The new Formula One season roars into action in Melbourne this weekend and for series owner Liberty Media, 2018 will be an opportunity to break clear of the era of Bernie Ecclestone.
After completing its multi-billion dollar takeover of Formula One 14 months ago, Liberty Media treated its debut season in 2017 as a year of transition, consolidation and education. This year, however, the series’ new bosses are intent on making their mark whilst bringing Formula One, a sport for so long under the vice-like grip of its erstwhile supremo Bernie Ecclestone, into the 21st century.
A new global marketing campaign, rolled out last week, and a soon-to-launch direct-to-consumer streaming service, F1 TV, are Liberty’s standout initiatives for 2018, part of the company’s overarching objective to take the sport of Formula One to more fans, more media platforms and more markets than ever before.
Ahead of the first Grand Prix of 2018 - which takes place in Melbourne, Australia this weekend - Sean Bratches, Formula One’s managing director of commercial operations, tells SportsPro about the ongoing evolution of F1 under Liberty, and explains how an organisation with a notoriously archaic approach to sponsorship is transforming itself into a commercially minded, fan-centric environment from the inside out.
You’ve created and now launched a new brand identity and global marketing campaign. Is this the first year on which we’re going to be judging the Liberty era?
I think this is a journey, not a destination, which is representative of most 20th century and certainly 21st century entities, commercial operations that are in the marketplace.
I think the fact that this is the first marketing campaign in the 67-year history of Formula One, I’m not sure if I should laugh or cry. But it’s certainly a representation of where we’re going, trying to develop Formula One into a strong global brand that serves its fans, repositions the sport from a pure motorsport entity to a media and entertainment brand, with what we’re calling the heart and soul of a race car driver in the middle of it.
We are trying to elevate the myriad elements of Formula One that makes this sport so great and what it is, and tell that story constantly in unique ways to ensure that we’re engaging fans and audiences around the world that are representative of this great sport and this great brand.
I think the fact that this is the first marketing campaign in the 67-year history of Formula One, I’m not sure if I should laugh or cry
What has the inspiration been for that?
The basis of everything that we’ve done is based on a global brand study that I did literally over a year ago and started the process effectively the first day that I got to the company. Not only was there no research department at Formula One, but there was no research within the company.
So we went to four continents, talked to multiple fans for multiple days, we conducted focus groups, we did online surveys, and we came up with reams and reams of paper that was a function of the findings and we synthesised that down to a very concise view of where we want to take the sport.
Our mission statement - to unleash the greatest racing spectacle on the planet - is a byproduct of this brand study, and so are the five north stars, which I think you’ve heard me talk about. These are: revel in the racing; breaking borders; putting the spectacular back into the spectacle; taste the oil; and feel the blood boil.
And so the relative elements that came out of that study had not only informed the creation of a new representative logo for the company, but also underpinned the marketing campaign that we launched this morning at nine o’clock.
As well as updating the public-facing elements of Formula One, last year you talked about needing to build the organisation from the inside. How is that taking shape, and how have people handled their various remits?
I was in a very unique position when I got to Formula One because a commercial group didn’t exist. So I was able to go out and attract an array of professionals, which I think is an extraordinary edit of the respective responsibilities in the marketplace, to develop a commercial team, which we’re still in the process of filling out.
The unique element of this, which I’m very encouraged about, is the fact that I’m able to create my own culture here at the company because there was not a culture that existed because there was no commercial group. The culture about having people as our priority, being inclusive, respect and support of colleagues, sharing credit not taking credit, conducting business in an honest and ethical way, underpinning the thesis that leaders make other people better. It’s one of communication, of having one focused and comprehensive strategy that everyone knows, and there’s relentless implementation of that strategy.
Really trying to maintain a very positive, find-a-way attitude, and I think that’s manifested itself within the commercial group of Formula One as we build it out and as we really take this extraordinary brand and begin to exploit it from a commercial standpoint, which hadn't really been done here before.
One of the first and most radical things that you’ve done from a commercial standpoint is the launch of F1 TV in the last couple of weeks. That was something that you trailed almost as soon as your senior team was put in place. What work has gone into building that platform?
Well, it’s evolutionary. And even as we sit here today, while we are not the first to market per se with a live OTT product, this is probably the most comprehensive and complex individual sport OTT in the marketplace in as much as we’re going to launch with 24 concurrent feeds on the platform in four different languages in close to 40 countries.
We’ve got an extraordinary team internally that is working to that end, but we’ve also engaged third parties that are experts in the respective areas, in terms of managed services and streaming, in terms of the development of state of the art user interfaces that activate the technology. And then obviously working with Wieden + Kennedy, Brainlabs and Wavemaker, our three agencies - Wieden + Kennedy being the creative agency, and the latter two are media agencies.
So we are incredibly encouraged. We think we’ve got a great product that will super-serve, hyper-serve, the petrol heads around the globe, in markets where we have the rights to launch this. A year ago, we had rights in no markets so very proud of our collective efforts to pave the way, to create opportunities for fans in many, many countries to engage in Formula One in new and unique ways that really only the broadband platform will permit.
What led you to think that this was the way forward for Formula One as a broadcast product?
In this day and age, you need to reach fans where they are, on whatever device that they’re on, through whatever platform that they’re consuming content on. And to not pursue that would be derelict from our perspective, as it relates to our brand and our business model going forward.
It really wasn’t a lot of debate here as to whether or not we should do it; it’s what’s the product, who are our partners, and what’s the business model that we go to the marketplace with? So I think we’re being respectful of the Formula One community and going to serve that community in a similar way that other sports fans are served in other sports around the world.
What are your targets for it this year and then for the next three years, covering the natural cycle of a broadcast contract?
I’m not going to talk about specific revenue or subscribers. But I think our goals are to introduce a product that works, that has compelling content on it, that has compelling technological features, that exploits the manifold opportunities that the broadband platform lends itself to from this perspective, and then to effectively market it and tell the story.
How is it going to affect your relationships with your broadcast partners, both in those markets where you have a TV partner but you’ve taken back the digital rights, and in markets like the UK where there is a partner providing a similar dedicated Formula One product or service to fans in that territory?
Our objective is to be complementary to our media rights partners in the respective markets where we are launching, and we are very focused on providing the value that we provision those partners.
We are creating regional feeds in markets that allow the sale of incremental inventory; we’re rolling out a new graphic package this year that we think is going to be much more compelling from a product standpoint; new camera angles and more cameras around the track that will pick up and identify racing in a much more efficient way; new technology that we’re integrating, from these ceramic microphones that we’re putting in or in proximity to the exhaust systems to better pick up sound or deliver better graphics and analytics on television for our respective partners to tell the story.#
We are very focused on the value proposition to our broadcast partners and we’ve been walking hand-in-hand with them along that path.
Speaking of your other partners, you renewed in recent days with DHL, who are a sponsor predating the Liberty era. How has their package changed? How have you changed the proposition for them, in terms of how they’ll work with you?
When we walked through the door, we had two sponsors that had recently walked out. We tried to change as the business model here, I would say, didn’t really comport with modern day sponsor fulfilment.
The only thing you could buy a year ago here was trackside. Now, there’s opportunities not only from a trackside standpoint in more LED and virtual, but sponsors can also activate in our fanzones. We’re creating four fan festivals this year. We introduced last year an esports platform that we’re going to blow out this year - more ways for their brands to manifest themselves within Formula One.
We’ve actually encouraged our partners to activate, which was an anathema here before, so we’re really letting them unleash their brands and making their investment more impactful. We’re encouraged that we’re renewing incumbent sponsors, which was not a practice that took place before at Formula One, and I think we’re creating a much more friendly sponsor environment where we are communicating with them and investing in the opportunities that they have to interact not only with the Formula One brand, but Formula One fans.
Furthermore, we are relaunching FormulaOne.com in mid-year, which will be a commercial site. Today, if someone wanted to put a display ad or a pre-roll or a post-roll video ad on FormulaOne.com, they couldn’t do it. The site is not set up technically to facilitate that, which is somewhat anachronistic in the world in which we live.
We think we are being extremely sponsor-friendly and putting our shoulders into making this a better environment for sponsors to create a return on investment that is representative in other sports around the world, and hopefully better than other sports around the world.
DHL's sponsorship with Formula One has changed under Liberty
It’s notable as well that you’ve extended the partnership that you put together last year with Snapchat, which does two things: it changes the space in which you’re operating as a media property, but also, potentially, really changes the audience that you’re looking at. What implications does that have for your commercial strategy? What kind of partners are you looking for that perhaps Formula One wasn't before?
We are a high-quality brand. I think the partners that we are looking for are the leaders in their respective categories, which will put them similarly situated to the incumbent sponsors that we have, or the incumbent media platforms that we have.
Our objective is to grow the Formula One audience and last year, through a number of means, we were successful in not only growing our digital audience - we were the fastest-growing sports brand or organisation in the world last year - but our television ratings were up and ratings for attendance at the Grands Prix were up.
We’re looking to parlay off that momentum this year and to continue the growth across the board. We’re going to do that by marketing this brand, by partnering with leading edge entities in both the linear and the digital worlds to create consumer experiences that are compelling, unique and thoughtful, and ultimately with the goal of expanding our audience and better serving our partners.
There are a couple of changes to the calendar this year but most notable is the return of France to the championship. Are we going to see an era now where there is a change of emphasis on the kinds of hosts that you have, and is there going to be more strategic direction in terms of how venues are selected?
We’ve been spending a lot of time on that topic and we actually have developed, as a company, a strategic plan. One component of that is our race promotion agreements and strategy.
Our objective is manifold: it’s to maintain the heritage markets and Grand Prix circuits in which we race today; it’s to extend and renew the purpose-built circuits that work for both us and the promoter; and I think we would like to see a little bit more street racing in major cities, iconic cities around the world where we can activate large fanbases and take advantage of the cityscapes for iconic television purposes.
Furthermore - and a lot of these are aspirational and they’ll take time to invoke - but we would like to better align the Grands Prix across the season so we’re not hop-scotching across the globe. I think, aspirationally, we would like to see a tranche of races in the European marketplace, then a tranche in the Americas, then a tranche in Asia. What that does is certainly manage the cost structure for Formula One and its teams, but it also allows us to identify sponsors in specific regions and engage them, where it’s much more difficult now when you’re coming into a continent and then leaving and not coming back for a month and a half.
I think most importantly, from a fan standpoint, being able to create a consistent timeframe that our races are on, at least for two and a half, three months, and be able to market that, I think is a compelling proposition and one in which we are competitively disadvantaged in the marketplace today.
Being the only truly global sport, all our games don’t take place in Germany, such as the Bundesliga, or in the States, such as the NFL. Our challenges from a consumer navigational standpoint, and from a fan standpoint, are more challenging, and a better organisation of our Grands Prix around the world would help us better serve fans.
Formula One is returning to France during the 2018 season
A new Concorde Agreement is due for discussion at the end of this year. You have noises about Ferrari leaving, you obviously have lots of movement of OEMs between various series. What kind of role can and will teams play in reshaping the future of Formula One, and have you planned for life without any of those marquee names? Do the plans you have work without them?
The existing agreement we have, known as Concorde, extends through the 2020 season. For a number of reasons we believe the time is right to begin the discussions, to look at the future of our sport. We are going to do that hand-in-glove with the FIA and each of the ten teams. This will be a product of an arms-length negotiation that will extend over a period of time and touch on a multiplicity of complicated issues.
Our objective, in the end, is to create a sport that is competitive, that is compelling, that makes business sense for all parties involved, not just a few, and our objective is to end this process with a model that makes sense for everyone. As part of a negotiation, there is give and take, and I’m sure that each party that is involved is going to have some wins on its ledger and have some losses on its ledger.
But ultimately, I think, everyone is going to be mature adults about the process and take their helicopters up and look at the sport of Formula One in the broadest sense, as opposed to being myopically focused on their aspect of the business, which will best serve everyone involved ultimately.
Finally, what’s the path back to profit for Formula One, and what would represent a really successful 2018 season for you?
Listen, first and foremost, we want a competitive grid. We don’t have that today. Since 2015, only three teams have won a Grand Prix. When you juxtapose that against other sports like Premier League - since the 2014/15 season, you look at the bottom three teams, they’ve either beaten or tied the top six teams 29 per cent of the time.
I would hope that the entire year starts out as competitive as the beginning of last year, with more teams participating in the lead, and we get the back of the grid closer to the front of the grid. I hope we’re successful in the implementation of many of our strategies to engage fans, to encourage race attendance and participation, to have more seats on couches watching our product, to have more individuals using our digital products and interacting with our brand in every possible way. We’re excited and encouraged about the start of the season in Melbourne, and we’ll go from there.
I’m very encouraged about the commercial prospects of Formula One, I think, with the development and implementation of a proper commercial team within the organisation, with everybody spending time working towards a collective goal. It’s a good time to be at Formula One, and it’s a better time to be a fan of Formula One.
Sean Bratches will be appearing as a keynote speaker at the Black Book Motorsport Forum in London on 21st August. You can find out more and register your interest for the event at http://www.blackbookmotorsportforum.com