What MotoGP Can Learn From F1: The Business Symposium

Since the global financial crisis struck back in 2008, MotoGP’s primary focus has been on cutting costs. These efforts have met with varying success – sometimes reducing costs over the long-term, after a short-term increase, sometimes having no discernible impact whatsoever – and as a result, the grids in all three classes are filling up again.

Further changes are afoot – chiefly, the promise by Honda and Yamaha to supply cheaper machinery to private teams, either in the form of production racers, such as Honda’s RC213V clone, or Yamaha’s offer to lease engines to chassis builders – but there is a limit to how much can be achieved by cutting costs. What is really needed is for the series to raise its revenues, something which the series has signally failed to do.

In truth, the series has never really recovered from the loss of tobacco sponsorship, something for which it should have been prepared, given that it had had many years’ warning of the ruling finally being applied.

The underlying problem was that the raising of sponsorship had been outsourced and the marketing of the series had been outsourced to a large degree to the tobacco companies, and once they left – with the honorable, if confusing, exception of Philip Morris – those skills disappeared with them. There was nobody left to try to increase the amount of money coming into the sport.

To its credit, Dorna have tried to address this issue, even going so far as to organize a sponsorship symposium with the teams last year. Unfortunately, it was far from a success, with one attendee being particularly scathing about it when asked for his impressions.

And because of the scarcity of sponsorship, Dorna has the regrettable tendency to regard itself in competition with the teams trying to bring sponsors into the series, rather than working in concert with them to raise the total income and reduce the dependence of the teams on Dorna subsidy.

MotoGP’s four-wheeled counterpart, F1, has a far better track record of raising sponsorship, in part because of its deeper roots in the business community. So it came as no surprise that when F1 came to the Circuit of the Americas in Austin, Texas the circuit’s owners – also well-known in the business community, with Red McCombs being a leading figure in Texan business, and one of the richest men on the planet – organized a forum to educate the Texas business community about the opportunities which motorsports present, and to allow the community to meet and network with top figures from F1. The event was judged a success, and a positive initiative taken by the circuit.

This is exactly the kind of initiative that is desperately needed by the motorcycle racing community as well. The idea of a business club or symposium is far from new – part of Ducati’s success in raising sponsorship to cover its costs is through working with the Italian business community to convince them of the opportunities MotoGP and WSBK has to offer, while Lucio Cecchinello leverages his business network on a smaller scale – but it has not been sufficiently exploited by either Dorna or the teams to help to increase interest in the sport. Dorna’s job – especially now that it runs both MotoGP and World Superbikes – must be to raise the profile of motorcycle racing as a whole, and try to increase interest and investment in the sport from outside businesses.

Given the fact that key players from the major manufacturers, teams and Dorna are present at race tracks around the world, there is a golden opportunity to be seized, if Dorna would only take the lead. Organizing symposium, or business clubs, or networking events at each race, and inviting local and national business leaders to attend them is a key stepping stone to a more stable future for motorcycle racing, reducing the dependence both on TV income, and on the willingness of the factories to continue racing.

It is not even limited to MotoGP’s managers and leaders: fans too can help. If you work for a large company, make sure the people in the marketing department where you work are aware of the value which MotoGP and World Superbikes represent, and the potential audience which it can reach. There are a few key numbers up on the MotoGP.com website, which provide enough information to start a conversation.

I am personally aware of one particularly innovative initiative, with a small outside company exploring ways to get an outside (and non-obvious) industry involved in motorcycle racing. Unfortunately again, it is being driven by the passion of the people involved, and not receiving the kind of support it should from Dorna.

For the past four years, the sport of motorcycle racing has been looking inwards, seeking ways and areas of cutting costs. It is time to start looking outwards, at seeking out partners, promoting the sport, and increasing investment and sponsorship in the sport. The opportunities are out there, and the examples of good practice are there to be followed.

If Dorna spent more of its efforts on organizing business symposiums such as the one organized by the Circuit of the Americas, and emulating the efforts such as LCR Honda’s Inspire magazine, an attempt to create a lifestyle magazine around which to offer more opportunities to partners and sponsors, the sport as a whole would be a great deal better off. We might even be able to start attracting new manufacturers into the sport, persuading them to see it as a marketing opportunity, rather than an R&D cost center.

Below is the press release about the MotorSport Business Forum from the Austin circuit:

MotorSport Business Forum: Texas Symposium 2012

AUSTIN, Texas (Nov. 19, 2012) – Formula One returns to American soil this weekend and not a minute too soon.

To mark its return, KHP and its long-standing partner, the MotorSport Business Forum (MSBF), supported by payment solutions experts Rêv Worldwide, hosted the inaugural Texas Business Symposium in Austin, Texas on behalf of Red McCombs and Bobby Epstein, co-founders and investors of the Circuit of The Americas.

Operating this year within the more intimate format of a Texas Business Symposium, the MSBF sought to educate Texas companies on the commercial benefits of motorsport involvement by engaging with experienced motorsport sponsors and technical partners as well as allowing international motorsport participants to gain a better understanding of the business environment and opportunities that exist in Austin and central Texas.

Hosted at the AT&T Center at the University of Texas in Austin, central Texan business leaders of today and tomorrow were joined by some of Formula One’s leading figures on the eve of the United States Grand Prix. The 200 plus congregation of delegates from both the regional business world and that of Formula One were testament to the joint excitement of the sport’s return to US soil, and in particular to Austin,Texas.

Red McCombs, founder of McCombs Partners and co-founder of Circuit of The Americas, whose name adorns the hosts’ School of Business, opened the inauguaral Texas Business Symposium with a heartfelt speech the day before his dream of a US Grand Prix in Austin becomes a reality.

This was followed by the CEO of Mercedes AMG Petronas F1 Team, Nick Fry’s keynote address that set the tone for the afternoon’s proceedings: Formula One sees Austin as the new, permanent home of the US Grand Prix. This feeling was reciprocated in the ensuing Q&A session which saw an enthusiastic reaction and postive exchange of ideas and views from both the podium and the gathered delegates, further enforcing the positive vibe that has seen Formula One welcomed so enthusiastically by the Austin business community.

Roy Sosa , founder, Chairman and CEO of Rêv Worldwide was clear in his support of this important gathering, stating: ‘Rêv is proud to welcome the MotorSport Business Forum to Austin, Texas. Our partnership represents an opportunity for business innovation that goes beyond technology and the track. The intersection of the entrepreneurial spirit in this city combined with the global reach already represented by this sport opens new business partnerships and product development ideas never seen before.’

Paul Hembery, Pirelli Motorsport Director, added ‘It has been a pleasure and a unique experience to participate in the inaugural Motorsport Business Forum in Austin. The United States are an important market, not only for Formula One, but for all the sponsors and partners involved in the sport. For Pirelli Formula One is a unique global platform to showcase our products and standards of technology. The Forum is certainly a great way to help bring the sport and its philosophy a bit closer to the decision makers of American companies and events like these will help the sport to establish itself in the States and to be successful. Hopefully, this Forum is the first of many in Austin and in other locations around the world.’

The final word of the day was left to Circuit of the Americas’ founding partner, and driving force behind the move to bring Formula One back to the United States, Bobby Epstein.

Katja Heim, CEO of event co-organisers KHP Consulting, was delighted with the reaction of all who attended the symposium, saying: ‘The success of the symposium clearly demonstrates there is an appetite in the US market to explore the many commercial opportunities that F1 has to offer. As with previous Forums KHP has helped to organise, the first and most important step is always bringing the right people together in the right environment.’

The full list of speakers – made up of Team Heads, Stakeholders, Series officials, Sponsors and Commercial Directors – were as follows:

Red McCombs, Founder of McCombs Partners and co-founder of Circuit of The Americas – Welcome Address
Nick Fry, CEO Mercedes AMG Petronas F1 Team – Keynote Address
Paul Hembery, Head of Pirelli Motorsport
Roy Sosa , founder, Chairman and CEO of Rêv Worldwide
Geoff McGrath, Managing Director of McLaren Applied Technologies
Mehul Kapadia, Vice President of Commercial Alliances and Sponsorships and Tata Communications.
Graeme Lowdon – President & Sporting Director at Marussia F1 Team
Pablo de Villota, Formula 1 Sponsorship Manager at Banco Santander
Bobby Epstein, Co-founder and Chairman at Circuit of The Americas