Winning not the Verstappen way, but the Liberty Media way 

Rodrigo Roque Neto                                  

Market Monday November 27th 2023

With way Formula 1 changed the sports panorama is something that few could predict, but Liberty Media was one of the only ones who could see through to the potential. Taking into consideration the way that Formula 1 has grown is above any other sport’s trajectory. 

On September 7th, 2016, Liberty Media Corporation, a US-based mass media company, announced a two-step acquisition of Formula One in a deal that values the company at $8bn, and its equity at $4.4bn. Liberty Media Corporation would perform the acquisition through a subsidiary, Liberty Media Group, which would be renamed as Formula One Group once the transaction was finalized. 

The Formula One Group is a group of companies, ultimately owned by Jersey-based parent company Delta Topco Ltd., responsible for the promotion of the FIA Formula One World Championship. As the Capitan of the boat at the time, Bernie Ecclestone, once said “Formula 1 should not be chasing a younger generation of fans as they are the wrong target for the sport’s sponsors”, giving clear evidence to the decreasing ratings, low engagement from the consumers and the drop of 40% of viewership.  

With that, once Liberty Media came into the picture, almost everything changed besides the essence of the sport. Chase Carey, the new CEO, had a clear plan to imbed the sport everywhere he could, from growing in the US to conquering China, mainly through intense marketing, like the famous Drive to Survive Show. But what time has told us it the way they were not able to achieve this goal without making key sacrifices. With the rapid growth they planned for the US, with the unveiling of 2 new locations with Miami and Las Vegas, already under the stewardship of Stevano Domenicalli, Formula 1 is rapidly achieving its goal (of accomplishing the American market) but with one sacrifice imposed by external factors. 

Essentially, with the COVID-19 pandemic and with a new focus on growing the sport next to Americans, the Chinese goal was put on hold (with the temporary suspension of the Chinese GP). But this new administration of the sport decided to explore even more a certain aspect in terms of market penetration in order to maintain sustainable growth in the markets they don’t have their full focus on. And the strategy that accomplishes this is hiring and presenting drivers from those same countries, take Zhou Guanyu for example with the goal of making China an expanded market, and attract local sponsorships that boost the Formula 1 name. 

But all in all, Liberty Media is being able to consolidate and present a huge advance to the sport, turning it over to turn a Formula 1 race into more of a bigger experience for the fans. Through intense marketing and positioning they were able to more than double their value making Formula 1 a global phenomenon, turning Liberty Media’s successful move into a story for the history books. 

Leave a Comment

Your email address will not be published. Required fields are marked *