Sunday, September 11, 2016

Will Formula One be a Success in the U.S.?

John Malone's Liberty Media to Buy Formula One 

With a long and popular history rooted deeply in Europe, the racing sport known as Formula One (F1) may now have a long awaited resurgence in the United States with the landmark sale of Formula One to U.S. media giant, Liberty Media Corp. In its September 8, 2016 article titled “John Malone’s Liberty Media to Buy Formula One”, WSJ details the momentous transition focusing on what it means for the future of the sport and the impact that the merging of media and F1 will have on the international marketing efforts geared towards U.S. audiences. 
Billionaire John Malone may not be a household name but his global media empire has been building quietly through the years. Known as Liberty Media Group, this empire consists of TV stations, cable companies, cellphone networks, a major stake in Sirius XM, and even the professional baseball team, the Atlanta Braves. But no media company has made a move as bold as buying an entire sports league or racing series. That's exactly what Malone did this week when he announced an $8 billion deal to buy Formula One. It is big news for the entire media landscape and for the international racing market.
International marketing focuses specifically on the social and cultural factors that will influence the creation and implementation of a marketing strategy. The merging of a media giant with an entire sport will provide marketers with an advantage considering the media assets available to them and will allow them to focus on the social and cultural challenges that will arise with the U.S. market and its fans.
It is well known in racing that in the U.S., NASCAR is king, but Formula One is the world's favorite auto racing series. Its races are held in Europe, the Middle East, Asia, and Canada, and they take over entire cities when they arrive.  As well, its audience differs from that of NASCAR; Formula One tends to attract audiences associated with wealth and sophistication. This means a lot of money is flowing through F1 and everything associated with it.
Although F1 is a huge draw to fans around the world, it is lacking in the U.S. NBC sports who has the television rights to broadcast F1 in the U.S. mentions its viewership at just over 300,000; about a tenth of the viewership of NASCAR races.  Still, according to Formula One, it has over 400 million viewers. That is an enormous number of fans attending the live events -- and live events are where TV networks and advertisers are focusing their financial interests.
It is not clear how Malone and his team of marketers might expand Formula One’s reach to the U.S. market. But noting the differences between its global market and U.S. market, specifically understanding the sociocultural factors that attract U.S. audiences to NASCAR will be the key to Formula One’s success in the U.S.

WSJ Article: John Malone's Liberty Media to Buy Formula One

Blog post by: Ally M.

1 comment:

  1. Great article Ally! This is very interesting as I believe the sociocultural factors are going to be more important than Malone and his marketing team believe. Nascar is so deep-rooted in American culture that I believe Formula One is going to have a hard time competing despite its international popularity. It's similar to soccer being incredibly popular internationally, but only having limited popularity in the U.S., where you have the NFL which is very similar to Nascar in the U.S. Especially with the southern part of the country, the NFL and Nascar have been what they have grown up watching and are deeply imbedded into the culture.
    It'll be very interesting to see what happens!