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Motorsport Going Global This page intentionally left blank MOTORSPORT GOING GLOBAL The challenges facing the world’s motorsport industry Nick Henry,Tim Angus, Mark Jenkins and Chris Aylett © Nick Henry,Tim Angus, Mark Jenkins and Chris Aylett 2007 Foreword © Max Mosley 2007 Softcover reprint of the hardcover 1st edition 2007 978-1-4039-4289-0 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2007 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York,N.Y.10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-1-349-52176-0 ISBN 978-0-230-59338-1 (eBook) DOI 10.1057/9780230593381 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. 10987654321 16 15 14 13 12 11 10 09 08 07 CONTENTS Preface vii Foreword by Max Mosley ix Executive Summary: The Global Motorsport Industry x Motorsport 2035 xii The Structure of Motorsport Going Global xv Part One The Global Motorsport Business 1 Defining the Business of Motorsport 1 The Motorsport Value Chain 2 Key Relationships 6 Key Drivers 7 Summary 9 Mapping the Global Motorsport Industry 10 Metrics for the Global Motorsport Industry 10 Benchmarking the Global Motorsport Industry 13 The Global Motorsport Value Chain 20 Thinking About the Global Motorsport Industry 31 Part Two Frontrunners on the Global Starting Grid 33 Introduction:The Frontrunners 33 The USA Motorsport Industry 34 The UK Motorsport Industry 45 The Japanese Motorsport Industry 56 The German Motorsport Industry 63 The Italian Motorsport Industry 73 The French Motorsport Industry 83 Conclusion: The Frontrunners 93 Part Three The Midfield 96 Introduction:The Midfield 96 The Australian Motorsport Industry 96 The Spanish Motorsport Industry 101 The South American (Brazil and Argentina) Motorsport Industry 104 The Mexican Motorsport Industry 108 The South African Motorsport Industry 111 Conclusion:The Midfield 115 v vi Contents Part Four Coming Through the Field 117 Introduction: Coming Through the Field 117 The Malaysian Motorsport Industry 117 The Gulf Region (Bahrain, Qatar, Dubai) Motorsport Industry 120 The Turkish Motorsport Industry 122 The Chinese Motorsport Industry 124 The Czech Motorsport Industry 127 Conclusion: Coming Through the Field 130 Part Five Motorsport Going Global 132 Globalization in Motorsport: A Driving Force for Change 134 Consumption 137 Supply 140 Technology 143 Motorsport Management 146 Visions of the Future: Motorsport Going Global 148 Motorsport Going Global:The Opportunity 155 Summary 156 Appendix Global Motorsport Disciplines and Series 157 Bibliography 159 Index 163 PREFACE Motorsport Going Global reflects over a decade of research by ourselves on the motorsport industry and, for some of us, a lifetime of engagement in the sport. It deliberately seeks to blend the academic, business and consultancy knowledge that sits at the core of the service offer of Motorsport Research Associates (MRA), one of the world’s leading consultancies on the business of motorsport, and of which we are members. This book is avowedly “global” in its outlook; this is our start and end point. Nevertheless, the origin of any nuanced understanding of the global picture is to recognize your place in the world. Our place—and the place from which we view and write about global motorsport—is in the heart of the UK’s Motorsport Valley®, one of the key production centers of world motorsport. We are proud of our small contribution to this world-beating location for the “business of win- ning” but recognize that our global search for material, data and information on the nascent motorsport industries of the world has inevitably been influenced by the origin from which we look outwards. A critical part of the global analysis of motorsport provided in Motorsport Going Global has been derived from a set of key informant interviews within the industry. We owe a debt of gratitude to Gian Paolo Dallara, Peter Digby, Herb Fishel, David Richards, Sir Jackie Stewart and Pat Symonds for providing both their time and insightful commentary. Equally, Nigel Geach of Sports Marketing Surveys and Tim Bamford of the Australian Grand Prix Corporation have been invaluable in assisting our quest for data on the industry. Our most sincere thanks to all of you. Finally, beyond those in the industry who have willingly given their time to us over the course of our many years of research, we thank Max Mosley at the FIA, the Motorsport Industry Association (MIA) for hosting our “book meetings” and Stephen Rutt and his colleagues at Palgrave Macmillan for, among other things, their patience. “Ladies and Gentlemen, start your engines.” Birmingham, UK, October 2006 NICK HENRY TIM ANGUS MARK JENKINS CHRIS AYLETT vii This page intentionally left blank FOREWORD Ever since I first became involved in motor sport in the early 1960s the industry has been growing at an incredible rate. It has developed from something of a niche sport to the all-encompassing set of global championships that we see today. The FIA Formula One World Championship has become the biggest annual sporting series in the world. In 2007, it featured 11 teams, running 22 drivers from 13 different countries participating in 17 races across 5 continents. It is also watched by hundreds of millions of viewers across the world and has certainly proved itself to be one of the few truly global sporting championships. But with this global exposure comes a great amount of responsibility. This is why I am delighted that, with the introduction of new regulations and new tech- nology, Formula One is set to contribute to the future development of the auto- motive industry. Unlike other sports, the global power of Formula One is not just in entertain- ment but also in the way it can benefit everyday life. For instance, one future change will be to limit power not by the size of the engine but by the amount of energy the engine uses. This means that if teams want a power advantage they will have to get more out of a given quantity of energy or fuel. As such, research in the sport will go into fuel efficiency or getting the most from the least. If this is done well—which it will be in Formula One—it will make a huge contribution to the transport industry and the environment. Other championship have also been progressing at an incredible rate. I have been delighted by the reaction to the FIA World Touring Car Championship since the FIA launched it as a global series in 2005. With races broadcast all over the world and a growing international fan-base, it demonstrates the huge reach of global motor sport and the industry that surrounds it. Even in karting—the entry-level for motor racing—we have witnessed unex- pected commercial growth. As many as five karting events, including the annual CIK-FIA World Championship, are now broadcast live across Europe. For an event that many see as the amateur level of the sport this is an impressive achieve- ment and demonstrates that motor sport, in whatever form, can garner a strong following. It all bodes well for an industry that I believe still has room to develop and reach its potential. And in order to do that it must overcome the many chal- lenges that have been so succinctly examined throughout this book. MAX MOSLEY President, Fédération Internationale de l’Automobile (FIA) ix EXECUTIVE SUMMARY: THE GLOBAL MOTORSPORT INDUSTRY This book defines the global motorsport business (Part One) and provides an overview of the 16 most significant national motorsport nations and regions of the world—the Global Starting Grid (Parts Two to Four). Motorsport Going Global ends with alternative visions of the future (Part Five) drawn from the insight of six international industry experts. In 2005: ■ we estimate the global motorsport industry to be worth some £50 billion, representing some 0.23 percent of global GDP; ■ excluding kart tracks, the global stock of permanent paved circuits is esti- mated at approximately 600 circuits; ■ official racing license holders number some 1 million around the globe; ■ only four racing series can be argued to be truly global and these involved 22 constructors; ■ there were 56 global motorsport events; ■ on average, over 52 million viewers watched each Formula One Grand Prix; the equivalent figure for a World Rally Championship (WRC) event was 50 million viewers. The Global Starting Grid can be segmented into the: ■ Frontrunners: the six global frontrunners are the USA, UK, Japan, Germany, Italy and France.

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