Formula E Might Actually Make Money Sometime Soon
Series CEO Alejandro Agag is like a less tyrannical Bernie Ecclestone—in a good way.
It's no secret that racing is enormously costly. Even for privateer teams, the costs rack up exponentially, making it difficult to pool funding for competition. Now take what you know from that situation, and then multiply it by 100—then, you might have an idea of what it costs to run an entire FIA series. That's what Formula E has been doing for the past two years, and by adding new races and venues to its calendar, things have been getting especially expensive. However, head boss Alejandro Agag says that they're right on track with their plan, and if it weren't for expansion, Formula E could've been profitable this year.
Total revenue for the series have nearly tripled, up from 19.9 million euros to 56.6 million. Operating losses have also been cut after another significant decline last year, meaning that Formula E could soon be in the black.
Agag told Reuters in a report, "We could have broken even this year but we decided to invest more in marketing and promotion. We decided to add races like the one in New York, which is in year one a race which is costing, we have significant capital expenditure."
All of this added exposure is also helping to reign in manufacturer interest, a major development area for the series. After drawing in the likes of Renault, BMW, Jaguar, and potentially many others, Formula E is seeing substantial growth that doesn't look to be slowing down.
If he and his crew could add other big name players like Ferrari to the mix, they could also see a significant uptick in fan fair, an already major focus for the series.
"If a manufacturer wants to spend a big amount of money, he can do it in Formula One. He cannot do it in Formula E. But if he wants to spend a moderate amount of money and be in a technology where they are all pushing, then Formula E is a very good option. This is why we have now a number of manufacturers and there will be more coming in the near future."
He's not too worried about profitability in the future. In fact, he said they can decided when it's time to bring in the cash.
"It's really up to us when we want to go to break even or not. We could be in break-even now, we could be in break-even next season but we may decide to invest more in marketing and promotion."
Even if you don't have the most favorable stance on Formula E, there's no doubt that its growing popularity and exceptional leadership has things headed in the right direction.