Reactions to Hamilton Ferrari move prove power of sport
Mercedes' British F1 Driver Lewis Hamilton speaks at Expo Dubai 2020 in the Gulf emirate on March 14, 2022.
What you need to know:
- The latest development is a joy to the three countries but the spells dorm to some events in the 2024 WRC calendar. Everybody is looking forward to having a chunk in the WRC and only the strong ones will survive.
- Apart from financial guarantees, the Promoter also looks at television and media value, safety, security, WRC brand visibility, and long organisational skills in each individual country.
The surprise move by Ferrari to sign British racing icon Lewis Hamilton and almost assured slots for Ireland and Saudi Arabia in the 2025 World Rally Championship within a week has excited the world of motorsport.
Hamilton’s move to Ferrari sent shock waves in Europe and the United States where stocks for Ferrari responded positively underlying the commercial power of Hamilton and Formula One after a huge surge in the Italian car maker’s share prices especially at the New York Exchange.
The bourse had impressive results on Thursday last week that by 1pm the share price was up by almost 13 percent adding more than £5.5 billion (Sh1.1 trillion) to the market cap. And rising.
Ferrari quickly issued a positive earnings report on Thursday to its shareholders, a confirmation that sports is a huge business especially in motorsports, football, basketball, American football and swimming.
The Italian company announced that revenue and core earnings, with EBITDA (earnings before interest, tax, depreciation and amortization) is anticipated to grow to $2.64 billion (Sh386 billion) this year on a healthy order-book, there was a notable step change in its price.
Ferrari’s one share traded at $346.78, (Sh55,484.8), and after the opening on Thursday, it rocketed to a high of $384.00 (Sh61,400) soon after giving the company an estimated market capitalisation of $69.12 billion (Sh11.040 trillion), up from $62.4 billion (Sh9.920 trillion) on Wednesday.
Hamilton, the first black F1 world champion, who has seven titles but has had a lean winless streak at Mercedes, is expected to give the Italian company a boost as it tries to regain the world’s constructor’s title in 2008.
Mercedes will now need to ponder what it does in the long term when it comes to replacing Hamilton, with obvious targets like Lando Norris and Charles Leclerc already contracted elsewhere.
Meanwhile, there is excitement in Ireland and Saudi Arabia after the WRC Promoter, the Munich-based company which own the commercial rights of the World Rally Championship and has a strong say on who hosts a round of the highest profile motorsport event after F1, announced on Monday that they are close to inking Promoter’s agreements with both countries.
Jordan is the last Middle East country to host a WRC event in 2011 while the championship was last in Ireland in the 2007/08 season.
The WRC Promoter Events Director Simon Larkin said they are impressed with Ireland’s confirmation that the government will commit a Sh3 billion budget for the 2025 event which runs for three years.
Money is not an issue also with Saudi Arabia whose sports diplomacy appears to be bearing fruits and the oil rich country has already won the right to host the 2030 Fifa World Cup, hosts the annual Dakar Rally and now the WRC.
The WRC Promoter also announced that they are in talks with South America and Paraguay has indicated its desire to join the WRC.
The latest development is a joy to the three countries but the spells dorm to some events in the 2024 WRC calendar. Everybody is looking forward to having a chunk in the WRC and only the strong ones will survive.
Apart from financial guarantees, the Promoter also looks at television and media value, safety, security, WRC brand visibility, and long organisational skills in each individual country.
