One subject has dominated the past three years of MotoGP, and indeed all of motorcycle racing. Despite some thrilling racing, technical innovation and both fascinating and tragic stories, the main topic of conversation among those involved in motorcycle racing has been how to cut costs. A raft of new regulations have been introduced, and even more radical changes are currently under discussion for the next few years.
At the official presentation of Yamaha's 2012 MotoGP campaign, Yamaha Racing Managing Director Lin Jarvis spoke to MotoMatters.com about the need for MotoGP to shift its focus, from just tinkering with the technical regulations to trying to expand its audience base and generate more income, taking advantage of new media and a more international audience to tap into new markets and more potential sponsors. "The technical regulations are very, very important, and bringing costs down is very important," Jarvis told us. "But the other thing is how to increase the popularity of the sport, and increase the revenue. Just saving costs is still shrinking."
Jarvis made it clear that he believes MotoGP's future lies beyond its traditional heartland in Europe, and beyond the existing revenue streams it has relied on, mainly income from TV contracts in Europe and Spanish and Italian sponsors. "We have to take the championship to different geographical locations, different media, different revenue streams. That's something people are not touching on enough. [Cost-cutting rule changes] are all very well, we can do that technically, but don't forget the revenue," the Yamaha boss emphasized.
In Jarvis' opinion, the problem was that concentrating the series in Southern Europe had left it too vulnerable to the financial crisis. "This year, we've got four races in Spain, one in Portugal and two in Italy. That's seven races of an eighteen-race championship in countries in deep recession." In the past fifteen or so years, the championship had relied too heavily on Southern Europe, Jarvis suggested, and with the economies in those countries in a parlous economic state, generating income from those countries had become much more complicated. "If you look at Repsol, it's mainly about the Spanish market, and you could say the same about [Spanish telecommunications company] Movistar in the past, about [Spanish insurer] Mapfre, you could make a long, long list of them. Even Fiat, though it was a global company, the sponsorship was mainly about Italy," Jarvis explained. "We followed that path because it was sustaining the sport, but the global financial crisis meant it suddenly creaked to an end."
The solution, Jarvis said, was to look further afield for sponsorship. "We have to change, we have to go elsewhere. Look at our sponsors now, ENEOS is Nippon Oil, from Japan, Semakin Di Depan is Asian, Yamalube is about global sales." That also meant evaluating the current places the series races in and trying to break into new markets. "For example, why are we racing in Qatar? We've been racing there for 8 years, but how many Qatari sponsors are there in the series? I see Qatar doing a lot of other things, with soccer, with the World Cup, with other sports, so why have we not been able to convert that major benefit of staging the first race into something more substantial? It's great, but it hasn't brought us any more investment."
The key markets that MotoGP has to be aiming at are the emerging economies around the globe, Jarvis told MotoMatters.com. "We need to be in Brazil, we need to be in India - we would really like to be in India. We should be in Indonesia, these are very important places. We need to maintain our foothold in major European markets, but we can do that with fewer races in Spain."
The revenue side of motorcycle racing was crucial, the Yamaha boss maintained. "The biggest problem this sport has today is money," Jarvis said. "We have to improve the attractiveness of the sport for the long term. That's absolutely critical." In the past, the manufacturers had neglected the revenue and marketing side of the sport and worried too much about the technical rules, he opined. "The MSMA, because it's primarily an engineering-based organization, has focused on technical regulations, and more recently on bringing costs down. But we need to improve the marketing side." Both Jarvis and HRC Communications and Marketing Director Livio Suppo had backgrounds in marketing, and both men believe that adding revenue and marketing value to the sport is a key aim for the future. "For example, Suzuki and Kawasaki left the sport because they were unable to make the sport valuable enough for their business. They finally pulled out because it was costing too much and not generating enough income or purpose for their key markets."
Those key markets are outside of Europe. "We believe the real potential is definitely in the Southeast Asian zone," Jarvis commented. "I saw the GDP figures of countries like the Philippines, Indonesia, Thailand, Vietnam, and they are amazing. This is where Dorna and the manufacturers could do a lot more, because we are doing almost nothing there."
Part of the opportunity that lies in in Southeast Asia is shifting patterns of spending, Jarvis explained. "I think in the past, we only sold small motorcycles in these countries, but that is changing. We sold millions of small motorcycles, but people want more now, they want the latest technology, the best they can get. There's a definite shift." This, Jarvis explained, is why Yamaha were not overly concerned about the lack of a title sponsor for the Yamaha Factory Racing team. "Our main goal is not to make money or promote other brands," Jarvis had told the media earlier, "the main reason for the Yamaha Factory Racing team to exist is to promote Yamaha's expertise and Yamaha's spirit of challenge to fans around the world. Hence the fact that everything [in the team, hospitality and garages] is very heavily Yamaha branded."
"We DO have a title sponsor," Jarvis told MotoMatters.com later that evening. "We have a title sponsor, and it's us. We are our own title sponsor. We are not in this sport to make money, we are present here as manufacturers to promote our brand around the world." Yamaha's 50th anniversary celebrations had been a prime example of what could be achieved, Jarvis said. "The 50th anniversary said a lot last year, because it was the visualization of why we've been here for the past 50 years."
The anniversary had had a definite impact on sales, as well. "I think we made 12 different race replica models of various different shapes and sizes, from scooters to R1s, and they've been very, very successful. Clothing and merchandizing was also very successful. That 50th anniversary worked very well for us," Jarvis concluded.