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The NFL and Hollywood lessons that Alpine’s US investors bring to F1

Monday’s confirmation of the anticipated American investment in the Alpine Formula 1 team was further proof of the championship’s expanding profile in the country.

Esteban Ocon, Alpine A523

Autosport Business

Covering industry news and insight into the business of motorsport

It also reflects an intriguing move by Renault to boost the profile of its sportscar brand and eventually generate more income around the F1 project, helped by the involvement of Hollywood star Ryan Reynolds and his associates Rob McElhenney and Michael B. Jordan.

To recap a consortium of three financial entities, Otro Capital, RedBird Capital Partners and Maximum Effort Investments, collectively known as the Investor Group, has paid €200m for a 24% stake in the team.

A works team taking on outside shareholders isn’t exactly a new idea – after all Mercedes only owns 33% of its Brackley operation after Jim Ratcliffe and INEOS took a stake.

Renault has made a huge commitment to Alpine and the F1 team, and clearly it didn’t necessarily need to bring in outside finance. What is more interesting for the company is the sports and entertainment marketing expertise that the Americans bring to the table.

It’s a little like those times on the Dragon’s Den TV show when an entrepreneur with a good idea surprises the would-be investors by saying that actually, he or she already has enough funding – what’s needed is a partner with the connections and reach to take things to the next level.

Alpine may be French to its core, but its CEO Laurent Rossi earned an MBA at Harvard, and worked for the well-known Boston Consulting Group and for Google before he returned to Europe. As such he has an international outlook that has no doubt played a role in sourcing investment in the US, while handily team principal Otmar Szafnauer is an American, which adds to the synergy with the new partners.

“They're going to help us on the monetisation side of the business,” says Rossi. “So strictly speaking, not on the sports side. People here [at Enstone] know what they're doing. People in Viry know what they're doing. They're going to continue doing what they're doing.

“They [the investors] are going to help us boost our revenue, hospitality, sponsoring, licensing, merchandising above and beyond what we had planned.

Pat Fry, Alpine F1 Team Chief Technical Officer and Laurent Rossi, Alpine Chief Executive Office

Pat Fry, Alpine F1 Team Chief Technical Officer and Laurent Rossi, Alpine Chief Executive Office

Photo by: Alpine

“A portion of that we will reinvest into facilities, into tools, into equipment. This is part of a plan that we already launched way before RedBird joined us, which we call Mountain Climber. You might have heard Otmar saying last year that we're hiring 80 people, we're investing here or there.

“So we're going to simply boost this plan, accelerate it even further, in the limitations of the cost cap, obviously. So this is how it's going to help us indirectly continue on our path.”

Expanding on that theme Rossi adds: “We have a road map, if you will. It's progressed that you build one step at a time, because it takes time to find the people find the resources to complement our team, because our team is slightly smaller than top teams.

“So we're just going to continue growing, expanding up to a point where we have similar structures and the way of doing makes a difference. And we believe the way of doing will make a difference because we have expertise here.”

We don’t know how the three investing entities have split the financing, but we can perhaps assume that the senior partner is the recently-formed Otro Capital, given that its co-founder Alec Scheiner is to become a director of the F1 team and has emerged as the group’s spokesperson. He and the other key Otro players were previously involved in RedBird, which is in effect a sister company.

So, who are those guys, and what is their background in sport? A lawyer by training, Scheiner’s CV includes almost a decade as a senior vice president and general counsel of the NFL's Dallas Cowboys, followed by three years as president of the Cleveland Browns.

One of his key associates, Brent Stehlik, was also with the Cowboys and the Browns in marketing roles, and has worked in baseball with the San Diego Padres and the Arizona Diamondbacks, and hockey with Tampa Bay Lightning.

That’s just the tip of the iceberg. As noted Otro is a new entity, but RedBird has long an involvement in a wide range of sporting activities under founder and Harvard and Oxford graduate Gerry Cardinale.

Pierre Gasly, Alpine A523

Pierre Gasly, Alpine A523

Photo by: Alpine

The company has a significant stake in Fenway Sports, whose portfolio includes Liverpool FC, the Boston Red Sox, and the Roush Fenway NASCAR team. RedBird also owns AC Milan, Toulouse FC and the Rajasthan Royals cricket team, while its sporting portfolio includes high end hospitality for the NFL, the TV network that hosts the New York Yankees, and partnerships with the NFL and MLB players’ associations which focus on image rights and licensing.

The company is also in the entertainment business, notably via Skydance Media (producers of the Mission: Impossible, Terminator, Star Trek, Top Gun, Jack Ryan and Jack Reacher franchises), while it has a partnership with Matt Damon and Ben Affleck through their Artists Equity studio.

The latter adds to the Hollywood sheen brought by Reynolds and his colleagues at Maximum Effort, who have famously already worked their magic on Wrexham AFC via the associated TV series.

So why have the Americans invested in F1, and specifically Alpine? In essence simply because they see it as a very good deal.

“We've been investing in sports for over 25 years,” says Otro boss Scheiner. “We've invested across various countries in the world, across almost every single sport. We've partnered with the Dallas Cowboys, the New York Yankees, the NFL, the NFL Players' Association, we've invested in football, we've invested in basketball and hockey, cricket in India.

“And so for us, when we look at sports investing, we look at three things. Number one, is there valuable intellectual property? Number two, can we provide value to an investment we bring? And number three, do we have like-minded partners? As we think about those things, and we look at Alpine, it checks every single box.”

Intriguingly, given how many potential investors with money to spend have been looking at F1 teams, it was Alpine who made the first approach.

“It starts with the partners for us, and it started with Laurent and Luca [De Meo, Renault CEO],” says Scheiner. “And they came to us, which is how we like to start these partnerships. Because it shows that there's a strategic value that we can bring. And so that like-minded partnership is the most important thing.

Esteban Ocon, Alpine F1 Team, 3rd position, with his trophy

Esteban Ocon, Alpine F1 Team, 3rd position, with his trophy

Photo by: Andy Hone / Motorsport Images

“We have to start with people who believe in what we believe in, which is the ability to bring commercial revenues to the table, to treat it like the scarce asset it is.”

Regarding the intellectual property angle Scheiner says: “If you think about F1, or you think about investing in sports in general, I always say to people this is the one business where you really should never leave your customer.

"And so the beauty of sports is there's a tie to your brand that cannot be lost just because performance goes down in one year. So that is the moat around the intellectual property that we find in F1.

“So if you start from that, and then you look at what Liberty's done, fixing the structure of the sport with the cost cap, and then launching the sport in the United States, we think it's the perfect time to invest.

“And we think Alpine is the perfect vehicle. A works team, an iconic team, high performance built into it, and the brand is just getting started. So that checks the box on the IP.”

The final element is what can Otro and the other investors bring to the table?

“How can we help? That's probably the most important question for us,” says Scheiner. “And for us, all of the things we've done in our career, all of the investments we've made, lend themselves to being able to help here.

“We built a company called Legends Hospitality when I was at the Dallas Cowboys. We essentially outsourced food and beverage, and sales, sponsorships, and ticketing sales. We built a business called On Location Experiences with the NFL as an equity investor, where we took the hospitality around the Super Bowl to the next level.

“We've invested in a business with the players’ associations, where we built a licencing business around video games and trading cards. And all of these experiences will lend themselves to success here.

“As we look at this sport, we think it is incredibly well run, the team is incredibly well run. But we do see a lot of upside. The same way we saw it when we invested a few years ago in cricket in India, and we were proven to be right.

Otmar Szafnauer, Alpine F1 Team, Team Principal, Ciaron Pilbeam, Alpine F1 Team Chief Race Engineer, Alan Permane, Alpine F1 Team Trackside Operations Director on the grid

Otmar Szafnauer, Alpine F1 Team, Team Principal, Ciaron Pilbeam, Alpine F1 Team Chief Race Engineer, Alan Permane, Alpine F1 Team Trackside Operations Director on the grid

Photo by: Alpine

“So I really appreciate the partnership. I appreciate the people that at Alpine and Renault for welcoming us, and we can't wait to get started.”

The actual investment is in the Alpine team, but obviously there’s a crossover into the road car world, which can only benefit the brand’s core business. And that’s where the US connections start to make even more sense for Renault.

Over the last couple of years Alpine has gradually been boosting its profile and moving away from the image of being a niche French company that many assumed to have closed long ago.

Now there are ambitions plans for international expansion that include a move towards electrification and new models such as a roadster version of the A110, the four-seater A310, the A290 hot hatch, and eventually an SUV.

It’s all underpinned by an easily adaptable aluminium chassis, known as the Alpine Performance Platform or APP, which lends itself to the different body formats.

"This model will clearly help us strengthen our presence in the core markets,” says Rossi. “So Europe and Japan in the first place, but also to expand globally and tackle true sportscars territories if you will, the first of which would be the US, an important sportscar territory, very large. And we will enter the US with all the models to be released from 2027 onwards.”

That expansion plan helps to bring everything into focus and explains why the US connections will be so useful for Alpine. Just imagine the exposure to be gained from Reynolds driving an A110 around Los Angeles, or a car being placed in a movie.

“We are a brand leaning on the sports branch and more than a branch,” says Rossi. “It's a sports franchise. And even in this field we're trying to look for the best partners, the best in class, and I believe we have found the best.

“The goal here is to grow the franchise, the motorsport franchise, and monetise it. And in Otro Capital, RedBird and Maximum Effort, we've found the perfect partners for us.”

Esteban Ocon, Alpine A523

Esteban Ocon, Alpine A523

Photo by: Andy Hone / Motorsport Images

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