about a sheikh blocking off streets to land his helicopter! The most frustrating thing was that apart from whatever was happening within the confines of the circuit, we didn't really see an impact of Formula 1 itself outside the circuit. There was little promotion downtown. Anyone who knows anything about Austin knows we are a festival city. All you had to do was make a free outdoor festival in advance of the race to educate people, give away few tickets etc.
The main problem with the F1 locally is struggling to appeal to the grassroots fans - these are the people who aren’t buying Rolexes but are future F1 fans, they invest in social media and team-wear. They are not already die-hard fans so even if their favourite driver goes to another team, they might support both teams so that’s more eyeballs on sponsors’ logos. From my perspective, F1 needs to really embrace the younger generation, widen their scope and not just focus on the Rolex subset.”
DR: “I went to the very first Austin race and it's interesting to hear Danielle’s points. As a fan, I sought out F1 events going on around in Austin e.g. Will Buxton’s Bash and Derek and Conor Daly’s event. My experience was impacted by teams reaching out to me; Shell and Pirelli invited me to the paddock multiple times so for me, it was a completely different experience. There were some events downtown, like 6th Street and other areas where cordoned off but other parts of the city, promotion was non-existent. I have friends who live in Austin that did not know there was an event going on!”
DC: “As someone who was arriving in the city during that week, it was well done. They had a Fan Fest, they blocked off some streets, had concerts and the event itself was very well done. However, it felt like F1 came in, landed and took off again but I don't know about retention rate for people who weren’t fans before or the residual effect in the city”
Q2: Brabham’s and Caterham’s revival due to Crowdfunding sponsorship – is this the future of motorsport sponsorship?
BS: “Is this (crowdfunding) the future? It's the future of most things as far as I can tell. For example, you can now get a crowdfunded mortgage which you couldn't do before so crowdfunding will probably open up a few opportunities but there will still be room for traditional sponsorship. A few years ago Williams F1 team issued some shares to the public; it wasn't well received but that was before the crowdfunding era.
Caterham did very well with their crowdfunding and they met their target. Someone from the team confirmed that there was an investor in the last few days hence the spike in the funds right at the end. That's the way it goes in investment. Quite a few people are reticent until they see a few people have invested in the same cause. No-one wants to be the first especially when parting with a large sum. It is like the IKEA-effect (The IKEA effect is a cognitive bias that occurs when consumers place a disproportionately high value on products they partially created i.e. when people use their own labour to construct a particular product, they value it more than if they didn't put any effort into its creation, even if it is done poorly) and that's my point in thinking crowdfunding is going to come to a head and become a real part of motorsport”
DC: “I think it's a nice start: Brabham has been gaining a lot of attention which at least is quite great and valuable. You have to have a few people try and falter in order to refine the system. I really like that these two groups tried it and brought a different type of attention rather than traditional outlets that Formula 1 is using. And as far as whether or not it is the future of motorsport sponsorship, I don't know but if it would be.
If you're a fan of the sport and that’s what it’s going to take, then heck yeah I'm up for it!” RZ: “Crowdfunding is really interesting and the reason why I find it interesting is, when you look at all the other global sports, the traditional sponsorship is actually gone as we think of it in F1. Big sports like baseball, basketball (the sports who sign record breaking sponsorship deals all the time) are not doing sponsorships the way F1 is. That said, for me, crowdfunding’s place is in the junior categories and grassroots racing. Applied in Formula 1, it is a weak attempt to find a different way to do sponsorships rather than changing the sponsorship model.
I do love that people are responding very well to it and it is indicative that if teams can get their act in gear and start offering fans actual engagement, fans will do it. But up to this point there hasn’t been anything for people to get on board with. But I'm of two minds - although I support it, I don't think it's really representative of future of sponsorship, certainly not on a global sports and sponsorship level.
Moderator: In terms of forecasting the budget, it would be quite tricky if you had piecewise payments from fans.
RZ: “The point about forecasting is really important because when a company decides to make a sponsorship plan, it's important to plan and budget at least two seasons in advance. So if you are a team with a budget of £150m per year, getting £150,000 from fans is great, but in the grand scheme of things, even if you could get a million from fans, that’s a drop in the bucket but you can't rely on that every year. And how often can you go to fans for that kind of money? I think that’s why it is great for the junior ranks (who can cope with instalments)”
DR: “I’d echo what everyone has been saying so far. For me, the thing that stood out for me about Caterham and Brabham’s crowdfunding is that Caterham was a known quantity; they’ve been racing in Formula One for 3 years. The Brabham family name is also well known in F1 and sports-car racing. I was just wondering if this was 3 or 4 years ago when HRT started out and they had started a crowdfunding initiative; would people have contributed. So for a new team in F1, it would be really hard to go down that route because no one knows who you are and you need to have someone invested and get the First Follower effect, and if you don't have any awareness, it can be really difficult.
To echo what was said about financial forecasting Christian Horner mentioned it on the Question of Sport - they (Red Bull Racing) have to know how much income is coming in at least two years in advance so they can plan car updates and designs. Although it must be said, the fan-engagement part of Crowdfunding is really nice” BS: “Caterham were attempting to phoenix the team. Soccer teams have phoenixed themselves i.e. when they get too far into debt; basically the fans buy by all the shares and form a new team under a different name. It’s the same team but it is owned by the fans for a few years till management can buy shares back. I think that's what Finbarr was attempting to do but he executed it with a remarkable lack of finesse”