Toto Wolff has reached selfie fame.
(Bloomberg) — Toto Wolff has reached selfie fame.
The co-owner, chief executive officer and team principal of the Mercedes-AMG Petronas Formula 1 team doesn’t drive cars on a racetrack anymore, at least not professionally. Yet owing to the exploding popularity of the F1 circuit, and a star turn on Netflix Inc.’s hit documentary series Drive to Survive, the 50-year-old Austrian has turned into a head-turning celebrity across the sports world.
Winning helps. During the past decade, Wolff oversaw one of the most remarkable streaks in professional sports history as his team racked up eight straight team titles and his star driver, Lewis Hamilton, won seven individual championships. That run came to an abrupt end over the past year, and now Wolff is betting his playbook can get him and Mercedes back to the podium.
“The weekends or the races we lose are the ones that our competitors will regret the most because we learn the most,” Wolff said in a series of interviews in Austin, Monaco and England for the latest episode of Bloomberg’s “Business of Sports” docuseries. “It’s going to make us better.”
Formula 1 has gone from an afterthought for US fans — something to watch when no football, basketball, baseball, hockey or soccer game is on — to a sport that commands weekend afternoon coverage on ESPN.
In the US, Formula 1 is already rivaling homegrown IndyCar racing — not the same as F1, despite appearances — and Nascar, which is still the most popular of the three. This year’s US Grand Prix, at Austin’s Circuit of the Americas, drew 440,000 fans, the most of any of the 22 races around the world.
Wolff, who started as a driver before turning to investments and, ultimately, the business of racing, has been an architect and beneficiary of that success, which he credits in part to the ownership of Liberty Media Corp., which bought Formula 1 in 2017 for $4.4 billion.
‘Massive Upswing’
“Although we were skeptical at the beginning, that’s where we really started to have this massive upswing,” Wolff said. “Together with the governing body, the FIA, we were able to put on a show during Covid that was the only global sport and it obviously helped a lot.”
The pandemic is also when viewers got their first look at Drive to Survive, which took them deep into the drama among drivers and their teams, including the principals. Mercedes and Wolff were absent from the first season by choice — Wolff didn’t see the value. He signed up for season two.
Liberty always saw massive potential for Formula 1 in the US, and Netflix provided evidence. The circuit put on a grand prix in Miami in May, drawing 330,000 fans, and next year will hold the Las Vegas Grand Prix on a street course that will see cars fly down the Strip at 200-plus miles per hour at night.
“We had the opportunity to really take Formula 1 to the next level in the United States through the explosion of popularity through Netflix, as well as Americans beginning to embrace the sport more,” said Renee Wilm, the chief legal officer and chief administrative officer of Liberty Media who is also serving as the CEO of the Las Vegas Grand Prix. “The timing was absolutely right.”
Vegas Grand Prix
Formula 1 and Liberty have more at stake in Las Vegas because the circuit will act as the promoter for the new grand prix, giving it both more potential upside and more financial risk. Across the rest of the calendar, Formula 1 works with local promoters who buy the right to host the race and shoulder infrastructure and promotion costs.
“We said: ‘OK, now it’s time to think bigger,’” Stefano Domenicali, CEO of Formula 1, said in an interview. “We took the decision to go for it, to invest and buy a property here.”
All of that accrues to the benefit of the drivers and their teams. Wolff is uniquely positioned to benefit, since he is essentially the coach, the business head and the owner.
Wolff’s precision and success managing Mercedes inspired a Harvard Business School case study, written by Anita Elberse, who teaches about the intersection of sports, entertainment, media and business. Wolff visited the campus this year to participate in a discussion and walked out of the class to fans waiting outside to catch a glimpse.
Lagging Redesign
A season of discontent for Mercedes followed, though.
New regulations by the sport’s governing body required each team to redesign its car. Wolff’s team came up with a design that failed to keep pace with its rivals, especially Red Bull. Max Verstappen secured his second-straight drivers’ championship with several races to spare, and Red Bull captured the Constructors’ Championship, the team prize Mercedes had won for the previous eight seasons.
“The winning streak has definitely come to an end and I’m sure it’s been a really tough year for everyone at Mercedes,” Elberse said in an interview. “But what goes to the very heart of why they are so successful is this idea of realizing that losing is always just around the corner, that the winning at some point will have to end.”
With the sport growing so fast in the US, sponsorships continue to pour in, though not without some risk. Mercedes said last week it was suspending its relationship with FTX, shortly before the cryptocurrency exchange filed for bankruptcy. The team removed FTX’s logo from the cars ahead of the Brazilian Grand Prix on Sunday.
Abu Dhabi Next
The Sao Paulo race, the penultimate of the season, produced the best result of the year for Mercedes, with George Russell winning his first-ever Grand Prix and Hamilton coming in second. That pushed Mercedes within striking distance, behind Ferrari, for second place in the team championship with only one event to go, this coming weekend in Abu Dhabi.
As Wolff looks ahead to a critical off-season, where Mercedes designers and engineers will aim to create a car to start a new winning streak, he said he’s trying to remember that while science will help drive decisions, he’s ultimately managing people.
“The joint objective is so massive that we just need to remind ourselves in these moments that we just want the same,” he said. “So we just need to get together and say, what is it that we want to do? And at the end, data are important to develop a quick car, but data don’t make decisions. Humans do, right?”
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