How F1 is trying to win the Jackpot in Las Vegas 🎲
+ Sergio Aguero Returns and Lewis Hamilton becomes Brazilian 🇧🇷
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Why does Azerbaijan, a country with just 10 million people, have a Formula 1 Grand Prix but not India or South Africa? Today, we explore the weird world of Grand Prix selection and understand how F1 is ripping up the playbook and investing billions into Las Vegas in the hopes of winning big.
The number of Formula 1 Grand Prix each season has grown from around 16 in the 1990s to the current record of 22 races.
The F1 teams and drivers now travel from Australia to Abu Dhabi, via Brazil, Monaco, Miami, and many more. F1 has become a global competition and it looks like more destinations will be added soon. According to F1 CEO Stefano Domenicali, Formula 1 has received enough interest to host at least 30 races a season and plans to introduce a 24 race calendar within a few years.
With so much demand across the globe, how does F1 decide where to race?
Traditionally, a government or private company that wants to bring F1 to their country will submit a proposal to Formula 1 outlining all of the reasons they should be selected. Although, the most important factor is often how much money they are willing to give F1 in race hosting fees.
Ah yes, the race hosting fee. This amount varies depending on the status of the track. Historic locations such as Monaco, Silverstone, or Spa pay around 15-25 million per year. Newer tracks with less racing pedigree, like Saudi Arabia and Azerbaijan, have to pay around 55 million per year. The logic here is that historic tracks get reduced rates because they bring in fans, while newer locations pay more because F1 brings fans to them.
This doesn’t mean that F1 simply chooses the location that has either the deepest pockets or the deepest links to racing. Only tracks that have attained FIA grade one status can host a Grand Prix. There is currently only 40 grade 1 circuits on the planet and any track looking to gain this status must meet a strict set of criteria. This includes:
minimum track length and width
adequate barriers and run-offs
suitable facilities
and an approved lay-out (no ovals.)
Even with a suitable location and a big offer of money, there is no guarantee of success.
F1 will also consider the logistics of hosting the event at that location. For example, F1 will want to make sure that the track is close to a large airport to make it easier for teams to transport their equipment and personnel.
F1 also ensures that the new track will engage a large enough audience. With Dutchman Max Verstappen becoming one of the biggest names in the sport, Formula 1 decided to return to racing at Zandvoort in the Netherlands knowing that the Orange Army would pack the grandstands.
Hosting an F1 race is not cheap. Any successful applicant can expect to spend at least $1 billion over a typical 10-year period. So what do they get in return?
A Grand Prix can bring fame and fortune to the local area. After hosting ‘the European Grand Prix’ in 2016, income from tourism grew by 20% in Azerbaijan. One study revealed that over 8% of a city's tourism can be attributed to hosting a Formula 1 street race.
The inaugural Miami Grand Prix in 2022 is said to have generated at least $50 million for the local economy.
Formula 1 bosses noticed this large flow of money from fans to race organizers and decided to get in on the action.
Earlier this year, F1 announced the Las Vegas Grand Prix. The street race, scheduled for the 2023 calendar, will see the cars driving at top speed down the famous Vegas strip.
What is interesting about this race is that F1 will receive absolutely nothing from hosting fees. But why? Did the F1 bosses lose a bet?
Not exactly - although they are taking a gamble - Formula 1 has decided to host the Las Vegas race itself. Instead of taking a large upfront fee and letting the organizer have all of the risk and reward, F1 will pay for absolutely everything itself and hope to make a profit down the line.
In total, Formula 1 will need to spend billions on infrastructure. In fact, F1 just invested $240 million to purchase land in Las Vegas for the construction of a pit lane and paddock.
With several private organizers lining up to throw money at F1, why would they decide to take on all of this financial risk?
Well, by hosting the race itself, F1 will be able to collect all of the ticket and sponsorship money that would normally go to the race organizer. In theory, this money will be several multiples of the average race hosting fee.
In some ways, this is more of a calculated investment than a gamble. Formula 1 is one of the fastest-growing sports in America, with tickets for U.S. races in Austin and Miami selling out and TV audiences growing by more than 50% each year. In fact demand for F1 is so strong that Netflix is considering rivaling ESPN in a $100 million deal for the U.S. TV rights.
The prospect of a Las Vegas race has already been met with enthusiasm from fans and drivers, and F1 will hope that this translates into ticket sales next year.
The traditional organizers will also be watching the Las Vegas race with keen interest. If F1 deems the project a success they may do more races on their own or start demanding more money in race hosting fees.
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🏀 Nike founder Phil Knight leads an investment group that has submitted a $2 billion offer to buy the Portland Trail brazers. The current owners have acknowledged the bid but maintain that the team is not for sale. Knight’s group may face some competition if the owners eventually decide to sell. Several parties are said to be readying bids for the team, currently valued at $2.05 billion by Forbes, with NBA commissioner Adam Silver claiming that the Trail Blazers will be sold ‘at some point.’
🥳 Some videos have the power to instantly brighten your day and this one is no exception.
When Sergio Aguero announced his retirement late last year due to a heart condition, he promised that he would return to playing football. Seeing Aguero back in action in a 5-a-side against River Plate fans in Miami delighted fans across the globe, with many hoping he might return to professional football. While a full comeback is unlikely, Aguero has agreed to join the Argentina coaching staff for the 2022 World Cup in Qatar.
🇧🇷 The Brazilian government has officially voted to give Lewis Hamilton honorary citizenship. This comes after Hamilton won last year's Brazilian Grand Prix and celebrated by waving the nation’s flag on the podium. Brazilians took this show of affection to heart and began chanting the Brit’s name alongside that of the legendary Ayrton Senna. Brazilian congressman Andre Figueiredo wanted to symbolize this newfound connection by forwarding a motion to grant Hamilton citizenship. The move received support from across the political spectrum, with many keen to praise Hamilton for his achievements in Formula 1 as well as his work tackling racism and defending human rights.