Stakes Get Bigger in Formula 1

Cricket

Motorsports

News, features & insights from the world of SportsTech. Every Week.

After sunny Rome, back to chilly Berlin. The autumn colours are a lovely sight while running / strolling through Tiergarten, an experience I recommend to anyone visiting the city.

Speaking of eye-catching, was really taken in by the Arctos Partners – Aston Martin F1 news. That rabbit hole of reading has lead to this week’s Feature Article. Had to find something to disappear into after the disappointment of India’s loss in last Sunday’s Cricket World Cup Final. Fair play to the Aussies, well deserved victory after out-playing India in all departments.

You don’t have to be a Cricket fan to appreciate this – Australia started the tournament 0-2 after losing to India and South Africa. The two teams they beat in the Final and Semis respectively. That’s called ‘Winning the Moments that Matter’.

Lastly, Happy Thanksgiving to all those who celebrate the holiday. Even if you don’t, It’s a chance to appreciate all the good things in our lives. Especially if there’s a smashing Thanksgiving dinner involved.

Happy Reading

Feature Article

Stakes get bigger in Formula 1

A data driven look at (by some metrics) the Worlds Fastest Growing Sport.

Last weekend’s race in Vegas brought out all the gambling puns, good and bad. Trust the internet to go all in on that.

The weekend nearly went down the drain (last pun, I promise) before it began but once the lights went out, it really was a fantastic race to watch.

Lance Stroll would have been happy with his second 5th place finish in two races, his season is ending strongly. Though the happiest Stroll in the paddock would likely have been his father Lawrence after Arctos Partners announced a minority investment in Aston Martin F1, two days before the race, valuing the team at £1 billion ($1.24 billion).

For context, Stroll Sr. led a consortium to acquire the F1 team (then Force India) in a distress sale for £90 million ($117 million) in Oct 2018. So just over 5 years ago. That’s a CAGR of 62%. Cue the champagne

Granted Lawrence Stroll has backed that initial investment with significant subsequent amounts. Credit to the team, that faith is being rewarded. And a fair share of that credit should go to Liberty Media.

Enough has been written about how Drive to Survive has helped grow the sport (there’s a lot more to it). This is not another piece on all the things Liberty Media have done right. Instead this is a quick look at the numbers, which speak for themselves.

In late 2016, Liberty Media agreed to buy controlling interest in the Formula 1 for $4.4 billion. Today Formula 1 is valued at $18.6 billion. That’s 20% higher than the combined value of the 10 teams. At an eye catching CAGR of 20%.

At the start of 2023 Liberty Media were crowned the Most Valuable Sports Empire by Forbes at $20.8 billion. Apart from Formula 1, their portfolio includes the Atlanta Braves, Drone Racing League, Overtime Sports and IndyCar team Meyer Shank Racing (me neither).

Arctos themselves have an impressive sports portfolio, now valued higher than the previously reported $6.6 billion in assets. It includes the Golden State Warriors, LA Dodgers + 13 other sports teams across the NHL, NBA, MLB and US Soccer.

These are serious people putting in serious money into F1 with the expectation that it’ll continue to grow at a healthy pace.

In July, Forbes did a great piece summarising the trend of rising F1 valuations. In case you missed it, here are some highlights:

• In early 2021 Sauber was looking to sell a majority stake in Alfa Romeo Racing to Andretti Autosport at a valuation of ~$350 million. The deal collapsed and instead Sauber sold a minority stake to Audi at a valuation of ~$650 million, nearly doubling the price in just 15 months. In 2023 the team is valued at $900 million.

• In June 2023 Alpine sold a 24% stake to a group including Ryan Reynolds’ Maximum Effort Investments, RedBird Capital Partners, Otro Capital & others. The terms of the deal, valuing the team at just over a $900 million, were locked 8 months prior. Forbes believed that valuation rose to $1.4 billion by the time the deal was executed.

• By Forbes’ estimates, on average, F1’s ten teams are worth $1.88 billion. That’s a nifty 276% increase from the $500 million average when Forbes last valued the teams in 2019.

As the legendary Murray Walker would say, that’s “Go, Go, Go!”. 

Cost cap firmly in place, a commitment to carbon neutrality by 2030 and glitzy new races added to the calendar, it’s no surprise that F1 is a very attractive place to put your money. Even for automotive giants like GM, who are quite keen to get on the F1 grid. They’d like to join Audi (Alfa Romeo Racing) & Ford (Red Bull Racing) as F1’s latest engine partners. Honda famously decided to exit F1 during a championship winning season and have since made a U-turn on that decision. They will come back to the grid in 2026 with the team that started this piece, Aston Martin F1.

The season finale this weekend brings to an end the least competitive F1 season in history, Verstappen’s 18 wins out of 21 races is the highest win percentage ever recorded.

Yet, according to some metrics, in statistically it’s most predictable season F1 very proudly and very aptly wears the tag of The World’s Fastest Growing Sport. 

Global SportsTech VC Report 2023: Coming Soon

We’re about a month away from publishing the 5th edition of our SportsTech VC Report, summarising what’s been a really interesting year so far for SportsTech. 

Dealflow is at a low, not a lot money going around. Yet interest has never been higher with new funds are being almost announced every week. Curious times. We’ll get into it.

Word to startups, investors and other interested stakeholders: partnership options available. Reach out if you want to be involved.

Top News from the World of SportsTech

Last Sunday’s Cricket World Cup Final (sigh…) saw Disney Hotstar break their streaming record with 59 million concurrent viewers. This topped the 53 million that was set earlier in that week from the India-NZ semifinal.

We saw the UFC team up with the WWE earlier this year. Now it’s the Professional Fighters League (PFL)’s turn. They’ve acquired Bellator, creating a global MMA powerhouse to take on the UFC. Fight, Fight, Fight!

The NFL have announced a $100,000 HealthTECH Challenge, a crowd-sourced challenge to help make playing surfaces more consistent and safer for players.

A new $100 million Blacktown Exercise Sports and Technolog (BEST) Hub opened in Sydney last week. The high-tech facility will promote sports amongst “local residents & rising stars”. Pretty sure the word ‘Technology’ was added purely for the best possible acronym.

 NHL Breakaway, the official digital collectibles from the NHL, NHLPA, and NHLAA, is out now.

Disney has teamed up with Dapper Labs to launch Disney Pinnacle, their NFT based digital collectibles. No surprise that you wont find the word “NFT” anywhere in that announcement. The NHL clearly didn’t get that memo.

Money Talks:

The China National Sports Group (CNSG) has partnered with Singapore-based investment firm White Group for a $200m fund to develop sports IPs and invest in infrastructure across the APAC region.

Rivalry, a sports betting and media company focusing on Esports and Millennial and Gen Z consumers, announced a CAD 14m investment round.

Portuguese connected boxing startup BHOUT announced €10m in seed funding earlier this month.

US based AllCity, a sports podcast and video content platform, raised $9.4m from Andre Iguodala’s Mosaic fund.

 Out&Back Outdoor, a marketplace for new and used outdoor gear, acquired gear exchange company The Locals Sale.

Latest from our Channels

 STX Weekly: AI-powered bodycams, CAA launches sports investment bank and more

Podcast Thursday Throwback

 #153 DIBZ – Interviewing Brennon D’souza, Founder & CEO of DIBZ. DIBZ is an extremely fast upgrade experience that is facilitated through text messaging, for Professional Sports, Concerts & Music Festivals. Based out of London & Atlanta, DIBZ is a tech startup that is a full-service texting engagement platform. Watch the full video here.

All our podcasts are now available as Vodcasts on our YouTube channel. We will be publishing new episodes and back catalogue from the year simultaneously so there’s plenty to watch.

The post Stakes Get Bigger in Formula 1 appeared first on STX.