F1 Update from the iSport F1 Pitstop: iSport’s Motorsport Expert Kunal Shah tells us more about the newly formed Formula 100 group in Formula1. An iSport exclusive!
Formula 100 – now that is yet another term that Formula1 fans will have to deal with. No don’t be misled, it is not yet another junior formula series that will produce F1 racers for the future, but it is the recently formed association of all the sponsors that invest in Formula1.
Surprised? Well there’s an association for all participants in Formula1 and here is when the sponsors believed that they weren’t being adequately represented! Formula Money (the brains behind the Formula 100) have been involved in research in the financial side of Formula1. The amount of money spent by teams and their sponsors, the rights fee, the government support, effect on local tourism, etc. are areas of study they are usually involved in. The Formula 100 is their way of making sure that the sponsor is heard and well. (100 indicates the top 100 sponsors in Formula1 that maketh this group!)
There’s an association for all participating teams, the Formula One Team Association or FOTA. Similarly, the drivers have an association Grand Prix Drivers Association or GPDA. These associations speak for their stakeholders in one voice – the FOTA speaks about the problems, issues and ideas that the teams have for the sport. The GPDA is a collective for all the Formula1 drivers on the grid.
So let’s question this move! Why on earth would the sponsors need representation in a sport they only fund? Well that itself is the answer – they are the money spenders, but not usually treated on an equal front. Allow me to explain!
Basis Formula Money’s research, the sponsors collectively spend more than $720 million on the sport compared to the $550 million spent by the teams – including the car manufacturers. This striking difference in investments and of course their returns is what prompted all sponsors to come together and form the Formula 100.
Formula1 is a commercial venture – every aspect of the sport has a successful commercial model involved and that’s exactly why Bernie Ecclestone is the most powerful figure in the sport. But more often than not, the commercial decisions that work for Formula1 don’t necessarily work for the sponsors involved.
As an effort to increase viewership, Formula1 has been visiting newer markets in Asia and America. The idea behind touching new mass markets is to increase TV numbers and hence revenues and also increase ticket sales, by offering the same spectacle to a different audience. While the revenue gathered from the newer markets work in favour of the FOM (Formula One Management) and the FOTA, they don’t necessarily work in favour of the sponsors.
For example: Vodafone, the title sponsor of the Mclaren-Mercedes team might be reluctant to visit a country where their network and customers don’t exist! (European markets are where they have traditionally existed!)
Similarly, a ban on in-season testing, means reduction of operating costs for the F1 teams, however, it also means a reduction in the number of days the sponsors can offer their clients and consumers the F1 experience. In the past, sponsors would also make the most of testing days by organizing B2B or B2C programs – both that are critical for sponsorship activation. I still remember the famous twin-seater F1 car that Minardi offered its sponsors during the testing days!
Formula1 cars since the early 2000s have become increasingly aero-dependent. As a result the number of ‘flat’ surfaces for sponsor decals reduced drastically. The side pods and engine covers that usually were sponsor favourites were suddenly curved to ensure better aero efficiency, but the sponsor lost out on TV visibility in the bargain.
A classic example of the 2010 season is the introduction of the f-duct. While it aids straight line speed, it also offers the sponsors some much needed flat surface to showcase their livery. However, come 2011, the same f-duct will be banned, resulting in the loss of the livery space.
Considering that an F1 sponsorship doesn’t come cheap and is averaged at $4 million per annum, it is only time that the sponsors want their opinions to be heard in unison. Whether this changes anything for the F1 fan is not certain, but Formula1 could just end up being a sport with too many unions, each wanting a larger share of the pie!
Kunal Shah is a former racer and writes exclusively on www.isport.in
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Kunal Shah
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... I highly doubt that they will. It will infact make the sport more manipulative than the past. One more union - and infact the power of this union is the highest. If they decide to go on strike, F1 will be cash strapped! |
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