Business Breakdowns
Episode 14 Formula One: The Iconic Motor Sport
Business Breakdowns

Episode 14: Formula One: The Iconic Motor Sport

Business Breakdowns

Episode 14

Formula One: The Iconic Motor Sport

Stefano Domenicali is the CEO of Formula 1 and Arman Gokgol-Kline is an investor from Ruane, Cunniff & Goldfarb. We cover how Formula 1 operates and generates revenue, Stefano’s own story growing up with Formula 1 and running Ferrari, and the white space opportunities for F1.

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Part 1

[00:03:00] - [First question] - The overall size of the F1 fanbase

[00:04:09] - What one could most attribute to the size of F1’s audience

[00:05:22] - Three key buckets of revenue and their percentage split

[00:07:21] - Business economics of the race tracks and promoter incentives

[00:11:22] - Thoughts on expanding the annual race and track count

[00:13:49] - Business economics of the race broadcasts

[00:18:59] - Business economics of sponsorships and partners

Part 2 

[00:21:21] - Where Stefano found his early passion for motorsport

[00:23:32] - What it was like to run an F1 team

[00:27:14] - Why they decided to open up social media to drivers and partner with Netflix

[00:33:07] - The Concorde Agreements and what made 2021’s agreement unique

[00:35:24] - How the budget is so crucial to a driver and their engineering team’s success

[00:38:13] - Key factors that define a great winning engineering team

[00:42:26] - What makes a driver great and stand out over time

[00:46:14] - Thoughts on the motorsport industry in a world aiming for environmental sustainability

[00:48:48] - What will be most different about F1 five years from now

[00:52:09] - Stefano’s most memorable moment across his entire career

Part 3

[00:53:10] - Biggest whitespaces in F1 that present great monetization opportunities

[00:58:49] - Unique team dynamics and how teams are built and developed

[01:02:39] - The story of Lawrence Stroll and Aston Martin 

[01:04:35] - Why BMW dropped out of F1 and why a manufacturer would choose to quit

[01:07:34] - Reasons why Porsche has never stepped into the motorsport space

[01:09:40] - Major costs centers of the business today

[01:11:25] - The history of Bernie Ecclestone and F1 racing

[01:14:08] - Lessons one could pull from F1 and unlocking value 

[01:15:30] - Areas of content production that F1 has done well

[01:17:10] - Additional ways F1 could monetize the relationships between teams and fans

[01:21:25] - Lessons that business builders can take away from F1’s story

[01:23:00] - Lessons that investors can take away from F1’s story

[01:24:25] - Where to learn more; Drive to Survive; Concorde Commercial Agreement

Formula One: The Iconic Motor Sport

Introduction

Patrick
In today's episode, we introduce another unique format for Business Breakdowns. We will be diving into the iconic global motorsport brand Formula One. To break down F1, I'll be joined by F1 CEO, Stefano Domenicali and Arman Gokgol-Kline, a partner and investor at Ruane, Cunniff, and Goldfarb.

To start the conversation Arman and I frame the business of F1 with a high-level overview of how the league operates and generates revenue. Then Arman joins me to speak to Stefano who was appointed CEO of F1 in late 2020 after the league and teams agreed to their latest Concorde agreement, which governs stakeholders across the ecosystem. We touch on Stefano's own story growing up with Formula One, how the team driver and ownership, worlds align, and what gets him most excited for the brand moving forward.

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