Study: F1 sponsorship revenue down in last 15 years despite $30bn income
Formula 1 motor racing has suffered a 39-per-cent fall in sponsorship revenue in the last 15 years, despite receiving $30 billion during that period, according to a new report by Formula Money, the industry monitor for the series.
Formula 1’s total sponsorship revenue totalled $1.7 billion last year, down from the peak figure of $2.8 billion in 2007.
In 2018, team sponsorship was the series' biggest source of sponsorship revenue at 44.7 per cent, with the highest sums coming from title sponsors, which receive naming rights and branding on the most visible parts of the cars.
Team sponsorship was up 11.3 per cent to $779.2 million last year, largely thanks to Sauber’s title partnership with Alfa Romeo, and Aston Martin’s extended deal with Red Bull.
However, team sponsorship has dropped by 14.2 per cent in the last five years, falling from $908.1 million in 2014, making it the third-lowest total in the last 15 years.
The loss of three teams – BMW, Honda and Toyota – in 2007 has been seen as one of the main reasons for the drop, but not the deciding factor, as the average sponsorship revenue per team fell by 5.6 per cent.
Over the past decade, the series has suffered a fall in its level of exposure, with television viewership declining by 18.3 per cent to 490 million, as the sport has signed more lucrative contracts with pay-TV networks instead of remaining on free-to-air channels.
Payments made by team owners were Formula 1’s second-largest source of sponsorship income, representing 38.9 per cent.
Official partners contributed 12.6 per cent, with Formula 1’s global partners leading the way.
The series' global partners are DHL, Heineken, Pirelli, Rolex and Emirates. Of the five brands, Heineken, Rolex and Emirates are reported to be paying the most, with annual fees of $50 million, $45 million and $42 million, respectively.
Global partners benefit from use of the Formula 1 logo in marketing campaigns, as well as title sponsorship of races and trackside branding throughout the season.
Trackside advertisers, such as Gulf Air and Singapore Airlines, which are also title sponsors of individual races, accounted for 3.8 per cent of the series' overall sponsorship haul.
In total, there were 239 sponsorship deals in Formula 1 last year, with an average value of $3.3 million per deal.
The biggest deal was Petronas’ title sponsorship of Mercedes, worth around $75 million annually.
Despite Mercedes’ huge deal, Ferrari generated the most from sponsors at $176.6 million, with its biggest deal with tobacco manufacturer Philip Morris International worth roughly $50 million a year.
Among other deals, Formula 1's 2019 sponsorship revenue is set to be boosted by an exclusive long-term trackside deal signed with Puma, the German sportswear brand, last month.
Formula 1 also recently concluded a three-year deal for the Netherlands to host an annual grand prix starting in 2020, with the Zandvoort circuit to stage its first round in 35 years. Heineken has already agreed to be the title sponsor.
To read Sportcal's recent report analysing all Formula 1 team sponsorship deals, click here.