enjoying.

  7. Dieter is correct to note here that this USGP crowd wasn’t the biggest ever F1 crowd. Indeed, it wasn’t even the biggest ever F1 crowd in the US!

    Indy 2000 was much bigger, as were Adelaide 1995 and others. Hell, this COTA crowd might not even be the biggest crowd ever at COTA. 2012 COTA had over 80K seats, that were more packed Friday & Saturday than the 56K seats in 2021. There were abt 45% more seats in 2012 than in 2021, & those 2012 seats were more packed on Friday & Saturday, yet COTA claims a 50% larger crowd? No way.

    Just more of the same nonsense from COTA. They are simply pulling numbers out of … thin air … in an attempt to justify the massive annual State subsidy they receive from the State of Texas. $250+Million SO FAR, with $35Million more in the pipeline.

    1. i agree, Netflix may have helped, but after covid lockdowns and such a string of horrible F1 seasons for the past 7 years, it was a perfect storm for success. Don’t count on it being like this always. If a season is not competitive, I’ll save my money. It’s not like the Indy 500 where the drivers are putting it on the line in such a different way. The 500 is compelling no matter who races, F1 needs competition and rivalries amongst the teams.

      1. Yep. Something that seems to be lost in all the hoopla over the USGP crowd is that there were no Canadian GP, Mexican GP, Brazilian GP, or USGP in 2020, and no Canadian GP in 2021 — so this was the first F1 GP in North OR South America since 2019. I do think F1 is gaining some ground in the US (not that I care if it does), but this crowd at COTA is not an accurate yardstick of that gain in popularity imho, even if you do believe COTA’s nice, round, “estimated” numbers. Also, this was the first USGP in a while that actually mattered in the championship standings, and there were thousands of carryover tickets that were purchased for the 2020 race that was cancelled. It was basically a 2-for-1 for COTA.

  8. Re: the ‘Netflix Effect’, Yep. I believe there are multiple factors that formed a bit of a perfect storm that helped get a big crowd to Austin. I’ll be interested to see how next year goes, and 2023, as Ross mentioned earlier.

    Something that seems to be lost in all the hoopla over the USGP crowd is that there were no Canadian GP, Mexican GP, Brazilian GP, or USGP in 2020, and no Canadian GP in 2021 — so this was the first F1 GP in North OR South America since 2019. I do think F1 is gaining some ground in the US (not that I care if it does), but this crowd at COTA is not an accurate yardstick of that gain in popularity imho, even if you do believe COTA’s nice, round, “estimated” numbers. It might have been the biggest crowd they’ve had at COTA, almost certainly, but that doesn’t support the claims that it was the “biggest crowd in F1 history” that I’m seeing in some articles now – or the claim that it was 50% larger than the 2012 crowd at COTA. 2000 & 2001 Indy, 1995 Adelaide, and others would like a word with those authors.

    The 3rd US race = Vegas. In 2023. That’s happening. Indy could easily be #4. And with 3 new races in the US, COTA boss Epstein sees the writing on the wall. It was no accident that he recently said the US can support four races. He’s trying to keep COTA from becoming expendable by lobbying FOM in the media. I think F1 needs the US (or at least thinks it does), but with 2, possibly 3 new races coming, they won’t need COTA for much longer, especially if COTA won’t properly repair the track. I think they’ll be back on the calendar next year, for sure, but after that it gets hazy.

    And yeah, there was no Netflix effect when Indy packed in over half a million for the weekend and 250K on race day back in 2000. That race and others were much bigger than this last race that’s being hailed as the largest crowd in F1 history. There were no claims in 2000 that F1 had “finally broken into the US market”. And speaking of murky numbers, that’s COTA’s bread & butter.

  9. “F1’s “We Race as One” initiative focuses on sustainability, diversity and inclusion, all of them highly valued issues amongst the Z generation, particularly in the USA.”

    So Hamilton and Vettel would be the most popular drivers since they’re the most outspoken on those issues, right?

    “That Max Verstappen and Lando Norris outscored Lewis Hamilton during a recent popularity survey speaks volumes, … That is youth speaking.”

    Oh. If that is the youth speaking, they don’t appear to be saying what you say they’re saying.

  10. Barry Bens (@barryfromdownunder)
    3rd November 2021, 18:11

    The fact that a sport becomes popular in a country when a series such as Drive to Survive airs, says a lot. Both about the country (and its inhabitants) and the view of the sport in said country.

    If the biggest reason of Americans liking F1 is because of a terible, fake and typical American-series such as DtS, I can do without it. Not just an extra race, the entire country.

    1. +1

      If F1 has to simplify, dramatise and overly-commercialise the sport for thick yank kids, then I as a reasonably educated British person of a decent age can do without the sport to be honest. I’m not what F1 wants.

      “Gen-Z” generally have the attention span of a goldfish, when they move on to their next brief obsession or social justice fight, what were alienated “avid” fans won’t be there anymore to cushion F1’s fall.

  11. Give Argentina a slot in the calendar again, and it’d be a massive sell out, even with the extreme prices in a country with huge inflation and a very bad peso-dolar convertion. So what?

    They want to put 3 races in the US because they know they can milk that cow even further. Why don’t you put 2 races in Mexico or 3 in Britain, if it’s attendance and interest what drives such decisions?

    And really, enough of Drive to Survive. It’s like the whole sport needs to thank a bad docuseries for the success it has… it’s only one step to gather new viewers, which it’s done well, but it’s nothing you can mantain forever.

    1. @fer-no65
      Well said about “Drive To Survive” – my thoughts exactly. Still don’t understand all the fuss about it to be honest.

      Journalism these days seems to latch on to the latest fad Netflix series and provide a series of over-analytical articles about the subject – this article is no exception

  12. Interesting and well-written article.

    F1 primarily selects race locations by how much they or their governments will pay. This is why we have the last race at a dull circuit far from fans and so many races in the gulf states and other locations with corrupt governments. Sportswashing pays.

    F1 wants more races in the US but I don’t think they are willing to forgo potential fees for a race elsewhere for a third race in the US. Even COTA might not be retained unless the track owners dump a lot of money for structural repairs to the track.

    I think it’s more likely we see a Pyongyang Street Circuit on the calendar than a third race in the US unless someone shows up with bags of cash.

    1. Yep. The racing surface at COTA is a complete disaster.

  13. The main question I have is, how long will the Netflix effect last? Happy to be proven wrong, but I believe too much is being read into this years attendance at COTA.

    Repressed demand due to COVID should not be discounted. Also, DTS is a relatively new phenomenon to most people.

    I’m just saying this because, most people of today, have infamously low attention spans, not mention the fickle nature that persist among the masses….I’m not sure this will last. I’m happy to be wrong on this!

  14. So if I understand this correctly, F1 is looking at 23 races spread across the globe with 2 being in the US and a further 2 for Canada and Mexico. Meanwhile Indy Car is looking at 17 races in the US alone, this sounds like a truck load of competition for bums in the seats.
    F1 may be in a different league than Indy Car, from our perspective, but will the fans ante up and pay the premium for F1.? Somehow I doubt it will be an easy sell.
    Even getting the local government to ante up for the hosting fee for the Canadian GP is fraught with political intrigue and organized resistance. Not guaranteed.

  15. Laguna Seca anyone?

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