CSBM and SONAX organize joint event on growth of Formula 1
Formula 1 Set to Overtake Soccer

The Formula 1 World Championship is a multimillion dollar industry as well as a sport with truly global reach, making it an ideal subject for a session organized by the Center for Sport Business Management (CSBM) and SONAX, a supplier to the Vodafone McLaren Mercedes team, on Dec. 13, 2007. The McLaren test driver and speaker at the event, Pedro Martínez de la Rosa provided some insider knowledge.

He said investment in the car’s technology is crucial in a sport where every hundredth of a second counts. “You can’t hold back the tide on spending,” he commented. IESE professor Sandalio Gómez and President of the CSBM, along with Professor Ignacio Urrutia, provided some details of the numbers involved: McLaren spent an estimated $402 million on its car in 2006, in third place behind Ferrari and Toyota, which was in pole position with $418 million.

The motor sport lags behind soccer in terms of sponsorship money, though. Soccer nets 35 percent of the global spend, ahead of Formula 1 on 15 percent, level with American football. But in Spain at least, more people watched Formula 1 than the Primera Liga in 2006.

As a result, Urrutia suggested that Formula 1 could end up overtaking the beautiful game in terms of sponsorship revenue since television rights and sponsorship money follow audience numbers. “Football better pull its socks up because it could end up losing money [to Formula 1] because Formula 1 is more dynamic and it changes each year.“

The "formula" is a set of rules which all participants and cars must meet. So if the championship manages to increase the level of competition between the cars and introduces more drivers of different nationalities, the professor believes it could increase interest in the sport. Meanwhile, De la Rosa sees further sponsorship opportunities in countries where cigarette advertising is still permitted.

De la Rosa admitted that "a team is like a company in that as well as winning races, it has to be profitable to survive.” The veteran driver added that rivalry is good as it "increases the fans’ passion for the sport, maximizes the competitive aspect and generates turnover”.

By this measure, the 2007 championship was a financial winner. Rivalry between two of his teammates, Spain’s Fernando Alonso and Lewis Hamilton of the U.K., kept fans’ attention rapt last year while the media feasted on rumors of favoritism, flare-ups and industrial espionage. The Grand Prix season ended with the McLaren drivers tied at second place just one point behind Finland’s Kimi Räikkönen of Ferrari.