Formula E has come a long way since being conceptualised on a napkin in a restaurant in Paris.
Indeed, that evening in 2011 – at a dinner attended by International Automobile Federation (FIA) president Jean Todt, Italian politician Antonio Tajani and a man with an idea – must seem a distant memory now that the doodle on said napkin has morphed into one of the world’s most talked-about motorsport series.
In the space of just four years, Formula E has staged more than 35 races across 13 cities spanning five continents, drawn major manufacturers such as Porsche, Audi and Mercedes to its grid, and secured the backing of affluent brands including Julius Baer, Tag Heuer and Allianz.
The latest addition to Formula E’s stable of sponsors was unveiled in January during a glamorous event at London’s Saatchi Gallery, which was attended by the championship’s drivers, various representatives from the media, and a pair of fully operational robots: one to serve refreshments to startled guests, and the other to pull away a giant white sheet revealing the series’ new title partner ABB, in what is a first-of-its-kind sponsorship category for a single-seater FIA-sanctioned championship.
And that, fundamentally, is Formula E in a nutshell. It confronts tradition with the future, challenges motorsport’s norms, and its digital-first approach is quite clearly geared towards the fans of tomorrow.
The championship’s city-centre street-circuit races are impossible to ignore, bringing the entertainment directly to spectators, who are invited to vote on in-race social media polls to choose the driver they would like to see get an additional power boost for their electric engines in the middle of a race. If ever there was a way to spark the world’s excitement about the future of mobility and cars, then this surely is it.
There were – and perhaps still are – an initial pool of doubters who questioned whether an environmentally friendly motorsport series could rival its combustion engine counterpart without the same noise and extreme speed that makes a successful championship so watchable.
But it is that very association – with innovation, environmental responsibility and being seen to actively fight climate change – that makes Formula E so attractive for brands, investors, and even A-list celebrities such as American actor Leonardo DiCaprio, who co-founded the Venturi Formula E team ahead of the championship’s inaugural season in 2014.
And when you stop to look at who is behind the wheel, Formula E’s rise is hardly surprising. Alejandro Agag (below), the aforementioned man with a plan, is better known as the championship’s forward-thinking founder and chief executive.
The Spaniard, born in Madrid, is an economics and business studies graduate, and is fluent in his native tongue, English, French and Italian. Having been actively involved in politics during his university life, he first made a name for himself in that realm in 1999 when he was elected as a member of the European Parliament, where he entered the economic and monetary affairs commission with a specific focus on anti-trust policy.
The negotiating skills Agag cultivated in the world of business and politics will no doubt have aided his first move into motorsport in 2001, when together with his business partner Flavio Briatore, he purchased the television rights for the Spanish Grand Prix, and later played a central role in bringing banking giant Santander on board as one of Formula One’s major sponsors.
On top of all that, Agag also owns the Barwa Addax GP2 Series team, and had a brief stint running one of London’s biggest soccer clubs, Queen Park Rangers. In fact, Agag’s eclectic mix of contacts is one that once led Spanish newspaper El Pais to label his Nokia sim card as the most valuable in the country.
All of those experiences, it seems, led Agag to that restaurant in Paris in 2011. Even at the age of 47, Agag has already achieved more than most, but with Formula E, there is a sense of responsibility that means he recognises there is still much more to be done. The championship might still have hurdles to overcome, but for now and the foreseeable, Agag is fully intent on ensuring that his pioneering strand of racing takes advantage of its pole position to shift the way that motorsport is perceived by generations to come.
What was behind your decision to launch Formula E? Is it true that the championship was first drawn up on a napkin?
I was having dinner at a restaurant in Paris with Jean Todt, the president of the FIA, and Antonio Tajani, who was the European Commissioner for Industry and Entrepreneurship at the time. We were discussing electrification and the future of mobility and cars, and the idea of doing an all-electric racing championship was born from that conversation. I was writing the ideas down on a napkin, and now that napkin is hanging above the same table in that restaurant.
How did your previous business experience within motorsport help you gain an understanding of what kind of approach would make Formula E a success?
I think my experience was really key because I had a little bit of experience in all the different areas.
First of all, I had a career in politics, which is always helpful for any complicated multilateral arrangement like this one. Then I had experience with Formula One’s Spanish TV rights that I worked on for a long time, as well as working in sponsorship management and sales.
I also managed my own team in GP2, so when a mechanic or a team principal comes to me complaining about the cost of tyres or spare parts, I know whether they are being truthful or not. Then I also had experience in other sports like football.
So I had a wide range of experience within the motorsport sector and within sports, which really helped me design the concept of Formula E in the right way.
Formula E's city-centre street-circuit races bring the entertainment directly to the fans
You’ve previously owned teams such as English soccer’s Queens Park Rangers. What are the different challenges of owning an entire championship as opposed to just one club or team competing within it?
It’s very different running a championship and running a competitor within that championship. Whether it’s in football, racing or any other sport, you always want to win.
In my position now, I don’t have the same motivation to win. I have the motivation to succeed and to create something great, but I don’t compete with anybody – or not regularly, at least. It’s a very different feeling and I actually miss the competition because I was a very hard competitor who always wanted to win, especially when it came to racing. Even when I was involved with football, when we lost a game I would spend the whole week after that depressed until the next game. So it’s really a much more emotional attachment when you’re competing as part of a team.
What have been the biggest changes in Formula E since its inaugural season in 2014?
We’ve had incredible growth. When we started Formula E we didn’t expect it to become so big, so it’s been very gratifying to see how much it has grown, how many people have joined us and how many companies and sponsors have come on board.
I have the motivation to succeed and to create something great, but I don’t compete with anybody – or not regularly, at least. It’s a very different feeling and I actually miss the competition because I was a very hard competitor who always wanted to win, especially when it came to racing.
So it has been great, but we’ve also had many challenges. In the first year we had financial challenges when it was very tough, because people didn’t believe we were going to continue, and after that we had some technological challenges. But our main challenge is dealing with cities. We want to race in the centre of cities, and that’s not always easy, but for us it is a really key part of our DNA that we are the championship of the cities and we want to maintain that.
In what ways do you think Formula E has succeeded where other aspiring motorsport championships might have failed?
Well I think the reason why other championships – which were really good concepts – didn’t work was because they did not manage to generate cash flow; they did not manage to bring in big sponsors that would support the business model. We have succeeded in that because we have been really lucky to have great partners from the start, and also some new partners which are really great. So we have an incredible roster of partners that support Formula E, and that’s really the key for our success.
One of the championship’s biggest draws is its city circuits, but as you mention and as the recent cancellation of the Montreal ePrix showed, there are challenges that come with that. How much harder is it for Formula E to secure race venues than it might be for championships that take place at traditional circuits?
It’s, like, a million times harder. It is really challenging, and it means we have cancellations like we did in Montreal and São Paulo.
The thing is that cities are living entities, so we have to adapt, be very flexible and remain open to change. The good thing is that our ecosystem also shares that philosophy – our teams and our sponsors are always ready for the changes, and we keep it flexible because we want to remain in the cities. If we wanted to have our events at a racetrack, we would have permanent circuits for the next ten years, but we don’t want that.
Agag (right) with American actor Leonardo DiCaprio, who co-founded the Venturi Formula E team ahead of the championship’s inaugural season in 2014
The championship obviously provides a great platform for manufacturers to showcase their technology but how are you trying to make the series more appealing from a competitive perspective?
From next year we will have the new cars which are capable of doing the whole race in one go. That is going to be really exciting because we are going to have new levels of energy, and the competition is going to be spectacular as a result.
The key, though, is to go more digital, to go more video game-like, to go more interactive with the fans and to put on a show that is like nothing else seen before, and I think we’re right on that path.
You recently announced ABB as your title sponsor, becoming the first FIA-sanctioned single-seater championship to sign one. Is this a mark of how far Formula E has come?
I think so, yes. The partnership with ABB is not only a matter of bringing in a big sponsor; it’s also what ABB does that is so complementary with Formula E. You could see at the announcement event how well aligned we are, and Ulrich Spiesshofer [chief executive of ABB] and myself are really looking in the same direction to improve the lives of people through technology, so I think it’s a great partnership.
How did that deal come about? Was having a title partner something you had always planned and were actively in the market for, or were the conversations initiated by ABB?
We never really thought to have a title partner, and it was not on our menu of possibilities. We approached ABB for a regular partnership and they actually said for a long time that although they liked Formula E, the timing was not right.
The thing is that cities are living entities, so we have to adapt, be very flexible and remain open to change. The good thing is that our ecosystem also shares that philosophy – our teams and our sponsors are always ready for the changes, and we keep it flexible because we want to remain in the cities.
Then a few months ago they said that the time is right now and when I met with Ulrich Spiesshofer he said he wanted to do it, but he wanted to do a special kind of partnership, which was the title partnership. I told him we don’t have a title partnership category, but he said, ‘Make one!’ And so we did.
You’ve managed to draw a number of blue-chip sponsors since launching, including the likes of Allianz, Julius Baer, Qatar Airways and more recently, Hugo Boss, which joined from Formula One. What is your pitch to those kinds of brands?
I think we are changing the paradigm now. Eyeballs are no longer the key driver when a decision about sponsorship is taken. Of course awareness and eyeballs are important, but it’s probably now the second-most important element in the decision-making process.
The first element is the association with the right message, and in that sense the message of Formula E is very strong. Innovation, technology and environment are the messages that many companies want to be associated with; they want to activate around that, they want to do more business around that, and that is why Formula E is so appealing.
Formula E has attracted manufacturers such as Porsche, Audi and Formula One world champions Mercedes
How are you attempting to attract fans to Formula E? Is it a case of trying to draw spectators from other motorsport properties, or is your target audience different to championships like Formula One?
I think our target audience is different. Obviously, other motorsport spectators are very welcome to come to Formula E but we are seeing that the big growth that we are having is actually coming from the digital impact of the championship.
To give you an example, last year we had a total of 50 million views of our content on our own platforms. This year, after only two race weekends, we had 65 million views. So we are basically having an explosion in terms of the digital following of the championship, but that’s a very different way of following. It’s not necessarily streaming of the whole race; it is through highlights, stories about the drivers and other short-form content. So on the digital side, we are seeing huge growth and we want to continue focusing on that because that’s probably a new kind of audience.
The last year has seen the likes of Mercedes, Porsche and Audi announce that they will be joining the Formula E grid. Is this a sign that the motorsport industry is already shifting towards electrification?
Yes, I think that’s exactly what’s happening. I think the movement is really happening now, because those manufacturers want to be in the championship to showcase their technology. It is also a good marketing platform and a sustainable platform, but the cost for them to be here is also a moderate one. So I think that has made it a good option for those manufacturers to come to Formula E, and we are really pleased to have these brands because I think they are going to add so much, not only for the technology development but also for the show.
We are basically having an explosion in terms of the digital following of the championship, but that’s a very different way of following. It’s not necessarily streaming of the whole race; it is through highlights, stories about the drivers and other short-form content.
What is the path to profit for Formula E?
The path to profit has been a long road. In the first year, like with many startups, basically you run out of cash and then you manage to get investors and you continue again until you run out of cash and then you continue. And then you start to generate serious cash flows, and that’s where we are now: in a situation where we could be making very significant profits but we have made a very conscious decision to continue investing in marketing, to continue investing in promotion of the championship and to continue investing in digital.
So what we are doing is basically investing everything we make in growth. Our shareholders are supportive of this strategy, so our financial position is very strong and well-positioned to grow in the next three to five years.
Agag says that Formula is focusing on digital to attract a new kind of audience to motorsport
You recently said that you expect Formula E to be the only viable motorsport series left in 20 to 40 years. Why do you think that is?
Well, I didn’t exactly say it like that. What I said is that it will be the racing championship that will represent the cars in the street.
There may be other kinds of racing. Horse racing, for example, will still be there, but we don’t ride our horses to the office. I think combustion racing may still be there, but it will called historic racing and will involve racing historic cars. For example, I love Ferraris, but people will use these cars maybe on Sundays to go into the mountains and have a ride in the same way that they use a horse to go around the countryside. But then they will come and use a driver-led, electric, connected car to move around the city, so mobility will be represented by Formula E.
Was heading up a series like this something you had imagined for your career? What ambitions do you have left?
Well no, not really to be honest. I was very happy and was living a very nice life on the sidelines of Formula One and GP2 with my team and my sponsors. I had a great life, really, and I wasn’t working as much as I am working now!
But I was really looking for a big challenge, and the beautiful thing with Formula E is that you feel that you are doing something good for society. You feel like you are making a contribution towards changing cities for the better, fighting pollution and fighting climate change, so that kind of thing is what really gives me a huge motivation.
So if I have any ambition left – and I probably have – it’s within that field. The more I can get involved in the environment and the fight against climate change, I think that is what can really drive the rest of my career.
This article originally appeared in issue 98 of SportsPro Magazine. To find out more or to subscribe, click here.