As Formula 1 racing gains a significant foothold in the United States, two racing teams that have struggled with funding in the past are now seeing additional opportunities with companies in America.
Jost Capito at Williams and Guenther Steiner at Haas aren’t sitting week-to-week in the F1 schedule thinking that they’re in a position to win the championship. At least not in recent years and certainly not in 2022 where Williams is currently last in the Constructor championship points and Haas sits 8th. Yes, they’ll always work toward it, and as part of the race-within-the-race, both teams claimed points this year, something not always a given in the past.
Racing in Formula 1 is not cheap by any standard. Even with a cost cap put in place, it was $145 million in 2021 and reduced to $140 million for this season. It will be lowered to $135 million for 2023.
Sponsorships fuel all forms of racing, but F1 eats at its table the most. With races staged globally, businesses can gain a worldwide footprint by inking deals.
Those deals aren’t cheap given the exposure, and myriad of ways to activate them globally. Still, the historic Williams family, they were forced to sell in 2020 to investment firm Dorilton Capital. American Gene Haas owns the Haas F1 team but Steiner and the company have bumped into primary sponsor issues in the past, namely with Russian sponsor Uralkali who was dropped in March due to the invasion of Ukraine.
For decades, the allure of F1 just never seemed to resonate in the U.S. And while much has been made of Netflix’s NFLX Drive To Survive docuseries playing a huge role in (finally!) growing interest in F1 in America, after a few seasons under its belt, there have been enough converts to say F1 is here to stay. In the span of two years, the global racing league has seen the introduction of a race in Miami around Hard Rock Stadium, and in 2023, Las Vegas will host a splashy night race that will be eye-popping on levels not seen since races began at Monaco.
I caught up with Jost and Steiner as they were in Vegas for a kickoff party for the 2023 race. As the smoke was still settling from the likes of Lewis Hamilton doing donuts on the Strip in front of thousands, both team principals were more than busy fielding calls.
“Given where Williams has come from financially, the 2022 season had its challenges,” Jost said by phone. “I believe we did quite a good off the track — how to develop the factory and the company, developing sponsorships — developing the commercial side of the business. Even on the track, we gained points where we close the gap quite a lot to the midfield teams. So I think we’re pretty happy where the season is going so far.”
For Steiner, the growth in U.S. popularity will pay direct dividends for 2023. Texas-based digital payment company MoneyGram inked a multi-year deal with Haas giving them a primary sponsor on car livery since dropping Uralkali ahead of the 2022 season. Financial terms were not made available but based on other deals that skew more toward mid-pack teams, the deal could be worth as much as $40 million annually; a big cash infusion for Haas.
“I live in the States and I can see the increased interest in F1 because five years ago, we could never have had that US company as a title sponsor there was just not enough interest even if MoneyGram wanted to go global,” said Steiner. “But MoneyGram being a U.S. company with a sponsorship deal for an American-owned team, it works out well.”
Steiner mentioned that with MoneyGram seeing the popularity of F1 growing in America, they can be one of the first companies which can “jump on the bandwagon” in the U.S.
“I think they’re very clever because if you’re first – or if you’re one of the first –the price is better because everything will go up in the future,” added Steiner.
Formula 1 has seen a resurgence on the business side since U.S.-based Liberty Media purchased the racing league. Recent Q3 financial reports show that F1 is bouncing back considerably from the height of the pandemic, posting $82 million in operating income, up 2% from Q32021, and that will continue as media rights deals from the likes of ESPN kick in next year.
As F1 continues to heat up in popularity, supply and demand will fuel additional sponsorship money, even as concerns about global inflation affect ad budgets.
“Liberty has done a fantastic job bringing the three races to the U.S. that really reflects the growing interest in America,” Jost said. “I think every team is benefiting from that. Formula One, as a franchise, consists of just 10 teams. It’s the biggest, or close to the biggest, global sports and entertainment series in the world. With just 10 teams for the whole business, it makes all of the teams more attractive for sponsorship deals.”