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As the highest class of international racing for open-wheel, single-seater cars, F1 is worth more than $18 billion and stands to accelerate even more as a bonafide entertainment business, as the Euro-born sport becomes more popular in China, the United States, and elsewhere. But F1 also faces its challenges, from new driving tech to adopt to new electrification pressures to confront.
In this episode, our Jalopnik colleague Ryan Erik King guest-stars to navigate a few high-speed laps around the past, present, and future of Formula One racing.
Featuring
Rocio Fabbro is a staff writer at Quartz and the host of Season 8 of the Quartz Obsession podcast. She’s obsessed with etymology, matcha, and late ’90s-early ’00s romcoms.
Ryan Erik King is a staff writer at Jalopnik. He’s obsessed with Formula 1 and every form of racing, from professional cycling to America’s Cup sailing.
Show notes
Drive to Survive Is Actually Bringing in New American F1 Fans
FIA Showcases Future-Focused Formula 1 Regulations For 2026 And Beyond
Formula 1 On Course To Deliver 100% Sustainable Fuels For 2026
Las Vegas GP Helps To Boost F1’s 2023 Profits To $392 Million
Transcript
Rocio: Formula One, the highest class of international racing for open wheel, single seater cars, has a rich history dating back over 70 years. From its early days as a European centric motorsport to its current status as a global entertainment juggernaut worth more than 18 billion, F1 has undergone a remarkable evolution.
Today, the sport is poised for even greater growth as it expands its reach in key markets like China and the United States. But as F1 looks to the future, it also faces a host of challenges. In this episode, we’ll be taking a deep dive into the past, present, and future of Formula One, exploring key moments, innovations, and some of the challenges that have shaped the sport.
Joining me to help us navigate this fascinating world is Ryan Erik King, staff writer at Jalopnik. Ryan, what do you see as the most significant factors driving F1's growth and shaping its future?
Ryan: I would have to say it’s 00:01:00 largely down to Formula 1's Presence in garnering a young fan base in key markets across the globe, specifically here in the United States.
Rocio: With that in mind, let’s buckle up and take a high speed journey through the world of Formula 1.
Ryan, can you take us back to the early days of F1 and how it all began?
Ryan: Let’s see. So, Formula 1 lists its inaugural season as 1950, but it actually traces its roots back to the late 19th century. When fledgling car companies raced across Europe in events organized by newspapers, the events offered newspapers the ability to have exclusive events to attract readership.
And for these car companies, they had the press outlet or the press reach to advertise their products to potential customers across the world.
Rocio: So that was a very 00:02:00 far cry from what we see today and the experience of Formula One and the way that fans interact with the sport now. And so, can you tell me a little bit about how Formula One technology has evolved from those early days?
Ryan: I would say that there have been a variety of key breakthroughs that definitely accelerated the progression of development in Formula One and the cars that they race on track. I would say the shift from steel and aluminum construction to carbon fiber is a massive change that in terms of how light the cars could be and inherently how fast it can go, but also how safe the cars could be.
They could withstand much heavier impacts than they used to. So much in Formula One has also stayed the same. We’re based in the regulations. They still run on consumer grade gasoline, and it is about eking out. Every bit of performance they can and back in as late as, well, yeah, as late as 1970s, they were using say carburetors and naturally aspirated engines.
But the big shift today would be using. Hybrid turbocharged engines and really ramping up the level of technology in Formula One to the point where these F1 teams are extremely large in scale with thousands of employees all working together in a singular effort to build two cars to put out on the track for 23 race weekends a year in the hands of just two drivers.
Rocio: Right, that’s just a huge undertaking and, again, a very far cry from where it started. In your view, what have been the biggest challenges in adapting to these new technologies while staying true to the heart and the essence of the sport?
Ryan: I’d probably narrow it down to two major challenges. First, people naturally don’t like change.
They want change. Formula one to be the sport that it was when they were growing up or first became interested in the sport. Big call and cry from fans today is bring back the V tens. A lot of fans in the nineties are nostalgic for the blaring. Literal chest pounding, the loud V10 engines, something that we don’t see today because the, the, the turbo hybrid engines they use are just inherently quieter because the turbocharger sits in the exhaust.
So it blocks some of the noise coming out of the tailpipe. And it’s something that a lot of people haven’t gotten used to. Another side of this, another challenge is the fact that it’s Of how expensive these cars are to develop. And Formula 1, there are two ways you could tackle the rising costs in Formula 1.
It’s either 1. Make more money. Just have more revenue to cover the development costs. Or 2. Limit how much teams can spend. Which is an avenue Formula 1 is taking where they have a cost cap in place to limit spending.
Rocio: Zooming out a little bit, taking a bird’s eye view at Formula One’s popularity, I think it used to be a pretty niche interest.
It had its dedicated solid base, but it didn’t have necessarily the widespread appeal, at least not in North America or markets outside of Europe, that it definitely does today. And I think we’ve seen with the Drive to Survive, how they were able to, the Netflix show, they were able to attract a broader, younger audience and really expand this appeal.
And so as F1 grows in popularity in markets like China and the U. S., how is the sport working to attract and 00:06:00 engage these new fans while also retaining its core European audience?
Ryan: I’d say over the past 15 years or so, there was a massive shift in how F1 tried to position itself and market itself to younger fans and in fans in markets where it didn’t have a strong foothold.
Because I would say in the early 2010s, F1's presence on social media was very limited. For instance, in 2010, F1 didn’t even have a YouTube channel, and effectively, it’s heavily restricted its image rights usages. So, there were certain points in time when it was Against F1's operating practices for even the drivers in the championship to share images of the garage on social media and change in direction, just sort of year by year, slowly inching forward, opening its doors more and more to the point where we have this Netflix docu series.
And I would say the breakout season for this docu series was probably the third season, which struck. In 2020. So a lot of people that year were at home with nothing to do and went through the first three years of Drive to Survive and got a peek in the Formula One, a sport that they had no interest in before and were just suddenly hooked.
Rocio: Taking a look at the business of F1, it’s now worth over 18 billion, which is a huge number, just thinking about the scale of the sport. What are some of the 00:08:00 key factors that have driven this immense growth? Ooh,
Ryan: I would say a lot of this growth has come from how Formula One organizes its races and where these events are held.
Formula One’s revenue comes from two major sources. One, its television broadcast contracts. And two, it’s sanctioning fees, the fees that it demands from race promoters to hold these events. And for the most part, a lot of these races are organized by national governments or subsidized by them.
A lot of Formula One’s contracts are with countries who are willing to pay hundreds of millions of dollars to host a Grand Prix during the season. So many of its recent deals are with Gulf States like Qatar. They’ve held the Bahrain Grand Prix since 2004. It’s first race in the region. They have a contract with the United Arab Emirates and the largest contract that it currently has is with the kingdom of Saudi Arabia.
And it is a massive influx of money coming into the sport. And Formula One has also realized that. Here in the United States, it could effectively cut out this middleman and organize the race itself, where they spent a half a billion dollars to set up the Las Vegas Grand Prix, and they’re expected to make that money back, which tells you the scale of how much revenue they expect to get from the United States, especially holding multiple races here.
And that’s another way that they can get a lot of revenue by simply holding more races.
Rocio: How does F1 balance these commercial interests with the integrity of the sport?
Ryan: Honestly, they don’t balance it. Where a large percentage of the calendar used to be held in Europe. The example I like to use is comparing F1's current season to Lewis Hamilton’s rookie season in 2007, where most of those European rounds that were on the schedule then aren’t here now.
So it was a 17 round calendar in 2007, where they went to Spain, Monaco, France, Britain, Germany, Hungary, Italy, and Belgium looking at the calendar today. Formula one no longer goes to France and Germany, which. Is sort of at the foundation of Formula One and where the sport was built. Germany invented the automobile and France invented automobile racing.
Rocio: Right. You would think those would be huge markets and how did that go over when they stopped racing there?
Ryan: It’s sort of a shock where you assume all these events that have been around for so long. So the reason why every Formula One race is called a Grand Prix is because of the French Grand Prix. And the French Grand Prix has been around since 1906.
And if you talk to the French organizers, they trace the race’s roots back to 1895. And The fact that the French government decided that they didn’t want to spend the money on Formula One anymore and Formula One decided, well, we’re just going to leave France.
Rocio: That’s huge and kind of crazy. And so we’ve talked about the larger sport and how that has evolved.
But let’s dive in a little bit to how the business model of the F1 teams has evolved over the years.
Ryan: I’d split it up into three distinct periods where before 1980. Effectively, the teams were racing for appearance money, prize money, and if they were tied to a manufacturer like, say, Ferrari, they were expecting to make a loss, where they were racing for other reasons to promote their company, sell cars.
After 1980, we ended up in the scenario where All this revenue is coming in from the television contracts and that money pooled into the prize pool, but it still wasn’t enough to be sustainable unless you were at the very top of the sport. Up until the point where even five years ago, the prize money scaled, obviously were the champions received the most money all the way down to 10th place, receiving the least.
And if you finished outside the top 10, you simply got no money for competing in formula one. So to fill up that gap, teams had to bring in sponsors and the sponsorship revenue really drives formula one’s economic engine, so to speak, where Before 1968 sponsorship in a formula one was strictly regulated.
You could only be sponsored by companies related to the auto industry. So you could only be sponsored by car companies, oil companies, parts companies, that form of restriction where you could only promote. Corporations within the industry, and also they restricted how your car could look. You had to race in a signed national colors.
So that’s why the Ferraris are still painted red to this day because Italy’s assigned color was red. Britain’s assigned color is green. France’s assigned color is blue. Germany’s assigned color was originally it was white. Now it’s silver, which is why people associate silver with Mercedes. Here in the United States, we had the very trendy blue with white stripes, and when sponsorship was deregulated in the late 60s, this is also around the same time that tobacco advertising on television was banned in the United States and in Britain.
So, through 1968, all the way up to 2008. F1's largest corporate sponsors, in terms of money they were putting into the championship, were tobacco companies. So, Marlboro famously sponsored both Ferrari and McLaren, and a variety of other brands sponsored those teams. And once that revenue faucet, so to speak, was shut off, teams had to become, I’d say, more creative in where they found funding.
Which came at a very difficult period when that source of revenue gets cut off in 2008. So, effectively, these teams have to create partnerships to garner these forms of revenue. So, since Mercedes returned to the sport in 2010, they’ve had ties with Petronas, Malaysia’s state oil company. And efflents most successful team over the past few years, Red Bull, even they have their own partnership with, or where new brands are becoming involved in the sport because they see this massive billboard as a way to promote their sport around the world.
Rocio: And I think it’s also interesting how after Drive to Survive in particular, individual drivers also became their own brands and started doing these partnerships. How is that different from the popularity of drivers independently in the past and how they worked with companies outside of racing?
Ryan: Yes, it’s definitely a new trend where in the past, I wouldn’t say drivers were marketed Less as athletes and closer to, say, maybe socialite celebrities, where, yes, a couple of them had sponsorship deals here and there, and they would appear in commercials, but largely a lot of those commercials were tied to the brands they raced for.
So, say, Michael Schumacher and Ferrari were effectively inseparable. And if he, say, had a brand deal with a clothing company, it would most likely be the same company that provided apparel to the team. And it wasn’t anything independent of that relationship, but now with, say, Lewis Hamilton, well, especially with Lewis Hamilton, his sponsorship deals and other connections are independent of where he competes.
Rocio: Yeah, and social media definitely also plays a huge role in all of that as well.
So we’ve talked about this, Oh, okay. So we’ve seen this rapid growth that we’ve seen, especially in the past few years, but how can Formula One sustainably keep growing and what are the approaches that you would see as the most successful for it to maintain this pace of growth or at least a sustainable level of growth?
Ryan: Oh. It’s hard for me to think of how to balance this boom into a line where this is sustainable long term. Because, for us here in the United States, this has come and gone before. Currently, the U. S. holds three F1 races a year. The Miami Grand Prix, the Las Vegas Grand Prix, and the United States Grand Prix in Austin, Texas.
And we were at this period before in the early eighties where the U S hosted three races a year. And that came and went to the point where the United States held no races a year. And now we’re suddenly back to three and keeping interest in formula one. It’s an awkward balance where financially for formula one to continue growing, it’s going to be difficult for them to hold more races because speaking with a lot of the drivers and a lot of the team staff, they are.
Stretch to their absolute limit when there are only 52 weeks in a year and you’re traveling around the world for 24 races. I think the limit in the rules for the maximum amount of races right now is 25. And even then people are feeling the strain. They don’t want to be on the road this long. They would probably want to see a reduction in the calendar, but that also means a reduction in revenue, which is not ideal for those who have a stake in the sports success.
And even then, Formula One also has to keep fans interested. And a lot of newer fans are becoming aware of the repetitive reality of Formula One. Where Formula One is a sport of dominant champions. When someone wins a championship, they rarely ever win just one. They win usually three or four in a row. If not in a row, three or four, you know, over a five or six year period.
And it is hard to keep people engaged when they head into a race weekend and they know who’s going to win the race. But a lot of former ones appeal appeal for longer term fans is the intrigue outside of that championship winning position.
Rocio: Right. And what is that intrigue just on a regular race basis for a long term fan like yourself?
Ryan: The game within a game. It is, while Formula One does have dominant winners who could win over half the races in a year. It is the small shifts in the competitive order because while formula one is definitely the fastest sport on the planet, the championship is the slowest moving. The competitive order takes well to win a championship in formula one.
It’s not a race by race effort. It’s more of a year by year effort that team slowly move up and down the order. Month by month and year by year. And they wait for that one specific flashpoint to make a big leap up the order and put themselves in a position to be that dominant champion. And that’s what fans really get locked into, especially this time of year.
Where drivers are negotiating contracts to go from team to team, hopefully to improve the car that they’re sitting in next year, key members of staff think, Hey, maybe my talents could be best used elsewhere to improve whatever team I go to and inherently my own career. And. It’s that, again, game within a game to try to move up the order.
Rocio: The environment is obviously a topic that we talk about a lot in a lot of different aspects, whether it’s businesses, across industries. Formula One, obviously, is a gas guzzling game. Sport, this increasing focus on sustainability in general, how is F1 working to incorporate some of the more environmentally friendly technologies such as electric power into its vehicles?
Ryan: The trend in Formula One right now is hybridization, where they are not abandoning internal combustion engines, but they’re incorporating electric motors into the car to create a single unit that they, well, refer to as a power unit. Back in 2009, 2010, that’s when F1 first incorporated what they called CURS, the Kinetic Energy Recovery System, where it was a battery, an electric motor, that could be used to Recover energy under braking and then use it and deploy that stored energy as electric power.
And then in 2014, they went into a full blown hybrid system where not only could the cars recover energy from breaking, but the cars could also harvest energy from the exhaust where it would use the blown gases out the tailpipe to spin a turbine and then. Through an electric motor that was attached to the turbocharger, power the turbocharger instead of a traditional turbocharger where that process is done through mechanical linkages.
Rocio: Are there any emerging technologies that you see out there that are going to have an impact on the sport in the coming years? And what do you think maybe would be the biggest one of those?
Ryan: It’s definitely going to appear once we hit 2026, when the new regulations come into force. The next rule set, they’re ditching the MGUH, the electric linkage in the turbocharge, and just going to a traditional mechanical turbocharger.
But they’re aiming to split power equally. So effectively, Half the car’s total output will come from internal combustion and the other half will come from electric power for the first time ever 50 50, but the internal combustion engine will be powered through sustainable fuels. So effectively it’ll work just like traditional gasoline, but instead of being sourced from crude oil, they’ll have to be sourced through other means.
Sustainable means has to be a hundred percent renewable and it has to be drop in fuel is the term they use. So effectively. That you could put this into any internal combustion engine on the road and run a car just like any other car.
Rocio: That seems like a very ambitious goal to be met in only two years.
How are they on track to do that?
Ryan: Yes, they are on track to do it. They’ve slowly been phasing it in, where the teams have been allowed to use a, well, The teams have been mandated to use a mix of sustainable fuel and conventional gas. With the hopes of ironing out all the kinks, if, of how the fuel ignites in the combustion chamber and a variety of other factors to make sure that when the shift to a hundred percent happens, it happens flawlessly.
Rocio: How are these shifts then going to change the future of the sport?
Ryan: Formula One can be very unpredictable and in some ways fickle about how certain teams want the sport to evolve and how the commercial rights holder for the championship wants the sport to evolve. And Formula One CEO Stefano Domenicali, who at one point in time was Ferrari’s team principal, he envisions a future where, with this sustainable fuel, F1 can completely ditch hybridization.
While it might sound like a step backward, a lot of people are excited for that step backward because one of the biggest complaints with Formula One’s current cars is, are that they’re so much heavier. In previous cars, that the weight of the battery pack needed, the power of the hybrid system has compromised how fast formula one cars can accelerate, how fast it can corner, how quickly they could slow down.
And a lot of people want that weight cut and formula one can still claim to be sustainable, environmentally friendly and forward looking if it’s running on sustainable fuel, despite not having any electrical power.
Rocio: As F1 continues to evolve, what do you see as the biggest opportunities and challenges for the sport in the years to come?
Ryan: I would say the biggest challenge to F1 would likely be, feels awkward to say, Formula 1 itself. It needs to realize that while the run for higher revenue and to try to find a way to make Formula 1 profitable for everyone involved is important. It needs to realize that it could chase away its existing fans and its newer fans doing so that it needs to have events that are accessible for fans financially and physically in locations where people can go to and afford to go to.
Also, when they get there, the product on the track needs to deliver. People expect sports to be entertaining. There’s no other way to put it. While the game within a game is what maintains their fan base. It what keeps them interested week to week, even when there’s no racing. When the races are on TV, they want to be excited.
They want to see upsets. They want to see action out on track between cars. The biggest opportunity for Formula One over the coming years is probably finding a way to keep their fan base, finding a way to cut out that middleman of, of needing to get revenue out of their races, to make this sustainable, to keep this growth going along.
Because if Formula One could independently generate revenue, then it could independently decide. where it wants to race and keep historic venues on the calendar for the foreseeable future.
Rocio: Thank you so much, Ryan, for taking us through this crash course of Formula One history and where it’s at today and what some of the biggest changes are and will be in the coming years.
Ryan King is a staff writer at Jalopnik. This episode was produced by Podcast Fast Track with additional support from Jason Russum, Amy Perry, Liliana Zapata, Juan Palacios, and Lorena Caro. Our theme music is by Taka Yasuzawa and Alex Zucchera. If you like what you heard, please subscribe on Apple Podcasts, Spotify, Amazon Music, or wherever you’re listening.
Tell your friends about us. Know someone who’s interested in the high octane world of Formula 1 and the future of motorsport? Send them this episode. Then head to qz. com slash obsession to sign up for Quartz’s weekly obsession email and browse hundreds of interesting backstories. I’m Rocio Fabbro.
Thanks for listening.
Credits
The Quartz Obsession is produced by Podcast Fast Track, with additional support from Jason Russum, Amy Perry, Liliana Zapata, Juan Palacios, and Lorena Caro. Our theme music is by Taka Yasuzawa and Alex Suguira. This episode was recorded at G/O Media headquarters in New York.