Who’s in, Who’s out – The 2010 Sponsorship Story

in BUSINESS by admin — March 13, 2010 at 8:15 am | 3 comments

Who’s in, Who’s out – The 2010 Sponsorship Story

As the teams prepare for the first race of this year’s Formula One season everyone is hoping that the on-track excitement lives up to the off-track business merry-go-round.

Last year we had the ‘credit crunch’ that left RBS and ING reeling - the weight of tax-payers money bearing down on the bankers’ shoulders in London and Amsterdam. Having spoken to a number of city analysts, the financial outlook for 2010 is potentially just as cloudy, remember the phrase ‘double-dip recession’ – it could well come out in the next 12 months.

This year, however, Santander have bucked the trend and are now the highest spending bank in Formula One, going where only Marlboro has gone before. With their branding emblazoned across the race-suits of the McLarens and the Ferraris in 2010, surely this will be a bumper year. Can’t quite see a commercial with both Lewis and Fernando in, though?!

Here are the sponsorship movers and shakers - the winners and losers of the credit crunch, as it were.

McLaren:

Known for being masters in the sponsorship game, the commercial team at McLaren has their hands full to continue to satisfy the forward-thinking Vodafone – remember the blackberry virals of last year. The major loss this year, though, is the factory team support of Mercedes Benz who have turned their hand back to running their own team. McLaren still have the branding, the funding and the engines, but how much will they lose by not being Mercedes Benz’s number one team? One has to think that they are looking for a manufacturer to step up and be as reliable as the German giant, take the severance money and become a number one team once more.

Mercedes GP:

No sooner had Ross Brawn started penning his autobiography with the words “Once upon a time…” had Norbert Haug inked a deal that saw Mercedes take a controlling stake in Brawn GP. Originally destined to be a ‘Global Team’, it has since recruited German pair of Nico Rosberg and a certain Michael Schumacher. The Silver Arrows return to the Formula One grid with only 1 major sponsor more than when they left the sport in 1955 with Petronas signed on as a €30 million title sponsor of the team. With Virgin now elsewhere, the team in Brackley needs to search hard for another cash-cow or Mercedes’ finances really will be tested.

Red Bull Racing:

Perhaps the ‘coolest’ team on the grid, the boys from Milton Keynes, led by the brilliant Adrian Newey, have managed to combine their party lifestyle with on-track results. Perhaps it’s the freedom that a billionaire owner gives. Dietrich Mateschitz’s energy drink fortune still funds the team with only low-key investment from TOTAL and Renault. Despite this, Red Bull continues to deliver some of the best marketing activation on the grid, from the ‘Energy Station’ that takes up two motorhome berths in the paddock to the next-generation 3-D animations that cost in excess of £120K. With such reliance on one man, is this year make-or-break for the team that might have just found their feet in the sport?

Ferrari:

Without doubt the biggest winners in the off-season sponsorship race. As in 2007, Spanish banking giant Santander has funded a Fernando Alonso move. This time they bought out the remaining year of Kimi Räikkönen’s contract to pave the way for Alonso to move to the Prancing Horse. Formula One’s worst kept secret was ‘revealed’ after the Singapore Grand Prix, despite being planned months in advance. Shell remain the team’s fuel and lubricant supplier, their value in kind outspending any other in the paddock, and then there’s Philip Morris. Marlboro has been in the paddock for years and funding Ferrari for most of those. Their current deal runs from 2005-2011 to the value of $1.1 billion - no wonder Ferrari didn’t agree to the €40 million spending cap!

at&t Williams:

Despite now being the perennial strugglers, Williams were the original sponsorship masters before Ron Dennis led McLaren to the top. RBS were the UK’s scapegoats for the credit crunch (the bank being now 84% owned by the British taxpayer) but despite the inclement financial future the brand has retained some of its top tier sponsorships including Williams. They along with Phillips, who have recently increased their investment in the team, look to have secured the racing costs for 2010. Now they need to perform on-track and with Rubens Barrichello (who incidentally told a few insiders that he didn’t even expect to be racing at the start of 2009) and Nico Hulkenberg they may have found a successful pair.

Renault:

Perhaps the award for the most dramatic downshift from title winners to title also-rans belongs to the Renault team. Crashgate (Singapore 2008) delivered the knockout punch to a team who were already on the ropes after ING declared that they would pull out of the sport at the end of 2009. The Singapore race fixing scandal merely gave the Dutch bank an excuse to get out early. Time travels fast in Formula One, though, and the deal to sign hp for the next two years signals the all-clear to partner with Renault once again. hp’s history in the sport is well-known; fingers crossed there’s money as well as technology in the deal to rejuvenate the receding Renaults.

Force India:

One of the most improved teams in 2009, Force India’s podium in Belgium remains many people’s highlights of the season. Another team owned by a billionaire, Force India are using Vijay Mallya’s business acumen to build a strong team built on the rubble of so many failed Formula One ventures. Kingfisher Airlines remain their most high profile sponsor with Whyte and Mackay, both companies owned by Dr Vijay Mallya, of course. Many people are expecting great things from the team this year, despite being beaten to the race to sign the next Indian Formula One racer by HRT who confirmed the capture of Karun Chandhok for 2010.

Scuderia Toro Rosso:

Like its big brother, Toro Rosso is funded by the Red Bull money of Dietrich Mateschitz. The teams are, despite appearances, run completely separately and the Italian-based outfit still has a great deal of work to do to emulate the 2009 success of Red Bull Racing. Scuderia actually means stables in Italian but unfortunately these red beasts are not the same as those bred over in Maranello. Their rookie-filled line ups often keeps the mechanics working late in the garage, but the status of owning 2 teams in Formula One must be enough for the Austrian magnate.

Lotus:

The Norfolk company’s first foray back into the world of Formula One since 1994 has many people holding their breath. Can Mike Gascoyne do it again with another small team? Will Lotus Racing claim their 80^th win? And, of course, will 1 Malaysia F1 Team unite the nation, as it is supposed to do? The team has placed its faith in Tony Fernandes’ wealth and his Tune Group sit proudly on the sidepod of the British Racing Green Lotus. CNN’s involvement in the team could be the smartest move by the team, giving it the exposure necessary to generate a more valuable sponsorship proposition.

Hispania Racing Team:

Yet to acquire a major sponsor, HRT takes to Sakhir with a blank livery. With a name like HRT, though, one would not expect sponsors to be jumping at the chance - not really the rich market for a female product. Only Cosworth, Bridgestone and Embratel adorn the car, the latter by way of a certain Bruno Senna. The more races that pass, you’d have to imagine that more sponsors would want to be associated with the great Brazilian’s namesake.

BMW Sauber:

Back in the trusty hands of the Swiss gent, Peter Sauber, the team has renewed vigour and lease of life. The driver line-up may be a surprise to many, but the clean, white livery probably will not be. The team is yet to find a major sponsor with Petronas defecting to Mercedes GP and Intel seemingly pulling out of the sport altogether. Only Swiss watch manufacturer, Certina, and Bridgestone make the side of the car in one of the many that will line up on the grid (probably at the back) without the customary Formula One branding. Surely brands can see the opportunities even in the smaller teams this year. Comparative media value and air time for a much reduced rate – don’t forget that there will be some tasty battles at the back of the grid worth watching, too.

Virgin Racing:

Richard Branson has taken the plunge. He played with Brawn GP (paying a reported $300K per race) in 2009 and now he has clearly graduated from the Dietrich Mateschitz school of Formula One. Seemingly the only way for him to realise his investment is to take over the team. If experience tells us anything, he will not be one for sitting at the bottom of the paddock, watching the media at work. Expect some tricks, ploys and sinful tactics to draw the media towards the Virgin end of the strip. The most successful of the new boys, Virgin has 7 additional sponsors on the car for Bahrain – value in kind or cash up front, Branson undoubtedly has the Midas touch.

Richard Soddy