Formula 1's American Growth Story
Over the course of a few years, Formula 1 (F1) has turned from a sport in decline to arguably the hottest ‘new’ sports obsession in America and one of the fastest growing sports in the world. The TV ratings have dramatically increased. The social media following has rapidly grown. The drivers have emerged as new celebrities and subsequently, Formula 1 revenue has reached new heights. How did it all happen?
Formula 1 has been around since 1950, but the true rebirth of modern F1 happened in 2017 when the Formula One Group was bought by Liberty Media. As a media private equity holding company led by John Malone, Liberty was on a mission to modernize the sport of Formula 1 and grow commercial revenue. Part of their strategy was to invest in social media, e-sports, and content. Liberty Media’s most powerful growth tool was partnering with Netflix to create the successful F1: Drive to Survive series, which played a massive role in building the brand awareness of Formula 1 amongst younger audiences. And what was the most important outcome of Drive to Survive? Capturing an entirely new group of fans in America.
For years, Formula 1 failed to penetrate mainstream American culture. Now, Formula 1 has become the hottest ‘new sports’ in the country. To reflect this new audience demand, Formula One is now growing to three Grand Prix races across the US - in Austin, Miami, and Las Vegas. Attendance at US races has reached all-time highs and the value of F1 media rights have grown. And with this new cultural relevance, Formula One is unlocking a new demographic of passionate collectors and investors across the United States.
F1 Cards, NFTs, and Collectibles
We have covered the growth of trading cards and one of the most exciting topics is the growth of F1 cards. Formula 1 cards from Topps have become one of the most sought after card products. The price of F1 cards is going up and Goldin Auction sold the most expensive F1 card ever in May of this year, a Lewis Hamilton rookie card that fetched a price of $900,00. We have seen growth across the board, particularly for the biggest drivers like Max Verstappen and Daniel Ricciardo.
One of the very first NFT projects was actually Formula 1 Delta Time, an officially licensed digital collectibles game created by Animoca Brands in 2019. And now several F1 teams have announced NFT projects this year. It’s still early, but we can expect more F1 teams and drivers to experiment with NFTs.
Sneakers and Fashion...The Next Frontier?
You can sense the momentum growing with Formula 1, but a big opportunity that isn’t talked about enough is sneakers! In addition to being the most successful F1 driver of all time, Lewis Hamilton is also regularly described as a fashion influencer. He has a deal with Puma, but his shoe choices are nowhere near as influential as many of these NBA players we see signing deals with Nike and Adidas.
One of the biggest opportunities for F1 to increase its cultural relevance is through fashion. NBA players with much smaller social media followings than F1 drivers are signing mega shoe deals that can often lead to resale hype. It seems that the idea of a Nike/Adidas shoe deal has not yet permeated the culture of F1 the same way as a league like the NBA. Perhaps this is due to there being such a big focus on engineering–a large part of a Formula 1 team’s success is based on their ability to maximize car technology. That same tech focus does not really exist in any other major sport.
And maybe that’s why there have not been any major sneaker deals with Formula 1 stars. If F1 wants to unlock the next frontier of cultural relevance and 'cool,' they need to expand more into fashion. It’s well documented how French club Paris Saint-Germain (PSG) worked with Nike to make PSG one of the most hip teams in the world. If I was running Formula One’s commercial team, I would focus the next step in expansion on the fashion industry. Surely dozens of fashion brands are eager to collab with F1 and capitalize on this hot new sport.
We're at the beginning of a modern renaissance in the sport of Formula 1. We can see this reflected in growth metrics and increases prices of Formula One collectibles. But how else does this story play out? In my humble opinion, F1--whether drivers, teams, or the sport in general--can have a greater impact on culture by having a greater impact on fashion. Let's see if they can make it happen.