Formula 1 CEO Stefano Domenicali Talks U.S. Grand Prix, Staying In Austin Long-Term

Formula 1 will make the last stop of its 2022 U.S. tour and celebrate 10 years of its return to America this weekend with the U.S. Grand Prix in Austin, Texas. Beyond its current agreement with Circuit of the Americas racetrack, the sport will not abandon its Texas site despite adding more U.S. venues in Miami and Las Vegas, according to F1 CEO Stefano Domenicali.

“Austin was the first to believe in Formula One in a consistent way, so we need to respect that,” says Domenicali. “The future of Austin is great, and I don’t see any problem thinking that can be the future.”

Domenicali spoke to Forbes senior writer Jabari Young in a wide-ranging interview about the 2022 F1 season, his second as CEO, expansion, and lessons from the Miami Grand Prix.

Business is back to normal

F1 is owned by Liberty Media which has a $13 billion market capitalization. Liberty also owns satellite radio company Sirius XM, Live Nation and Major League Baseball’s Atlanta Braves. In August, Liberty invested in Generation Z sports company Overtime, which it attributes to F1’s tracking stock, listed as “FWONA” on NASDAQ. Tracking stocks are used to gauge revenue for a particular division in a company’s portfolio.

F1 made $2.1 billion in revenue for the 2021 season, up from $1.1 billion the season prior, which was impacted by Covid and $2 billion for the 2019 season. Domenicali said he was optimistic about projections “in terms of total revenue for the future.” He added, “A lot of interest from the commercial point of view. It’s given us a great signal.”

Sports fans in the U.S. took a liking to F1 over the last few years, a feeling that increased during the pandemic. In March, Disney-owned ESPN reported that F1’s season opener, the Bahrain Grand Prix, averaged 1.3 million viewers, its most-watched F1 race since 1995. Two months later, the network said F1 averaged 2.6 million viewers for the Miami Grand Prix. That became the most-watched F1 race in the U.S.

“Austin was the first to believe in Formula One in a consistent way, so we need to respect that.”

ESPN reportedly renewed its deal with Liberty Media and is estimated to pay over $75 million for F1 rights. That’s up from a reported $5 million per season. On the sponsorship front, cryptocurrency platform Cyrpto.com is in year two of a $100 million pact it struck with F1 in 2021.

When discussing whether Netflix’s “Drive to Survive” series raised interest in F1 and increased the profile of rising stars like Ferrari driver Charles Leclerc, Domenicali concurred, adding, “It’s been phenomenal the way Netflix has been able to activate a new generation — we need to thank them.”

Domenicali took over as CEO in January 2021, replacing Chase Carey, who helped commercialize F1. Before taking the helm as F1 boss, Domenicali served as Team Principal of Ferrari, vice-president at Audi, and CEO of Lamborghini. Asked to describe his first two years as CEO, Domenicali labeled the role an “extraordinary experience,” citing growth in the U.S. market.

F1 left the U.S. in 2007 as interest dwindled but returned in 2012 when Austin showed interest in reviving the U.S. Grand Prix. For that, Domenicali says F1 will remain loyal.

“We can’t forget that we’re coming from a situation a couple of years ago where the numbers were not there,” Domenicali says. “We were in a very difficult situation, generally speaking. We were thinking do we need to keep investing in the U.S. because, after many years, we weren’t able to activate [interest].”

F1 signed a five-year deal in February to keep the U.S. Grand Prix at the Circuit of the Americas, or COTA, track. Since 2012, COTA promoters have funded the U.S. Grand Prix by using more than $150 million in public dollars from Texas’ Major Events Reimbursement Program, or MERP, according to The Associated Press. However, with Miami and Las Vegas on the schedule for the next ten years, COTA’s track could use an upgrade, especially if it wants to keep F1 beyond 2026.

Asked if at least a $100 million investment is needed to improve COTA, Domenicali said, “The accuracy of the numbers depends on what you have to do. Investing in experience is what we want. Experience means attention to the crowd, attention to the things that are working, improving on things to make sure this event will be incredible.”

F1 promoters, Domenicali adds, “need to understand what the value proposition is they need to offer to our customers. At the end of the day, fans are coming to the track, and the experience needs to be [first class].”

Watch the video for more of Domenicali’s interview with Forbes.