Racing league Formula One confirmed a third U.S. race to happen in 2023. Here are the details about the announcement and why continued growth for the league in the U.S. is so important for the company and potentially, the stock.
What Happened: Formula One, a publicly-traded racing league owned by Liberty Formula One FWONAFWONK, announced a long-rumored Las Vegas race being added to the circuit.
The Las Vegas Grand Prix will be added to the Formula One World Championship schedule in 2023, marking a total of three U.S. races with Austin, Texas, and Miami, Florida, already on the schedule. In 2022, the Miami Grand Prix is set for May and the U.S. Grand Prix in Texas is set for October.
The race will be unique for several reasons, including taking place Saturday night versus the traditional Sunday time slot and on the Las Vegas Strip with racers competing against the backdrop of famous hotels, casinos and neon lights.
The Las Vegas Grand Prix will be held in November 2023. The race will be promoted by Formula One and Liberty Media along with partner Live Nation Entertainment, Inc. LYV. Other partners in the race include MGM Resorts International MGM, Wynn Resorts, Limited WYNN, Resorts World, The Venetian Resort and MSG Sphere, a music and sports entertainment arena from Madison Square Garden Entertainment Corp MSGE.
“There is no better place for Formula One to race than in the global entertainment capital of the world and we cannot wait to be here next year,” Formula One CEO Stefano Domenicali said.
Why It’s Important For Las Vegas: After the announcement, some were quick to point out that a portion of Las Vegas streets will be shut down on a Saturday night.
While this sounds like a negative for the city, it’s important to remember the huge audience Formula One draws and the potential in money spent on hotel rooms and at casinos, benefitting the city and major companies on the Las Vegas Strip.
“The is going to be more than just a race,” Formula One correspondent Lawrence Barretto said. “The Las Vegas Grand Prix will be an event. With more than 150,000 hotel rooms, the place will be heaving, delivering the kind of buzz and electric atmosphere Formula One has never seen before.”
Barretto called Las Vegas seductive and hypnotic and previewed that the Las Vegas race could be one of the “most iconic pieces of racetrack on the Formula One calendar.”
The writer highlighted that many will make a weekend out of the race, whether it means going to casinos, hotels or taking in another entertainment event. There is also the potential for a home Raiders game nearby and the race takes place during the NHL season, which means there could be Golden Knights games in the city over the weekend.
Formula One remains a massive global sports league. More than 445 million people around the world watched at least one Formula One race, up 3% year-over-year. The average viewership for a 2021 Formula One race globally was 70.3 million. That is a lot of people set to tune in and see the Las Vegas strip.
Related Link: After Formula One Success, Netflix Is Filming A Docuseries On This Sport
Why It’s Important For Formula One and U.S. Growth: The addition of a third U.S. race comes at the perfect time for Formula One. A docuseries called “Formula One: Drive to Survive” was released on Netflix Inc NFLX in 2019 and has led to a surge in viewership for Formula One races in the U.S.
Social media engagement increased 99% year-over-year for Formula One in the year after the Netflix show aired. The league also saw a large increase in viewership for races following the Netflix show, especially in the highly coveted 16 to 35 age demographic.
For the 2021 season, viewership for Formula One was up 4% overall to 1.55 billion globally. The U.S. saw viewership up 58% year-over-year, one of the largest increases outside of The Netherlands (+81%).
The Walt Disney Co DIS has media rights to Formula One in the U.S. and its ESPN unit saw an average of 934,000 viewers for its races broadcast in 2021. This marked a record for Formula One in the U.S. and was up 39% over the 2019 season and up 54% over the 2020 season. The previous record for ESPN dated back to 1995 with an average of 748,000 viewers.
The U.S. Grand Prix in Austin, Texas, averaged 1.2 million viewers on Disney's ABC and was the highest viewed race of the 2021 season in the U.S. There were 53% more people in the U.S. that tuned in to at least one Formula One race in 2021 compared to 2020.
The Saudi Arabian Grand Prix on March 27, 2022, was the most-watched Formula One race on ESPN since 1995 with an average of 1.45 million viewers and a peak of 1.82 million. The race came in ahead of the previous race — Bahrain Grand Prix — which had an impressive 1.35 million average viewers. Viewership for the Saudi Arabian Grand Prix in the U.S. was up 54% from last year’s same race.
Through the first two races of the season, U.S. viewership for Formula One is averaging 1.4 million viewers and up 47% to last year’s average and up 52% to last year’s first two races. The average viewership is up 99% to the first two races of the 2020 season in the U.S.
The fourth season of “Drive to Survive” ranked among the five most-viewed English-language shows on Netflix with more than 28 million hours watched in each of its first two weeks available.
The success of U.S. viewership and a third U.S. race could pay off big for the racing league when it comes time to renew a deal with ESPN or find a new partner. ESPN has the U.S. rights through 2022 and several parties are interested in grabbing Formula One rights including Amazon.com, Inc. AMZN and Netflix.
“A few years ago, the rights to Formula One were sold. At that time, we were not among the bidders — today we would think about it,” Netflix CEO Reed Hastings said in September 2021.
FWONA Price Action: Liberty Formula One Group shares are up 0.063% at $63.17 on Friday afternoon at publication. Shares hit a high of $63.87 on Friday, passing a previous 52-week high of $63.42.
Photo: Formula One race in Texas, photo by Bill Stephan on Unsplash
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