Collaborating with $270 Million F1 rights holder, Mercedes Benz Has a Good News for its American Fans

Ever since Liberty Media’s takeover of Formula 1, the sport’s popularity has skyrocketed. The biggest market F1 has tapped into is the United States. Thanks to Liberty Media and Netflix’s Drive to Survive, everyone is reaping the rewards of Formula 1’s rising popularity. Now, Mercedes Benz USA is the latest benefactor of the booming popularity by joining hands with ESPN.

ESPN picked up the media rights for Formula 1 back in 2018. Since then, the popularity of the sport has taken massive leaps, making this an incredibly lucrative deal for ESPN. However, this has come at a cost. ESPN had been paying $5 million a year for media rights until 2023. From 2023 onwards, the price tag jumped to $75-90 million annually for the next three years. This approximately translates to $270 million total. After the initial doubts, the Disney-owned company renewed its vows to telecast the races. According to Sports Business Journal, the broadcasting channel is almost sold out for the sponsorship rights, especially after Mercedes Benz’s addition.

ESPN is planning to continue streaming the race completely commercial-free. However, because of the hefty signing-on fee, ESPN will commercialize the sport to a greater extent. This is where Mercedes Benz comes in.

ESPN’s new presenting partner is Mercedes-Benz USA replacing Mothers Polish. For the next three years, there will be a presentation animation at the start and end of each race. Mercedes Benz’s presence will be felt with seven watermarked graphics in the corner of the screen for one minute each during a race as well. Apart from the pre, post, and during-race presence, Mercedes will also get post-race mentions along with inclusions in cross-promotion campaigns.

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These are the only available options for ESPN’s commercial-free telecasting policy. However, if we look a the numbers, these subtle promotions are worth the investment.

The enticing numbers behind the ESPN telecasting that convinced Mercedes Benz to come on board

Apart from Mercedes, ESPN has attracted multiple sponsors on board with its wide range of inventory. However, why are companies jumping to get on board? Let’s look at the numbers.

In 2022 alone, ESPN’s ad sales revenue grew by 163% over its F1 inventory. However, since ESPN picked up the rights in 2018, the ad revenue sales have risen a total of 1,405%. Sean Hanrahan, senior vice president of Disney Advertising Sports Brand Solutions, even revealed they are nearly sold out of inventory.

“The momentum that has happened with F1 … you put (it) all together and you’ve had advertisers calling to say, ‘How can I be a part of it?’” He said.

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F1 has become extremely desirable for investors. Looking at the current trend, this popularity and revenue train won’t slow down.