Celtics owners invest $21 million in Formula E racing circuit
A new, environmentally friendly auto racing series just got even greener.
Boston Celtics managing partner Wyc Grousbeck and a dozen of his co-owners in the NBA franchise have invested $21 million into Formula E, an all-electric circuit that has already attracted celebrities with environmental interests such as actor Leonardo DiCaprio and billionaire Richard Branson. The series is scheduled to debut in Beijing in September and continue on the streets from Miami to Monaco in a 10-race, Formula One-style championship.
"We aim to help make Formula E a worldwide sensation," Grousbeck told The Associated Press this week shortly before the deal closed. "With our upcoming races in the centers of Los Angeles and Miami, we will help showcase the power and promise of sustainable vehicle technology."
The leader of a group that purchased the NBA’s most-decorated franchise in 2002, Grousbeck formed Causeway Media Partners this May — it’s named for the street that runs past the Boston Garden — along with fellow venture capitalists Bob Higgins and Mark Wan, a Celtics co-owner who is also part-owner of the San Francisco 49ers.
The group has raised about $100 million to invest in sports media and entertainment properties.
Formula E is its first.
"We know the power of competition and entertainment, and will bring our knowledge to the development of the market for electric vehicles," Grousbeck said. "Causeway’s mission is to find investment opportunities that benefit from our deep network of NBA and NFL team owners, media executives and professional investors. Formula E is a perfect match."
In an email from Malaysia, where he joined Prime Minister Najib Razak to announce the second race on the 2014 schedule, Formula E chief executive officer Alejandro Agag said the investment by American sports team owners is "a game-changer."
"The U.S. is one of the main markets for Formula E," said Agag, adding that there will be two American teams and two American races in the first season. "To have a partner that knows deeply the U.S. sports market places us in a unique position to develop our championship in the Americas."
Auto racing aficionados have long been drawn to the pure power of Formula One, with its Ferraris and Mercedes pushing the limits of automotive technology.
But the circuit’s detractors complain that the technology — and the money spent to develop and obtain it — makes driving skill an afterthought, with a lack of passing that can turn the typical Formula One race into a parade. The politics of the sanctioning body can also border on the sordid, with F1 boss Bernie Ecclestone currently facing bribery charges in Germany.
The Formula E founders are hoping their circuit will be attractive to younger fans who are enthusiastic about the environmentally friendly mission.
"Formula E is a completely different proposition," Agag wrote. "We see ourselves as a complement, not a competitor, to other series like IndyCar or Formula One."
The first generation of the Formula E car will be a uniform vehicle that reaches a top speed of 160 mph, with an electric power unit by McLaren, a wireless charging system by Qualcomm and tires from Michelin that are designed to last the entire race. Batteries will last about 25 minutes; instead of traditional pit stops, drivers will switch between two cars.
"The spectacle of the drivers running is going to be cool," Grousbeck said.
But perhaps the most noticeable change is that the roar of the engine familiar to race fans of other circuits will be replaced by what Agag called a "futuristic noise" of about 80 decibels.
"We believe the sound is going to be one of our big assets," he said. "That level is high enough to deliver plenty of excitement, but low enough to allow us to race in the center of cities all around the world. We think fans will love it."
The plan is for individual manufacturers to begin racing their own cars in the second year, "making possible a technology fight essential to motorsport competition," Agag said. DiCaprio’s group said last week it will build its own chassis in Year 2.
"The championship aims to become the development platform for batteries, power trains and charging technologies that then can trickle down to road cars," Agag said. "We want to make cities more sustainable and healthy by promoting EV’s."
Grousbeck, who will serve on the board of Formula E Holdings, said the competition for faster and more efficient electric racecars is expected to bring technological breakthroughs that will show up in street-ready electric vehicles.
The environmental benefits are no doubt what attracted Branson and DiCaprio. While they are backing individual teams, Causeway Media Partners is investing in Formula E itself, which has been licensed by the international governing body for motorsports as the exclusive international all-electric circuit for the next 25 years.
According to the investment group, there is a waiting list beyond the 10 teams that have already signed on for the first year. Car manufacturers Audi and Renault are already backing the series, as are sponsors DHL and Virgin, and broadcasting deals have been signed with Fox Sports in the United States and TV Asahi in Japan.
"The ultimate goal is to become a preferred channel for promoting and increasing electric vehicle sales to consumers," Causeway Media Partners said in a release. "If this goal is achieved, the holding company that owns the sport should become highly profitable."