The organizers of the Formula One Grand Prix of America race in the New York-New Jersey market have begun a search for a title sponsor willing to pay $15 million and developed preliminary pricing for ticket and hospitality packages.
Sponsorship, general ticket sales and hospitality will be the event’s three primary revenue streams, said Leo Hindery, the race’s promoter and founder of InterMedia Partners. The race, which will be held along the Hudson River in New Jersey, is scheduled for June 2013.
Hindery said his agreement with F1 Management Chair Bernie Ecclestone calls for race organizers to share sponsorship, hospitality and ticket revenue with F1 management. He declined to specify how that revenue would be split, but said the revenue-sharing arrangement combined with the sanction fee for the race will deliver F1 management the same amount of money in aggregate that it receives from other races.
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Sponsor volume may be higher than at the Petronas Malaysia Grand Prix, Hindery says.
Photo by: GETTY IMAGES |
Under terms of the agreement with F1, New York-New Jersey race organizers will have three sponsorships to sell: a title sponsorship and two official partnerships. The three companies that sign on for those deals will be featured in pre-race promotions and trackside signage that will be visible on the F1 worldwide broadcast that reaches an estimated 30 million people.
“Because it’s New York, we’ll have more sponsors than other races elsewhere in the world. The volume of sponsorship might be higher than Kuala Lumpur,” said Hindery referring to the March 19 Petronas Malaysia Grand Prix.
The organizers have hired SJX Partners to assist with sponsorship sales. The agency, which is headed by former USTA chief marketer Harlan Stone, is working with Grand Prix of America chief marketer Trip Wheeler on selling the race title sponsorship. The group initially went to market with a $20 million package, but that has decreased to $15 million. NASCAR Sprint Cup race title sponsorships typically sell for $3 million to $5 million.
They also are looking for two official sponsors. The pricing on those agreements wasn’t available.
The categories that the sales team is focused on include: financial services, pharmaceutical, technology, telecommunications, energy and apparel. They hope to find a sponsor by June so that they can announce the sponsor with one year to go before the race.
The pricing for sponsorship is based on the premium paid for F1’s global sponsorships, which can cost as much as $40 million a year and include trackside signage during races, and other marquee New York sports events such as the U.S. Open.
Race organizers also have begun outlining ticket pricing. The current plan is to offer three-day hospitality packages that cost $3,000 to $4,000 per person. Those packages will include seat locations above the pit area and catered food and drink.
Three-day general admission tickets will be sold for an average price of $400 to $450.
The organizers plan to market both the race and the entertainment offerings of the New York market in their ticket sales efforts. They plan to play up the city’s restaurants, theaters, music and other options.
Internal projections estimate the race will attract 110,000 people. That number is based in part on the 90,000 spectators who attend the annual F1 race in Montreal.
Organizers don’t think ticket prices will impede them from hitting their attendance goal. The average price for U.S. Open men’s final tickets are $330.
“New York’s a special market, and if there’s a premium, then New York demands it,” said Tom Cotter, president of Grand Prix of America.
Cotter said he plans to hire a number of contractors to assist with the race. He recently interviewed design companies for a job developing temporary suites for the race. He plans to hire a ticketing company and may consider hiring a sales agency to assist with hospitality packages.
Cotter said one of the other things New York race organizers are discussing is creating ancillary events that turn the week before the F1 race into a celebration similar to the one that precedes the Super Bowl. They would host concerts on both sides of the Hudson.
If they did that, Cotter said the organizers would look to sell additional sponsorships around that celebration.
The group hopes to iron out those plans and others this spring. Hindery said that when the race was announced last fall he felt like he had plenty of time to prepare for the summer of 2013 event, but that’s begun to change.
“We have to find those sponsors and treat them with respect so they want to stay sponsors; we have to get 100,000 people to show up and the food better be good,” he said. “Thank God we’ve got a year to do this. I’m getting a little edgy to get things done.”
Staff writer Terry Lefton contributed to this report.
