Thought leadership series

Thought leadership series

Why social justice and esports are so important to Formula E

Formula E, the all-electric single-seater series, was set up as the motorsport championship with a sense of purpose, to create a more sustainable future. As the world has changed dramatically this year, the series is well placed to capitalise.

Why social justice and esports are so important to Formula E

It is currently on a break before Season VII starts in January. The championship had a successful finale in Berlin in August, using the novel approach also taken by the UEFA Champions League, to have a series of six races in nine days in one location to crown its champion.

It was the kind of needs-must innovative thinking that typifies motorsport and Formula E in particular. So where does the series go from here? It is currently reliant on manufacturers, who are having their own challenges and keeping costs under control is essential.

For the latest #ThinkingForward interview with the sport’s leaders, we hear from Formula E CEO Jamie Reigle about entertainment, how FE is looking at F1 style budget caps and how to get fans back to the races.

What impact do you think this COVID crisis is going to have on the drive that we were already seeing towards electric mobility and the decarbonisation of motorsport and how do you think it will impact the attitude of manufacturers and where they focus their motorsport budgets going forward?

When we were in a late March, early April, you know, it was a pretty scary place to be. If you recall those moments, we were all very uncertain around where the world was going. I'm a massive believer in Formula E's long-term potential. I'm a big believer in the power of sport to inspire. I have no doubts about the long-term trajectory. Equally, whichever form of motorsport, we're all in the live events business with incremental exposure to the automotive industry. And in April, that was a fairly uncertain place to be. I think, what we've seen is the climate agenda and the push to electric vehicles has come up.  I think on the consumer side people were looking outside perhaps breathing fresher air than they breathed in a long time, certainly if they live in a city. That touches right at we're all about.

With the economic disruption from the crisis, you saw a lot of government support and stimulus into the economies. And in France, in Germany in the UK those subsidies were pushed towards sustainable technologies. So we view that as really positive. It doesn't hurt to have a bit of government wind at your back! And so we feel pretty good about where we are, but we're also cognizant of the challenges we all collectively face, we have to figure out a way to bring our product back whatever type of motorsport it is, we have to be able to figure out a way to host events in a safe way and, and get fans back because as much as I'm proud of what we all achieved collectively in Berlin I would be lying if I said it wouldn't be much better if we had all of our fans there.

Jamie Reigle, CEO of Formula E with Antonio Felix da Costa, DS Techeetah on the grid

Jamie Reigle, CEO of Formula E with Antonio Felix da Costa, DS Techeetah on the grid

Photo by: Dom Romney / Motorsport Images

Going back to the early lockdown no-one was buying any cars for quite a long time manufacturers were having to do all kinds of scenario planning as to what the future will look like. Now obviously around the world, things opened up a bit, cars are selling again. Formula E is pretty manufacturer dependent -  what are you hearing from them about their appetite to invest in the sport in the short to medium term?

Well, we've spent a lot of time speaking this Spring with all of our teams, in particular the manufacturers who have an end product that ties into Formula E. And in really simple terms, our priority as a championship is to grow the audience to make the sport as popular as possible and also to make it an appealing investment proposition and whether you're a large manufacturer who has an end game that ties to their electric mobility fleet or whether you're an independent team who are looking at Formula E to win championships exclusively and hopefully make some money.  There needs to be a path to profitability, there needs to be a return on investment and we spent a lot of time this spring with FIA with all of the representatives, the teams and the manufacturers, trying to look at what we can control about the business model.  

What we can't control is when the virus is going to be under control, where we're going to be able to race and on what day? Some of those things are, are unknown variables, even today, as we look into 2021.

What we can control is the inputs. We can figure out how attractive is it to participate in Formula E? What does it cost to put a competitive team on the grid? The DNA of the championship is that any team, any driver can win and Alejandro [Agag, series founder] set it up in a way where we try to keep the costs as controlled as possible. But as with anything that ties to innovation and motorsport those costs have a habit of creeping up. And so we've looked really closely at resource restrictions. We didn't feel like delaying Gen 3 would be the right signal to the market because we're about progress and there needs to be a link to innovation that ties ultimately to the road car programmes. So we wanted to be able to launch it, but make the generation last longer. So it'll be four years instead of three. We'll have two homologations instead of four. That has an impact on the cost programme. And then our job as the championship is grow the audience, so they can make money and sponsorship, media, and so on.

Oliver Rowland, Nissan e.Dams, Nissan IMO2

Oliver Rowland, Nissan e.Dams, Nissan IMO2

Photo by: Alastair Staley / Motorsport Images

Looking at it from the outside, it's really about getting the balance right between the common parts and manufacturer parts, the things that leave room for them to talk about their innovations. Looking at what Formula One has done with the budget cap, the levelling up agenda as well, in the rules. Are there any discussions around that going on in your in your series?

Absolutely, I think we have a responsibility to develop a profitable business model for ourselves, but also for all of our stakeholders. The challenge is each of the teams and each of the manufacturers comes at it with slightly different objectives. So we try to normalise that to a degree but ultimately, you try to focus on, is the product really compelling, is the racing compelling. And for Formula E what that means is every team has a really good chance of winning. Where is the investment going in the cars that is going to allow each team or each manufacturer to be able to tell a differentiated story in our case that that's all about the power train and the software development that goes into converting battery energy into the powertrain. And then you can deal with resource restrictions; we are looking at a cost cap or financial regulations. We're not as far along as Formula 1 and they've obviously been successful in instituting that, which I think is a good thing, generally speaking. One of the bright sides of a crisis like this is it focuses the minds. When I started a year ago, it was made very clear to me that this (budget cap) wouldn't be possible in motorsport. It exists in a lot have other sports.  So you either believe motorsport is genuinely unique in that regard, or it's a question of regulation, rules and enforcement. But to have all that you need collective will amongst the stakeholders. And I think what we've seen in the last six months is a push toward that. So I would say that I don't want to make a prediction that we will definitely do it, but it's certainly something that's on the table and I think, would serve really a powerful signal to reinforce that return on investment case for either the existing teams in the championship or frankly, for new investors who are considering coming in.

Jamie Reigle, CEO of Formula E

Jamie Reigle, CEO of Formula E

Photo by: Dom Romney / Motorsport Images

So the sport obviously has a strong sort of sense of mission around purpose, as we've touched upon and electric mobility, but Formula E has actually proved very entertaining as well. I mean, the races are close, and there's a lot, there's a lot of action, how do you feel about it as an entertainment product?

Well, I think if you look at the ingredients that all of the best sports, sports that have been commercially successful, that have big, deep passionate fan bases, which is, of course, our ambition to achieve that. What are the characteristics that they have? They're embedded in the culture in a way that's pretty authentic, they have a product that's inherently competitive, the outcomes are unpredictable. And so when I look at Formula E, you know, we have a lot of those ingredients, right? We're topical as it relates to electric mobility. The way the FIA and Formula E and Alejandro and the team set up the qualifying structure to mix things up. The nature of the competition is such that on average, every four races, we have three different winners. That's fantastic for live entertainment. We have all the ingredients there.

Speaking of fan experience, let’s look ahead to next season. It's due to kick off obviously in January. Will we see fans attending races and can you imagine by the time you get to London almost a year from now you'll have a full crowd?

I think the last six months has shown that making bold prognostications around the future around this pandemic is a fool's errand. But I will be very disappointed if next year we did not have fans at some of our races in some form. I think as we look to 2021, there's no doubt that the world is going to be impacted by COVID. And that's going to depend on which country you're in and the regulatory environment; how many people can be hosted at a particular venue at the same time, there's a lot of variables that go into that.

Despite the fact that we're seeing a bit of a second wave in a lot of markets, where I take a lot of confidence is we know we were able to deliver something in Berlin. We think there's ways even if we're limited on a single venue, to be able to host fan events around the city, which would allow us to be able to engage our fans, our sponsors to be able to activate. So I think we just need to adapt and be flexible. Where I take conferences is Germany (football), you know, it's 1000 people per event today. My understanding is that's moving to 5000 in a couple of months’ time. I can't look you in the eye and make a bold prediction. But I'm sure we'll find a way to get some fans exposed to that London experience.

Edoardo Mortara, Venturi, EQ Silver Arrow 01

Edoardo Mortara, Venturi, EQ Silver Arrow 01

Photo by: Sam Bloxham / Motorsport Images

And then talking about accessibility to the sport, obviously eSports is a is a critical component of that for any sport, particularly racing series at the moment. Like many rights holders, obviously you were active in the lockdown period with the virtual racing series Race at Home initiative and obviously in supportive of UNICEF. What did that do for you in terms of your development in the esports space, and particularly in terms of accessibility - people discovering your sport?

Truth be told we were not first to market. I remember in March, there was a number of initiatives popping up and we were looking at it saying, ‘We're not going to have that novelty factor.' How do we stand out from a crowded area not just in motorsport, but in sport generally. We partnered with UNICEF because we really felt that was appropriate and we wanted to support youth in particular faced with COVID. We differentiate the product by making sure that all of the Formula E teams and all the drivers are participating. And then we also differentiate by having what we call the challenge grid, which basically melded into one broadcast product, the challenge grid of gamers and celebrities.  The audiences were great. There were some markets we were pulling as big - if not larger - audiences on our Race at Home series, as we do for a normal event. It shows we have some work to do on the regular events! But it also shows that there's appetite and the demographic clearly is younger. With things like attack mode and fan boost, we're a natural blend of the real and the gaming worlds anyway, and so that that leap isn't so great. But it really did serve a great purpose of melding those audiences. All the teams and drivers said they loved it, and they want to continue and we're working now on plans to support the main Formula E championship and access that complementary audience.

Antonio Felix da Costa, DS Techeetah, DS E-Tense FE20, at the start of the race

Antonio Felix da Costa, DS Techeetah, DS E-Tense FE20, at the start of the race

Photo by: Zak Mauger / Motorsport Images

We all feel more vulnerable, I think as a world as a result of what's happened in 2020 with COVID, especially events based businesses like sports, what's steps are you putting in place to future proof Formula E as a sport?

Formula E is somewhat unique in the sense that it was founded with this core principle to try to make the world a better place in simple terms, through addressing climate change with electric vehicles. The world is facing an enormous number of challenges. COVID, racial justice, social justice issues, which have come up the agenda massively in the last three months, and I think we'll see 2020 as an inflection point for sport where there's an expectation from our fans, that we leverage our platform for greater good to draw attention to some of the inequities in the world. And we had a lot of time to reflect on that, as Formula E this spring and we said, 'Hey, you know, in simple terms, we're about a better future.' That's what Formula E is all about in terms of addressing climate change, where else should we be lending our platform? Where else should we be speaking and the social justice thing is really important, which is why we came up with this, this sort of core principle around "Positively Charged", which is really an internal rallying point for, our staff, but then also it radiates out to our partners, and to our fans. We're going to look back five years from now and say, 'Wow, that was that was an incredible time to live through.' And as a sport, you have to be humble about it. But also sport has this wonderful power to showcase the best of humanity and we try to do our small part in that.

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