CAA Sports wins race for F1 agency deal
A couple of days after Liberty Media completed its Formula One acquisition in January, CAA Sports’ Paul Danforth met with the racing circuit’s Sean Bratches in London to discuss the sport’s lackluster sponsorship sales.
Under former CEO Bernie Ecclestone, F1 had not been focused on sponsorship sales — part of the reason why the series currently has only five corporate partners: Rolex, Heineken, Emirates, Pirelli and DHL.
CAA Sports wanted to handle that business, and it was not alone. Others, including WME-IMG, beat a path to Bratches’ door, negotiating for the rights to sell F1’s commercial inventory. The reason was obvious: the agencies believe F1’s sales have been so undervalued that any attention would result in wild revenue growth. It’s not so much the cost of F1’s global sponsorship deals, which generally are valued between $20 million and $30 million per year. It’s more the lack of deals in important categories, like telecom and hospitality, that fuels the interest.
After three months of negotiations, F1 this week will announce officially that CAA Sports is its agency of record, responsible for selling the racing circuit’s rights globally. The deal runs through 2018, after which the two sides expect to renew.
|Sean Bratches has been building F1’s sponsorship arm since Liberty Media took over.
“The intention is to create a longer-term partnership,” said Bratches, F1’s managing director of commercial operations, said by phone from London. “This deal won’t preclude other organizations from bringing us deals. We’ll do deals on our own, too.”
Because F1 historically was not focused on sponsorship sales, CAA Sports sees a lot of potential upside. Terms of the deal were not disclosed but CAA Sports likely receives a percentage of deals they close on behalf of F1.
“Formula One wasn’t exactly out there talking to corporations all over the world on how they could partner with the sport,” said Danforth, CAA Sports’ global head of sales. “That’s what we are really excited about.”
A former top executive with ESPN, Bratches has been trying to build out F1’s sponsorship group since Liberty Media completed the acquisition on Jan. 23. Bratches hired Murray Barnett from the World Rugby Union to take on the new position of global head of sponsorship and commercial partnerships. Barnett starts April 25. He hired Matthew Roberts from Sky Television to be global head of research. They will be based in London.
Eventually, Bratches expects to open sales offices in London, New York and Singapore. “We inherited a business without a real sponsorship group, so we have to build one,” he said.
The deal is a boon for CAA Sports, which convinced F1 to hire it because of the agency’s work with other companies. CAA Sports has deals with entities such as F1 team Red Bull Racing, the San Francisco 49ers and Golden State Warriors.
CAA Sports also convinced F1 that it can target relevant categories that have been ignored historically by the sport.
“When you look at the world of technology, each of these teams are probably spending more money on technology than any sport in the world, yet there’s not even a technology partner of the sport,” said Danforth, who will lead the sales effort. “We couldn’t be more excited about digging into that space and talking to everyone that we’ve been talking to in Silicon Valley with our 49ers project and our Warriors project. That is one of the places that we’re going to start. … We need to get the right partners in who are going to want to co-promote the sport around the world.”
Danforth believes that CAA Sports and F1 can work together effectively for a long time and help the sport build its sponsorship business.
“We’ve worked with Madison Square Garden for the last eight years, and they have hundreds of sales people,” he said. “We’re used to working alongside some organizations that have very little internal support and others that have robust sales teams.”