Re-capturing Formula 1’s authenticity

Simon Chadwick is Professor of Sports Enterprise at Salford University Manchester, where he’s also a Co-Director of the Centre for Sports Business. In addition, Simon is a Senior Fellow of the China Policy Institute at the University of Nottingham and is founding Co-Director of its China Soccer Observatory. His research, writing and consultancy activities are focused on commercial strategy, sports marketing, global management and the influence of geopolitics on each of these areas, so we at Paddock magazine were very eager to meet him and ask a few relevant questions. 

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Simon, you’ve worked with some of the world’s key stakeholders in sport, including FC Barcelona, UEFA, Mastercard, Nielsen and the European Union, regularly commenting on the business of sport for the likes of Time, Newsweek, CNN, the BBC, Financial Times and the WSJ. How would you say Formula 1 is doing so far under new management by Liberty Media?

The acquisition of Formula 1 by Liberty Media marked such a significant change in the sport’s history that it would be unwise to make any major judgements on progress to date. Thus far, one conclusion could be that Liberty is pursuing an evolutionary approach rather than a revolutionary one. Such was the established, entrenched nature of Formula 1’s existing culture and its associated activities, that one senses it is taking time for Liberty to reengineer the business, its culture, strategy, operations and commercial activities. As the sport enters the second year of its new ownership, the scrutiny of Liberty will rightly intensify, and it will be interesting to hear from the company what its more detailed plans are for Formula 1. Among the priorities for Liberty would seem to be competition format, digital and social developments, new market entry, and building fan engagement (especially among younger age groups).

How Formula 1 could strengthen its image in Asia, apart from more races there or Asian drivers in Formula 1 teams?

Apart from races and drivers, Asian sponsors and Asian teams are the next most obvious answers to that question. However, this would be rather too flippant, as a more general question – why Asia? – needs to be asked. Alternative forms of the question might be: is Asia predisposed towards Formula 1? What does Asia want from the sport? How should Formula 1 be delivered in Asia? It’s common for sports to be seduced by the perception of financial returns promised by Asian markets. However, entering and being successful in markets like China is a challenge that Formula 1, and others, ignore at their peril. Markets and consumers are more sophisticated than many in the West imagine, and Formula 1 must understand both rather than adopting a default perception that they are easy-wins financially or cash-cows. To strengthen its image in Asia, Formula 1 should therefore understand, adapt and innovate. For example, in China, my opinion is that its digital and social environment is one of the most sophisticated in the world. Hence, there are potentially some interesting collaborative opportunities for Formula 1 and China to work on.

The way Formula 1 challenges this emerging order will make for a very interesting battle.

Simon Chadwick

In terms of marketing, do you see any opportunities how Formula 1 could learn from other sports?

Formula 1 is not alone in facing mounting challenges as the world of the 21st-century sport begins to change. In Europe, soccer is faced with fan engagement, broadcasting and financial issues. The same too in the United States where, for example, a great institution – American football – is facing real threats to its historic dominance of the sporting landscape. Among the threats faced are their relevance to new consumer generations, the robustness of the formats in which they have always been played, the notion that sports are nowadays about experience and co-creation, and the rapidly changing modes of online consumption. Cricket in India, notably the Premier League, has been very successful at adapting to the new environment; Formula E has brought innovative new competition formats, including the use of platforms such as Twitter; and rugby union has been aggressively, and successfully, entering new market territories. Otherwise, the world of extreme and street sports must be a reference point for Formula 1, as they are already engaged with “next-gen” sports consumers such as millennials and Gen-Z youngsters. The way Formula 1 challenges this emerging order will make for a very interesting battle.

In your opinion, how will the role of Formula 1 change among other world-class sports in the near future?

As someone who started following Formula 1 in the 1970s (following James Hunt’s championship win in 1977, for the next decade I became a hard-core fan), the sport was always synonymous with glitz and glam, duelling and drama. I had time to watch, few concerns about the world, and was seduced by the people and places the sport introduced me to. However, for the last two decades, Formula 1 and I have sailed away in different directions. When I finished at university and began working, I simply didn’t have the time to devote to attending races (or even watching them on television at times). Environmental concerns were an issue for me; I began to see that glitz and glamour as something divisive, not appealing; races grew to become boring and processional; technology rather than people and their personalities increasingly took centre-stage. I still have an affection for Formula 1 but feel it has rather lost its place at the top of world sport. If it can re-capture its authenticity, find renewed excitement and become relevant again, I sincerely hope that people across the world will engage with it again in a sustained, meaningful way.

What’s most important in your own work today?

My attention is constantly divided between the old industrial heartlands of sport (notably Western Europe and North America) and the growing powers of global sports (specifically in East and West Asia). I spend a lot of time working in the Middle East, and in East Asia (notably China). Among the latter group of countries, the sport has been adopted as a means of driving economic activity and building industrial capacity, but at the same time using it as a means through which to achieve geopolitical goals. This can include gaining access to natural resources, influencing global decision-makers and generating soft power influence across the world. Understanding commercial decision-making and strategies in this context are therefore both intriguing and extremely important. For instance, the proliferation of Middle East airline carriers engaged in sports sponsorship is neither an accident nor a fluke. There are commercial reasons why we have seen such a convergence taking place. However, understanding the geopolitical aspirations of countries in the Gulf region is important contextual detail underpinning it. This contrasts with Europe and America, where the state generally adopts a laissez-faire approach to sport and markets function more freely than in Asia.