Joining F1 is a sign — Liberty Media and Netflix extend their partnership Volkswagen returns to the race
Volkswagen’s return to the game with 2 new potential f1 deals. Porsche and Audi joining F1 is a sign.
For quite some time, the rumors that Porsche and Audi have been joining Formula 1. Now that has been officially confirmed, it shows that the significant investment will be rewarded by financial gain.
Volkswagen is likely to take two steps: one will be that Porsche will replace Honda as the engine supplier by partnering with Red Bull Racing. Although the Japanese company continues to support the 2022 season, the race team had to start its own power unit division called Red Bull Powertrains.
A second potential play may involve Audi buying McLaren, though the supercar maker has received a $50 million Saudi investment ($758 million U.S.). Audi is reportedly ready to offer around €500 million ($556.3 million U.S.) for McLaren.
VW’s CEO Herbert Diess said on Monday that the two premium brands would be joining the top global racing league in 2026 when technical regulations that boost energy savings come into play. As Diess said, “You can't get into Formula 1 unless a technology window opens, you need a rule change to get in there.”
The financial return on the F1 investment.
Diess said that return through sponsorships, brand exposure, and more that now come with Formula 1 is greater than the investment into the racing league. Liberty Media-owned F1 continues to grow in popularity through the docuseries Drive To Survive, and that factored into the decision.
Formula 1’s economic model shifted beginning in 2021 with a cap system designed to make the field more competitive. For 2021, the cap was $145 million. For 2022 it is $140 million and $135 million for 2023 with inflation increases allowed on top for 2024 and beyond.
Taking the cost containment and increased popularity of the global racing league together makes the platform an alluring combination for the likes of Volkswagen’s Porsche and Audi brands.