The brand new F1 CEO has to cope with the way forward for the US Grand Prix in Austin because the monitor contract expires after the 2021 season
British Mercedes AMG Petronas Motorsport driver Lewis Hamilton (44) celebrates winning the 2019 FIA Formula 1 World Championship after the USA F1 Grand Prix race at the Circuit of The Americas on November 3, 2019 in Austin, Texas.
Ken Murray | Icon Sportswire | Getty Images
Formula 1 has a fan base, its revenues have bounced back from losses and it has a racing star in Lewis Hamilton who can grow its minority consumers.
The mission now is to continue expanding in the US and the Liberty Media property will have a new voice to accomplish that mission.
On Friday, F1 announced that it would put CEO Chase Carey "in the role of non-executive chairman" and replace him with Stefano Domenicali, the former Ferrari team boss.
It was a move approved by officials across F1.
Hamilton called Domenicali's attitude "amazing". "I don't think they could really have picked someone better, to be honest, to replace a pair of big shoes with Chase, who did a great job and who always had such a great approach," said Hamilton in the formula 1 cited. com.
Carey, who has been F1's CEO since 2017, helped negotiate a new Concorde deal with racing teams, including a new $ 175 million cap that capped the teams' spending per calendar year.
Due to Covid-19, the new cap for the 2021 season has been lowered to $ 145 million. The new agreement expires in 2025. Carey also helped finalize a new three-year media rights deal with ESPN in November 2019.
Greg Maffei, President and CEO of Liberty Media, joined CNBC's "Squawk Box" on Thursday but said nothing about the CEO change at F1.
In a statement, Maffei praised Carey for "a phenomenal job" and recognized him for putting together "a world-class trade and sports organization with a long list of achievements, including expanding the appeal of the sport, increasing its digital presence and the Establishing new technical regulations, securing an upper cost limit for the first time and reaching a new, fairer Concorde agreement with the teams. "
Carey's exit, however, comes as no surprise to racing drivers.
Though F1 grossed around $ 2 billion in 2019 after losses in previous seasons, its expansion strategy in the US and China remains uncertain after Carey said the territories are part of F1's 2017 plans.
The Chinese Grand Prix has been canceled due to Covid-19, but rumors circulated that F1 was on the verge of a new five-year deal to hold the event at the Shanghai International Circuit. However, it is unclear whether current US-China relations and the TikTok saga would affect the future of F1 in the country.
Race winner Lewis Hamilton from Great Britain and the Mercedes GP celebrate in Parc Ferme during the F1 Grand Prix of Tuscany at the Mugello Circuit on September 13, 2020 in Scarperia, Italy.
Dan Istitene | Formula 1 | Getty Images
Future in Austin
In the US, the deal between F1 and the Circuit of The Americas in Austin, which hosts the United States Grand Prix, will expire after the 2021 season, with the uncertainty that the parties will be renewed.
Securing the US Grand Prix event in Austin would be vital to Formula 1, as the track is perfect for racing and the city's sports base, a young community, would support the visibility of the sponsorship.
Austin now includes a Major League Soccer Club and the circuit plans to attract NASCAR, which has just added sports icon Michael Jordan as a team owner.
The $ 300 million track is receiving government funding from Texas as part of the Major Event Reimbursement program to cover the $ 25 million operating cost of hosting the F1 event and plans to rehabilitate the track with one hotel and one Water Park.
There are rumors of a return to Indianapolis Motor Speedway with Roger Penske as the new owner. However, after a failed process from 2000 to 2007, moving would be risky for Liberty. The Indianapolis 500 and Brickyard 400 are also the main races on the track and could overshadow any F1 event.
The US Grand Prix did not take place in the US from 2008 to 2011 after leaving Indianapolis. It returned in 2012 after Austin built its track.
F1 is also looking to host an event in Miami outside of the Hard Rock Stadium, but faces resistance from local residents over issues like noise levels. F1 has revised its event schedules, but even if a race is in 2021, the city doesn't seem to want F1 the way the organization wants it to be.
This all adds to the uncertainty surrounding F1's US expansion strategy. If Liberty doesn't negotiate a return to Austin, the growth of its $ 4.4 billion US racing property could slow.
"I think it's right to say that F1 wouldn't exist in the US right now if we hadn't built a house for it here at COTA," Epstein said in an interview with ESPN in 2019. "You just have to look, What We worked in the US and helped build a fan base here – before ticket sales went down and it was difficult for any racetrack to establish itself as the home of F1.
"It wasn't like it is today, there were a lot of races on Mickey Mouse street tracks that you can't build a story on. It was the same with Indy – even if you ignore the 2005 incident which was a pretty big black eye for F1, the track was still the home of the Indy 500, not F1. "