F1’s Crackdown, A Demure Summer, and Sponsor Drama!
Hi there! Welcome to Track Limits, a weekly F1 newsletter where we break down the major headlines and dive into the questions, trends, and topics that spark our collective curiosity. Nothing is off-topic and a little fun is always part of the mix!
Good afternoon!! The summer break is officially over, and there's no better way to get back into the racing spirit than with the enthusiasm of the Dutch fans!
We had the usual sea of orange, everyone obsessing over stroopwafels, non-stop electronic music, and even a flower-adorned truck for the driver’s parade! The typical Dutch weather also made an appearance, with multiple showers and some rather unpleasant wind gusts. Miraculously, these mixed conditions stayed away on Sunday, giving us a race without a safety car or yellow flag!
As expected, McLaren continued their fight for the championship title. Although both McLarens struggled off the line, and Norris fell behind Verstappen by turn 1, the Brit regained the lead and crossed the finish line with a 22-second gap. Whether it was a cheeky nod to Verstappen or not, I don’t know, but I have to confess - I chuckled when Norris used the Dutchman's iconic radio line, 'simply lovely,' after his win!
Despite all that, the weekend itself wasn’t particularly exciting. Sure, Alpine announced Doohan as their driver for 2025. Sargeant had a major crash, intensifying rumours of an imminent replacement - which turned out to be true. Asymmetric braking continued to be the technical hot topic, and the gyroscopic camera made a comeback, giving us some beautiful footage. Verstappen completed his 200th Grand Prix, and Albon was disqualified from qualifying after a technical infringement. But are we really going to remember this weekend? Honestly, I don’t think so!!
Unfortunately, I was right and the summer break ended up being far from exciting. If once drivers lived their best frat boy lives with wild parties, yachts full of models, questionable outfits, and outrageous drama, this year we saw nothing even close to it. In fact, we haven’t seen anything like it in years!!
Jumping on an overdone trend that perfectly captures this F1 summer break: “It was very demure, very mindful!”
Most drivers kept a low profile, with only a few offering glimpses into their holiday shenanigans. We saw Leclerc yachting around the Mediterranean, sporting goofy hats and showcasing his quirky dance moves! Norris decided to embrace the mullet this summer - which, contrary to most, I actually like on him. I’m seriously starting to wonder if this is the male equivalent of cutting bangs!! Additionally, his confusing relationship status continued to fuel speculation, leading to a flood of increasingly outrageous stories on our feeds all summer long. In the meantime, Albon perfectly embodied the golden retriever boyfriend vibe during his mountain retreat!
Unsurprisingly, Bottas couldn’t stay still and fully embraced his cycling obsession, visiting gravel roads all over Europe and snapping pics of stunning landscapes. And, as tradition now demands, we couldn’t wrap up the summer break without another nude BotASS moment!! I have to be honest, this year was not his best work!! Meanwhile, Hamilton attended the Olympics, traveled around Africa, and visited the Maratane refugee settlements in Mozambique. Somehow, Hamilton puts us all to shame, even when he’s on vacation!
Once in Zandvoort, it seemed like the media hadn't realized that the summer break was over. Somehow, a journalist sparked the most unserious discussion in the paddock: What is the best Verstappen song? I mean, I’m all for this debate, because 'Tu Tu Tu Tu Max Verstappen' is clearly the best song. It gives you everything you need: a high-energy beat, a catchy chorus, and snippets of race commentary and driver radio! Is there really anything that could top that?! But seriously, how did we end up here?!
On a far more interesting note were this year’s trophies. They were designed in collaboration with Robbie Williams - which is both unusual and fascinating - and draw inspiration from his recent exhibition at the Moco Museum in Amsterdam, where he explores the themes of mental health and the pressures of stardom.
As a result, the trophies feature several handwritten phrases from the exhibition, such as “coping with the heartbreak of failure,” “public scrutiny and limited privacy,” “pushing through minor injuries and fatigue,” and “lack of opportunity for spontaneity.” These phrases more than likely also reflect the mental challenges drivers face, making the trophies not just beautiful symbols of their on-track achievement but actually relevant to them. Each trophy was made by Royal Delft, renowned for its iconic Delft Blue pottery.
I don’t know about you, but trophies like these - ones inspired by local traditions and more than just ad space for sponsors - are the ones I appreciate the most. Plus, they make it so much easier to identify which Grand Prix they belong to!
Oh wow, I almost forgot the most important summer break shenanigan!! So, the Piastri family has become Formula One’s social media blessing, bringing us unmeasurable entertainment in the most charming and dry way ever!! This status was cemented during the break when Piastri’s mom had the most hilarious and insightful conversation with the guys from the Red Flags Podcast. I have to be honest - I think I might like her even more than Piastri! Is that wrong of me?!!!
F1’s Crackdown
Over the summer break, several Formula One creators and small businesses rebranded their social media accounts, domain names and revamped their content. What caught everyone's attention was the fact that all of them removed any mention of F1. Despite most of them having pivoted to other motorsports over the past year, there was a lingering sense that something was up.
This was confirmed last week when several of them revealed that the Formula One Group had been sending cease and desist letters, alleging violations of Formula One’s brand guidelines - essentially, claiming they infringed on their trademarks and intellectual property.
ZOOMING OUT:
Formula One is no stranger to cease and desist letters. Bernie Ecclestone, the former owner of Formula One’s commercial rights before selling them to a private equity firm in the early 2000s, was notorious for pursuing anyone who used his protected marks or intellectual property without proper licensing. Even Hamilton has claimed to have received some of these letters!
When Liberty Media acquired Formula One’s commercial rights in 2016, the trademarks and intellectual property were integral assets and a crucial revenue stream. However, in 2016, F1 was in a very different position in terms of its enterprise and brand value.
Formula One had $4 billion in debt, and there was a significant financial disparity between teams, many of which were operating at a loss. Sponsorship interest was flat, and global viewership numbers were declining. As a result, the series was valued at $8 billion, including debt. And Liberty Media acquired a majority stake for $4.4 billion in cash and stock, marking a substantial drop from its previous peak valuation of $12 billion.
One major growth opportunity Liberty Media identified for the sport was digital media, an area previously overlooked by past owners. They believed that through it they could modernize race broadcasting and increase exposure with younger audiences whose media consumption was increasingly shifting toward digital channels.
This proved to be true. Over the span of five years, the sport experienced a remarkable growth in global viewership and attendance. Most teams became profitable following the implementation of the cost cap, with several reaching valuations of over a billion dollars in 2023 - which is an average increase of 276% since 2019. Meanwhile, Formula 1’s revenue soared.
While many attribute the turnaround to "Drive to Survive" and Formula 1’s social media push, there is something to be said about the role fans played in this growth. Formula 1, broadcasters, and teams can only produce so much content, far less than what populates our social media feeds. This level of reach has only been possible because fans - some of whom have turned content creation into a professional endeavor - began producing their own content about the sport. Through them, we were suddenly flooded with diverse voices, fresh perspectives, and innovative formats, which helped engage both new and seasoned fans throughout the year - something the series has long struggled with.
Although Formula 1 prides itself on its historic association with luxury brands and having a high-net-worth fanbase, the arrival of a new passionate fan demographic - younger and skewing more female - made the sport culturally relevant for the first time in decades. They turned the F1 brand into a globally recognized entity and put their tremendous economic power behind it. As a result, Formula One has become exactly what brands are eager to partner with, illustrated by the sport surpassing 300 sponsors for the first time in its history in 2023.
This seems to have prompted a shift in how Formula 1, under Liberty Media, protects its trademarks and intellectual property. While they previously targeted third parties infringing on these rights, fans and content creators had largely been exempt, with some even collaborating with Formula 1 and teams in previous seasons. However, this recent cease and desist campaign has made it clear that this is no longer the case. Which understandably aggravated some, not because they have to change their social media handles and comply with new guidelines, but because it signals the series’ intend to limit creators' ability to capitalize from the growth and increased brand valuation they have helped build.
Legally, the Formula One Group is within its rights to enforce these trademarks as the owner, and there are several business reasons for doing so. These include protecting against brand dilution, ensuring quality standards, satisfying license holders, and maximizing revenue.
However, this crackdown has highlighted that the democratization of media has benefited platforms and brands far more than the creators who produce the innovative, engaging, and entertaining content that attracts large audiences. Making discussions on for example fair use, intellectual property protection, fair compensation, industry standardization and transparency, and platform accountability - not only critical in Formula One but across the broader media and entertainment industry.
Sponsor Drama
It seems Haas can’t catch a break with sponsors. This time, the trouble didn’t come from an energy drink but from the Russian fertilizer producer and exporter, Uralkali.
On Thursday, it was reported that bailiffs and Dutch police visited the American team at the Zandvoort circuit to inventory and assess the value of their on-site equipment, machinery, and even cars. This came as a result of Haas missing a deadline set by the Swiss arbitration court to repay Uralkali. In response, the Russian company turned to the Dutch courts, which ruled that Haas couldn’t leave the Netherlands without proof of payment.
THE DETAILS:
In 2021, the American-owned team Haas announced a new title sponsor: the Russian fertilizer producer and exporter Uralkali. The Mazepin family, which owns the parent company Uralchem, would also be part of the driver line-up with Nikita Mazepin joining Mick Schumacher for his rookie season.
But in February 2022, just before Formula One’s pre-season testing, Russia invaded Ukraine, leading to sanctions imposed by several countries, including the USA and the UK. Unlike other sports regulatory bodies, the FIA chose not to ban Russian and Belarusian drivers, provided they did not compete under their national flags and refrained from expressing support for the military invasion. Despite this, Haas decided to terminate its contract with both Uralkali and Mazepin.
However, the problem with this decision was that Uralkali had already paid the sponsorship fee for the 2022 season.
While Haas had a just cause to terminate the contract, Uralkali argued that the team needed to refund the payment, seeing that the contractual obligations associated with the fee had not been met by Haas. As a result, the parties turned to arbitration in Switzerland - a common place for resolving international disputes due to the country's long history of political neutrality and efficient resolution process - to settle their disagreement.
In June, the Swiss arbitration court ruled that Haas was required to return the majority of the 2022 sponsorship fee, which allegedly is around €8 million. While the deadline for repayment was not disclosed, by mid-July Uralkali publicly stated that they hadn’t received any of the money owed, which constituted a breach of the agreement.
An important issue to consider in this matter is that the sanctions imposed on Russia prohibit American companies - including their foreign branches - from engaging in financial transactions, business dealings, or any other economic activities with sanctioned companies, sectors, or individuals. Violating these sanctions can lead to fines, as well as civil and criminal penalties.
In some cases, companies can apply for a specific license from the U.S. Office of Foreign Assets Control (OFAC) to obtain an exemption from the sanctions, such as when compliance with a court order is required. The OFAC does not specify the exact timeframe for processing such licenses, noting that the duration depends on the complexity, scope, and details of the application.
This additional legal procedure might explain why Haas didn’t pay Uralkali immediately after the arbitration court’s ruling. However, it doesn’t clarify how their license request status could suddenly change, allowing them to make the financial transaction on Friday.
Could Haas' legal team have pressured OFAC to expedite the process after receiving the Dutch court order on Thursday? It’s possible, though the probability of it being effective is to be determined. So, what other explanation could there be for Haas' delay?
A quick look at Haas' financial records from 2022, the most recent available at the Companies House - the British agency that maintains company registries - suggests the team may have faced, and could still be facing liquidity issues. This means Haas might not have had the cash or cash equivalents readily available to issue an €8 million cheque to Uralkali.
As such, they would need to find a solution to meet this short-term obligation, such as selling assets, securing a loan, raising capital by selling a stake in the company, or negotiating a new sponsorship deal - possibly even a combination of these four. Given that these options take time to arrange and finalize, they provide a plausible explanation for the delay but also why they were suddenly able to comply.
Interestingly, if the team's liquidity situation was indeed insufficient and Haas' owner remained unwilling to further invest in the team, it could have presented an ideal opportunity for interested parties to gain a stake in Haas. Even a small minority stake would be a significant foot in the door - one that has been very hard to kick open - and could potentially serve as a foundation for a larger, more ambitious project in the future. Let's not forget that many others, including companies and individuals currently on the grid, have taken that path in the past as well!
Unfortunately, only time will reveal which course of action Haas ultimately chose. As the team seems reluctant to disclose the reasons behind their rather embarrassing situation in Zandvoort.
This week’s recomended content!!
🗞 READ
A Cease-and-Desistenomenon | FIA Explains Laser Scanning System for F1 Scrutineering | How F1 Is Wooing a New Breed of Luxury Brands as Sponsors | How a North Holland Oil and Gas Advertising Agenda Threatens to Become Formula 1's New Tobacco Ban | How the development battle between the Formula 1 factories has ignited the 2024 season | Amos Winter - MIT Professor, Racecar Driver, and Super Tifosi
🎧 LISTEN
The Red Flag Pod: Oscar Piastri's Mom Tells Us What Makes Him Emotional and Becoming an F1 Twitter Icon | The Fast and the Curious: George Russell on Brad Pitt, "Yabba Dabba Doo" & his future at Mercedes | Team Torque: Logan left Alex on read | High Performance: Ollie Bearman Exclusive: The Untold Story of F1’s Next Star
Photo Credit: Charles Leclerc, Aston Martin F1, Kevin Magnussen