WILMETTE, Ill. — The new year is upon the motorsports industry and indications are favorable entering the new racing season.
This month, we will review the trends from last year and explore how the industry will keep that momentum moving forward.
Thanks to the ongoing COVID-19 pandemic, the 2021 racing campaign started with uncertainty regarding racing schedules and whether fans would be allowed to watch races in person. Over the next few months, testing protocols and vaccine initiatives were established with drivers and teams participating in public awareness campaigns.
Some parts of the country were open for spectators sooner than others. As a result, postponements occurred and events were canceled or moved to alternate venues as certain regions flared up and limited spectators. The result was a different calendar that included some non-traditional competition formats.
Flexibility was the key. Motorsports and its partners responded based on lessons learned over the previous 12 months. Sponsorship and broadcast contracts were fulfilled and financial obligations were met.
By the middle of the year, tracks began removing restrictions. Thus, the second half of the season was much closer to a normal year by most standards.
The overall results from a scheduling perspective have been viewed as positive. All dates and venues were fair game as track and series promoters experimented with new ideas and invoked changes that will be around long after the pandemic is over.
Traditionalists were uneasy as established markets and dates were no longer assured. However, as the metrics rolled in for attendance and ratings, it was clear changes had positive impacts.
Cost-cutting initiatives also kept moving forward. Long a barrier for those wanting to enter the sport and even a bigger hurdle to clear in order to reach the winners’ circle, officials recognized they had to do something about the cost of racing.
Many of the stakeholders gathered and some bold moves came about, particularly when it comes to the larger professional series. The results included spec chassis and interchangeable parts. Indications from testing are that the competitive balance will be restored and the financial playing field may be leveled.
There is change in team ownership not seen in many years. New entities view business opportunities in motorsports on par with other professional sports. The availability of financial capital, stability of rules packages and existing owners seeking exit transitions as prices are rising have made it the ideal time for new team owners to enter the motorsports arena.
The new breed of owners is embracing non-traditional media opportunities on and off the track. Viewed as digital partnerships, many with celebrities from the sports and entertainment businesses, these new partnerships look to generate solid revenue numbers.
Sports betting is also bringing new engagement to motorsports. The establishment of fantasy sports leagues and their growth over the last three decades has been the primary catalyst. Legalization and the expansion of gambling during the last two years has been phenomenal.
Casinos are locating sports books at tracks and mobile devices bring betting into the grandstands. These companies are signing sponsorship agreements throughout the motorsports industry.
Media companies continue to delve deeper into sports and rights holders are spending higher fees on their contracts, including renewing deals ahead of schedule and extending the terms of agreements.
Viewership platforms are diverging with on-demand and streaming video, driving expansion. The development of content by non-traditional players has been brilliant. Netflix’s “Drive to Survive” is the primary force behind the incredible rise of Formula 1 in worldwide popularity.
The industry behind the sport is healthy. Shutdowns, supply shortages and rising prices are part of the storyline. Trade shows, led by SEMA and PRI, gave companies the occasion to meet with their customer base. Cautious optimism was the underlying theme at both gatherings.
The outlook is bright. Motorsports faced the challenges and adapted. That’s what racers do best. This, along with solid economic fundamentals, should make next season competitive on and off the track.