How Formula 1 Resurrected Itself
The marquee brand flirted with death and came back stronger than ever. How?
In a few hours, Formula 1 will host a star studded event at London’s O2 Arena showcasing the new cars and drivers for the upcoming 2025 season. This event will be the first of its kind in the sports’ 75 year history. A far cry from just a decade ago when the sport was losing viewership and multiple racing teams were on the brink of bankruptcy. Your surprise is palpable, the sport hasn’t always been as adeptly ran as it has the past 7 years. So what exactly has changed in the last decade? I’ll tell you.
A video I took at the 2022 Canadian Grand Prix.
Formula One as we know it today is a racing series that had its inaugural race in 1950. The Fédération Internationale de l'Automobile's (FIA) - which is the governing body behind the sport - was formed in 1946 and to this day sets up the rules and regulations that enhance competition on the track. In simple terms; the FIA sets the rules, the teams build completive cars based on them, the drivers race the cars and Formula 1 is the commercial partner that brings the action to our screens.
The Dark Decade
Just a decade ago, Formula One was floundering. Viewership had dropped to a 7 year low in 2015, no doubt a result of uncompetitive drivers and constructors championships that left viewers bored stiff. In fact, the entire half decade leading up to that point had been a story of the uninspiring dominance of single teams and drivers. Lewis Hamilton had just raced to 2 sleepy drivers championships in a row. Worse still, Sebastian Vettel had won FOUR drivers championships in a row before that! Audiences were uninterested.
Furthermore, the archaic media strategy observed by former Formula One Group boss Bernie Ecclestone did nothing to highlight who the competitors were behind the helmet. Teams were not allowed to post any content from race events on their social media, alongside other restrictions. When asked about F1’s non existent social media strategy in a 2014 interview, Ecclestone said
“I’m not interested in tweeting, Facebook and whatever this nonsense is. I tried to find out but in any case I’m too old-fashioned. I couldn’t see any value in it. And, I don’t know what the so-called ‘young generation’ of today really wants. What is it? You ask a 15 or 16-year-old kid, ‘What do you want?’ and they don’t know.”
Formula One needed saving.
The Rebirth
In late 2016, word began to spread about a potential takeover by US based firm Liberty Media. Less than a year later, they purchased The Formula One Group from Bernie Ecclestone for a fee of $4.4 Billion. In prospectus documents from the time which have since been released, Liberty outlined a bold vision for the sport; aiming to transform its digital strategy, overhaul the competitive environment and broaden its reach in untapped markets.
Their first order of business was lifting the backwards social media restrictions. This video - the first of its kind - was quickly posted by Red Bull Racing on their Twitter account, highlighting their star driver Daniel Ricciardo ahead of pre season testing in 2017. Notice the laughably low like count, this was uncharted territory for F1.
From then on, Liberty Media continued to make shrewd yet impactful decisions that slowly propelled the sport upwards. Uploading race highlights to YouTube, stocking the F1 website with driver interviews, deep dives and profiles as well as keeping up an incessant social media strategy that ensured fans were ever informed. These changes greatly helped but the two biggest catalysts for growth were yet to come.
Drive To Survive
On 24 March 2018, Formula One announced that Netflix had commissioned a ten episode docu-series giving an exclusive behind the scenes look at the 2018 Formula One World Championship. On 24 July 2019, Formula One announced that a second season would premiere in 2020 covering the 2019 Formula One World Championship, involving all 10 teams. Unknown at the time, this would prove monumental.
Season 2 released on February 28th, 2020; with all 10 episodes available for streaming at once. This was just as the entire world was beginning to quarantine as a result of the Covid-19 pandemic. Since the upcoming 2020 season was promptly shut down, fans flocked to Netflix to get their racing fix and the show exploded from there. For once, the sports’ personalities, often shrouded in mystery and respectability, were out to see in their full competitive nature. The show even clicked with non-fans, who were not only drawn to its dramatized nature that made it easy to follow, but the humanization of the drivers who raced to the brink of death for a living. Formula One had arrived on the global scene.
The Cost Cap
Not satisfied, Liberty Media had another stroke of strategic genius ready for Formula One’s return in 2021. They introduced a cost cap. You see, F1 was by nature an uncompetitive sport because the well capitalized teams (Ferrari, Mercedes, Red Bull) often owned by large global companies could spend whatever amount on research and development to make sure their cars were the fastest on the grid. Being the fastest would win them championships, both maximizing their TV time (sponsorship money) and prize money. As a result, the fastest teams would always remain the fastest. Not very exciting.
Liberty Media observed this and found a fix. They introduced a cost cap which ensured that every team had a dollar limit on how much they could spend on developing their car on a given year. This cap excluded driver and team principal salaries, so the best teams weren’t completely hamstrung, but what it did was ensure that even the smaller teams could financially compete and potentially even break even. Prior to this, F1 was primarily a loss-making endeavour.
The Outcome
I daresay Formula One has never been more popular. The 2024 season is already being lauded as one of the most competitive of all time. The sport has expanded its number of yearly Grand Prix to 24, compared to 19 in 2015. Viewership records continue to be broken yearly both on TV and in person. Most remarkably, every F1 team is said to have made a profit in 2024, highlighting a level of sustainability that was once thought to be impossible.
This is a story of how timely strategic decisions paired with a stroke of fortune can turn almost anything around. See you tonight for the reveal of the new cars. You can find it here.
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