The economic reality of the commercial world looks to be brutally bleak for the live events business, which of course includes all motorsport activity.
A pandemic-affected landscape that by rights should make motorsports commercial officers endure sleepless nights, was and is feared in most racing businesses.
Yet, in Formula E there is one team showing fruitful fortitude at present – reigning champions DS Techeetah.
Earlier this week it announced a major new deal with American media giant Verizon. Consequently, Jean-Eric Vergne and Antonio Felix da Costa carry significant branding for Yahoo on its cars this season.
The remarkable aspect of all this, is that the team has achieved it all while only racing at one location (Tempelhof airfield) in the last 11 months and with a composite calendar only just starting to emerge for the year ahead.
“The one thing that’s been amazing to me is how we’ve actually grown during COVID, rather than going in the opposite direction,” DS Techeetah’s chief commercial officer Keith Smout told The Race.
“I know some people are having difficulties doing deals, whereas we’ve been able to continue to harness some growth. I think it shows that Formula E is more aligned with real-world conditions now and more specifically in the post-COVID landscape.
“I think it also shows that DS Automobiles are forward-thinking as well, and looking towards how they can help us build partnerships together, but still make sure that they’re getting the core things that they want to get out of Formula E, too. We’re all rowing in the same direction.”
That course should have many obstacles and vicious currents to deal with but again DS and Techeetah have approached Formula E with a seemingly smart philosophy.
Far from throwing money indiscriminately at the technical and sporting programme, they have opted for a moderate spend – which is dwarfed by other manufacturers, who nevertheless have so far been far less successful on the track.
DS Techeetah is ultimately an independent manufacturer-backed team, as opposed to a full-on factory manufacturer entity, and the operation runs in a “very different world commercially”, according to Smout.
“As an example I could be talking to somebody for, as an example, $2 million, because I need that $2 million to fulfil and complete budget requirements,” he says.
“But a traditionally-structured manufacturer could accept $500,000 for the same deal, because they’re not as pressured to get the budget as we are.
“Now, that may be changing in their world. But the manufacturer is not driven by those worries, whereas that is part of our platform, we have no choice but to get the maximum dollars from the opportunity.”
Techeetah itself is a totally new brand, not even five years old as of 2021. But it is one that achieved almost immediate success and netted three straight drivers’ titles and a brace of teams’ crowns between 2018 and 2020.
From a technical standpoint it was furthered by its partnership with DS Automobiles from 2018 onwards. But from a branding angle all it initially had was a mythical Chinese dragon via its ownership by SECA, the Chinese sports marketing company, which is the majority owner of the business.
Crucially, it took a while for Techeetah to become a commercially-savvy team but when former BAR, Jordan and Jaguar F1 commercial officer Smout joined in 2017, a clearer identity started to form.
It wasn’t long before the Techeetah name brought visions of a real beast – a cheetah – rather than a fabled one. This allowed the team to develop a more defined brand, which also cleverly encompassed animal welfare and conservation. This was with a successful partnership it created with the Big Cat Sanctuary, which became well-known to British TV audiences on the ‘Big Cats about the House’ series on BBC2.
“Commercial and branding was just getting organised for us in 2017 and all efforts were initially on running the car, getting drivers and making the team work between China, England and eventually France,” Smout tells The Race.
“Concentrating on getting an identity and getting commercial things done, it takes a long time to start gaining momentum with partners.”
Despite the ongoing pandemic Formula E is still in something of a growth period from a commercial perspective. Yet the obvious fact is that the opportunity for sponsorship sales, at a business-to-consumer level, is smaller than F1.
“It may cost less to get involved in Formula E, but you’ve got to ensure you’ve got return on investment,” says Smout.
“We have to reach more of a critical mass in order to get sponsorship that’s going to be really consumer-focused.”
There are many opportunities for team partners in Formula E, including companies who specifically want to be associated with the future of mobility and the technology that aligns and is associated with it.
Then there are companies that produce and make products that benefit a technologically forward-thinking, sustainable series such as Formula E.
Additionally, marketing budget can be used in a more corporately and socially responsible (CSR) way, a strand of sponsorship which in recent years has gained massive traction.
Then there are the companies that want to put their own technology into the sport and also ingratiate it into business-to-business opportunities with the manufacturers.
“I look at this way,” says Smout. “Business-to-consumer, it’s there, it’s relevant, and as Formula E gets to, let’s say, its 10th season, you can see there will be a crossover where it grows more.
“But for us right now, the consumer side is a quarter of what we look at. Everything else is business-to-business, CSR and technology. Those are the roads we go down and we are focused on.”
The dynamic of the DS and Techeetah partnership, on paper at least, probably shouldn’t work as well as it has and does. Across China (SECA), France (DS), the UK (team principal Mark Preston and team manager Nigel Beresford are based there) and Canada (Smout’s location) it would seem far too fractious to function efficiently.
But the evidence on just about every level is to the contrary.
DS Automobiles entered Formula E, initially with Virgin in 2015, to promote its brand as being built through technological excellence, and that’s what it’s successfully doing.
But for Techeetah, having a DS Automobiles logo and branding on its entry gives, according to Smout, “a beautiful pathway” to partnerships.
“DS and PSA [owner, now Stellantis after a merger with Fiat Chrysler] are both super co-operative in enabling us to attract sponsors that are looking to work with such a prestigious manufacturer,” reckons Smout.
“That gives us direct benefits as we are a conduit for opportunities. We can never guarantee that there’s business for a specific company to do with PSA but the opportunities are at least there.
“So, just having that opportunity is often enough for people to want to join with for at least introductions.”
In the beginning Formula E attracted plenty of smaller companies, even some start-ups. But now large corporations such as Verizon, which DS Techeetah landed earlier this week, are embracing Formula E and want to be aligned with sustainability because that’s the direction those large companies are going in.
There is little doubt that DS Techeetah punches above its collective size and weight consistently.
“In terms of overall numbers we are modest compared to others,” adds Smout.
“But crucially we have some visionary and dedicated individuals, such as business development chief Jon Wilde, head of PR Sara Hernmarck and our great partners at DS.”
The fundamentals are that 12 Formula E teams are in a position to offer very similar returns when it comes to branding, hospitality, activations, driver days, merchandising, etc, But only one can offer having champion status, and now world champion status.
When teams win they inevitably gain two things – the command of a bigger budget and a bigger dollar from companies as partners. Companies are striving to win in the corporate world on all levels and the vast majority want to be associated with winners.
Smout doesn’t disagree but gives an interesting slant on the team’s philosophy.
“I don’t like the word ‘sponsorship’, to be honest with you, because if somebody is going to give me a million dollars to put their brand on the car, we literally want them to be part of the team, so it really is a partnership in the truest sense of the word,” he says.
“This is what we agree to together, and we’re going to go and win the world championship as one. It’s not just the Techeetah brand, it’s not just about the DS brand, so everybody’s involved at the core.”
