Motorsport Sponsorship Market - Forecast(2023 - 2028)

Motorsport Sponsorship Market Overview

Motorsport Sponsorship Market is set to grow at CAGR 9.7% during the forecast period 2022-2027 to reach $4.1 billion in 2027. Growth in formula racing format for electric vehicles, rising revenues in Formula One racing championship, growing popularity of motorsports among millennial through broadcasting and social networking platform have boosted the motorsports market. Factors such as increase in number of races, trackside advertising and sponsorships are driving the motorsports market forward. Huge investments are done by the sponsors as these sports events are an ideal platform for the companies to promote their products to improve brand awareness and media coverage. This racing entertainment attracts spectators and generates revenue for their products. Increasing safety features in racing vehicles, increasing promotional effectiveness coupled with rising investments by sponsors across the globe would propel the market growth during the forecast period. Changes in the motorsport regulations such as limitations on the number of combustion engines, turbos and MGU-Hs and others as a key focus towards the driver safety, introduction of Apps, streaming platforms and improved graphics for revolutionizing fans experience and other key trends in the motorsport industry will impact the growth of the market in the coming future.

Report Coverage

The report: “Motorsport Sponsorship Market Report– Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the Motorsport Sponsorship market

By Type: Track Sponsorship, Race Series Sponsorship, Race Team Sponsorship
By Race Series: Formula Racing (Formula 1, Formula E, Formula 2, Formula 3, Formula 4, Indycar, Formula Renault, Formula Ford, Formula BMW), Speedway/Sprint Car (Lucas Oil ASCS Sprint Car Series, World of Outlaws, All Star Circuit of Champions, World Series Sprintcars, USCS Sprint Car, UMSS Sprint Car Series), Hill climb (FIA European Hill Climb Championship, FIA International Hill Climb Cup, Championnat de France de la Montagne, FIA Hill Climb Masters, British Hill Climb Championship), Touring Car Racing (World Touring Car Cup, Deutsche Tourenwagen Masters (DTM), British Touring Car Championship (BTCC), Supercars Championship, Asian Touring Car Championship), Off Road Racing (Lucas Oil Off Road Racing Series, TORC: The Off-Road Championship, SCORE International, Best in the Desert, Formula Off-Road), Rally Racing (World Rally Championship, Junior World Rally Championship, Asia-Pacific Rally Championship, European Rally Championship, Intercontinental Rally Challenge, American Rally Association (ARA) National Championship Series, Dakar Rally Series, FIA Cross Country Rally World Cup), Rallycross (FIA World Rallycross Championship, FIA European Rallycross Championship, TitansRX International Europe Series, British Rallycross Championship), Stock Car Racing (NASCAR, IMCA Modified Championship, Arena Racing USA, ARCA Menards Series, CRA Super Series), Drag Racing (NHRA Full Throttle series, International Hot Rod Association Drag Series, FIA European Drag Racing Championships), Kart Racing (FIA Karting World Championship, FIA Karting European Championship, International Kart Federation Championship), Sports Car Racing (World Endurance Championship, WeatherTech SportsCar Championship, European Le Mans Series, Blancpain Endurance Series, Blancpain Sprint Series, Intercontinental GT Challenge, 24H Series, Trans AM Series)
By Geography: North America (U.S, Canada, Mexico), South America (Brazil, Argentina and Others), Europe (Germany, UK, France, Italy, Spain, Russia, Netherlands and Others), APAC (China, Japan, India, Australia and Others), and RoW (Middle East and Africa)

Key Takeaways

• The growth is mainly attributed to rising partnership of brands and television right holders, emergence of new sporting power, greater fusion of sports and entertainment, rising popularity of live sports on OTT and social media platform.
• Furthermore, Touring Car Racing analyzed to witness highest growth during the forecast period. The growing adoption of aggressive digital strategy in world touring car championship such as introduction of new interactive show with WTCC drivers on each event exclusively for digital broadcasting is welcoming larger audience and recruiting new generation of fans. Factors like incorporation of new program formats are analysed to fuel the market growth in future years.
• In 2020, there were two F1 Grands Prix in Abu Dhabi and Bahrain, MotoGP in Qatar while Saudi Arabia added the legendary Dakar rally in 2020 to its roster that already includes the Riyadh Formula E race.

Motorsport Sponsorship Market, By Region, 2021 (%)

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Motorsport Sponsorship Market Segment Analysis - By Type

Race Series sponsorship segment is projected to grow at a CAGR of 8.2% through 2027. Online motorsport advertisement and banner advertising are the perfect ways to advertise goods, facilities, teams and leagues in the racing market. Online motorsport advertising includes integrated, cross-channel advertising opportunities which include a mixture of OTT digital advertisement and traditional online advertising. Increasing penetration of digital distribution platform to engage with affluent, educated and global motor racing fans who are passionate and loyal to the brands that support their favourite sport is the key factor driving the market growth forward. Motorsports dealers can maximize additional sales with robust ad campaigns, utilizing TV and social media platform. Drawn to the sport by its attractive demographics, the strong brand loyalty of the fans, and opportunities to build relationships with other corporate partners, sponsors are active in all aspects of auto racing. In addition to supporting racing teams by direct sponsorship of a team, which funds certain costs of their operations, sponsors support track operators by paying fees associated with rights to official status designations for specified product categories and the naming of events such as the Auto Club 500, the Ford 400 or the Crown Royal 400. In addition, premier racing events such as the Daytona 500 frequently have multiple official corporate sponsors. Sponsors negotiate to receive specified advertising exposure through television and radio coverage, newspapers, race programs, brochures and advertising at the track. Finally, sponsors pay fees to track operators for the use of proprietary logos and trademarks to promote the sponsor’s association with an event and drive retail sales. In November 2021, Tata Consultancy Services announced to enter Formula E, the world of motorsport as new title sponsor for Jaguar racing. Such sponsorship will drive research and innovation while steering towards advanced concepts and electric vehicle (EV) technologies.

Motorsport Sponsorship Market Segment Analysis - By Race Series

Formula Racing segment is projected to grow at a high rate from 26.2% share in 2021. The exponential growth in popularity of international racing for single-seater formula racing cars among motorsports enthusiasts is the key factor attributing to the global Formula 1 market. Many brands are increasing their market penetration and profits by sponsoring an F1 team as a part of enhancing their strategic position in the first instance and developing unique competitive advantages. Sponsors easily reach their target audience through communication linked with their passions. Furthermore, presence of Netflix docu-series” Formula 1: Drive to Survive” is bolstering the fandom of Formula 1 and thus growing penetration of Formula 1 racing in OTT platform will augment the market in future years. The rising craze and excitement among millennial about their favourite F1 teams including Ferrari, McLaren, Red Bull, Williams and so on are contributing towards the growth of the market. Formula One has emerged as a huge business with sponsors pouring in money. Television rights earn a lot of money for both the Fédération Internationale de l’Automobile (FIA) and the teams. Teams invest hundreds of millions of dollars in developing cars that will win the championship and such investments are set to fuel the Fomula1 market growth in the long run. Growth in buying tickets for Formula one World Championship across the globe is augmenting the market. According to Formula 1’s owners. more than a quarter of a million people have already registered for pre-sale tickets of Miami Grand Prix, which is about to take place in May 2022 and 1800 people have already placed a $5000 deposit for luxury hospitality.

In March 2020, Formula 1 announced about launch of a new F1 Esports Virtual Grand Prix series, featuring a number of current F1 drivers due to the ongoing COVID-19 situation to replace postponed races. The series has been introduced to enable fans to continue watching Formula 1 races virtually and such digital business initiatives are attributing to its market growth. Covid-19 pandemic has had a significant financial impact on Formula 1 racing. Due to global lockdowns and travel restrictions several races this season were either cancelled or postponed, March 2021, Formula 1 announced about reducing the budget cap from $175 million per year to $145 million from 2021. This decision was taken for the teams to operate under strict financial regulations, as a part of curbing costs to become more sustainable during the outbreak of Covid-19..

Motorsport Sponsorship Market Segment Analysis - By Geography

Europe dominated the Motorsports Market in 2021, with a share of 42.4% and estimated to grow rapidly during the forecast period. This growth is mainly driven by increasingly sophisticated and tailored content strategies for each major platform and emergence of social media and OTT platform as broadcast channels in this region. In October 2021, The International Automobile Federation's (FIA) announced about its new plan of developing motorsport in Africa, to improve motorsport across the continent by strengthening the operational foundations for future events, implementing legacy projects and boosting commercial partnerships. Such developments will accelerate the growth of this market during 2022-2027.

Motorsport Sponsorship Market Drivers

Adoption of new business models is one of major factors creating opportunities for the motorsports market:

Amidst the Covid-19 break out, many motorsports organizations were adopting many new business models including organizing virtual racing events to overcome, such a difficult situation where fans were not able to enjoy these events like before, which in turn will create more opportunities for the motorsports market during the forecast period 2022-2027. For instance, in January 2021, F1 announced about the return of Virtual Grands Prix in 2021 after record-breaking year for F1 Esports Series. The F1 report also states that, the virtual racing witnessed a total of 11.4 million live stream views across all digital platforms, which represented a 98% increase than 2019. Similarly, in September 20221, Porsche launched Gran Turismo Cup Asia Pacific virtual racing. The involvement of well known famous champions from past and present days, makes these events more popular among the fans. Furthermore, the prize money from these events goes straight to the charitable trusts, which also affected the involvement of the fans and drivers as well as other celebrities positively. A report states that, more than 30 million people tuned into the Virtual Grand Prix series 2020 to see F1 stars, sporting icons and music chart toppers represent the ten F1 teams in eight live events that replaced the official calendar, as the real-life racing stopped due to the pandemic. Hence, the adoption of new business models such as holding virtual GPs, will create ample opportunities for the growth of this market during 2022-2027.

Growing Popularity of Motorsports

Motorsports events generates huge amount of revenue and contributes towards the economical development, which is a major growth driving factor of this market. In July 2021, the International Automobile Federation (FIA) revealed that the motorsport industry contributed an annual $188.2 billion of business to the global economy. Growing popularity of motorsports among the people creates a positive impact on the revenue. According to another report of FIA, motorsports is one of the most watched sports worldwide and is one of the fastest growing spectator sports. Grand Prix sports events had an annual attendance of more than 4 million in 2019, while 8 Grands Prix events had more than 200,000 spectators. The weekend attendance went up by 1.75% and the Sunday attendance was up by 4% compared to 2018. Such high popularity of this sports creates various ways to generate higher revenue. This in turn drives the growth of this market. Furthermore, this popularity also provides incentives to the broadcasters to get the broadcasting rights of such events, which creates revenue, as it requires huge amount of investments. This became a major source of revenue for the people and organizations associated with the events. Apart from that, its popularity not only creates revenue though the ticketing but it also attracts more advertisements and sponsorships from various organizations as well as increasing demand for official merchandises and special meet & greet events with the participants, which generates new streams for revenues. In November 2021, Formula 1 owners announced that more than a quarter of a million people have already registered for pre-sale tickets for inaugural Miami Grand Prix, which will take place around May 2022, where the planned audience capacity is around 80,000. The FIA report of July 2021, shows that motorsports industry added $79.1 billion in total value through the goods and services including official merchandises, produced by the motorsport industry.

Motorsport Sponsorship Market Challenges

Negative Environmental Affects are impeding Growth Market

Even though the motorsports market is growing over the years, but the associated environmental risks are creating hurdles for the growth of this market. These motorsports vehicles causes air pollution as well as noise pollution and creates negative impacts on the environment. For instance, according to a report of International Automobile Federation (FIA), published on December 2019, environmental risk is one of the major challenges faced by the F1 motorsport market, as the F1 driving activities produces around 256000 tonnes of carbon dioxide annually. The audit conducted by the FIA also states that, the total carbon dioxide generated by the F1 motorsports in 2019 reached 1.9 million tonnes per year, after including the pollution created by the fans of this sport. Such negative impact of these sports events on the environment will create hurdles for the growth of this market during the forecast period 2022-2027. However, rising adoption of electric vehicles for such motorsports events and various initiatives taken by the FIA to reduce the emission level of F1 is assisting in offsetting this challenge during the later stages of forecast period 2022-2027.

Motorsport Sponsorship Market Landscape

Product launches, acquisitions, Partnerships and R&D activities are key strategies adopted by players in the Motorsport Sponsorship market. Motorsport Sponsorship top companies include

1. AMG Motorsport
2. Ferrari S.p.A
3. McLaren Group
4. Redbull Racing
5. BMW Motorsport Group
6. Roush Fenway Racing
7. Team Penske
8. Target Ganassi Racing
9. Aston Martin Racing
10. Alpine Racing

Recent Developments

• In January, 2020, Team Penske and XPEL Inc., announced multi-year partnership. XPEL will be the primary sponsor of the NTT Indycar series. XPEL will serve as the official protective film partner of Team Penske.
• In August 2020, Williams Racing was acquired by Dorilton Capital to restore the competitiveness of the team. The new Concorde will help address the historical challenges that Williams has faced and reduces the financial and on-track disparities between teams.

Relevant Report Titles:

Global Motorsports Industry Database 2004 to 2019 by Quarter and yearly forecast 2030

Report Code: ATR 0005

Motorsport Components Market - Forecast(2022 - 2027)

Report Code: ATR 0058

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