Formula One Signs $100 Million Deal to Shift Gears on Gambling Sponsorship
Posted on: September 18, 2018, 07:00h.
Last updated on: September 18, 2018, 06:36h.
Formula One will embrace gambling sponsorship for the first time in its history.
The Financial Times reports the race car series has sold the global rights to Formula One gambling sponsorship to London-based marketing agency Interregional Sports Group, which will shortly begin selling to betting companies. The deals will include branding at trackside and on screen graphics during televised races.
While Formula One has not officially disclosed the sum it received for the rights, an FT source described it “at least $100 million” which would make it one of the biggest commercial contracts the sport has ever signed.
The deal represents the radical new path for Formula One, mapped out by its new owner, Liberty Media, the US mass media company that acquired the racing series in 2016 for $8 billion.
Kicking the Tires
The series had previously been run for 40 years by the British business magnate Bernie Ecclestone as his own personal fiefdom, and while it was always at the cutting edge of technical engineering, in other respects it was set in its ways.
For example, Ecclestone refused to allow gambling advertising because he felt it would tarnish the sport’s glamorous image. But Liberty is eager to propel Formula One slipstreaming into the digital age and to explore new avenues of monetization — and that involves upping sponsorship quota.
Managing director of Formula One’s commercial operations Sean Bratches told the FT this was a “fan-centric” move that would help shoulder some of the huge costs for the teams that are constantly vying to remain at the forefront of technical excellence.
There’s an understanding that sponsorship injects economics into the sport that improves the sport to the fan,” said Bratches. “You have to balance that with how you serve fans. This is an opportunity that serves both of those masters.”
For betting companies, it presents the opportunity to engage with a truly international platform, which will help their brands reach markets where it’s difficult to find exposure, such as Asia.
At a time when there is talk of clamping down on gambling advertising in soccer, for example, Formula One’s truly international nature makes it harder for the regulators in individual countries to exert pressure. Formula One persisted with tobacco company sponsorship well into the 1990s, long after many countries had banned cigarette advertising.
Also this week, Liberty Media announced it had signed a deal with global sports integrity firm Sportsradar, which will disseminate Formula One’s data to help gambling companies create in-play betting markets for the sport. The deal will also allow Sportsradar to monitor the markets for suspicious betting patterns.
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