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The sale of a majority ownership of V8 Supercars to Sydney-based private equity firm Archer Capital gives the series the foundation it needs to pursue the most adventurous expansion plan in Australian sport.
The deal means Australian Motor Racing Partners Pty Limited (AMRP), backed by Archer Capital, will soon own 60 per cent of the series, the teams’ 40 per cent and, critically, current chairman Tony Cochrane, who has guided the series in its current guise, will stay on, leading the charge.
Andrew Gray and Brad Lancken will represent AMRP, joining Cochrane and team representatives Roland Dale and Brad Jones on the new board of directors of V8 Supercars Australia Holdings Pty Ltd, guiding the overall direction of the series.
Meanwhile, a new commission, likely to be modeled on the AFL’s, will concern itself with decision-making on sporting matters – technical and sporting rules and regulations.
With the new ownership structure in place and licence holders (team owners) suddenly $4 million-plus richer, the sport can move forward into what’s shaping as a critical decade: its next television deal due for 2013, the Car of the Future regulations (the next generation cars), new manufacturers and international expansion, all the while fighting for mainstream attention at home.
And while the AFL, NRL and company battle over the Gold Coast and western Sydney, V8 Supercars is looking to the United States, India, Qatar, Singapore and elsewhere.
Cochrane confirmed in the sale announcement that the series would expand to 18 events in 2013, with up to six overseas events (not including New Zealand) allowed as part of V8 Supercars’ recent deal with motorsport governing body, the FIA, which awarded the series international status.
Why expand into Asia?
Well, apart from Formula One’s recent intrusion into the region, it remains relatively untapped for motorsport and international sport. Other categories, such as the World Touring Car Championship, have a minimal foothold in Asia, and given the growing motorsport culture and economic opportunities that lie within our neighbours to the north, it makes sense for V8 Supercars to have a presence in the region, more so than in the USA, South Africa or elsewhere.
Ultimately this is about growing the V8 Supercar pie.
V8 Supercars and its teams can offer sponsors and backers a growing global audience and a presence in economies across Asia and the Middle East; an advantage they’ll have over Australian sports’ heavy hitters such as the AFL and NRL, whose reach is limited to Australia and New Zealand.
For multinational corporations already in the sport, such as Vodafone, Pepsi, Jack Daniels, Jim Beam and co, overseas events are obviously attractive – significantly increasing the bang for their buck and the reach of their sponsorship.
While the AFL and NRL flirt with international growth and a long-term presence in markets such as Asia, it will be easier for V8 Supercars to sell its universally understood product – motorsport – compared to the footy codes’ unique games and rules.
But no one in V8 Supercars should underestimate the challenge ahead.
After all, such expansion needs to be about more than bottom lines, as the series risks isolating its Australian fan base without adequately attracting a new one in these new regions.
Even Formula One, with mega worldwide television deals and a global profile only rivaled by European football, cannot fill stadiums in China, Turkey, Abu Dhabi etc. And the quintessentially Australian V8 series has a way to go to educate and attract an international audience to the ways of V8 Supercars.
The product is strong.
Television ratings and crowds have been up in 2011 off the back of the thrilling end to the 2010 season (it’s not often you see all three championship contenders follow each other into the wall in the penultimate race of the year), and that competitiveness has carried into 2011, where two teams – Kelly Racing and Brad Jones Racing – have claimed their first race wins this season in an incredibly deep field.
There are 28 strongly supported cars with a growing portfolio of non-automotive sponsors entering the sport. Only NASCAR in North America can claim to have a stronger domestic motorsport category.
But is that enough to warrant such international growth?
Important in all this is not just the prospect of new manufacturers entering the sport as a result of Car of the Future, but also the next television deal, which will be critical to the sport’s popularity at home.
Live coverage, as all codes are finding, is fast becoming a requirement, and it remains to be seen whether Channel Seven, recently renewed as the free-to-air home of the AFL, can retain V8 Supercars.
Should they on-sell a game or two, there will conveniently be a gap in the schedule for some V8 racing. Like the fortunes of the NRL television deal, V8 Supercars will have to wait for the conclusion of the AFL’s before they can settle their own.
And if V8 Supercars is to appease its Australian fan base on international expansion, overseas events cannot be buried in the middle of the night back home. The next television deal must guarantee Australia-friendly coverage times.
Selling Australian fans on international expansion and the move away the Holden versus Ford duopoly is an imperative for V8 Supercars’ new owners. It cannot afford to alienate its Aussie fan base at a time when the Australian sporting landscape is so competitive, and so many codes and clubs are fighting for their share of your attention.
But Australian fans needn’t worry that the series will be completely lost to overseas, exotic locations.
The decision to award majority ownership to the Australia-based Archer Capital as opposed to Asian sports agency World Sports Group, who were also leading bidders, highlights a desire to retain the Australian core of V8 Supercars.
World Sports Group, heavily involved in the Asian Champions League, the Indian Premier League and other Asian interests, would undoubtedly have pushed for a heavier Asian focus – more so than Archer Capital with its Australian interests.
As V8 Supercar board member, team boss and driver Todd Kelly said, “They (Archer Capital) are not going to go and tip the sport on its head and send us to ‘god knows where’ overseas to go and race for half the year.
“They are extremely conscious of the Australian fans and that’s the first thing that everyone is going to concentrate on, making sure that we’ve got everything happening back here in our own backyard as best we can.”
That backyard will always be V8 Supercars’ heartland, at events such as Bathurst, Winton, Darwin, Sandown and co, just as the AFL’s heartland will remain in Melbourne, the NRL’s in Sydney and so on. Expansion should not be mistaken for relocation. But, ultimately, V8 Supercars’ expansion represents one of the bravest expansion plans in Australian sport – far more so than any of the footy codes’.
Is it a risk too far? We shall see…
Godspeed, V8 Supercars.
Follow Adrian on twitter @AdrianMusolino