Lewis Hamilton: The Tiger Woods of Racing?
(Editor's note: This is an updated version of the story.)
The eyes of motor sports were on São Paulo on Nov. 2 for the final grand prix of the 2008 Formula One season. At stake wasn't just the F1 World Drivers' Championship—the crowning moment in a global sport whose annual revenues rank behind only the National Football League and Major League Baseball. Equally compelling for fans around the world was the driver who won it: Lewis Hamilton. After a thrilling last-minute comback, the 23-year-old Briton became the youngest champion in Formula One history. With his broad marketability and multimillion-dollar sponsorship deals, Hamilton already is drawing comparisons to sports megastars Tiger Woods and David Beckham.
Companies such as Reebok (ADSG.DE), Vodafone (VOD), and Hugo Boss (BOSG.DE) have flocked to be associated with Hamilton because of his remarkable life story. Signed by Formula One racing team McLaren when he was only 13, Hamilton worked his way up from teenage go-karts to F1 speed machines by winning at each level along the way. Clean-cut, media savvy, and the first black driver in Formula One's history, Hamilton missed winning the 2007 drivers' championship in his rookie season by just one point. Continued success in his second season—and his growing media visibility—have turned Hamilton into Formula One's poster boy as it expands into lucrative new markets such as China and India.
Now that Hamilton has clinched victory in Brazil, his appeal looks set to leap beyond motor sports into wider popular culture. With his good looks and celebrity friends—he hangs out with hip-hop stars Diddy and Pharrell Williams and dated Pussycat Dolls singer Nicole Scherzinger—Hamilton already has become tabloid fodder. Sponsors are drooling to tap the "Hamilton Effect," leveraging his popularity to reach customers who don't normally follow Formula One.
Transcending the Sport
"Hamilton represents the changing of the guard for Formula One," says Iain Ellwood, head of consulting at Interband in London. "He's highly attractive to any sponsor and can easily go beyond F1 into a wider market." Earlier driving champions such as Michael Schumacher, Fernando Alonso, and Kimi Räikkönen achieved fame within the sport but didn't necessarily transcend it, the way Tiger Woods has with golf.
Hamilton also could help Formula One itself. In his 2007 rookie year, average television audiences for F1 in Britain nearly doubled from 2006. Grand prix from Shanghai to Singapore sold out this year as fans sought a glimpse of their F1 idol. Hamilton might even help Formula One get a foothold in the U.S., where it is completely overshadowed by Nascar.
All this success is starting to translate into big money. Hamilton signed a new five-year contract last year with the McLaren racing team—part-owned by automaker Daimler (DAI)—that is estimated to be worth £75 million ($120 million). He also counts Spain's Banco Santander (STD) and liquor giant Diageo (DEO), the owner of Johnny Walker scotch, among his major sponsors. Though none of the sponsors chose to comment on their deals with Hamilton, sports marketing analysts estimate his annual income now falls between $40 million and $50 million. That's a ways off from Tiger Woods' 2007 earnings of $115 million, but it does put Hamilton on par with NBA stars LeBron James and Kobe Bryant.
"Hamilton certainly has the potential to reach $1 billion in earnings by the end of his career," says Stephen Bradley, director of the sports marketing and sponsorship team at marketing consultancy Hill & Knowlton. "He's at the top of one of the few genuinely global sports, so he has the chance to be as much of a lifestyle icon as a sporting icon."
New Star for Far East F1 Fans
To lay claim to these future earnings, Hamilton must keep winning on the track. Last year he held a 17-point lead with just two races to go but lost in the end to Finland's Räikkönen. Now that he has taken the 2008 prize, the pressure will mount to continue winning at one of the world's most grueling sports. According to Interbrand's Ellwood, only this success will catapult Hamilton into the same league as sport's most marketable stars.
Adding to the pressure: Formula One is banking on Hamilton's appeal to feed its expansion in the Far East. The sport has typically drawn its largest audiences from Western Europe, but Bernie Ecclestone, whose Formula One Group owns the sport's global commercial rights (BusinessWeek.com, 1/18/07), has turned his attention eastward in search of greater revenue. Eight of this year's 18 grand prix, for example, were held outside Europe, with countries like Bahrain and Malaysia willing to pay approximately $45 million each to host an event.
"[Hamilton] is a new star who will help improve the sport's appeal in the Far East," says Alan Switzer, director of the sports business group at consultancy Deloitte. In a sign of things to come, Formula One Group recently penned a five-year TV rights deal with pan-Asian ESPN Star Sports for $100 million, compared with a previous deal worth $20 million.
With sponsors and Formula One rushing to cash in on his success, it's sometimes easy to forget that the poised and self-confident Hamilton is only in his second year as an F1 driver. But his youth has led to some mistakes this season that cost him vital points in the drivers' championship standings. Now he has banished the doubters—and sports marketers are licking their chops.