I read with interest that former FIA President Max Mosley believes that the salaries being paid to the top F1 stars are “absurd”. It is a fascinating discussion. What is someone worth? There are some who believe – quite rightly, in my opinion – that skilled surgeons and medical researchers have far more value than football players and yet most are paid a fraction of the money that goes to the sportsmen.
The answer is that people are worth what someone will pay for them. A brilliant surgeon may demand 10 times his current salary, but if he cannot find a hospital willing to pay, he is not going to get the money. Thus there must be demand. In Formula 1 that demand comes from teams and from sponsors. Teams are paying for speed, sponsors for reflected glory. This is why many F1 deals feature a salary and significant bonuses. This is why it is so hard to work out who earns what because the total is based on the results not on a static figure. In F1 the value of one driver compared to another is measured in tenths of a second. The difference between a star and a jodrell is about half a second a lap and when you consider how much it costs to get that kind of difference from technology, you can see that drivers can claim to be worth what they are paid. Some teams, notably Williams, have a policy of spending money on their cars rather on their drivers, on the basis that if one has the fastest cars, the fastest drivers will want to be in them. This is sound thinking if you can build the fastest cars…
For big corporations, however, it is more than just the speed that matters. Drivers are the ambassadors for corporate brands. Racing drivers, like corporate executives, take advantage of this situation and negotiate huge sums of money for themselves, arguing that they are unique (or the only one available). Why do the corporations agree to these numbers? Big companies are involved in racing for two reasons: they are either trying to sell something or the sport is something that the chairman likes. If the chairman is into golf then the company sponsors golf. This means that he can swan around with the stars and have a good time, while telling everyone that it is good for the business.
The key word in all sponsorships is aspiration. Companies want to be involved in activities and with people who impress the man and woman on the street and make them more likely to buy a product. Charlize Theron is paid large sums of money by Christian Dior because the company believes that her golden girl image will result in more sales. The companies are playing on the dreams and ambitions of the viewers. If you follow it back you will find that the first “celebrity endorsements” date from the 18th Century when the china manufacturer Josiah Wedgwood used royal endorsements to give his brand cachet. People bought his china because they thought the royals used it. This was followed by the era of the trade card, which often pictured a celebrity or with the growth of sport, a sportsman. There were even trade cards featuring famous writers. The growth of the entertainment industry, notably the cinema, was embraced by companies, notably tobacco firms, which used film stars to promote their products. Heroes have always been aspirational figures and so it is no great surprise that racing drivers quickly joined film stars as celebrities.
The one problem with this is that human beings are fallible and while corporate ambassadors are supposed to embody the corporate identity in their appearance, their demeanor, their values and ethics, they sometimes mess up. One thinks of cyclist Lance Armstrong and golfer Tiger Woods as stars who went off the rails and lost a lot. In a corporate sense FIFA is in the process of doing the same and there is, of course, the celebrated model of self-destruction, Gerald Ratner, who described his jewellery products as “total crap” and effectively destroyed all he had. This is why racing drivers have become less interesting over time because they have contracts restricting what they can say and do and they are terrified of saying anything that will get them into trouble, which is easily done when do-gooders, equality and human rights commissions and hypocritical media jump at every opportunity to create a scandal. Thus drivers in the modern era appear duller than they really are.
However the good news is that successful racers can go on getting such jobs for years after their racing careers are over, as has been proven by the activities of Sir Jackie Stewart, Alain Prost and Niki Lauda. The key to success as a corporate ambassador is visibility and public awareness, likability, trust and one’s abilities as a trendsetter. The sport’s global reach is of key importance but top racing drivers have high market-penetration in terms of public awareness. Even if audiences are falling, Formula 1 is still being watched by tens of millions of people every Sunday there is a race. And there are still few better ways for a global brand to reach the audience it wants than through televised live sport.
Bernie Ecclestone recently commented that Lewis Hamilton is “the best world champion we’ve had”. he was referring to Hamilton’s desire to not only be a sporting star but to become a globally-known figure. “Apart from the fact he’s talented, he’s a good guy, he gets out on the street and supports and promotes Formula 1. He’s 100 percent box office.” Ecclestone said that he wished that others such as Sebastian Vettel and Nico Rosberg would do the same and criticised them for limiting their role to being racing drivers and not playing the role of stars. Others argue that F1 drivers are not great role models because most of them start earning large sums of money and then take off to a tax-free country, rather than staying at home and paying their taxes.”
The interesting thing with the modern age is that animation and virtual reality has undermined real human achievement. Kids can do do amazing things in virtual environments and so their awe of people who do the same things for real is perhaps less than once it was. The youth of today are more obsessed than ever with celebrity culture – they have aspirations as every generation has had – but with the reality and structured factual TV programming and social networking, they are following people who have become famous without actually doing anything. They are famous for being famous yet their self-promotional skills have somehow captured the public imagination and they have become hugely influential. They are, if you like, virtual celebrities. In a world where real heroes are harder to find, the value of those that do exist increases…
It is just a question of supply and demand.