Business of Speed
The Money Behind the Motorsports Industry
By: Tim Frost
Date: July 2017

This month we will look at the motorsports from the social and digital media perspective.  What is it worth and how do we consume it?

Fan engagement from a driver perspective has become vitally important.  Connecting with spectators away from the track is imperative in a digital world. Working with sponsors typically involves media interviews, hospitality appearances, commercial advertising, and speaking engagements.  Specific contractual details are detailed in personal services agreements serving as the basis for lucrative compensation packages.

Developing and maintaining the personal brand takes a full tool kit. Being authentic, original, artistic, funny, and compassionate can be a balancing act.  Doing all of this on multiple platforms is complex.

Companies are monitoring this activity to see which drivers can be bring additional value to the partnership.  On-track performance still matters but the intangible value associated of personal relationships is gaining prominence.

The challenging environment for sponsorship has made drivers realize they have be proactive in managing their careers.  Creating an individual base along side team and series sponsors provides diversification.

Transformation is well underway for the media. Technology is driving the change with new devices and more platforms. The result: audience fragmentation.

More choices for consumers – video clips, over-the-top (OTT) platforms, live streaming and social media that allows for easier broadcasting. Effective strategies for distributing content may include pushing out on every channel and platform or maintain existing feeds.

The total audience size is not growing materially. It is being diluted. Shifting from intensity to generality – less focus and more breadth.

Sports are the epicenter. According to Neilson Sports, 91% of the top live US broadcasts were sports, media consumption for sports on smart phones exceeds traditional television, and over 50% of social media conversations on twitter were lead by sports.

The evolving nature of audience consumption is changing the dynamics of the relationship between rights holders and their partners. The escalation of sports broadcast fees is the basis for economic strength of leagues and venue.

The key is illustrate the value and importance across screens and platforms and be smart in their decisions where they need to dedicate time and resources.