The global appeal of Formula 1 (F1) means that it is one of the most popular sporting championships in the world. Since its formation in 1950, many high-profile and well recognised car manufacturers have competed in it. This study analyses whether results achieved by car manufacturers while competing in F1 affect the stock prices of the publicly traded car manufacturer owners of the F1 team (or in the case of one team, its associated car manufacturer). The paper observes a seven-year time-period and averages out the results based on the month in which the races took place. It then organises this data into a panel to perform both a dynamic and static panel analysis, which in turn allows the paper to evaluate and discuss the results.
Regression results from the dynamic panel analysis show that all theorised variables were found to be statistically insignificant. In the static panel analysis, the paper found that increasing the number of Drivers’ World Champions on the grid leads to negative returns for car manufacturers. It also shows that seasons that took place during COVID-19 exhibit negative returns for car manufacturers. Furthermore, the static analysis found yearly discounts for car manufacturers. This paper also provides recommendations to both the owners of F1 Liberty Media and the organisers, the Fédération Internationale de l’Automobile. in order for them to boost the popularity of F1 and maximise returns for car manufacturers to attract new car manufacturers to the championship. The paper also gives recommendations to the existing car manufacturer competitors and any future competitors on the level of success they should seek to maximise their returns from F1 competition.
Numerous questions exist about the future of F1, given various global conditions. This paper should provide a small insight into the actions the rights holder and organiser can take to maintain and grow F1’s global popularity and to attract more manufacturers to the sport. Otherwise, changes in consumer demand towards electric vehicles and various global shocks may cause F1 to lose its global appeal.
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