In 1960, Formula 1 crossed the finish line ten years after its inception. It was a decidedly different sport to that of today, set in an era of gentlemen drivers who took risks that are now unacceptable. It is clear that the money around the category was far less than it is today and the first sponsors to approach the teams were seen as a betrayal of the spirit of competition.

The first brand to strike a deal with a team was Yeoman Credit LTD, a motor insurance company, who signed a deal with the British Racing Partnership, which brought Coopers to the track. Owners Ken Gregory and Alfred Moss renamed the team ‘Yeoman Credit Racing Team’ for an investment of £40,000 for equipment and £20,000 for team management. The partnership lasted three seasons and was followed by an advertising boom that took over F1, from the Lotus Golden Leaf of 1968, to the present day, with liveries that have marked the history and imagination of the category, such as the Lotus John Player Special, McLaren Marlboro and Williams Camel.

Formula 1, the ideal platform for sponsors

Currently, companies are associated with Formula 1 or teams with purely financial operations or the sharing of specific technical skills. Each brand enters the automotive game with the clear objective of getting a commercial return on your investment, which can be read in terms of increased sales, increased visibility and brand recognition or for purely strategic purposes.

As analysed by marketing expert Maksim Minkov, the main sectors investing in Formula 1 are IT and software services, engineering and automotive, which have gradually replaced historical references such as alcohol or tobacco.

 

F1 fan demographics and sponsor retention

Formula One reaches over 180 countries worldwide, thanks to the transfer of television rights, and thus offers a real audience to sponsors who want to join it. Recent research by Nielsen I stole demographics of the audience that follows the grand prix:

The fan base is made up of affluent and educated men aged 25-54

56% of fans are men

68% of fans are between 16 and 44 years old

47% of fans are highly educated

60% of fans have an annual income over $50,000

 

 

Lewis Hallett shared the results of a survey conducted on the Voice of F1 Fans platform of a sample of 2,000 fans who told their story of how loyal they are to the sponsors present in F1:

 

The research shows that companies are more likely to reach consumers by sponsoring a team than F1 as a whole. While the 40% of fans who have bought a team or category partner brand may seem like a significant figure, it is lower than data from other series such as NASCAR, reflecting the description of the average American football fan who has a higher level of ‘compulsive buying’ than the rest of the world.

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Miami unseen 🌴🎬

Sharing some behind the scenes footage from our first home race of the year! #HaasF1 pic.twitter.com/5mqDp8ai4U

— MoneyGram Haas F1 Team (@HaasF1Team) May 21, 2023

 

 

The American sponsorship boom

It is no mystery that the TV series Drive to Survive has attracted a new, younger and more global audience to Formula One. Especially in the United States the pinnacle of motorsport has attracted a lot of attention, immediately monetised in substantial investments. Grand Prix races in the United States went from one to three in the space of two years, just as the cost of the television rights purchased by ESPN increased by 18 times.

But not only that, as an analysis conducted by the Finnish Spomotionil analysis showed that US-made sponsors historically outperformed those in the main European markets. In fact, at the start of the championship, there were 105 US companies associated with the ten Formula One teams, compared to 104 for the sum of Italy, the UK, Switzerland, Germany and France combined.

The number of US brands has almost doubled compared to 2019 (there were “only” 55), with a progression comparable to the growth curve achieved by Drive to Survive.

Of the new sponsors arriving in 2023, 30% are from the US.

The world champion team, i.e. Redbull, has obviously benefited from major investment, having gone from 9 to 18 partners in the last two years and is preparing to adopt a brand like Ford in 2026, which will make it even more attractive to US companies. McLaren is also well established in the US, with 25 brands, while Haas is third with eight.

 

To give an idea of the US cash flow coming into the teams, the three-year deal between Stake and Alfa Romeo has been quantified at $93 million, the three-year deal between MoneyGram and Haas at $20 million per year, the one between Oracle and Red Bull a staggering $300 million (from 2022 to 2026).

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The United States is confirmed as a boundless frontier

In terms of TV rights, the US is a limitless expanse for Formula 1, also in terms of sponsors.

Red Bull and its associates can add up to a whopping 105 US companies investing in their product, a large number compared to, for example, Formula E (22) and WRC (5), but far less than the two major categories of American motorsport. The IndyCar Series has 151 brands in its portfolio, while NASCAR dominates with 296 US brands, due to the ‘compulsive buying’ dynamics of its fans mentioned above.

As Formula One becomes more and more established in the US, it has the clear objective of welcoming more and more local investors for both the teams and itself, in a historical period when European companies do not seem so inclined to invest in motor sport. Let’s not forget that among the global partners in the category are the American companies AWS (Amazon Web Services) and Salesforce.

 

Schumacher predicts catastrophe

 

And also in terms of average ticket costs, the US is king. According to F1Destination’s analysis, the three-day Las Vegas is the most expensive, with an average price of $1,667, followed by Miami at $1,113, with the first of the European stopovers, Monte Carlo, fourth at $677.

But there is a downside: Catering to US fan base and corporate interest risks changing the sport too much for the historic European audience. What if the American public – extremely fickle, as evidenced by the boom in Drive to Survive – decides to turn its attention elsewhere?

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