465 replies to this topic

[Prost1997T]

http://www.autosport...t.php/id/117663

Dennis now believes that the costs of competing are so high that handing over title sponsorship rights is no longer possible without selling it off too cheaply.

"Title sponsorship doesn't exist any more as a concept," said Dennis. "If you look at what title sponsorship would normally be, it would be somewhere between 40-50 per cent of your budget. Where the budgets are for a competitive team, no company will come in and give you that kind of money."

Since there hasn't been that much sponsorship-specific discussion on the forum, I thought this would make a good starting point. Is Dennis' philosophy the correct one? With increasing numbers of "house" sponsors and B2B deals, I'm not convinced that the F1 teams have the bargaining position to be asking as much as they were in the '00s manufacturer era.

[MP430]

A line from the movie "Friday" comes to mind when I think about lack of sponsors.

[rasul]

I think he's just having trouble finding a sponsor who's willing to pay enough.

It's rumoured that Phillip Morris pays Ferrari US$160 million per season and they don't even have the Marlboro logo on the car. 

[Sash1]

So he basically says he prefers to cough up something like say 20 million himself, because he thinks it is worth 40% of his budget (let's assume 40 million) and 20 million is to cheap. I am confused. It sounds like someone who has not accepted that his results the last few years have been so poor, that the title sponsorship on his car are not worth 40% of his budget until the team has proven that worth again. Because he can't get an overpriced contract signed by an overambitious marketing team from some company does not mean that the system is a thing of the past. What arrogance.

[dgduris]

What constitutes "Title Sponsor" other than naming rights to the team and the price tag that comes with it.

 

Having not been able to put together a sponsorship deal since 2013, I am not sure Ron is an authority on sponsorship in F1 anymore.

 

Two words: Red Bull. 

Edited by dgduris, 12 February 2015 - 13:24.

[tweiss]

It's only a thing of the past because he can't find a title sponsor...

 

The world is broke and getting companies to pony up funds to go racing is the problem...

[dgduris]

2013: "We'll announce a Title Sponsor soon."

 

2014: "we're very close to a deal to announce a Title Sponsor."

 

January, 2015: "That's not our final livery. We'll be announcing a Title Sponsor soon and, then, will premier our 2015 livery."

 

February 2015: "The days of Title Sponsorship are past."

Edited by dgduris, 12 February 2015 - 13:32.

[Gyno]

The world is not broke.

The money just doesn't dissapear, It's still out there.

1 of the reasons it's difficult to get sponsors to join is because F1 is DYING.

 

The big players know this and dont wanna waste their money into a dying sport that will have empty grandstands during race day and a few senile old farts who watch it on tv.

[Lotus53B]

You can bet your ass that if in some parallel universe McLaren win the championship he'll rapidly reverse his opinion next year...

[wj_gibson]

I think he's right, though.

 

Who wants to pay £50mn to be a title sponsor in a sport that is increasingly hidden behind a paywall, that has no marketing strategy whatsoever to speak of (other than aiming itself at 70 year olds with Rolex watches), that has absolutely no connection with any recognisable global consumer brand besides Red Bull, and which generates more negative headlines than any other sport I can think of? What return does the sponsor actually get for that, especially given the trend for increasingly cautious spend on anything even remotely superfluous in a post-crash economy?

 

NB this, like everything else in F1, has been coming for years. It was only the heavy involvement of the manufacturers from 2002 onward that covered an already gaping cash hole at the heart of the sport.

Edited by wj_gibson, 12 February 2015 - 13:41.

[bub72ck]

How it relates to McLaren directly set aside, I think RD is on point.  There are so many places to spend money now with advertising.  Facebook, Twitter, websites, etc all provide channels to fans and are places to put advertising dollars for companies.  NASCAR is in the same boat.  Many of the top teams now have two or three different sponsors that rotate as the car's main livery.  The days of all top teams pairing with a primary sponsor for two decades are IMO over.   

[dau]

I think he's right, though.

 

Who wants to pay £50mn to be a title sponsor in a sport that is increasingly hidden behind a paywall, that has no marketing strategy whatsoever to speak of (other than aiming itself at 70 year olds with Rolex watches), that has absolutely no connection with any recognisable global consumer brand besides Red Bull, and which generates more negative headlines than any other sport I can think of? [...]

Well, there's Infiniti Red Bull, Williams Martini, Sahara Force India and Mercedes AMG Petronas. So some companies seem to see some value in being present in the team name.

[GazWillsDSJ]

Ron Dennis’ recent comments are starting to annoy me.

 

First his Ron speak ‘size zero’ - so in other words you’ve designed something brand new with a new manufacturer that has no space for flexibility on the car - so it’ll keep breaking – a stupid philosophy on such a new partnership.

He then says he is focused on making a quick car not a reliable one,  well it’s neither yet and this is the opposite to what the dominant World Championship winning team are saying themselves – Maybe he could learn something there.

He then argues that there is no point making the car a pretty colour just to appease someone in the team.   Well what about the fans?  Autosport wrote an article last week about Red Bull and how liveries stir the emotions, of the fans, and maybe the backers (Ron?)

He now says that F1 budgets are too expensive to attract a single large backer – well therein lies the problem and a major one, it’s not a budget if you can’t balance it out is it? He is touting a basic business fundamental flaw as if its now normal practice.    The money you spend needs to be equal to or less than the money you are bringing in.

 

F1 you are spending too much money!!!! Sort yourselves out!

 

Ron, go back to business school.

[Rinehart]

Well, there's Infiniti Red Bull, Williams Martini, Sahara Force India and Mercedes AMG Petronas. So some companies seem to see some value in being present in the team name.

Exactly, Redbull & Petronas for example are certainly paying the sort of sums that constitutes "title sponsorship" by Rons own commercial yardstick, plus there are sponsors with huge budgets that have chosen other sports - e.g. Emirates.

 

His opinion is basically "I can't find one so they don't exist". An opinion that would change immediately if he did find one and he says they are still looking.

 

Its rumoured that McLaren turned down the Martini deal last year before Williams took it, at somewhere in the region of £25m. 

 

I don't understand why they turned that deal down. How is the title package on their car worth "double that" if nobody is queuing up to pay it? 

[Rinehart]

 

I think he's just having trouble finding a sponsor who's willing to pay enough.

It's rumoured that Phillip Morris pays Ferrari US$160 million per season and they don't even have the Marlboro logo on the car. 

 

Unfortunately Marlboro are really the only global tobacco brand that have successfully created subliminal branding in the post-tobacco ban era. No other tobacco brand has established a set of non-trademarked colours or graphics that are recognisable. Otherwise the obvious answer would be to do the same thing, with another huge global tobacco brand. Marlboro thought about this a decade before the bans came into effect. 

[Anderis]

Its rumoured that McLaren turned down the Martini deal last year before Williams took it, at somewhere in the region of £25m. 

 

I don't understand why they turned that deal down. How is the title package on their car worth "double that" if nobody is queuing up to pay it? 

I think Williams just accepted an underpriced deal so McLaren was without chance to win this battle for Martini sponsorship anyway. From what I know, the deal was only worth $15m for 2014 and that's ridiculously low for a title sponsorship, livery change and stickers all over the car including rear wing and engine cover. Some sponsors used to pay that much for just one big sticker a few years ago (and I'm not talking about frontrunner teams only).

 

No wonder why Martini decided to chose Williams and I'm not surprised McLaren didn't decide to come with an offer that could match the one that came from them  I think it was a matter of Williams offering very good deal to Martini, than McLaren turning something down.

Edited by Anderis, 12 February 2015 - 14:25.

[Supertourer]

Well, there's Infiniti Red Bull, Williams Martini, Sahara Force India and Mercedes AMG Petronas. So some companies seem to see some value in being present in the team name.

Actually I believe Williams is an example of what RD is referring to as I think their investment is around $15M per year, so they get a long of bang for their buck. As for Sahara - they are a shareholder in the FI team.

 

The Petronas sponsorship of Mercedes is part of a strategic supplier partnership with Daimler to supply lubricants for their road cars. Infiniti are no doubt a large contributor to RB but not 50% of the budget.

[03011969]

I think this is Ron's way of saying McLaren aren't a big enough team anymore to attract the sponsorship they would like, but is unwilling (perhaps correctly so) to accept the kind of sponsorship deal that the market says McLaren, in their current midfield status, deserve.

[tifosiMac]

It certainly is if you can't get it Ron! 

[Zoony]

Unfortunately Marlboro are really the only global tobacco brand that have successfully created subliminal branding in the post-tobacco ban era. No other tobacco brand has established a set of non-trademarked colours or graphics that are recognisable. Otherwise the obvious answer would be to do the same thing, with another huge global tobacco brand. Marlboro thought about this a decade before the bans came into effect. 

 

It might seem like the obvious answer, but as long as McLaren is UK based it would be illegal. The UK's Tobacco Advertising & Promotion Act makes it an offence to accept any sponsorship monies from tobacco companies, regardless of whether tobacco logos are displayed. The Italian version of the tobacco advertising legislation is far less strict, and is why Ferrari are able to accept Marlboro sponsorship.

 

On the subject of Ron's statement, I have to agree with those who have said that it sounds like sour grapes. I see his point about not wanting to devalue sponsorships, but surely it would make more economic sense to accept whatever is on offer rather than do without anything at all. It seems a very odd and arrogant stance to take.

[P123]

 

I think he's just having trouble finding a sponsor who's willing to pay enough.

It's rumoured that Phillip Morris pays Ferrari US$160 million per season and they don't even have the Marlboro logo on the car. 

 

 

They buy the space and sell some of it on to the likes of Santander, UPS, etc.

[P123]

Anyway, I'm sure I read these quotes from RD a few days (maybe weeks) back.... surely not Autosport rehashing something as 'new' news..... again.

[GrumpyYoungMan]

The world is not broke.

The money just doesn't dissapear, It's still out there.

 

1 of the reasons it's difficult to get sponsors to join is because F1 is DYING.

 

The big players know this and dont wanna waste their money into a dying sport that will have empty grandstands during race day and a few senile old farts who watch it on tv.

That is only because everyone talks it down, instead of trying to fix the issues...

 

Money does disappear its called inflation...

Edited by GrumpyYoungMan, 12 February 2015 - 14:37.

[taran]

Ron Dennis is not a stupid man. His conclusions may be wrong but he obviously believes what he says, based on facts available to him.

 

He seems to imply that that big sponsors are only willing to pay up to a certain amount (say $50m) for major signage on a car. Traditionally, the main sponsor provides up to 50% of the entire budget so a team could realistically raise $100m from sponsors with such a title sponsor. However, top teams spend $200m - $250m a year.

 

Obviously, that is not enough to cover their expenses, especially without large FOM pay outs. Which means the traditional way of sponsorship with a big sponsor and a few smaller ones is no longer sufficient unless the sponsors are willing to pay more for the same space on the car. And with F1 not being very attractive with Bernie at the helm, that’s not an option.

 

Therefore he is looking at a new model in which several sponsors are willing to share the car livery space amongst themselves for a price which falls between full title sponsorship and the small fee minor sponsors usually pay. With the result being more than a traditional sponsorship setup would rake in.

 

And in a way, Dennis has been right. There have been very few major new sponsorship deals in F1, certainly at the top teams. ING was pretty much the last IIRC. Martini has gotten a lot of attention but the actual worth of the deal is peanuts.

 

Sure, there is a certain amount of sour grapes, there would have to be with a dour character like Ron, but he still has a point. If he locks McLaren into a sponsorship for 3 years (usual for large sponsorship deals) at a piddling amount, he faces problems down the road as the team will not have the funds to match the other rich teams. So as long as the team can survive without a big title sponsor, the option to get a long term big sponsor remains. And if the new strategy of several largish sponsors works, so much the better.

 

Williams obviously wasn’t in that position and needed to sign any sponsor they could in 2014 after Maldonado left to show they were still a viable team after several poor years and a lucky win.

[BRG]

I think this is Ron's way of saying McLaren aren't a big enough team anymore to attract the sponsorship they would like, but is unwilling (perhaps correctly so) to accept the kind of sponsorship deal that the market says McLaren, in their current midfield status, deserve.

No teams are attracting the sponsorship they would like.  Other than Ferrari - bankrolled by immoral cash from Marlboro and by Fiat - and Red Bull - owned and funded by themselves - all the other team are in even worse shape than McLaren.  Dennis is telling us that they have done their best to get a big sponsor but now have to accept that there ain't no such thing anymore.  The world has moved on and throwing mega bucks at F1 is no longer something any sensible business will consider.

[sopa]

My personal interpretation is that McLaren is stuck in vacuum between two sides. They definitely want to be a top team, define themselves as such and want to run the operation as a top team effort, which would also mean top category budget. But sponsors do not see them that way and are not willing to pay as much to catch up with Mercedes, Ferrari and Red Bull in the finance stakes. So McLaren is inbetween - perhaps their budget is somewhat bigger than the one of traditional midfield teams, but it doesn't match top teams either. So what to do? Only time will tell, whether it goes one way or the other. Ron tries hard to turn McLaren into a top team again, but real life is more complicated.

[tormave]

Well, there's Infiniti Red Bull, Williams Martini, Sahara Force India and Mercedes AMG Petronas. So some companies seem to see some value in being present in the team name.

 

The only traditional title sponsor here is Martini. Sahara owns almost half of Force India (and their CEO is in prison), Mercedes owns 100% of it's own team as does Red Bull. Infinity label is an engine discount from Renault rather than a title sponsorship in the traditional sense. Also, I've heard how much Martini pays Williams for the title privilege and it's a pittance compared to what title sponsorship used go for as well as Williams' annual racing budget.

 

What Ron did is develop his own source of money to put back into racing. McLaren did this in a remarkably short time span too.

[Nonesuch]

He seems to imply that that big sponsors are only willing to pay up to a certain amount (say $50m) for major signage on a car. Traditionally, the main sponsor provides up to 50% of the entire budget so a team could realistically raise $100m from sponsors with such a title sponsor. However, top teams spend $200m - $250m a year. Obviously, that is not enough to cover their expenses, especially without large FOM pay outs.

 

Dennis can declare that space on his cars' sidepods is worth $50 million a year, but when nobody takes him serious then the real worth is closer to $0. At least, the amount of money he'll receive will be in that range, anyway.

 

Williams might not have hit the motherlode by accepting Martini's deal, but one assumes that Martini's offer was better than the alternatives available to Williams at the time.

 

Dennis is starting to sound like the guy left standing in the rain because after refusing a dozen Volkwagens he's still certain the next car to take a hitch-hiker will be a Mercedes... Honda.

 

On the more positive side: McLaren doesn't actually seem to be in dire need of a big sponsor. So perhaps it's not as much of a problem as some are suggesting.
 

Therefore he is looking at a new model in which several sponsors are willing to share the car livery space amongst themselves for a price which falls between full title sponsorship and the small fee minor sponsors usually pay. With the result being more than a traditional sponsorship setup would rake in.

 
 While that makes sense, it's a tight rope to walk: too many sponsors and the logo becomes indistinguishable among the clutter. Especially when, like Lotus is doing, they're all given the same colour.

Edited by Nonesuch, 12 February 2015 - 15:20.

[P123]

The only traditional title sponsor here is Martini. Sahara owns almost half of Force India (and their CEO is in prison), Mercedes owns 100% of it's own team as does Red Bull. Infinity label is an engine discount from Renault rather than a title sponsorship in the traditional sense. Also, I've heard how much Martini pays Williams for the title privilege and it's a pittance compared to what title sponsorship used go for as well as Williams' annual racing budget.

 

What Ron did is develop his own source of money to put back into racing. McLaren did this in a remarkably short time span too.

 

I think Merc own 60% of their team.  Wolff owns 30% and Lauda the remaining 10%.

 

F1 teams seem to have trouble attracting sponsors of any sort these days.  Whether that is because they ask for too much, down to F1's sluggish embracement of new forms of media, F1 being more restricted to pay TV, FOM's unfair advantage in controlling the broadcast and trackside advertising and therefore being able to guarantee x hours coverage, or the various scandals such as Singapore '08, Mosley and Ecclestone's bribery case....  If Philip Morris ever did ditch Ferrari it would be interesting to see how well they could fill that void financially (they will always have sponsor stickers on the car but maybe not at the same price...).

Edited by P123, 12 February 2015 - 15:46.

[Nemo1965]

Considering the fact that most of McLaren's money is earned by the car-business and none-F1 activities (right?), the title-sponsor of McLaren is.... McLaren. Just like Ferrari is the title-sponsor of... Ferrari.

 

Same applies for Mercedes and Red Bull, of course.

[Abranet]

Considering the fact that most of McLaren's money is earned by the car-business and none-F1 activities (right?), the title-sponsor of McLaren is.... McLaren. Just like Ferrari is the title-sponsor of... Ferrari.

 

Same applies for Mercedes and Red Bull, of course.

 

Apart from Marlboro is the title sponsor for Ferrari who then re-sale that space to others and I doubt McLaren automotive is making anywhere near enough profit to be funding an F1 team. 

[dau]

The only traditional title sponsor here is Martini. Sahara owns almost half of Force India (and their CEO is in prison), Mercedes owns 100% of it's own team as does Red Bull. Infinity label is an engine discount from Renault rather than a title sponsorship in the traditional sense. Also, I've heard how much Martini pays Williams for the title privilege and it's a pittance compared to what title sponsorship used go for as well as Williams' annual racing budget.

 

What Ron did is develop his own source of money to put back into racing. McLaren did this in a remarkably short time span too.

Sure, they're not title sponsors in the traditional sense of something like Marlboro or West, but that's a pretty strict definition of "title sponsorship", don't you think? Point is that they see value in having a major presence on the car and in the team name. Petronas may not be directly paying Merc for title sponsorship, but them being there is part of their strategic partnership with Mercedes from which the F1 team profits as well. Same goes for Infiniti and also Sahara. Would the latter have invested in FI without getting that sort of exposure? I doubt it. 

 

So yes, Martini don't pay 50% of Williams' budget like it used to be in the old days. But i don't see why they'd have to to be title sponsor. As for Ron's own source of money, i'm still waiting to see that. Last i heard was that he was still searching for investors to put £300m in the McLaren Group. That was last month.

[Rinehart]

Considering the fact that most of McLaren's money is earned by the car-business and none-F1 activities (right?), the title-sponsor of McLaren is.... McLaren. Just like Ferrari is the title-sponsor of... Ferrari.

 

Same applies for Mercedes and Red Bull, of course.

Indeed.

[Timstr11]

Ron Dennis is not a stupid man. His conclusions may be wrong but he obviously believes what he says, based on facts available to him.

 

He seems to imply that that big sponsors are only willing to pay up to a certain amount (say $50m) for major signage on a car. Traditionally, the main sponsor provides up to 50% of the entire budget so a team could realistically raise $100m from sponsors with such a title sponsor. However, top teams spend $200m - $250m a year.

 

Obviously, that is not enough to cover their expenses, especially without large FOM pay outs. Which means the traditional way of sponsorship with a big sponsor and a few smaller ones is no longer sufficient unless the sponsors are willing to pay more for the same space on the car. And with F1 not being very attractive with Bernie at the helm, that’s not an option.

 

Therefore he is looking at a new model in which several sponsors are willing to share the car livery space amongst themselves for a price which falls between full title sponsorship and the small fee minor sponsors usually pay. With the result being more than a traditional sponsorship setup would rake in.

 

And in a way, Dennis has been right. There have been very few major new sponsorship deals in F1, certainly at the top teams. ING was pretty much the last IIRC. Martini has gotten a lot of attention but the actual worth of the deal is peanuts.

 

Sure, there is a certain amount of sour grapes, there would have to be with a dour character like Ron, but he still has a point. If he locks McLaren into a sponsorship for 3 years (usual for large sponsorship deals) at a piddling amount, he faces problems down the road as the team will not have the funds to match the other rich teams. So as long as the team can survive without a big title sponsor, the option to get a long term big sponsor remains. And if the new strategy of several largish sponsors works, so much the better.

 

Williams obviously wasn’t in that position and needed to sign any sponsor they could in 2014 after Maldonado left to show they were still a viable team after several poor years and a lucky win.

 

I doubt that in current circumstances sponsors are still willing to pay 50 million USD for half the space on a car. Not even for the championship leader.

 

Circumstances have changed.

Ron Dennis makes it sound as if it's set in stone how much signage on a car is worth. It never was and it never will be. 

[charly0418]

2013: "We'll announce a Title Sponsor soon."

 

2014: "we're very close to a deal to announce a Title Sponsor."

 

January, 2015: "That's not our final livery. We'll be announcing a Title Sponsor soon and, then, will premier our 2015 livery."

 

February 2015: "The days of Title Sponsorship are past."

 

lol, my favorite is still his guarantee McLaren would win a race in 2014

[kevinracefan]

Ron has the factory, manpower, and payroll of a top team..

 

unfortunately he no longer has the results of a top team...

 

results matter when selling sponsorship...

[Tsarwash]

 

 

F1 you are spending too much money!!!! Sort yourselves out!

 

Ron, go back to business school.

I think with respect, that when you have built up a business with a turnover close to the size of McLaren's, you can justifiably to Dennis to return to business school. Until then I think that we all have to accept the Ron is probably a far better businessman than you are. I think that his non F1 business's have a combined turnover of half a billion pounds according to basic sources. 

[pup]

Part of what Dennis says makes sense; i.e., if the sport is no longer valuable enough to attract title sponsors, then you need to come up with a new way of selling sponsorships to recoup the money.

 

But the other part - that he'd rather go without than to sell a title sponsorship for cheap - just isn't logical.  That is, if you can't attract a high dollar sponsor, then your choices are to take a little money, or to take none.  Obviously in that case, you take what you can.  Unless you're an idiot, of course, and I don't think Dennis qualifies.  The only reason not to take a smaller deal is if you believe that by doing so you'll miss out on an opportunity that you haven't discovered yet; i.e, a high dollar sponsor.  And if that's the case, then the premise of his argument is wrong - the age of title sponsors is not over.

 

Personally, I think he's taking a page from Bernie's book - use the press as a tool in your negotiations.  McLaren probably have several potential title sponsors, just none who want to pay McLaren's fee.  Knowing Dennis, he's probably asking for way more than he's letting on.  He doesn't like to do deals that he can't brag about.  Everything in his life has to be an over-the-top triumph.  

[GrumpyYoungMan]

Part of what Dennis says makes sense; i.e., if the sport is no longer valuable enough to attract title sponsors, then you need to come up with a new way of selling sponsorships to recoup the money.

 

But the other part - that he'd rather go without than to sell a title sponsorship for cheap - just isn't logical.  That is, if you can't attract a high dollar sponsor, then your choices are to take a little money, or to take none.  Obviously in that case, you take what you can.  Unless you're an idiot, of course, and I don't think Dennis qualifies.  The only reason not to take a smaller deal is if you believe that by doing so you'll miss out on an opportunity that you haven't discovered yet; i.e, a high dollar sponsor.  And if that's the case, then the premise of his argument is wrong - the age of title sponsors is not over.

 

Personally, I think he's taking a page from Bernie's book - use the press as a tool in your negotiations.  McLaren probably have several potential title sponsors, just none who want to pay McLaren's fee.  Knowing Dennis, he's probably asking for way more than he's letting on.  He doesn't like to do deals that he can't brag about.  Everything in his life has to be an over-the-top triumph.  

Could he also be playing a possible (high stake) game here with a (possible) sponsor....?

Edited by GrumpyYoungMan, 12 February 2015 - 16:21.

[kosmos]

Ron has the factory, manpower, and payroll of a top team..

 

unfortunately he no longer has the results of a top team...

 

results matter when selling sponsorship...

 

 

Pretty much.

 

Make fast car - Win races - Win championships and sponsors will come.

[redreni]

I think Denis is frustrated, but there's absolutely no reason why the value of a title sponsorship deal should be dictated by the size of the team's budget.

 

It should, if anything, work the other way around, with the size of the budget being constrained by available resources, including the limit of what can be raised through sponsorship, with the latter being dictated by the value of the offering to potential sponsors in terms of brand exposure, positive impact on brand image, etc.

 

If he's saying "well, FOM income has increased, Mercedes and Red Bull are spending more than they used to, we've increased our budget as well, so I'm putting up my asking price for title sponsorship in line with that", it probably explains why his team doesn't have a title sponsor.

[David Lightman]

The question is why a sport as large as F1 can't attract companies like Google, Apple, Coke, Nike etc who are all swimming in a vast sea of money. Apple could sponsor the entire grid and not even notice a dent in it's bank balance.

[BellisEndis]

 

I think he's just having trouble finding a sponsor who's willing to pay enough.

It's rumoured that Phillip Morris pays Ferrari US$160 million per season and they don't even have the Marlboro logo on the car. 

 

 

Maybe no logo on the car but they use the car to sell smokes ;)
 

[Nemo1965]

Apart from Marlboro is the title sponsor for Ferrari who then re-sale that space to others and I doubt McLaren automotive is making anywhere near enough profit to be funding an F1 team. 

 

Apparently the company McLaren Group is funding a F1 team, even if it puts them in debt. Otherwise there would not have been a McLaren F1 team now. I don't understand the finances of McLaren (I really don't), but I can't imagine where else they get their money from.

 

Regarding Ferrari: it sells cars (and other Ferrari-products) to drive F1, it always has been like that.

Edited by Nemo1965, 12 February 2015 - 16:44.

[Fastcake]

I think Merc own 60% of their team.  Wolff owns 30% and Lauda the remaining 10%.

 

F1 teams seem to have trouble attracting sponsors of any sort these days.  Whether that is because they ask for too much, down to F1's sluggish embracement of new forms of media, F1 being more restricted to pay TV, FOM's unfair advantage in controlling the broadcast and trackside advertising and therefore being able to guarantee x hours coverage, or the various scandals such as Singapore '08, Mosley and Ecclestone's bribery case....  If Philip Morris ever did ditch Ferrari it would be interesting to see how well they could fill that void financially (they will always have sponsor stickers on the car but maybe not at the same price...).

 

Sooner or later Philip Morris will have to stop sponsoring Ferrari. Tobacco legislation is only getting more stricter, and the loophole in Italian law that allows Ferrari to carry on accepting the Marlboro man will eventually be closed.

 

Sure, they're not title sponsors in the traditional sense of something like Marlboro or West, but that's a pretty strict definition of "title sponsorship", don't you think? Point is that they see value in having a major presence on the car and in the team name. Petronas may not be directly paying Merc for title sponsorship, but them being there is part of their strategic partnership with Mercedes from which the F1 team profits as well. Same goes for Infiniti and also Sahara. Would the latter have invested in FI without getting that sort of exposure? I doubt it. 

 

So yes, Martini don't pay 50% of Williams' budget like it used to be in the old days. But i don't see why they'd have to to be title sponsor. As for Ron's own source of money, i'm still waiting to see that. Last i heard was that he was still searching for investors to put £300m in the McLaren Group. That was last month.

 

Sahara and Force India have a much more complex relationship than a simple promotional affair. As I remember it, Sahara ended up owning equity in Force India due to the various business dealings between Subrata Roy and Mallya, and subsequently has contributed a small amount to the team just to keep some value in their investment. It's certainly not a title sponsorship - Sahara have their name there because they own the team!

[superden]

Apple could sponsor the entire grid and not even notice a dent in it's bank balance.

Because F1 is too small, too niche and frankly, too insignificant to a massive percentage of its key demographic. It wouldn't offer them a return worth bothering with. F1 is also perceived by many as a shambolic waste of money and an unnecessary squandering of resources. It's 'un-green' if you like and that is a big part of the mission statement of most multi-national businesses these days. Environmental awareness sells, and half-cocked KERS and limited fuel use regulations do not constitute genuinely green technology. If they were to be involved in anything, it would be Formula E.

Google are pushing electric, driverless (and ****ing soul destroying) cars for goodness sake.

Apple and Google et al simply don't NEED or, likely as not, WANT F1 to showcase their brands. They have other, more useful outlets for that, which are cheaper and appeal to their user base more than a few well paid drivers drivers going round in circles.

Edited by superden, 12 February 2015 - 17:06.

[Rinehart]

Sooner or later Philip Morris will have to stop sponsoring Ferrari. Tobacco legislation is only getting more stricter, and the loophole in Italian law that allows Ferrari to carry on accepting the Marlboro man will eventually be closed.

 

 

 

There is no rush for the law in Italy to be changed to the detriment of their beloved national racing team, Ferrari. Why do you think Italy has this exceptional difference in the first place?! 

 

Besides the deal isn't sponsorship (we all know it is in reality) but it isn't technically. No Marlboro logos feature on the car (we all know the car is one big Malboro Logo in reality)... Nothing will change anytime soon.

[Nonesuch]

The question is why a sport as large as F1 can't attract companies like Google, Apple, Coke, Nike etc who are all swimming in a vast sea of money. Apple could sponsor the entire grid and not even notice a dent in it's bank balance.

 

Wasn't the 2007 Earth Car Honda a result of a deal with Google that failed at the last minute? I recall there being some rumours to that effect at the time.

 

I doubt Apple's main demographic has a lot of overlap with that of F1, though of course I could be completely wrong.

[charly0418]

"Our cars will not feature a title sponsor at the first event and it will definitely be featuring a title sponsor some time in the next few races," Dennis said. "Why? Because I strongly believe we are Manchester United. Inevitably when you have a run of poor results people try to push the rate card down and I won't accept that.

"I know what this company is and I know what this grand prix team can achieve, and that requires the correct recognition when it comes to a commercial relationship with a principal sponsor.

"We are negotiating with several companies at the moment and I'm optimistic it will happen sooner rather than later. But part of being the size that we are, money is an issue. The racing team - who doesn't have to worry about income - has the biggest budget that it's had in the history of the company."

[mclarensmps]

I can tell how many people have read the article and how many are commenting based purely on the headline.

Ron's Idea of a title sponsor is someone who can fund 40-50% of the season's budget, to put massive logos on the car. Now you consider what 40-50% of McLaren's budget is. Let's say it's 300 million, for example.

 

Who is going to shell out 150m to put their logo on a car these days?

I think Ferrari are the only ones who can claim to have a sponsor that does that, right?