What NASCAR Can Teach F1

If F1 claims to be the pinnacle of global motorsports from a technological and worldwide audience standpoint, there are a number of areas where it can learn from others, particularly Nascar.

Presence in films and series

This reflection crystallized somewhat improbably: M6 decided to bring its American series The Glades back on air. What’s the connection with your news site’s favorite subject about F1 economic news? In one of the episodes aired this week, the hero gets involved in a story that involves… a Nascar team.

Florida hosts the first and last race of the season, with the Daytona 500 and the season finale in Miami. It was during this second race that the episode took place. But NASCAR and its teams decided to fully play along with this episode, as no fewer than three current drivers of the discipline actively participated in the scenario. These drivers were not unknown since they were the three-time champion Tony Stewart, two-time runner-up Carl Edwards, and the promising Joey Logano.

When have we seen drivers of the caliber of Michael Schumacher, Sebastian Vettel, or Lewis Hamilton in a primetime series or movie? Yet, Nascar also succeeded in creating a film entirely centered around its story: Cars. This franchise has become one of Disney’s most profitable, thus generating financial returns for the sport. More importantly, this kind of animation helps create an emotional bond with the younger generations, who are the fans of tomorrow…

Merchandising

The advantage of appealing to younger generations is that they tend to want to resemble their favorite heroes, whether real or imaginary. Therefore, Nascar has set up a whole range of merchandise (with clothing at the forefront) featuring the colors of the sport itself as well as its drivers or major events (Daytona 500, Indianapolis…).

In order to maximize revenue from these merchandise items, Nascar has established two separate sales channels: the first is, of course, the trucks present at each of the 36 races of the season. Since the vast majority of the circuits on the calendar are ovals, these sales trucks are located just outside the paid area, allowing them to reach a much wider audience than just the spectators of the F1 Village.

The second sales channel is obviously the Internet. Nascar has set up a dedicated section on its website to take advantage of the significant organic traffic it generates. To maximize the revenues from this channel, Nascar has chosen to partner with a specialist in the sector since it is, in fact, a commercial subsidiary of the e-commerce giant eBay. This is why the site offers auctions on products ranging from a special Valentine’s Day card in a driver’s colors for five dollars to a VIP package for a race, which can exceed 1500 dollars.

Official partnerships

Another aspect where Nascar is far ahead of F1 is in the number of official partners of the sport. Their number in F1 is currently extremely limited since only Allianz, DHL, LG, and UBS are in this category, while DHL, Mumm champagnes, Rolex, and Tata Communication are among the official suppliers of F1. The estimated cost of such a contract generally amounts to around 30 million dollars.

Conversely, NASCAR has formed partnerships with an impressive number of partners in almost every field: banking (Bank of America), soft drinks (Coca-Cola), beer (Coors Light), paint (DuPont), batteries (Exide), chocolate and chocolate bars (Mars), as well as agricultural equipment (New Holland) and RVs (Camping World)! Even the F1 team McLaren is involved, providing direct injection to the entire lineup since the 2012 season. Undoubtedly, the revenue generated from all these partnerships exceeds the 174 million euros that F1 managed to generate through this channel during the 2011 season.

Thus, if F1 generates nearly 1.2 billion euros per season, its growth potential is much greater than just adding new events to the calendar, which reaches the physical limits of the various participants. But more importantly, NASCAR has managed to establish a business model where all interests are aligned since the France family, which owns NASCAR, also owns half of the tracks on which the sport takes place. Under these conditions, it is not surprising that the tracks receive 65% of the revenues generated by the sport, which they must certainly redistribute to the teams through participation and performance bonuses.

At the same time, in Formula 1, CVC agreed on a billion-dollar dividend, with no benefits for the sport…

With the participation of www.Racingbusiness.fr