BlackBook Motorsport 2020: The racing industry weighs its post-pandemic future

Released this week, the latest edition of the BlackBook of Motorsport features every major championship promoter, as well as a range of other key industry stakeholders, all of whom are facing untold financial pressures as they scramble to reopen for business following the Covid-19 pandemic.

The business of motorsport is, of course, a business of live events, a global industry built upon large-scale gatherings, cross-border manufacturing and supply chains, and a crowded calendar that, for many world championships and their competing teams and drivers, requires travel to all corners of the globe.

It goes without saying, then, that these are hugely challenging times for everyone involved.

Like all of sport, the world of motor racing has been rocked by the Covid-19 pandemic. The automotive and hospitality sectors have been impacted as heavily as any, while the live entertainment industry has ground to a screeching halt. Motorsports properties, each with its own designs on commercial growth and international expansion, have been universally stopped in their tracks, stalled by government restrictions on movement and lockdown measures intended to contain the spread of the novel coronavirus.

Several series had managed to begin their 2020 seasons in earnest before the rapid outbreak of Covid-19 rendered racing impossible and forced a staggering spate of postponements and cancellations, casting serious doubt over whether any events can go ahead at all this year.

Formula One’s attempts to keep its show on the road only underlined the fluidity that has characterised such a fast-moving situation. The entire F1 circus had already arrived in Melbourne for the season-opening Australian Grand Prix on 15th March when, after a remarkable week in which the entire sporting world came to a standstill, it too finally succumbed. Formula One management’s last-minute call to cancel on the eve of its annual curtain-raiser left the sport in limbo, and soon other racing promoters across the globe found themselves facing difficult decisions of their own.

Commercially speaking, there is no denying that the repercussions of the pandemic will be profound, even if the full extent of the fallout remains incalculable in these early days. 

In the coming months, all manner of commercial agreements – from hosting and driver contracts to broadcast rights and sponsorship deals – will need to be revisited. Priorities will be reassessed in line with new economic realities and evolving market conditions, while calendars will be revised in close coordination with a myriad of stakeholders, not least the FIA, motorsport’s global governing body.

But for all the inevitable doom and gloom that has overshadowed the first quarter of 2020, there have been more than a few bright spots away from the track. Motorsport’s ingrained culture of innovation and technological advancement has been put to work in astonishing ways during this time of adversity.

Most notably, teams in Formula One were quick to repurpose their factories to aid in the manufacturing of life-saving healthcare equipment, while drivers, executives and other stakeholders across the industry have been proactive in raising vital funds for frontline care workers. Such endeavours will not be forgotten anytime soon.

Electric remains the future

For all the disruption wrought by the Covid-19 pandemic, championship promoters and manufacturers across the automotive industry at large remain convinced of one thing: electric racing is the future of motorsport.

Most promoters have been forced to temporarily delay plans for electrification due to the current health crisis and associated concerns around research and development costs. Nevertheless, there is a growing consensus within motorsport that the days of internal combustion engines – both on the track and on the road – are numbered.

The continued rise of Formula E, the pioneer and poster child for electric racing, has demonstrated the increased market relevance that can be gained from investing in more sustainable forms of mobility. Major manufacturers have gravitated en masse towards the all-electric championship, in many cases at the expense of their other racing programmes. Now other series organisers want a piece of the action.

IMG Motorsport, promoters of the FIA World Rallycross Championship, and Eurosport Events, stewards of the FIA World Touring Car Cup (WTCR) and other properties, are following suit, launching Projekt E and Pure ETCR respectively. Even drag racing’s NHRA has brought an electric component to its supercharged, fossil fuelled events.

“We have visited 15 different car manufacturers and the message we got is that consumer perception is key to improve their electric segment market share,” François Ribeiro, the head of Eurosport Events, tells the Black Book. 

“There is still a perception that electric cars are boring; that they aren’t fun, are slow and are not appealing. We are convinced that motorsport can really play a role in improving the consumer perception, not only around electric racing, but also around electric transport and mobility.”

In addition to delaying plans for electrification, several promoters have pushed back the introduction of new regulations and next-generation cars in response to the pandemic. Formula One’s new sporting, technical and financial regulations were due to come into force next year, for example. They will now be implemented in 2022 at the earliest, and could be delayed a further year as teams grapple to make sense of the economic implications.

World Rallycross' electric Projekt E car was unveiled at Latvia’s Riga Motor Museum in September.

Accelerating into esports

With race schedules and longer-term objectives put on hold, many series have used their enforced hiatus to accelerate and expand existing activities in other areas, such as esports. The likes of Formula One, Nascar, Indycar, World Rallycross and Australia’s Supercars have all ventured further into the realms of virtual gaming in recent weeks, eager to satisfy the appetites of content-starved fans during the absence of live action.

In most cases, broadcast partners have responded in kind, driven by a need to fill programming schedules and the pressure to keep advertising dollars rolling in. The results, both in terms of viewership and fan engagement, have generally been positive, giving motorsport a welcome outlet and much-needed visibility when much of society has sat frozen in isolation.

Esports has also provided motorsport with newfound opportunities for creative cross-promotion. The involvement of Red Bull Racing’s Max Verstappen has helped Supercars raise the profile of its virtual racing series, for instance, while the appearance of English cricketer Ben Stokes in Formula One’s Virtual Grands Prix has helped motorsport’s glamour championship tap into a new audience.

Hookit’s social data insights

Esports competitions are one way in which rights holders are seeking to drive value for their commercial partners in the absence of live action, but social media remains central to any digital strategy and is an invaluable tool for delivering return on investment (ROI) back to sponsors who have seen their rights and assets tied to specific events disappear. 

In recognition of that, the Black Book has once again teamed up with sponsorship analytics pioneer Hookit to deliver insights into the effectiveness of series sponsorships and the visibility and value each property drives for its partner brands across three of the leading social media networks: Instagram, Facebook and Twitter.

As the book’s official data partner, Hookit’s contributions appear alongside official 2019 statistics for each of the 17 featured championships this year. Data points include the total number of followers and branded posts for all official series accounts in the calendar year 2019, as well as Adjusted Ad Value (AAV), an engagement-focused metric based on the Hookit Valuation Model (HVM) that enables sponsors to accurately measure ROI from social media.

The BlackBook of Motorsport 2020 is out now. To purchase a copy of the book, or to find out more details about the BlackBook motorsports membership community, click here.

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