The success of home hero Lewis Hamilton has helped to boost crowd numbers at F1's British Grand Prix ... [+]
Additional reporting by Caroline Reid
The importance of Formula One’s home race in Britain has been revealed in new data which shows that sponsors based in the country have fueled an estimated $2 billion of investment in the sport over the past 15 years.
Until recently, the future of the British Grand Prix was in doubt as its organizers prematurely put the brakes on their contract in 2017. Its accelerating hosting fee had driven up red ink for the British Racing Drivers’ Club (BRDC), a group of 850 motorsport luminaries including former Indy 500 winner Mario Andretti, Roger Penske and Sir Jackie Stewart.
Last weekend’s race at the Silverstone circuit was set to be the last but it was kept on track for another five years after an eleventh hour deal saw F1 sacrifice up to $107.2 million in hosting fee income as we revealed.
F1, which is listed on the Nasdaq with the ticker FWONK, had a lot to lose from the British Grand Prix biting the dust. The race attracted a crowd of 140,500 last year giving it the highest attendance of any event on the calendar. It is also F1’s oldest race as it was the first one when the championship launched in 1950.
Britain has had a Grand Prix every year since then and it has remained a crucial market as F1 itself is located there as well as seven of the ten teams. Many of them spoke out in support of the race and it wasn’t just driven by national pride.
Britain is home to the second-highest number of F1 sponsors and last year 20.8% of the 216 companies partnering with the sport were based in the country. It is only beaten by the United States thanks to the large number of technology firms involved with F1. It doesn’t stop there.
Britain comes fourth when countries are ranked by the value of F1 sponsorship from local companies. Last year British businesses provided an estimated $103.3 million of F1 sponsorship which represents around 10.4% of the total paid to the sport. It was an increase of 8.4% on 2017 and was driven by luxury auto marque Aston Martin boosting its fee by five times to around $40 million when it became the title partner of the Red Bull Racing team.
This more than offset the loss of sponsorship from Johnnie Walker, which is owned by British beverage giant Diageo. Johnnie Walker’s spending reversed by around $20 million as it dropped deals with the McLaren and Force India teams to focus on sponsorship of F1 itself.
As shown in the graph below, last year’s haul from British businesses was the highest since 2013 when it hit $139 million before crashing when McLaren lost its title sponsorship from telecoms giant Vodafone. This was still far from the peak of $206.3 million that British businesses paid in 2006 when tobacco sponsorship spiked in a last hurrah before legislation stamped it out.
F1 sponsorship crashed when tobacco marketing was banned and when telecoms giant Vodafone pulled out
It helped to bring the combined total from Britain since 2004 to $2 billion and although the values for individual deals are rarely released publicly, this author has unique insight into them through leading a team which has been analyzing the market for 15 years.
Fees for every sponsorship deal have been derived from hundreds of interviews cross-referenced with thousands of company filings. Values are based on the size, location and number of decals as well as other benefits received by the sponsor and the performance of the team at the time the deal was signed.
The results have been compiled in the new Formula Money Sponsorship Database, the first-ever searchable database of F1 sponsorship values. The database not only covers every team sponsorship deal since 2004 but also all of the series partnerships, race title sponsorships, trackside advertising, and team owner spending during that time. All together it covers more than 6,000 deals from 1,066 companies which have paid a total of $30 billion since 2004. British businesses account for 7% of it and the loss of the British Grand Prix could have jeopardised this cashflow.
“Seven out of the 10 F1 teams are based in the UK – many close to Silverstone. This brings vital jobs to the country, as well as having a positive impact on the local communities and economy,” said BRDC chairman John Grant when he gave the red light to the British Grand Prix in 2017.
“The UK motorsport industry today is worth an estimated £10.5 billion [$12.2 billion] - employing over 45,000 people and exporting over 75% of its output. That is larger than the equivalent sectors in Germany, Italy and France combined. Having the British Grand Prix at Silverstone – the biggest occasion on the motor racing calendar – serves as a focal point for so much of what is great about UK motorsports, and the wider engineering and manufacturing sectors.”
He added that “there’s a good reason why the area around Silverstone is known as the ‘Silicon Valley of motor sport’. Take away the British Grand Prix and this is all placed at risk.” Although Britain has swerved around this threat for the moment, obstacles still lie ahead.
In addition to analyzing the sponsorship market, a team including this author also collects data about the highest and lowest ticket prices at every Grand Prix along with the attendance from Friday to Sunday. Data stretching back to 2006 is available to the public in a report and although this author was involved with compiling it, the information comes directly from the race organizers which are all independent sources.
It reveals that race-day attendance at the British Grand Prix has surged by a staggering 80.7% since 2006, the year before home hero Lewis Hamilton joined F1. Since then, Hamilton has won five titles and didn’t just go into last weekend’s race as the reigning champion but also at the top of the standings.
The BRDC made the most of it as crowd numbers surged to a record 141,000 but this growth could run out of steam when the 34 year-old finally calls it a day. If that happens before the BRDC signs a new contract, it could still only be a matter of years before the British Grand Prix reaches the end of the road.
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