F1 is no longer a sport. F1 is a platform.

Our open discussion -- we are still working through these ideas -- on how F1 has rapidly evolved from a (mostly) European sport into a global platform with multiple massive revenue-generating ecosystems. New fortunes will be made and new personalities will shine through. It's like private equity, but in reverse. Instead of extracting every resource, today's F1 is enabling thousands of new opportunities to flourish. 

We also share our thoughts on a potential "F1 World" -- like Disney World, but for Formula 1. Sim race alongside a Charles Leclerc avatar. Enjoy a non-alcoholic beverage at Lewis Hamilton's bar. Drive Sao Paulo Grand in the rain. 

And as always, thank you for listening to everybody's most beloved father and son F1 podcast!  

Transcript

Brian S Hall (00:01.522)
Hello again, I get it. You look at your dad, you think dad's too pretty to work, but work I must. And this injustice, son, is compounded by the fact that I have to work in an office. I've got to go into an office with people. But something happened the other day. Took me by surprise. It a good surprise, more than my heart. This young man and young woman in their 20s were talking about F1.

They clearly knew F1. She, the girl, the lady, and lady at least knew Carlos Sainz was, no big surprise, but they kind of knew, if not the races, they knew some of the drama, some of the soul popper elements, some of the drive to survive type stuff. But hey, that's a big, that's a big shift from when we were watching it on NBC Sports and nobody else knew about this. So something, I thought that was a nice little fun surprise. All right, son, you ready to go?

Patrick (01:00.578)
I'm ready to go.

Brian S Hall (01:02.78)
Whoops. Hello. Welcome to Hard Compound, an American take on Formula One with your host, Ryan Ampatrick. This is a special episode. Just thought about this. So just a few notes and half-baked ideas, some wild assumptions. There's something I want to discuss, And that is, is F1 peaking as a sport as it is peaking as a sport?

It's no longer a sport, it's become a platform. A platform upon which a million fortunes can be made or lost.

Okay, hear me out. Before, let me just go on. You look at the global growth of F1, something not many yet realize, it's no longer just a sport, it's a global platform like Apple's iOS or X. It's a platform that will make the owners fantastically wealthy, staff quite well off, but also could service the launch pad for hundreds, maybe thousands of others.

to make a name for themselves, to make money for themselves. That's what this theme of this episode of Heart Compound will be all about. All right, son, are ready to do this? I mean, think about this, the races, owning and operating a team, requires billions of dollars. You got drivers, engineers, designers, air dynamics, you've got logistics, folks, marketing, finance, social media, HR.

Patrick (02:23.349)
Sure, let's do it.

Brian S Hall (02:40.53)
all those employees, factories, R and D drivers. And for what? To produce two cars? No, no, this is no longer a sport. This is a platform. Cadillac has already dropped a billion and a half dollars. They haven't even raced yet. They're spending millions to advertise their new livery, their new car on the Superbowl later today. This is a cultural event, not an advertisement. These races, they are seen

hundreds of thousands of people every season. each race you've got a varying class of business executives, government officials, billionaires, sheiks, private investors, all gathered. Different groups at every race. Each race watched around the world by millions. Apple just dropped a fortune just for the stream rights in the US.

I got Apple TV only to see F1, but I'm sure I'll watch other Apple content. The same with Drive to Survive. I get Netflix for a month or two every year to watch Drive to Survive. I'll watch a little bit of other content. Cities are paying millions of dollars for the privilege of hosting a race, getting their race on the calendar. I just want to gather your thoughts on this, Patrick. What do you think of this notion that F1

has transformed from a sport into a global platform.

Patrick (04:12.406)
Well, I think it's yeah, I think it's always had the potential for that. It's they have the most space of any sport to provide advertisements basically, which sort of already makes it different than other sports. It's not just on

jerseys or the name of the stadium but it's everywhere around the track all over the cars and they're all different all the cars are different

Obviously we have

Or I guess I should say this is a global sport. It's shown all around the world. It's enjoyed by people all around the world and it travels all around the world, which is again, different from pretty much any other sport. Um, maybe, soccer, but soccer isn't really traveling. They're very regional, right?

and they sort of stay there.

Patrick (05:31.01)
people around the world watch soccer, but not necessarily watch the same, the same sort of, I don't know, premier league or, or Spanish league or whatever, right? They'll watch their own, country's soccer league. So this is very, I think a unique sport and they're in a unique position to kind of become.

what you're saying, a platform for sort of global entertainment and provide a place for advertisers or, you know, fans to kind of experience this entity.

That is F1.

Brian S Hall (06:27.376)
Right. Let's, yeah, I mean, you think of the experience ecosystem. There's the race that's on track. We're watching it on television. There's pre-race coverage, there's race coverage, there's post-race coverage. There's discussions on social media, on TikTok, X, Reddit. There are Sims. We can be part of the Sims, we can F1 game. There's Las Vegas, we can go to, they've got a big.

a growing presence in Las Vegas, museum, Sims, maybe there'll be meet and greets, races around the world where there can be travel experiences. The entertainment and experience platform of just F1 is massive. And I'm almost wondering if there was just an F1 movie, but can F1 make a Hollywood rather than Hollywood make an F1 movie? Can F1 make a Hollywood, which is essentially bring together

this amazing talent, some producer money, a studio, get all the right professionals, boom, make some new talent, make some new entertainment project. And then let others feed off of that.

Patrick (07:41.954)
Well, what they should do is probably follow the Disney model, right? And create F1 world. Same to Disney world, right? And you know, Disney world never been, don't really care to go, but I hear people enjoy it. There's also whatever the hell it's called Epcot or something.

Brian S Hall (07:53.412)
yeah.

Brian S Hall (08:07.138)
Yeah, Harry Potter world.

Patrick (08:07.522)
Which is like a global experience, right? In F1 world, will they go all over the world? They must have a global experience, right? Why not? You know, I think this follows in the same vein as your F1 Hollywood, right? And just, you know, sure, you can have studios and all this stuff to kind of,

to sort of help develop content, maybe develop driver talent or scout driver talent, or maybe they...

We're podcasters. like to talk about F1. There's a lot of people who are podcasters that like to talk about F1. Maybe they bring in, maybe they bring in people like us to, to, you know, fund their shows or, you know, basically create content for F1 in this, you know, space.

Brian S Hall (08:53.17)
Ha

Brian S Hall (09:12.124)
Maybe just share splices of content. Max saying something, Carlos saying something, Jane Voll saying something that we get to use on our show this week. Somebody else uses something different the following week. Yeah.

Patrick (09:24.91)
But I mean, they're sort of starting this in Vegas a little bit. They have some locations similar in the UK that have, you know, little go kart tracks and Sims and things like this for people to experience kind of, you know, the F1 experience or whatever they call it. And that's fun. But I think

I think you're onto something that, that it can really be a space for, where they can develop a space, I guess that attracts a global market that creates content, that creates experiences, helps grow. I shouldn't say the sport, but the platform and.

I think this is very possible, it's very real, and it's in its infancy right now, I think, but certainly can grow into something that I think will be quite impressive down the road.

Brian S Hall (10:47.44)
You touched on this briefly a moment ago.

one is a platform for advertisements. mean, look at the cars in just 2021. I believe it was Williams had six race suit sponsors. Now they have 21 race suit sponsors. They're livery. If you just saw it's sharp blue livery filled with sponsors. The driver and a car are already many platforms for advertising the race. There are the global sponsors.

There are the on track regional sponsors. You have the TV sponsorship and advertising. I mean, you wonder.

What could they, what else is there maybe? When they show how much heat is on the tires or power in the battery, can you know, there'd be like pop-up advertisements, I don't know. And then of course there's the branding that the drivers themselves can do. Lewis is already, you he's promoting his non-alcoholic brand. Ricardo's everyone's pal. He should be able to start promoting a lot of things.

We thought Cadillac was going to hire, or at least I did, Checo and Zhou as their drivers because those were the two drivers that had F1 experience that could sell them probably the most cars in the US and China. They went with Vodoss and Checo and Zhou as reserve. But I think it's, you know, they're even selecting drivers based on how much they can sell, not just because how much money the driver's bringing, but

Brian S Hall (12:34.67)
It was kind of tipped past that to where, you know, how much are they selling of the actual product? Not that they're bringing sponsors in.

Patrick (12:47.138)
Yeah, and I think this is.

That's also relevant based on the new regulations that F1 is bringing starting this season. You know, they are trying to set up regulations whereby the technology developed by these F1 teams, most of which are vehicle manufacturers.

can sort of trickle down into their mainstream everyday vehicles that they are selling. And so, you you kind of pair.

Well, what are we developing for our F1 vehicles and how can that be integrated or implemented in our sort of manufactured vehicles that we're selling? And then how can we use our F1 team and drivers to then sell those?

those products that we're developing. think that's very, it's very a unique sort of situation, I think that, that F1 has.

Brian S Hall (14:17.134)
And you make me think of something where it's like, well, why shouldn't Mercedes or Ferrari have teams of patent attorneys? We're going to patent everything we can think of, everything we come up with from physical to sensors to new technologies to new processes of how we ship stuff back and forth all around the world. Just anything.

something aerodynamics, something with carbon fiber, and then just sort of have now you've got teams of pet motors. How about teams of not just drivers, but teams of salesmen going, hey, I'm an expert in sales to two robotics. What can these robotics? I'm an expert in sales of technologies and sensors. What fields could they use? What carbon fiber uses robotics? Is it health care, standard manufacturing? That, yeah, I think that this could happen.

Brian S Hall (15:14.136)
Speaking of which, F1 is a platform for technology. mean, there's for us, it's like, are there F1 APIs? I mean, we easily can put our podcast on Apple Podcasts or Spotify, for example. I mean, maybe F1 should have a platform of promoting podcasts and social media influencers. I get a regular email from F1. There's a website, F1.

They have e-commerce. There's with F1 TV, they're streaming. I mean, the F1 platform units, you can connect some of the most savvy sports people, entertainment people, fashion, travel.

Brian S Hall (16:05.02)
Seems to go on

Patrick (16:06.51)
Yeah, I mean there's a lot of... a lot of,

capability, I guess, or potential for.

for F1 to kind of utilize all of those things. and you know, you can go on to F1.com or whatever and look at, what's the next race? Well, maybe there should be a tab for, just experiences and, you know, book your, book your total F1 experience. Maybe it can be a group experience so that it's not as, as a,

expensive or daunting or challenging, right? And you can go and do a trip to wherever Barcelona and, know, do a see the race, but also here's, you know, an itinerary for the week around Barcelona. How would that be? or yeah, just having content about F1, from

different people podcasts or influencers or what have you. Sitting on there for anybody that wants to is interested in F1 can go in and view all that content. Like you mentioned, e-commerce fashion, those kinds of things. All of the drivers have their own sort of line of products, I guess.

Patrick (17:50.124)
Why not house all of them in one location? And then, you know, Lewis is obviously big into fashion and has, and is, you know, developing a non-alcoholic tequila or whatever it is, right? Maybe all of that can be, can be located on, on an F1 site and, sort of promoted by the sport.

And maybe they take, you know, a small commission or whatever it is, but these are all, these are all things that can, I think, have an impact or influence on the way people interact with F1 and view F1. And, all of that is, is I think a product of the way that the sport is set up and how it's become kind of a global platform, as you're saying.

Brian S Hall (18:47.982)
I love how you like your idea of F1 world like instead of Disney world and it's like you can go and experience you can get into a car do sims race against others race against the drivers times have you know open one can be little you know little avatars of but it's of max for example challenging you you could sit at the bar and drink your louis hamilton

non-alcoholic beverage, for example. You know, you have families there. I like that idea. I also just think, you know, when you look at some of the money coming in to F1, it's a lot of it's private equity money. Private equity Williams, they bought it. Huge private equity money in the Cadillac team. There's some in Alpine.

and Christian Horner is working with other private equity groups to sort of take control of that. And in America, we're used to private equity and we know what that means. Private equity is essentially, we're going to give you just enough money to fail. We're going to allow you to continue operating until we have figured out how we can suck out every asset and every penny of value from you. And then we leave. It would make no sense to do that for F1.

Well, your costs are so high in F1. Your operating costs are just, you know, I mean, like I said, Cadillac has already dropped a billion and half dollars. They haven't raced yet. We don't know what the car can even do. It's, it's using, so private equity in this case is being, is pivoting and if we're investing in this because it then gives us access, not just to the sport dollars, any potential profit from running Cadillac, for example, or cutting deals with.

Apple TV, for example, with, you know, the track in Barcelona, raising track fees. It's everywhere we go. We're going to meet with the top government officials in that town. There's going to be sheiks and billionaires. There's going to be rich people. There's going to be hustlers, people with great ideas, young people who are going to like, hey, man, what do you need from me? I will do it because I want to make something. These are just...

Brian S Hall (21:10.854)
I don't know, there just seems to be new ways of coming up with money that I think is not being looked at closely enough. There's a reason why private equity is spending a fortune for Cadillac. I don't think it was just to make the meager amount of profit a Cadillac racing team will in F1. That's nothing to do with it.

so I just think there's all these, these, these other other ways of, of looking at this. And I just think also that it's, like you said, soccer is certainly more popular, but I might watch my soccer team here locally. Then maybe somebody else, but here it's, I follow F1 and this week they're in Madrid and this week they're in Manza and this week they're in Miami and now they're in here.

And it's always this whole different environment with different people, different groups of money.

Patrick (22:13.056)
I mean, it is like you say, a traveling circus, right? And it goes everywhere and it is inherently sort of different from other sports. and it does provide an opportunity to meet with.

realistically like powerful, influential and important people, for a lot of these, a lot of these teams, owners, investors, things like that. And we even, you know, very briefly, was touched on in, in F1 the movie, right? I mean, this guy is an investor in the team and is trying basically.

to make it lose so that they can sell it so that he makes more money. and, and, know, this is, this is, sort of how F1 works and functions. And it's not necessarily whether or not the team does well. It's how these investment groups, private equity, whatever it is, can

ultimately make the most from from it. And so, you know, whether that is having a direct line of communication to government officials, or, you know, billionaires across the world or whatever it is, there's a there's a way that

Brian S Hall (23:39.506)
Okay, well.

Patrick (24:02.026)
owners, investors of these teams can basically profit even if they're not doing well on.

Brian S Hall (24:08.306)
Right. I think, you know, that's a good point. This sort of the hidden ending of F1 the movie isn't that Sonny Hayes wins a race. It's that the old school F1 hustler is able to hang onto his team. You know, the voracious private equity, you know, the mean guys aren't going to take hold of the team. And I love the old school F1 guys. I always loved Helmut. He was an asshole, but like he's our connection. Like you mentioned in a previous episode, he's our connection.

Patrick (24:32.462)
You

Brian S Hall (24:39.186)
But I think those days are gone. It's corporate, it's private equity, it's just big money. And the big money is not looking at simply extracting value because the value of F1, there really isn't much value if you look at it as a sort of a finite resource.

You know of like well, I'll now own the Alpine team. Yay. Now, what does that mean? I've got massive massive costs even even if we Quit even if we sell our wind tunnel even if we buy our engines from Mercedes. I've got massive costs How much money am I realistically gonna make off of this deal five percent ten percent? Far below what private equity would

would want to. So instead, they're looking at how can I use this as a platform of cutting deals with government, cutting deals with Disney or entertainment giants, of new sponsorship, of leveraging some of the assets here. Now I'll get a MotoGP team. now I'll get, now I know these guys, how sports works. Maybe I'll get a sliver of a Mutual League Baseball team, for example. They're sort of using it as a launch pad. And I think

folks still don't understand this yet, that F1 is a platform, that F1 is a launch pad. Its growth has gotten so big, so fast, that we're kind of missing out on the story of F1 being a launch pad for new money, for private equity money, for new media, for new entertainment experiences, new travel experiences.

Patrick (26:18.324)
Yeah, I mean look they better get in on it now because one eleventh of f1 world is gonna be It's gonna be a lot. Okay, so i'm just telling you

Brian S Hall (26:30.182)
That's funny. Do you think F1 don't have many stars? F1 has not really produced many stars. Lewis, still not much of a star in the US. I he's known. But you compare him to Tom Brady, to someone in soccer. Gunther was almost a star.

Carlos, the ladies like Carlos, Ricardo, everybody liked Ricardo. But right now, we're still, don't yet have that kind of, no one's become an F1 star, either as a driver, a team principal, a social media influencer. We don't really have an F1 star yet.

Patrick (27:19.278)
Yeah, definitely not in the US, certainly. And even abroad or globally, I'm not sure that anyone in F1 is particularly a star, a global star. Maybe Sonny Haze is the closest we have at this point.

Brian S Hall (27:42.397)
I always think of Oli Bareman. mean Oli Bareman is quite talented. He's a driver. He very likely will go to Ferrari. He's a young guy, well spoken. He seems like a fun guy like Ricardo. Um...

I don't know, maybe he's the next big F1 star, star I'm waiting, I don't know.

Patrick (28:04.044)
Yeah, it's tough too.

To tell, you know, even someone like Max who's at his absolute peak right now is...

has won several championships at this point in his career, racing basically better than anybody else.

He just doesn't quite have the character or qualities that it takes to be sort of a global sensation. And I don't necessarily think that's a bad thing. It just is the way that it is. He's not a Kobe Bryant or a Shohei Otani.

Brian S Hall (29:02.448)
Right. Right. Right. He's not drawing attention to himself almost by his personality.

Patrick (29:09.556)
Right. And so I don't know that there's anyone currently in F1 that can sort of be that. I think Lewis is really the only one currently on the grid anyways, that that can be that I, you know, to me it takes

both success in whatever you're doing and to be a little bit of a diva. And Lewis, I think, is the only one that sort of has both of those qualities currently. So we'll see. Maybe Ollie, he seems like a good lad and he's quite...

quite good so far in F1. It'll be tough, you know? I think Drive to Survive made Gunther Steiner sort of a cult hero, almost. It will definitely take something like that, some sort of content related to F1, but not necessarily just

sort of on track performance or like interviews or whatever to make them a global sensation. So I'll need additional content, I think.

Brian S Hall (30:44.923)
You

Right, right. But I wonder if Max, Max is not, Max does not have that personality. You're not drawn to him and he doesn't want that. But I still wonder if he could become, let's say the first billion dollar F1 man while a driver. I mean, let's say he continues to drive this well and it's four or five years from now. The money is even

radically bigger. think what he's been with Red Bull, but think of instead somebody is like, Hey, I want to get into F1 to sell my product and have it help sell these other products, which helps those these other products. And, you know, maybe the value of my company right now is 5 billion, 6 billion, 10 billion. You get max as your driver of your new team and it's wearing your, your, your team colors.

and he promises to promote your team product and suddenly your $10 billion company now is worth $15 billion and he gets 20 % of that so he's a billionaire now. I mean, I can see this happening.

Patrick (31:59.662)
Yeah, I mean I That would not surprise me for something like that to happen

you know, he, he certainly is.

worthy of it, I think, and would be if he continues to kind of perform the way that he is. And in all honesty, he's a pretty safe sponsor, you know?

Brian S Hall (32:32.966)
Right, right, he's gonna go home and play with his kids and get on the Sims.

Patrick (32:39.854)
So that that certainly would not surprise me, you know, if it, you know, if meta decides that they want to fucking F1 team, you know, just go here, we'll give you. Uh, 5 % stake. There you go. There's there's $20 billion for you. Um.

Brian S Hall (32:48.645)
Right,

Brian S Hall (32:59.858)
Right Yeah, cuz I mean we're thinking you know Total Wolf is team principal owns bit of Mercedes a good bit of it Gritch and Horner Batting wants me back in f1 as a team principal, but also part owner. Why can't driver be a part owner?

Patrick (33:19.694)
Yeah, I mean it would be would definitely be interesting it you know, I think there are other Other people around f1 though that could become kind of globally famous and associated with with the sport Whether those are Broadcasters potentially, you know, we we see that in the US sometimes where we're

broadcasters become like these, you know, famous sort of sensations. Um, or whether it's a, a driver's significant other or something like that. Maybe they're kind of a, uh, a popular person. Um, you know, we see that in, in, uh, sports very frequently here. You think about, uh,

Brian S Hall (33:53.436)
Bye.

Patrick (34:20.248)
Travis Kelsey in the NFL, right? Marrying Taylor Swift or whatever. It's like, all of a sudden everybody fucking loves the NFL because Taylor Swift has some minute association with it.

Brian S Hall (34:32.466)
right? And he has like a massively popular podcast.

Patrick (34:37.696)
So, you know, it sort of takes the right person to become involved, I think. And it's not far away, I think, but we will get some sort of global star soon.

Brian S Hall (34:57.882)
Alright, want to thank you all for... Excuse me.

listening to everybody's most beloved father and son F1 Podcast. Sorry about my voice. You are listening is much appreciated and we are lights out.

Patrick (35:12.75)
Thanks for listening.