The unprecedented FIA move to boost Formula E’s future

Formula E has stood out for its groundbreaking efforts in motorsport since its race debut in 2014, but it made another revolutionary step last week - one that came off-track.

For the first time in its history, the FIA agreed to let a single-seater championship have a title partner.

The deal between Formula E and Swiss technology company ABB - making the series now officially known as the ‘ABB Formula E Championship’ - was heralded as being a “game-changer” in the lead-up to the announcement, made at the stylish Saatchi Gallery in London.

Title partners are nothing new in motorsport. Many championships have them across the world. IndyCar is sponsored by telecommunications giant Verizon. NASCAR works with drinks company Monster. Australian Supercars links up with Virgin. BTCC and Dunlop. IMSA and WeatherTech. The list can go on and on.

But the nature of the deal between Formula E and its title partner makes this different. It is not simply a case of a company wishing to throw money at a series in return for greater exposure and brand awareness. It is a commitment from both parties towards a wider-reaching endgame.

ABB may not be a name familiar to the general public. The company focuses chiefly on power and automation solutions, with a strong focus on new, sustainable technologies - hence its tie-up with Formula E - and ranked 32nd in Forbes’ list of top multinational companies in 2017. As big fish go, this one takes up much of the pond.

“Formula E is our baby, and to share our name and link our name with someone was a really big step for us,” recognised Formula E CEO Alejandro Agag at the official announcement.

“So when the idea came up and it was actually not my idea, it was [ABB CEO] Uli Speisshofer’s idea, I was in shock for a bit. I was thinking ‘are we going to have a title partner?’ But if there is one company that is the perfect match for Formula E, that’s ABB.

“ABB is a company that from fast-charging technology and the revolution that fast-charging can mean for electric mobility. From managing grids to renewable energy to robotics or artificial intelligence, all these technologies together combined, we will make a change. That’s why we are going to make that change together.”

At the heart of Formula E’s mission has been a desire to make a real change to the world. It is not just a racing championship. It is a vehicle for shifting society’s paradigms, matching up with ABB’s own ambitions.

The technological aspect is a key part of the partnership between the two parties, making it further-reaching than a regular sponsorship agreement.

“This is not just a sponsorship agreement: it’s a true partnership where we want to do many more things and we can do with ABB,” Agag said.

“For example, charging in Formula E, who knows in races in three or four or five years, have four pit stops where the cars come, they go at incredibly high speeds for seven minutes, then they come in, and in 10 seconds they get 20kw/h of energy in the battery and off they go. The cars could go at 400 mph! It might be a problem for our city tracks…


“The sky’s the limit with a partnership like this. It goes far beyond a traditional sponsorship partnership.”

It is this uniqueness that prompted the FIA to take an unprecedented step and give permission for Formula E to link up with a title sponsor, the first for a single-seater championship in the organisation’s 113-year history.

“I had to do some convincing,” Agag admitted. “The president of the FIA, Jean Todt, was a bit surprised when I told him we have a title sponsor for the championship.

“But again, I think all of the arguments that I explained before, why it ABB is such a good fit for Formula E, I think that convinced Jean Todt and the FIA to have this title sponsor in the name.”

Title sponsorship is a dying trend in global sport for a variety of reasons, particularly for sports leagues. Consecutive McLaren Formula 1 bosses Ron Dennis and Zak Brown have both been quoted as saying that the practice is no longer essential for teams, and from an image standpoint, it can have a significant effect.

The Premier League football league took an unprecedented step of its own in 2015 when, for the first time in 23 years, it announced it would not be looking for a title sponsor following the end of its long-running deal with Barclays.

Premier League bosses turned down a £45 million per year offer from drinks brand Diageo in favour of a ‘clean’ marketing strategy. It could market itself however it pleased, not bolting a name onto the front of every action it took. It’s a similar approach to that of the NFL and NBA leagues in the United States, and one that has served the FIA’s championships - particularly Formula 1 - well over the years.

So for the FIA to break with this previously unwavering stance after so long is significant. It is proof that as crucial as a ‘clean’ image is, if the right partner comes along, a deal is workable - and may not have that much impact.

Formula E is the only series that can realistically do that. Calling the series the ‘ABB FIA Formula E Championship’ may become a bit of a mouthful at times, but the connotations associated are in-keeping with the company’s own vision. All it takes is for a fan or curious observer to do a bit of research into the work that ABB does, and it is clear why a partnership works. The same cannot be said of Verizon and IndyCar, Monster and NASCAR or for Barclays and the Premier League.

The arrival of such a high-profile title sponsor is not only a boost for Formula E internally, but also for the wider paddock, with a number of key figures expressing their excitement about the move.

“It’s fantastic to be in a championship going from strength to strength, first with the great number of manufacturers getting involved and now a title partner,” said Jaguar Formula E chief James Barclay.

“A title partnership of this scale is a big coup for motorsport, particularly at the moment. It’s a really great message for the championship. Not only is it a great message for manufacturers, but it’s also relevant for brands to use Formula E as a platform.

“I think this kind of landscape, it’s a fantastic announcement for the championship. Hopefully it continues to build and title partnerships can also be thought for teams in terms of our commercial models.

“It’s all building more confidence in the Formula E model. That’s a very good thing.”

“I think the main question is when was the last time a major sponsor such as this closed such a big deal in motorsport?” pondered defending Formula E champion Lucas di Grassi.

“You have may one in F1 that is at that level, maybe two, but not anywhere else. That just shows how Formula E is growing.

“Obviously we welcome every partner of the championship. ABB is an example of a company that is looking to the future with robotics and automation in manufacturer, electric cars and every else, so we welcome them.

“It just shows that Formula E has a lot of potential to still grow. Formula E is the place to be now for everybody, for manufacturers, sponsors. It just creates even credibility for us.”

Credibility aside, the deal also acts as a good financial boost to Formula E, understood to be worth more than $15 million per year. The series came close to collapse just a few races into its debut season, but the financial picture is far, far healthier now as more and more sponsors join the fray, ABB being the latest in a long line to jump on-board for the long-term.

To put that figure in context, IndyCar is looking for a partner to pay a similar figure upon the end of Verizon’s existing deal at the end of this year, while Monster’s tie-up with NASCAR - a series far, far bigger than Formula E - is only an additional $5 million per year.

“We have to change shirts every two months in Formula E because we have to add another partner to the roster,” Agag said.

“We have a great number of sponsors, and the beautiful thing about our partners is that they are looking at the long term. They are seeing this as a transformation of the landscape of sports and also mobility.

“They’re not so worried on the short-term how many people are watching the race. We are, because you want as many as possible through every channel. But they’re looking at what’s going to happen with electric mobility in five years, seven years in this case [with ABB].

“So our whole ecosystem is committed and thinking in the long-term.”

Nevertheless, there is a need for short-term results. Formula E’s TV figures have hardly hit the lofty levels of F1, with last weekend’s Marrakesh race suffering a drop from 443k viewers to just 260k between its Season 3 and Season 4 runnings in the UK.

Agag, however, sees a wider picture, calling TV figures a “stone-age concept”.

“I have four kids,” he explained. “Out of the four, the third watches a little bit of TV. The other three basically don’t. They watch stuff on Netflix which is through the TV and a kind of midway thing, and they watch a lot on their mobile phones, and they’re on social media.

“There is a whole new way to measure the impact of anything, not only of a sport or show like ours, but anything.”

TV deals are a decent source of income for most racing championships, but Agag again does not see Formula E following the traditional model - which, given its struggle for coverage in the UK over the years, is perhaps for the best - as it comes to a crossroads for its future media approach.

“In the traditional business model of a sport, [revenue] would probably be one-third sponsorship, one-third TV rights, one-third hospitality, TV etc,” Agag said.

“Our business model is at the moment based on sponsorship revenue and team revenue. As you know, out of our 12 teams, we have a very strong manufacturer audience. So it’s very much based on the B2B side of the equation at the moment.

“We are effectively in the middle of a strategic choice where to go with TV rights - the media rights, let’s not call them anymore TV rights. Because there is effectively money in TV, but now there is a lot of money from people like Amazon, like Facebook that are changing the whole landscape.

“So you have to be really careful who you get married with in a way. Are you going down the traditional line of media and TV? Are you going digital? Are you monetising in a digital way the media rights? Are you monetising them in different new ways that are there, and are maybe there in two or three or four years?”

Again, it’s further proof of Formula E’s admirable long-term vision, but the need for immediate gains is also important - something even the chief of ABB, Mr. Speisshofer, noted.

“We want to on the one hand change the world, but we also want to make money because we have a business to run,” he said.

It is an approach that is not only key to ABB’s partnership with Formula E, but the future of Formula E itself. The further-reaching aims and ambitions must align with the steps made to keep it successful in the here and now. Because without a present, there is no future.

By recognising this and giving its blessing to this marriage, the FIA may have broken its own traditions, but it has also given its fastest-growing championship a significant boost moving forward.

And if any championship is going to break the mould of what we’ve known before, it is Formula E.