ABB FIA Formula E, the only fully electric championship in the world, wrapped up its 2017-2018 season (10 cities/12 races) in Brooklyn (the circuit races in city centers) on Sunday with Drivers’ Championship winner Jean-Eric Vergne winning the final race of the season; Audi finished as the Teams’ Champion in its first season on the circuit, finishing just 2 points ahead of Techeetah. JohnWallStreet had the chance to connect with FE CEO Alejandro Agag on Friday to talk about why manufacturers are drawn to the sport, the circuit’s distribution strategy and where FE’s growth is coming from.
JWS: Manufacturers (see: Audi, Jaguar) that don’t run teams on the Formula One circuit are choosing to race on the Formula E circuit. Why is that?
Alejandro: The electric technology, especially in mobility, is still at the beginning of the curve. So, the developments you make are actually very relevant and can immediately be transferred to the road cars. Combustion cars have been around for a long while, all of the developments that can be done have been done already; they’re fully developed or practically fully developed. That’s why a lot of manufacturers joined so late (i.e. after witnessing developments within first few seasons). They see a platform where they can develop technologies that they can use on the road cars.
Editor’s Note: Nissan is on board for the 2018-2019 season. Porshe and Mercedes will follow the following year. Formula E has more manufacturers than IndyCar and F1 combined.
JWS: Rights holders across the sports world have been introducing direct-to-consumer OTT platforms, but Formula E doesn’t have one. Can you explain your distribution strategy?
Alejandro: We don’t have an OTT offering at the moment because we’re trying to maximize reach in terms of free-to-air distribution. In the U.S., we’re on Fox Sports 1 &2. In Latin America, we’re on Fox. In Europe, we’re on Eurosport and on the main free to air channels in Italy, France, Germany and the U.K. We’re on Fuji TV in Japan and CCTV in China.
JWS: Formula E just completed its 4th season. Where is the audience growth coming from?
Alejandro: The growth in viewership is mainly driven by European markets, by China and South America, so those are the places we’re investing most heavily in marketing the series. On the digital side, we’re seeing particularly strong growth from the younger segments of the demographic.
Editor’s Note: FE reported in April that overall digital engagement rose +330% YoY (through 1st half of ’17-’18 season), including +347% with the 13-17 year-old demo and +54% with the 18-24 demo.
Howie Long-Short: The circuit’s title sponsor is ABB, the world’s largest builder of electricity grids; power and automation are the company’s core businesses. The company is publicly traded on the NYSE under the symbol ABB. Back in April, ABB reported it had beat net profit ($572 million), sales ($8.63 billion) and order intake ($9.77 billion) estimates for the first 3 months of ’18. Though ’18 represents the first year that “all ABB markets are either steady or growing”, share prices continue to decline. ABB shares are down -8% (to $21.63) since the company reported Q1 earnings and they’re down 24.5% since hitting a 52-week high in late Jan. ABB is scheduled to present Q2 earnings on Thursday (July 19th).
Fan Marino: NYC is the sole U.S. stop on the Formula E circuit. Why aren’t there more races domestically?
Alejandro: We have very little traction with sponsors in the U.S. The U.S. has NASCAR and IndyCar, so they (U.S. corporations) don’t pay much attention to international series’. We go everywhere else in the world; China, South America, Europe, and get many millions of dollars for sponsorships. We have very large sponsors, global sponsors that are in the championship, but we don’t have many local sponsorships.
Fun Fact: Did you know that Formula E is adding a power strip for the 2018-2019 season? Drivers who pick it up will see a temporary boost in their car’s power (think: Mario Kart). There’s been no indication that the sport is looking to banana peels anytime soon.
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