Power Players: How CEO Stefano Domenicali is Growing F1's Legacy

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0:42Hey there, welcome back to The Deal. I'm your host, Jason Kelly, flying solo this week and sharing a special interview with the CEO of Formula One. Something a bit different for The Deal. His name is Stefano Domenicali, and I got to sit down with Stefano back in September for a docuseries I did with Bloomberg Originals called Power Players. And this season, we dove into the business of F1 and motorsport racing overall. So, of course, I had to speak with the big boss. In this conversation, you'll hear us talk about some of the biggest, latest deals in the world of racing, including the addition of Cadillac to the F1 grid.

1:15And also how Stefano teamed up with the folks behind the Brad Pitt movie F1. You probably saw that. And the push to bring more women into racing through F1 Academy. Speaking of which, if you haven't listened to our interview with the managing director of F1 Academy, Susie Wolfe, I highly recommend you go listen to that episode of The Deal. It'll be linked in the show notes. My conversation with Stefano is featured in the third episode of my Power Players docuseries, which focused on how F1 is bringing its booming business to Miami. So we start off by diving into the deal that Stefano made with Tom Garfinkel and Stephen Ross.

1:48Ross is the owner of the Miami Dolphins and Hard Rock Stadium, where the Miami Grand Prix is located. Tom Garfinkel is the CEO, and we spoke to Tom actually on The Deal last spring. That conversation also linked in our show notes. We love The Deal's cinematic universe here. But without further ado, here's my conversation with Stefano Domenicali. Enjoy.

2:19So Stefano, great to spend some time with you. So let's start here in the United States. I'm in the United States. You're back over in London, fresh from another weekend of racing. Take me back to the decision to go with Miami as a new Grand Prix in the United States. Why did you do it? What was the pitch back and forth with you and Tom Garfinkel? Well, first of all, it's great to connect, Jason. Thanks for your time. I mean, the pitch is very, very simple. To be solid in our growth in one of the most important markets for us, it was important to understand where we believed there was the need to create the right foundation.

3:00And, of course, when you're talking about entertainment, when you're talking about sport, Miami is in the top list. and that became quite natural to keep hammering down as fast as possible that possibility. And as soon as I came in in the position, I wanted to reconnect with Tom and make sure we could be able to find a solution that will enable on one side, on Miami, to build the right infrastructure and to build what I believe will be a great legacy for our sport and on our side to start really having Miami into the pillars of our strategy in the U.S. As you know, we had one race since many years in Austin, and we had the sort of ups and downs coming in, coming out in the U.S., having races basically almost everywhere, but without having any kind of real strategy there.

3:51And of course, as you can imagine, now it's totally different. So we said, OK, let's go to Miami. Let's make sure that we can find a solution that could be very, very interesting for both of us. And actually, after just a couple of years, I mean, Miami seems to be in the calendar since a decade. That means that we are very effective and very, very happy that Tom and Mr. Ross has invested with us. And the way that we are using their expertise in American sport to develop the growth of our sport in U.S. Right. And this was not an easy deal to get done, is my understanding, right? I mean, you guys, you know, went through a lot of iterations.

4:28Obviously, there were a lot of things going on in the world at the time. Do you remember it being a pretty tough deal to get over the line, as it were? Well, that's part of the game. When we have two important entities, F1 from one side, and of course, Tom and Steve Ross and Miami Dolphins, Steve Ross Group, you understand that the power is there on both sides. And of course, we both need to make sure, and that's my philosophy, by the way. If you want to have a marriage, both have to be happy. You cannot drain up one of the others because at the end of the day, they will not last. And because for me, it was essential to have a long-term vision on that.

5:05After a little bit of a tennis game, I would say we find the right deal. And now it's really boost on. And every year we are coming, I think Miami is representing an incredible event, which we are very proud of. And to that point, I mean, the long term, you extend to 2041. It's one of the longest extensions you've ever had. Why do that? What did you see that's different that gave you that level of confidence to go that far into the future? Very simple, because I go back to the first point that you were mentioning. For us, Miami is one of the pillars of our strategy in the U.S. And on the other side, being long-term visionary, we can allow also Miami to invest on us.

5:45And because of the nature of the business we are having today is really incredible and we are living, I would say, a golden moment for our sport, we demand the things to grow the business together. So having the vision such a long term will enable both of us to exploit the maximum out of our strategy. And what is it, do you think specific, I just want to push on this a little bit. What is it specifically about Miami, both in the US calendar of events are called the North American calendar of F1 events, but also in the global? What does it bring that is distinct? And what do you take from it that you apply across other Grand Prix, especially, you know, the one you own in Vegas?

6:28Well, Vegas has a different approach. We can go through that after. But let's say Miami represent the area where entertainment, also Latin culture, motorsport culture, world of music and fun, and of course also a place where the business is developing dramatically, positively, is there. So therefore, we do believe it's the right place to be and with no question. And I would say everyone, not only us as a sport league owner, I would say, but also our partners, our teams, everyone, all the stakeholders of whom recognize that. So that's the reason why, as I said, everyone is so happy to be there for such a long time.

7:05And so talk to me about, you know, going global for a second, talk to me about the overall mix, how that's changed. You know, you recently, ahead of the conversation we're having, you re-upped with Monaco for an extension. Is the mix basically where you want it at this point, or where could we see some changes on the margins over the next three to five years in terms of the global calendar? I think the global calendar now is reaching out all the world that we want. Of course, there are markets that are relatively more important in Burton Comer because of the business while and what is the opportunity we can bring home both for our stakeholders, but also for us.

7:45But in terms of continent, I think we are a good balance. and in terms of number, we should be around 24 Grand Prix. And we don't have to forget that just four years ago, we were 20. So almost one third of our growth is something spectacular because that means that the business is solid. We are very strong in Europe. We are very strong in America. We are very strong in Southeast Asia. We are very strong in Middle East. We are good in Australia. We have one objective to work on, still working on, is Africa because it's the only country that is missing. but we are working very hard to make this happen as soon as we can, but also as soon as all the conditions are right.

8:26Because we cannot be there just to, let's say, tick the box, because we really want to be there in the right condition, and we are working for that. And if I go even to the discussion on, you know, new circuits, street circuits, traditional circuits, I think that the beauty of what we're doing today is we have the right mix. We don't have to deny that we start from traditional track, evolving a situation that is different because we are now, you know, very effective in embracing a sort of social movement around the city where the Grand Prix is hosted. And the more we are growing, the more this will happen.

9:01But it's up to us to maintain the right equilibrium. We know that it's essential to be credible in what we are doing. And so this is really what we are doing today. You know, one interesting thing about Miami is you have done some interesting experimenting and you see a lot of the newer sort of formats and elements of F1 on display. Sprint races, obviously, which you've been investing in pretty heavily, and F1 Academy is another thing that obviously has been a big investment. Let's start with sprint races. That has been a very popular format. It extends the weekend. What have you seen when it comes to sprints?

9:35Should we expect to see more of them? How does that fit into sort of the business case for F1 right now? Well, I start from the fact that the sprint concert started from the fact that our duty is to listen to our fans and the customers. Customers are promoters, are media, are people that are watching Formula One. And because now we have not only avid fans that are following Formula One, but also we have new generation of fans. You know, my first things that I always say to our people is to listen. And listening means that what we can do to attract people to stay focused on a racing weekend without having drop of attention.

10:13Because, you know, I know very well that free practice is very interesting for drivers, for engineers, for mechanics, because you are getting ready more and more to prepare the race in the way that we want. But this is not actually what people would like to see when you are going to the track or see television because they want to see action. And you are doing something to achieve some sporting things when you're running. That was the starting point. At the beginning, as always, when we talk about this new format or new ideas, the ones that are more resistant to the change are the actual people on the ecosystem that are naturally very protective of what we are doing since the many years.

10:49And now I would say we have moved out from this situation. And I see that the reaction to that change has been very, very positive. And I think that is the right way because we are listening to the people. And that's really the key of success that we're having today. listen to the fans and that's on us to try to make the right decision to apply to the sport i think that is a trend that will evolve in the future for sure but we need to be prudent because for example next year we have a new car that will be totally different there will be a focus on that and therefore up to that we don't know where exactly we're going to be therefore the next step of growth in terms of changing maybe in terms of quantity the sprint in the calendar or the The format has to be done through the right step of thinking, decision-making process, and so on.

11:35But that's definitely a trend that we can see. People want to see action on track. Action on track means less predictability, means less time to prepare the car and the driver for the final moment. That's the really thinking behind.

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12:30Okay, so you went somewhere where I'm really interested to hear more about. This is a massive year we're looking ahead to 2026. The regulation changes. This is obviously built into the business model of Formula One. It's one of the most exciting things for fans, for all the stakeholders that you mentioned. Help me understand something you just said, which is how does that sort of change make you think about the frequency of races, the types of formats? I want to make sure I understand that. Absolutely, Jason. I mean, next year, as you know, there will be a big change in terms of technical regulation because we put at the center the sustainable fuel that was relevant in terms of being at the center of the technological development in the automotive industry.

13:12That's why we have a major car manufacturer that live in a bit of a difficult moment that are coming back to the sport. So that means that job done in terms of done the right decision. But there will be a totally new car. There will be a totally new way of driving the car. So we need to understand how in the track that we are performing, this will have an effect on the possibility of overtaking, the possibility of having the right action on the track. So that's the focus of next year. Therefore, after that, after we're going to see how this will develop, we will understand if, because this will happen in any case, how, let's say, we're going to improve the quantity of the typology of the sprint approach.

13:49We're going to discuss with the FIA, with the teams in the next weeks, in the next month. And it's a process that has to be done properly with no anxiety because we cannot do mistakes. But we cannot be even too shy to try something new. That's the secret. Try to be always in front of the change. And that's the reason why, for example, not only on that side, you know, we were able to push the boundary in places or things that had never been done before. Or I go back to the way that we did Netflix program, the way that we present, for example, the movie, this kind of all the social media impact in our ecosystem.

14:24Before, it was not even possible to think something like that. But this is the way that we want to, you know, use our form of pushing and changing the boundary of our sport to try to be more effective and more present with all the people that are our fuel for the future. So you gave me a great segue to F1 Academy, back to F1 Academy, which I would say, is present in Miami and five other places. There are six total, right? Seven total, yeah. Tell me about the importance of F1 Academy in terms of growing the fan base. I know that, you know, Susie and her team have a stated goal of getting a woman on the F1 grid.

15:01There's also an element of building the business and the fan base. How is that going? How are you able to measure that so far? Well, it's going very, very well, tremendously well, but I do once again, step back. I mean, you may argue, people can argue, is it our role as F1 to invest in a grassroots project to develop the sport? You may say yes, you may say no. We say yes with facts, investing. And the only way to attract the female world to our sport is to create at the beginning a possibility to be on the spotlight, to be relevant. We know that is also a matter not only of talent, a matter of quantity.

15:38We need to create the momentum to attract attention to make sure that, you know, in the girls' world, they can start being attracted by our sport and then start in the roots of karting and the other formula. And the only way to do it is really to do what we did. With Suzy, we create a championship that is, you know, under our responsibility where we want to have, first of all, the attention that is needed to create, you know, the vibes. That is, as always, as a role model, we try to attract the women world to our sport. And on top of that, there is the need of the team who want to invest with us.

16:12And this is what has happened because they feel that it's also our responsibility to develop a sport. We have to take away all the physical barrier to allow, you know, there will be no differentiator factor for a man or a woman to drive. And this has been done. So it's just a matter of believing and investing in this project. We know that it's not possible unless there is a miracle that something will happen in the very short term to have a woman or a girl that is very young, you know, to be in the F1. But this will happen because we do believe we're going to be very resilient to believe in this project up to that moment.

16:46And this will have also an incredible effect, not only on the racing side of it, but also in the world of the female being very, very relevant in the world of engineering and in the mechanics, in the technician world of Formula One. That's really what we want to do. We will not give up and we will keep pushing even more to make sure that this relevancy will attract more interest to our sport. And do you think F1 Academy will run in more? Is the plan to run it during more weekends in the coming seasons? I think that is for sure an objective, but we need to be prudent in terms of understanding how the business is growing.

17:21Therefore, yes, but as I said, step by step, that's really our strategy. Going back to the U.S. aspect of this, obviously a huge moment in terms of growing the sport in America is the addition of Cadillac to the grid and GM sort of coming in. What does that mean? How do you model that out in terms of the plan to continue to grab the attention and grab some more American fans? Well, for sure, Cadillac will play a massive role of investing in our sport and investing in their ecosystem to attack people on F1. We don't have to forget that not only Cadillac, but also Ford with Red Bull will invest and will be significant for us.

18:01So there will be a very important key player that with their dimension will be able to help us to develop the attention on F1. We're working already together to understand what could be the synergies that we can play together. And this will have an effect for sure because they are very, very, you know, very important factor. You know, they are big automotive companies with a lot of very loyal clients and loyal customers that will help us, as I said, to be even stronger in the U.S. I'm pretty sure about it. And it was an interesting journey, to say the least, to sort of get Cadillac onto the grid.

18:36There was resistance, you know, when Michael Andretti was involved. You finally got it over the line. Do you feel like, you know, no one ever agrees on everything, especially in Formula One. We've all watched the show. But do you feel like there's a full embrace of Cadillac at this point coming onto the grid? The answer is absolutely easy and simple. Absolutely yes. Now yes. the condition has evolved in the way that we believe both. Now both an old ecosystem is absolutely happy and there's no doubt about it. I mean, there will be a very important pillar of the next push that we're going to have as an effect in not only US, but in the world.

19:13But of course, this is for the bigger picture. They're going to be, you know, focused on trying to be very strong on the track because we don't have to forget that this is a sport with a lot of competition. So this will have an effect in any case on the global attractivity of who we are now today.

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20:11Speaking of competition, you know, there was in, you know, the past several years, in the 23 and the 24 season, some concern that maybe Formula One had lost some of its drama, no shortage of drama this season so far. You obviously can't ultimately control that, but how important is it to the business that there is real competition up and down the grid, across all the garages, new faces, new players coming into it? How much do you rely on that to ensure that the business keeps growing? Well, definitely is a part of a bigger picture. There's no doubt that if you have interest in racing, you know, sporting things that are happening on the track, out of the track, or some polemics, or, you know, something that is related to the fact that we are always at the center of the attention is definitely relevant.

21:03The element for us is to make sure that this has to be, you know, at the center of our attention. If you look at what is happening today, You know, the gaps within the cars is very, very small. I mean, we have in qualifying 20 cars in less than one second. I mean, for the new fans, it's something that is unbelievable, the level of competition we have. And even in the future, what we have done in terms of trying to keep that as a very relevant part of the equation is that if there will be a new change of regulation that will allow the field to be less compacted, we know how to address the fact that we're going to have less time to make sure that the field will be compacted again.

21:39And then, of course, the other element that is relevant is to keep the focus on the personalities, on the people that are really, you know, I said the jewel of our sport. The fact that we need to keep embracing them at the center of our attention, preparing, you know, content to develop and to create stories is very relevant. Because from one side, you may hear from the ecosystem of Formula 1, oh, maybe 24 races are too many. I don't agree because, you know, our competition is not only in the sport field, where, I don't know, in the U.S., NBA have more than 80 games. Baseball, you know, we don't even count even more than 150, 160.

22:17You know, NFL has a season that is short, but it's very, very long. But we are not competing only with them. We are competing with movies, with theater, with events, with attraction. That's the dimension in which we are now today. Thinking big means that our field of competition is not anymore relevant to the sport itself. That means that we need to make sure that all the elements of our attractivity are pushed in that way. And to that end, getting involved in storytelling, obviously Drive to Survive was its own phenomenon. You and I have talked about that. You've talked about it a lot. The movie, however, F1 the movie, was a huge bet for you guys to really go in and to open access in a way you had never done before.

22:59How have you been able to measure the payoff for that? Has it been noticeable and measurable in terms of new fans coming in? How do you assess that so far? Well, first of all, I remember because exactly I was in this office in February 21, when I had the first meeting with Jerry Bruckheimer and Joe Kosicki. They were coming here with the Apple people to explain to me this project. And I was immediately touched by the fact that could be seen a great opportunity for us to get into a dimension that we were not there. and the beauty of this when I presented that to the teams everyone understood and for me was very important to make sure that the product was authentic as much as of course it's a movie but authentic and the beautiful journey that we did in the last years to produce it was we couldn't touch you know what has been live sport what is live sport that's racing that is sport it has to be pure but it was phenomenal the way that we were able to with different cuttings with different production people having the chance to do the movie.

24:02And now you can see that as Finnish, you understand or people were there, understood exactly what was happening. But it was really fascinating what we did and that's been an incredible journey. The effect, not yet measurable in terms of what is the real, if I may say, dollar effect. But honestly, that is not the most relevant thing. I know that the movie is really going very, very well in terms of return on that investment. It's huge. And this is fantastic and we have to be proud. But what will be the effect? The major effect is in terms of awareness, we're going to talk of FOMO1 in places and with people that no one would have expected to be in touch with.