F1 sponsors launch alliance
In a bold move to form a “collective voice,” several F1 corporate sponsors have created a new organization, “Formula 100,” according to BBC Sport. The group will represent the top 100 power brokers involved in the sport. Featuring world-famous names like Total, Shell, Santander and Allianz, the group met in London earlier in the week and is looking to recruit 70 more companies.
Given that Formula 1 possesses a vast audience of 520 million viewers across 187 countries, several firms are eager to capitalize on the marketing opportunity presented by so much exposure. Yet according to financial analysts Formula Money, business deals with F1 are the hefty price of $4.1m on average.
Because of this, companies are driven to increase their revenues, but this is usually dictated by the Formula 1 Group and the International Automobile Federation. Over recent years, the need for these companies to make a profit have lead to a shift in business dynamics, charging governments, rather than companies, high prices for hosting new F1 events such as Korea and Abu Dhabi. Christian Sylt, co-founder of Formula 100, argues that this is one of the prime motivators behind his company’s creation. “The physical, geographical direction the sport is taking at the moment is a real concern for many of our members,” he said.
Cutting costs have also inflicted a gash in the corporations’ wallets. While less testing times are beneficial for the team’s bank account, they lessen opportunities for sponsors to hold their own events.
Yet F1 President Bernie Ecclestone is adamantly against the organization, claiming that “The people behind this thing have no investment in F1,” and states that “The sponsors know exactly what they're doing when they get involved in F1.” But despite Eccelstone’s typically hard-to-please demeanour, after investments soaring as high as $720 million, Formula 100 will strive to accrue a little more dominance in F1’s financial gymnastics.
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