According to the European Sponsorship Association, the overall sector fell 23% in 2020, the first decline in over a decade. The survey, carried out in collaboration with Nielsen Research, found that sports sponsorship fell 9% while the music industry saw a 70% decline – no surprise given the live performance nature of the sector, which has apparently been particularly hard hit by Covid. 19th
However, all the signs indicate that motorsport – especially Formula 1 – appears to be bucking this trend. All ten teams announced new partners or renewals of existing contracts, with a number of partnerships confirmed in advance of the second round in Imola.
The Aston Martin F1 Team appears to have overshadowed the grid after appointing Jefferson Slack to the newly created position of General Manager for Commerce and Marketing in September. No sooner had the American, who led Michael Jordan in basketball before working in sports investing, his feet under his desk than a series of deals were struck, including that of IT giant Cognizant as title partner with an estimated $ 35 million each Season. Season.
“IT is the future of Formula 1,” said Stroll RaceFans in an exclusive interview in February. “It’s the Internet of Things, it’s cloud computing, it’s digital engineering, it’s data analysis, it is [artificial intelligence]. We’re building a new one [F1] Factory; I want it to be a smart factory, 5G. The most important partner you can have in Formula 1 today to make a real contribution to the team is an IT partner. “
Aston Martin won new title sponsor Cognizant Unsurpassed, while the Bahrain Red Bull Grand Prix announced the return of software giant Oracle to F1 – the company sponsored Benetton in the early 1990s – in a deal designed to rival Cognizant’s , and then an extension of the TAG-Heuer deal was confirmed until the end of 2024.
At the same time, Mercedes announces the software company TeamViewer as its main partner; It was crucial that all three companies considered a broader sport sponsorship, so the teams had to sell both F1 as a platform and their own earnings.
McLaren also took a bumper off-season after CEO Zak Brown renewed a number of partner agreements – the team now has more than 30 partners and 12 official suppliers, despite a title sponsor eluding the team. Last year, however, McLaren sold an initial 15% stake – rising to 33% by the end of 2022 – in US sports mutual fund MSP. With that, McLaren valued the team at nearly $ 700 million, indicating F1’s commercial potential.
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“I think the Formula 1 grid is probably the healthiest and richest that has ever existed,” said Brown in Bahrain.
Brown says F1 is in good financial shape. This “health and prosperity” extends across the entire network, albeit to a greater or lesser extent. For example, the security created by the sale of Williams to Dorilton Capital enables the team to attract outside commercial sponsors and funding from brands within the corporate network of the US-based mutual fund. Haas announced a number of partners that have nothing to do with title sponsor Uralkali and will be controlled by driver Nikita Mazepin’s father, Dmitry.
Indeed, including contracts signed or renewed at the F1 company level – for example, F1 trading rights owner Liberty announced Saudi oil giant Aramco and betting website Bet188 earlier this year, as well as Ferrari Trento sparkling wine and a cybersecurity company earlier this year – that could Sports rightly claim to have closed more deals together since Covid took over the world than any other season in the last decade.
In total, Liberty has 16 corporate partners, ranging from the over $ 40 million trio of Heineken, Aramco and Emirates to a handful who pay a tenth per year. RaceFans estimates that Liberty’s affiliate income exceeds $ 220 million per year.
The reasons for this commercial interest are as varied as the sectors F1 attracted, but the credit is due in no small part to its resilience during the pandemic: F1 was the first global sport to regain activity, and it succeeded last year to cram three. Quarter of his planned schedule in six months. Existing sponsors were not only very impressed, but brands desperately looking for a global television audience and especially paying attention with money to burn.
The new podium sponsor Ferrari Trento made its debut last weekend. “Formula 1 and the teams have teamed up very well in Covid-19,” Brown believes. “The financial impact on sales has been offset, at least for McLaren, by a cost reduction [due to less races and fewer travelling staff and regulatory cost-cutting measures].
“Even though we had a drop in sales, we did a great job saving money so we actually had no impact on the bottom line.”
One of the main advantages of F1 is that the message space is at the center of the action – mostly in the car – and is obviously larger than it is for soccer jerseys or tennis clothes. In fact, teams can enlarge or add logos, or even offer sponsors a second brand, a tactic McLaren used to keep sponsors in by keeping them cute despite fewer races and no (or reduced) trackside audience.
The step in the current Concorde agreement (2021-25) to a greater sporting and technical parity from 2022 means that sponsors can support a team of their choice if they know that they have a chance to be seen on television or by the stands. These are now dipping their metaphorical toes in the water before the switch next year.
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The hybrid engines and the sustainability push from F1 have kept the sport in tune with global trends – regardless of the rise in sales of full battery vehicles, hybridization still makes up the bulk of car sales – and the sport’s commitment to 100% non-fossil fuel from 2025 makes it attractive to sponsors who shied away from during F1’s gas-guzzling days.
Ditto F1’s diversity initiative “We drive as one”. “Since 2017, our under-35 fan base has grown 41 percent,” says Ellie Norman, F1’s Marketing Director, who attributes this growth to recent “sustainability, diversity, inclusion and community efforts”. These messages are sent worldwide every two weeks.
“One of the trends we’re seeing in Formula 1 is the emergence of new technology, new countries, and new companies to use as a great platform to, as we say, get famous quickly,” says Brown. “Some of the better known brands don’t need brand awareness. They want the content that the sport and the drivers create. “
Flashback: Netflix Drive to Survive Season ThreeThis “content” goes beyond traditional television awards as F1’s social media drive, esports, and Netflix “Drive to Survive” series have brought the sport to a new and diverse audience, in many cases in new territories. While brands typically pay a small fortune to get their products in front of an audience, F1 provides that visibility as an integral part as teams and drivers become household names.
“I think Netflix was great for F1,” Brown believes. “It’s the number one trend,” he said, adding, “I think it was number one in 25 countries. The main goal of Netflix is to entertain and attract new viewers to F1. That has been achieved ten times over which is great. “
This indicates a sport that is no longer dependent on the whims of the car companies or the size of the billionaires, while attracting new fans at the same time. Mercedes and Renault (Alpine) are at the start, and Stroll is a billionaire, as are Gene Haas and Red Bull / AlphaTauri owner Dietrich Mateschitz and Sauber boss Finn Rausing, but at least they can expect more adequate returns on their respective investments than Regarding F1 as a bottomless pit.
This in turn provides the much-needed stability and ensures further growth precisely at a time when F1 is exposed to an onslaught of electrification. Who would have thought that Netflix, social media platforms, and esports would ultimately prove to be the saviors of F1?
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