The one formula for wealth

Lewis Hamilton may have missed out on the Formula One world championship on Sunday – compounding a miserable weekend for British sport – but he is still set to become one of the richest sportsmen in the world, according to sponsorship experts.

Brands are clamouring to sign up the 22-year-old, who came within a single point of winning the title in his first season, breaking a string of records in the process. Vodafone – the title sponsor of Hamilton’s team McLaren – is said to be lining up a bumper personal endorsement deal and he is likely to attract interest from companies in almost every other sector.

Hamilton could earn more than £100m from sponsorship alone in the next ten years, according to Dominic Curran, director at Karen Earl Sponsorship, putting him among the top earners in sport alongside the likes of David Beckham and Tiger Woods.

“He [Hamilton] will make a huge amount from sponsorship over a long career – easily in the Beckham class and beyond,” adds Curran. “He’s a sponsor’s dream. Hamilton combines looks, personality and charisma with the elusive quality of being a genuine winner. He is also the first black driver in Formula One which, in a similar way to Tiger Woods in golf, differentiates him in the market.”

Hamilton’s current deal with McLaren limits the brands with which he can be associated to the team’s official sponsors, which include watchmaker TAG Heuer and financial services giant Santander, as well as Vodafone. He is rumoured to have earned about £500,000 this season but that figure will be dwarfed by his next pay deal, which will almost certainly see the rules on endorsements relaxed. “Despite missing out on the championship, he’s the biggest thing in F1 at the moment,” says Curran. “He’s now got the negotiating power and is in a strong position.” Experts predict that power could see him agree a five-year contract with McLaren worth £150m, making him the highest paid driver in F1.

Male-orientated industries
Brands most likely to want Hamilton to endorse their products will be those that appeal to young males aged 25 and above such as fashion and sportswear lines, watches, cars, financial services providers and brands in the booming male grooming industry. Many believe that could be one of the most important sectors for Hamilton to break into because his contract is likely to make more traditional categories that conflict with the team’s partners – such as telecoms – off limits.

Managing partner at Havas Sports UK Keith Impey says: “He’s young, good looking and unusually has the potential to appeal across both genders. He’s obviously a good looking lad for the girls. The more wins, the more publicity, and the more brands across the genders he will appeal to. His star is in the ascendancy even though he didn’t win the title this time. But if he had won it would put a 20% premium on him that would grow year on year.”
Hamilton is single-handedly increasing the popularity of Formula One. Live coverage of the Brazilian Grand Prix on ITV1 on Sunday gave the broadcaster 50% of the television audience when viewers peaked at 10.6 million. It averaged 9 million viewers and was the most watched race since 2000.

Motor racing claims to be one of the only truly global sports, giving Hamilton tremendous worldwide exposure. However, experts point out that it is still some way behind football and, perhaps even more crucially, has yet to fully crack the US market. Ben Barker, who handles sponsorship at Hill & Knowlton, believes the amount Hamilton can make from sponsorship will depend on the number of markets in which he makes it big.

Setting sights on the us market
Jeremy Clark, managing director for EMEA at MEC Access, the sponsorship communications agency, adds: “Formula One has so far struggled to break into the most lucrative sports market, North America. Lewis needs to be in North America to emulate the earning power of the likes of Tiger Woods and David Beckham, but this is more than possible.”

Many in the sponsorship industry have compared Hamilton’s earning potential from endorsements to Beckham’s. However, Clifford Bloxham, vice-president of Octagon Athletes & Personalities, a sports marketing and management agency, thinks a more realistic comparison would be to golfer Woods or tennis superstar Roger Federer.

Beckham, he says, has become a success in football without winning the World Cup or any other major international tournaments. “In most sports you need to be seen as the man who wins the title for the kind of branding power Beckham has achieved,” he adds. “However much we hype Beckham in the US, it’s happened because he’s a news story more then a success story.”

Some experts are even predicting that Hamilton could become the world’s first billion dollar sportsman but the key to that is being unique, believes Bloxham. He says the only other young sports star who compares to Hamilton at the moment is tennis player Rafael Nadal (although Bloxham thinks swimmer Michael Phelps could also join that select group in the future).

“Big deals will come from brands looking to use them in campaigns that resonate with younger consumers. At the moment Hamilton is one of two in a group,” adds Bloxham. “If he can become one of one he can almost charge what he likes,” says Bloxham.

One of Hamilton’s biggest advantages, according to David Peters, head of sponsorship at Carat, is that he is much younger than most F1 drivers. But experts point out that he must keep his feet on the ground and limit the number of deals he does to keep his value high.

Clark says: “Formula One is a fickle sport and much depends on how the car and team perform, not just the driver. Ferrari could come out bigger and better in 2008, pushing Hamilton further down the grid.”

But if he continues to perform on the track and can build Brand Hamilton – like Brand Beckham before it – there really is no ceiling. Clark adds: “If F1 can crack North America then Hamilton could truly become a global sports superstar and one of the most sought-after brand ambassadors of all time.”