On Friday night, six days before the start of Rally Sweden, FIA announced that they could not find a global promotor and broadcaster for the FIA World Rally Championship 2012. The story has been going on for a while, with previous rights holder North One Sport being in a tricky financial situation since months and finally being thrown out of the discussion by the FIA – a decision that was announced on the 8th of January, days before the season opening in Monte Carlo.
To know all discussions behind FIA’s decision is almost impossible for anyone not being right in the center of them. But first, let’s think about what global promotion and broadcasting means for the championship. We probably all know that rallying is an expensive sport. To be a runner, skier or swimmer on world level you need good shoes, clothes, some staff around you and a lot of travelling. I’m not an expert but you all get the point that in rallying you need to bring a car worth at least €500.000 with you, a whole school-class of mechanics, coordinators etc. with you and just the entry fee for a rally may cost you more than the swimmer needs to spend on gear in a year.
So, I spent a few years working with Daniel Carlsson’s bid in the WRC and another year working with promotion at Rally Sweden, and I can tell you that in both organisations we hadn’t been worth many pennies in our discussions with sponsors without the global coverage. With Carlsson, we used statistics from a global market research company that provided various measures as well as an exact value in euros of the TV exposure from Rally Sweden 2006, where Daniel ended up on the podium. And at Rally Sweden, we could point at exactly how popular the sport were in Sweden (which is far more popular than most Swedes would guess!), the hundreds of millions of people the WRC reaches worldwide during a year, etc. And I can tell you, despite having very strong figures on our side, we still had a hell selling our stuff because the sport is just extremely expensive. To sell exposure (that’s exactly what we do when talking to sponsors), a thing you can never taste or even feel in your hand, with bids that must start at over €10.000 to even be interesting, is extremely difficult. At least in Sweden, but I have a strong feeling the situation is very much the same in most countries and for most drivers, rallies, etc.
That was how the situation was. Now, we don’t have the global promotion or broadcasting. I can’t say FIA screwed it up because I don’t know what happened. But in my opinion, FIA has two major responsibilities above all others regarding the World Rally Championship. Those are: 1) To keep sporting on a good level with regulations, etc. 2) To make sure there is a connection and co-branding between the organisers in the championship, mostly by arranging global promotion and broadcasting. So, now I can say it: FIA screwed it up.
No matter whose fault it was this means that the strong arguments, that was all our strong selling points, are gone. Of course organisers and drivers can refer to TV-coverage arranged by the local organiser. But if I’m a driver and want to do Rally Finland. What shall I tell my sponsors? “Uhm, I hope the event will be covered world-wide”? Or “Uhm, I hope the event will be covered in [put your home country here]“? Or “Uhm, I hope the event will be covered in Finland”? Or the truth: “Uhm, I have no clue if the event will be covered at all”?
That’s the team/drivers perspective. And what about the organisers. They need to start looking for production partners. That’s probably not a big deal, there are plenty of them. But what quality can they deliver? And are they all capable of handling the enormous logistical problem covering a WRC event is? And still the real problem for the organisers are another one. That they need to find buyers of the production, to distribute it to the world and cover the expenses. I’m no expert in this, but I guess that wont be one buyer. They need to call all possible TV networks and channels and negotiate with them. Oh my, I’m so happy I’m not reponsible for that.
Now, let’s assume the organisers are those superheros they probably are, and able to solve all this. Then we still have the problem of problems left. The problem that FIA created yesterday, when doing their announcement. It’s the fact that they show everyone that they are willing to really do the thing that most people probably feared but thought were totally impossible. To let all the championship sponsors, manufacturers, team sponsors, drivers’ sponsors and everyone else that are spending their money on the World Rally Championship down. The one single value that makes the WRC exist is the promotional value, where speed meets skills that meets rough circumstances and mixes up into action and adrenaline enough to glue people in front of their TVs, computers, magazines and phones just to follow it. No investor cares about speed, skills, circumstances, action or adrenaline after all. They care about the money. And no exposure, no money. At least not any money in, just a hell lot of money out.
All other problems can be solved. By organisers arranging their own stuff. Maybe by FIA making a last minute deal. Etc. But the big problem is a mistake that can’t be undone. Who wants (or dares?) to invest in a championship where the main organiser has proved to be ready to devaluate all value in the product for a year or so? I wouldn’t be.
No, in my opinion the announcement is a total mental breakdown by the FIA indicating that they are totally unable to handle the World Rally Championship.
Background information:
Pressrelease by the FIA, 3rd of February 2012
Autosport: WRC event organisers told to finalise their own TV deals after Eurosport talks break down
