The Added Value for F1 Sponsors in Netflix’s ‘Drive to Survive’
Introduction
In what seems like the blink of an eye, Netflix’s Drive to Survive has taken over our screens. Within the first two weeks of Drive to Survive season four’s release, the series was watched for over 57 million hours. Since the inception of this wildly successful relationship between Formula One and Netflix, F1 has seen a year-over-year increase in viewership around the world (several of the Navigators making their own contributions to these figures). This seemed to come to a head last year as F1 saw a cumulative viewership increase of 58% YoY in the US alone.
It has become increasingly obvious that Drive to Survive has not only become a staple for F1 fans, but also the first major touchpoint on the road to F1 fandom. As such, sponsors involved in the sport have a growing obligation to understand the opportunity this series represents. Sponsorship is a pivotal part of the puzzle that makes up F1’s revenue structure. It’s for this reason that sponsors are given such prominent placement within the teams, showing up on the drivers’ race suits and on the car itself.
This kind of airtime on a show with such significant viewership is not something to be taken lightly, and that’s why our team conducted some in-depth research on just how valuable an F1 sponsorship is, exclusively within the first two weeks of Drive to Survive’s season release. Using Navigate’s proprietary valuation methodology, our team valued the exposure of both teams and brands during the season, coming to a final fair market value.
Takeaway #1: Mercedes provided a staggering $17.8 million of value to the partners
Despite a highly controversial loss in the final race of the season, it is Mercedes who finds themselves atop our table. Clearly, they were featured prominently throughout the season, not only in their fight for the eventual title, but also due to the changes in their driver lineup that occurred during last season, adding George Russell and releasing Valtteri Bottas after a five-year stint with the team.
In total, the Drive to Survive season generated an astonishing $42.2 million in sponsorship exposure value in the first two weeks since the season’s March 11th release. The typical names find themselves on top of the list, with a few surprises sprinkled in as well.
These results beg the question as to what sort of an influence Red Bull’s Max Verstappen might have had on the overall value gained by teams, had he not declined to be a part of this most recent season. Another major missing piece is Alfa Romeo and Aston Martin, two teams whose presence is almost entirely absent from the series. Obviously from our outsider’s perspective it’s impossible to tell if this was Netflix’s choice or rather the teams’, but whatever the case, it leaves us to wonder, just how much value was lost?
Takeaway #2: Mercedes’ title sponsor Petronas received $6.48M in exposure value
Mercedes has led the rankings as the overall most valuable team, so it comes as no surprise to see the top three most valuable individual sponsors are all Mercedes affiliates. Petronas leads the entire field in what can only be described as a landslide, with Red Bull’s most valuable sponsor, Tag Heuer generating approximately a third of Petronas’ value.
Whilst these figures might be less surprising for those who watched Drive to Survive, the reality that the leading sponsors for each team are able to generate significant traction via the streaming series alone, should be a pleasing one to any current and potential F1 sponsor. According to GlobalData estimates Mercedes’ partner, Petronas, overall sponsorship fee is $65M. Based on our valuation, Petronas receives 1/10th of that fee in exposure value just from the first two weeks of airing of Netflix series Drive to Survive season four. On the Red Bull side, according to GlobalData estimate fee of $10M, Mobil 1 receives roughly 17% of that value in exposure from the series.
Takeaway #3: Sponsors featured in the ‘Helmet Camera’ shots received over $10M in value
In a series like Drive to Survive, the way assets are displayed is of paramount importance to their valuation. Before beginning this research, our team had expectations on which assets would generate the most value. However, the emphasis that Netflix producers placed on the ‘in-car’ moments have far surpassed the predetermined notions of where the value might have been. In the below chart, the sponsors featured in the ‘Helmet Camera’ shots stand as the single most valuable asset class in the series, generating an estimated $1.3 million more in value than the ‘Front of Shirt’ asset class. Whether surprising or not, this is something that could continue to carry significant weight in valuations of F1 sponsors.
Takeaway #4: Haas F1 surprises with over $2M in generated value
The standout surprise in our analysis, but perhaps one Navigate should have seen coming, is team Haas F1. Despite landing firmly at the bottom of the table in the Constructor’s Championships with a total of 0 points throughout the entire year, they excelled in the sponsorship department. Their leading sponsor in 2021, Uralkali (a sponsor that has since been dropped by Haas, along with Russian driver Nikita Mazepin in the wake of Russia’s invasion of Ukraine) gained a stunning $1.29 million in value through their title sponsorship of the team, putting them on a par with one of the most historic and famed sponsors in Formula 1, namely Shell, Ferrari’s sponsor since 1950. This insight shows the power that these sponsorship slots hold for teams and sponsors, allowing them to earn significant value, even in the face of poor on track performances. It’s undeniable that having charismatic characters helps these teams in no small way, with Haas’ Team Principal, Guenther Steiner, a clear fan favorite around the globe. In any case, Haas’ early success in the 2022 season will no doubt continue to earn them great value as the season progresses and the Drive to Survive producers decide where to place their attention.
Recommendations / Key Takeaways
The question that remains: how should sponsors and teams use all of this information moving forward? It is clear to us at Navigate that there were teams who missed out on serious value throughout this most recent season of Drive to Survive. The show had a staggering Average Minute Audience of 8.4 million in its first two weeks on Netflix, so even considering the inherent diminishing returns, we can still expect value generation to continue as new viewers take to F1’s ever-growing world.
Some particularly material missed opportunities this season come in the form of Williams who missed out on an estimated $475k worth of value through due to a lack of sponsorship assets. Furthermore, McLaren, who elected not to have a sponsor on the back of their polo shirt, lost around $370k of value from this missing asset. Opportunities like these, whilst few and far between, should be taken seriously, as they represent real potential value in a landscape that is only becoming more appealing to sponsors within the sporting world.
Additionally, sponsors who favored placement on the front of shirt slot rather than the cars themselves saw significantly better returns on their investment. With the cars in such constant and rapid movement they ultimately didn’t represent such key sponsorship opportunities. Similarly, the helmet camera, with such central on-screen exposure and few distractions, also represented one of the most valuable asset classes in the series as a whole. These insights will be crucial as sponsorship negotiations happen, and the real value of this Netflix series continues to be unearthed.
In the last few months, Netflix has announced similar style shows with the PGA, the ATP and the Tour de France. There have even been rumors that the NFL could experiment with having more football content on the streaming platform. Whilst Netflix’s investment in the behind-the-scenes world of sports is obvious, it is not yet obvious just how much value this will generate the sporting sphere. This analysis, however, will hopefully shed some light on the potential offered up to teams, sponsors and individuals alike as Netflix’s viewership continues to grow and as sports content continues its expansion into every sphere of entertainment.
Appendix
If you have any questions or would like to learn more, feel free to email Tatu Tiililae at TATU@NVGT.COM.
