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F1 2017: Where have all the sponsors gone?

March 1, 2017

The frenzied couple of weeks that covers the F1 car launches is always a fascinating period. It gives us our first glimpses of the cars set to do battle on race circuits around the world in 2017. This year we have had our attention drawn to the size of the rear tyres, the debatable look of the ‘shark fins’, and the changing liveries. All of this has done well to distract from a more alarming issue, where have all the sponsors gone?

McLaren’s new look has taken some of the attention away from the glaringly obvious blank space on the side of the car, a space befitting of a non-existing title sponsor. Sauber have disguised their lack of sponsors by putting the focus on their 25 year anniversary in racing, whilst let’s not forget that we lost a team long before the season even started, with Manor Racing unable to find a buyer or title sponsor to keep the team afloat. Gone are the heady days of brands fighting for space on a crowded piece of bodywork, or tobacco brands adorning themselves all over a team’s car. Don’t be fooled into thinking this is just a problem for the ‘smaller’ teams either, you can win a World Championship and struggle to attract sponsors. The Mercedes W08 still sporting a Blackberry sized gap on the side of the nose, cockpit surrounds and cockpit top following the company’s withdrawal before the start of the 2016 season.

So why are the sponsors staying away? Vijay Mallya, Force India F1 team owner, has been very vocal on the issue over the last couple of weeks, laying the blame on the outgoing Bernie Ecclestone. The Indian businessman was quoted as saying, “If the boss of Formula 1 says publicly that the sport is crap, what do you expect? Which sponsor wants to enter a business than speaks like that about itself? Bernie put off many sponsors with his comments, and those who did come went to the rights holders.”

Whilst Vijay Mallya lays the blame on the senior guys who run the sport, it might be worthwhile for the teams to take a look closer to home. In a highly competitive global sporting environment where brands have a gluttony of sponsorship opportunities presenting themselves on a daily basis, there is a chance that F1 teams are valuing their assets far too highly and not responding to the changing sponsorship landscape.

Motorsport sponsorship specialist, Jim Wright, feels that it is the teams who need to take a harder look at their strategy and pricing when it comes to sponsorship. “Teams are basing their sponsorship valuations as a proportion of the overall running costs incurred by the team, not based on the actual value of the sponsorship,” explains Wright. “For example, if a front wing end plate accounts for 3% of the overall cost, then a team will expect to get the same amount of money back from a brand sponsoring that position. The reality is that the actual value of that position is much less than 3%, and brands know this and therefore are not willing to shelve out the money to put their name on the side of the car. As costs are growing, media values are dropping, and therein lies the problem.”

It is perhaps a combination of these factors that are also seeing companies look elsewhere to place their sponsorship within the top-levels of motorsport. The rise of Formula E has seen the likes of Mumm and Allianz take notice and make the step across. Although not as team sponsors, the movements of major companies such as these may give a further indication of what is to come. A sport that prides itself on its green credentials, its unique race locations, and inevitably lower sponsorship valuations as the series still finds it legs, acts as an appealing alternative to the high costs and “crap” show that F1 offers.

Where does the sport go from here? As more bare carbon appears on the sidepods of the cars, it is becoming more apparent that F1 needs to take a harder look at what is going on and what can be done to ensure that brands are attracted to what is still the pinnacle of motorsport. With new senior management in the form of Liberty Media, now feels like the perfect moment for this change to occur. Indeed Liberty Media are aware of this and intent on attracting more sponsors into the sport through ramping up F1 events to a Super Bowl level by turning each international Grand Prix into a week long event.

New Executive Director of McLaren, Zak Brown, certainly feels that the sport can once again move in the right direction. Brown was quoted as saying “With Liberty Media coming in we now have a great story about where the sport is going. McLaren is now a good story, and so is F1 – so there are positive times ahead.” How long these ‘positive times’ will take to rear their head, we will wait and see. In the meantime allow yourself to be distracted by the new car liveries, but don’t go looking too closely for any new sponsors.

By Stuart Owen, Account Manager at Sine Qua Non International



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