70 replies to this topic

[Owen]

Originally posted by taran
I think this is a period in which F1's image of a luxurious, high-tech, over the top, glamourous, spend ridiculous amounts, sports will work against it. Companies need to advertise, perhaps more so in economically trying times, but the perception of their advertising is equally important.

When laying off thousands of people, you simply cannot be seen to sponsor something which is known for profligate spending and an excessive life style. At that point, sponsoring will just start to work against you.

When it comes to companies saved by government bailouts (which is another word for taxpayer's money), then it becomes even more so.

F1 budgets may be secure for 2009 due to current contracts (although i am sure every contract has get out clauses) but there will be no new contracts in the current economic climate.

ING has now announced it is withdrawing from F1 at the end of 2009. I am sure they are just the first of many sponsors.

You make a good point. Companies will not wish to look like they are spending out on 'luxuries' like F1 sponsorship at a time when a great deal of people are being made redundant or when a company is struggling. I wouldn't like to be hunting for deals right now in this climate. The 2010 grid could be pretty barren of new sponsors.

[Motormedia]

The whole RBS affair is going to hurt F1 as whole. I'm not sure ING will do that to the same extent since they did the right thing and made the announcement way before their involvement had started to infuriate people to the same extent as with regards to RBS. It will not be easy to find new sponsors if the sport becomes associated with immoral behavior.

[dank]

Wonder what implications this will have on the ING sponsored circuits such as Spa?

[Snap Matt]

Originally posted by dank
Wonder what implications this will have on the ING sponsored circuits such as Spa?

Where does that money go? Let me rephrase that... who is that sponsorship paid to? Is it straight to Bernie's pocket like the other signage, or does it go to the organiser to contribute towards the race fee Bernie charges to to the circuit?

[dank]

Originally posted by Snap Matt

Where does that money go? Let me rephrase that... who is that sponsorship paid to? Is it straight to Bernie's pocket like the other signage, or does it go to the organiser to contribute towards the race fee Bernie charges to to the circuit?

Well as I've since found out, the money ends up in the FOM's coffers. If no other sponsor comes along two things might happen:

1. They'll up the sanctioning fee.
2. They'll take Hungary and/or Spa elsewhere, probably backed by a government no doubt.

[Ocelot]

They'll take Hungary and/or Spa elsewhere, probably backed by a government no doubt.

The race that's most at risk from this is Turkey. Bernie had already put it on the warning list and it's no surprise since F1 runs the circuit and so instead of getting megabucks for the race (like at most other new GPs) it is paying for it. However, any sponsorship money from the race will go directly to Bernie's company to offset the cost of hosting the race. ING is title sponsor of the Turkish GP but not next year. This means less money coming in to cover the costs of the race which puts it even more at risk.

I think this is a period in which F1's image of a luxurious, high-tech, over the top, glamourous, spend ridiculous amounts, sports will work against it.

No doubt about that. RBS' WIlliams' sponsorship made it to the cover of the UK Express newspaper yesterday for this very reason (and because a pressure group is calling for RBS to ditch it - not long before that happens...):
http://www.express.c...n-bail-out-cash

[Buttoneer]

Regardless of the eventual outcome, the standard of reporting in that article is appalling.

The RBS sponsorship portfolio also includes deals with Six Nations rugby and British tennis ace Andy Murray.

...as a cosy little aside.

Sponsorship is still important if you want to attract business and, more importantly, so the corporate bankers, treasurers and investors get the sort of treatment they expect. You can bet your arse that Santander won't stop.

[Owen]

Originally posted by Buttoneer
Regardless of the eventual outcome, the standard of reporting in that article is appalling.
...as a cosy little aside.

Sponsorship is still important if you want to attract business and, more importantly, so the corporate bankers, treasurers and investors get the sort of treatment they expect. You can bet your arse that Santander won't stop.

Difference is that Santander has a more steady financial footing and is not massively in debt and relying on taxpayer money.

[MikeTekRacing]

Originally posted by Owen


You make a good point. Companies will not wish to look like they are spending out on 'luxuries' like F1 sponsorship at a time when a great deal of people are being made redundant or when a company is struggling. I wouldn't like to be hunting for deals right now in this climate. The 2010 grid could be pretty barren of new sponsors.

that's a rather narrow view on it (sorry)
nobody spends money on sponsorship as a luxury. it's not like you go and stay at the Ritz.
they spend it as an investment and hope to get more business (and thus more money).
if your company is struggling and you don't get new business you won't be around for long.
at the end of the day it remains a basic business decision. do i get more than i invest? can i get more by using the money in other programs?

[Owen]

Originally posted by MikeTekRacing

that's a rather narrow view on it (sorry)
nobody spends money on sponsorship as a luxury. it's not like you go and stay at the Ritz.
they spend it as an investment and hope to get more business (and thus more money).
if your company is struggling and you don't get new business you won't be around for long.

Agreed. But perception and reality are two different things. It's perceived by many as extravagant. I can't see the thousands who were made redundant by RBS being too pleased that RBS is to continue it's high profile and highly expensive sponsorship arrangements for example.

[Buttoneer]

Originally posted by Owen


Agreed. But perception and reality are two different things. It's perceived by many as extravagant.

Completely understand, and the reality is that it IS extravagant even for the individuals involved. But. Important business decisions are made off the back of these extravagances. Important relationships develop and flourish. Backs are rubbed and palms are greased and the heavy wheels of capitalism will creak around. And they will be after the same business that Santander is after.

To a certain extent RBS would be far better off toughing out any outcry much like they are trying to do over bonuses.

[Ocelot]

Difference is that Santander has a more steady financial footing and is not massively in debt and relying on taxpayer money.

Absolutely! I totally agree and I'm confident that the pressure will soon get so great that RBS will have no choice but to cease its F1 activity. The TaxPayers' Alliance anger is the prelude to assaults on the government in Parliament I'm sure.

[billkaos]

Originally posted by Owen


Difference is that Santander has a more steady financial footing and is not massively in debt and relying on taxpayer money.

Not for a very long time.

Regards.

[MichaelPM]

I bet all teams where evaluating their sponsors for the future before anyone here even mubbled the word "global economic crisis".

[Owen]

Surer: All financial institutions will exit F1
here

[MichaelPM]

Originally posted by Owen
Surer: All financial institutions will exit F1
here

I was going to reply but that pretty much sums up what I was going to say.

I think oil companys will be the next big thing, well not bigger but just biggest thing to replace banks.

[lukywill]

indeed and comunications companies like alice or vodafone, the one's that escape current crises.

pity that petrobas left williams just withdraw the titanic ex-tyrrell.

[Gilles4Ever]

Originally posted by lukywill
indeed and comunications companies like alice or vodafone, the one's that escape current crises.

pity that petrobas left williams just withdraw the titanic ex-tyrrell.

Alice have withdrawn as title/naming sponsor of the Alice/Pramac Ducati team in motogp citing economic climate.

[lukywill]

a excuse to fly higher with ferrari.

[lukywill]

besides weird marlboro drug sponsor to ferrari (and failures to be car manufacturers and financial groups) what major sponsors we do have?

2 electronics company's, panasonic and phillips.
1 communications group, vodafone. (add alice and at&t (?)
1 (2) drink aux sauté, redbull. (add lewis walker)
1 mmillionaires, from india
and some petrol companies: petronas, total,

[taran]

In many ways, banking and F1 have been very unnatural partners IMO.
The innovative ways of modern banking peddled by the banks (and the glamorous entertaining) have merely led to high-level graft, fraud, stupidity and mismanagement. In short, I prefer my bankers to be solid, boring and dependable. And not involved in fancy, fast paced sports like racing and yachting.

High tech companies were ideally suited to F1 and will probably remain so but the natural sponsors of F1 are the fuel and tyre companies (if F1 gets rid of the single tyre brand rule). If no other sponsors can be found, their sponsorship should be enough to keep the sport functioning.

In the early 90s, teams could survive on $5m and be successful on $40m while still building exciting, highly advanced cars. There is no reason they can't do so again, after cutting away much of the flab.