Formula One Continues To Expand Globally – Coming To Miami
Formula One has announced they are adding a second US Grand Prix in Miami. Today's email breaks down the details.
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After rumors and discussions have seemingly been ongoing for the better part of a decade, Formula One officially announced they are adding a second Grand Prix in the United States yesterday.
Here are the race details:
The agreement is for 10-years in total.
The race will be held at Hard Rock Stadium in Miami.
No exact date has been set, but it will be held in Q2 2022 (Apr-Jun).
Hard Rock Stadium is home to the NFL’s Miami Dolphins and hosted Super Bowl LIV between the San Francisco 49ers and the Kansas City Chiefs, following a privately funded $350 million renovation in 2015.
The circuit itself will be 3.4 miles, feature 19 corners, three straights, and potential for three DRS zones, with an estimated top speed of 198 mph.
With COVID-19 forcing Formula 1 to operate a shortened 17-race schedule that took place largely behind closed doors in 2020, its parent company, Liberty Media, says the sport recorded an $877 million decline in revenue last year — from $2.03 billion in 2019 to $1.14 billion in 2020.
Furthermore, Formula 1 saw its stock price ($FWONA) decline over 50% in a single month last year when the pandemic began.
The interesting part?
That only tells half the story.
Despite posting an operating loss of $386 million last year, compared to a profit of $17 million in 2019, Liberty Media has quietly been executing its robust digital strategy to engage a younger audience in the sport.
Formula One has been working with Netflix for the last few years on “Formula One: Drive to Survive,” a documentary-style show that follows Formula One and its teams throughout the course of a season.
The show allows fans to get a never-before-seen glimpse into the paddock and the inner workings of the world championship series, revealing dramatic rivalries and friendships that traditional broadcasts fail to capitalize on.
The best part?
Not only did Mercedes and Ferrari — the top two teams — agree to participate in filming after seeing the success of season one, but Netflix announced last month that the documentary-style series was trending number one worldwide.
Even better, the results are quantifiable:
Formula One made significant digital gains in 2020, with social media engagements soaring 99% year-over-year (YoY) to 810 million (Source).
Formula One is the fastest-growing major sports property across Facebook, Twitter, Instagram, YouTube, Tiktok, Snapchat, Twitch, and Chinese social platforms, with total followers up 3% to 35 million (Source).
Over 75% of Formula One’s audience growth in 2020 came from those aged between 16 and 35, a key demographic for broadcasting and advertising partners (Source).
The partnership between Netflix and Formula One appears to be helping the sport grow internationally.
For the first event of the 2021 Formula One season in Bahrain, ESPN 2 averaged almost 900,000 viewers. That’s still a small number compared to an average NFL or NBA broadcast, but it represents the largest US-based audience for Formula One in years.
Now, they’ll look to continue that momentum in Miami.
Figuring out the local economic impact of hosting a large professional sporting event is not always an easy equation. Analysts typically tend to underestimate the cost of construction and forget about the budget constraints of potential visitors, while overestimating potential tax revenue in the process.
The positive for Miami?
Formula One naturally attracts international visitors, with government officials in Texas estimating that roughly 300,000 out-of-town visitors come to Austin each year for their F1 event.
With new rules being implemented to even the playing field and innovative digital partnerships continuing to grow the audience internationally, if Miami can build out ancillary events around the Grand Prix to provide week-long entertainment, there is no reason this can’t have a similar local economic impact to the Super Bowl.
On that front, only time will tell.
Have a great day, and we’ll talk tomorrow.
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