F1 sponsors hit by global recession

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The world’s economy is still reeling from the traumas of September and October.

F1 sponsors give $300m to F1 teams each year – but more and more of those companies are reporting huge profit falls and staff cut backs. Some are even falling back on their national governments for financial support.

Could we soon see a major reduction in F1 sponsorship? Here’s a look at how some of the biggest names in F1 sponsorship are faring in the growing global recession.


AMD – Electronics

AMD began to experience problems before the economic downturn, beginning with its $5.4bn purchase of ATI. It has posted a loss for eight consecutive quarters and cut staff, but in October announced $8.4bn of investment from Abu Dhabi.

Etihad Airways – Airlines

The very high oil prices earlier this year put huge pressure on airlines, forcing 30 to close this year. Those prices have now fallen but reduced demands for passenger seats and cargo continues to squeeze airlines. However the emerging Asian airlines like Etihad are in the strongest position, and in July the company made one of the largest aircraft purchases ever, worth $20bn.


McLaren sponsors Santander are weathering the financial storm better than some

Santander – Financial services

Reported a 4.7% increase in profit in the third quarter of 2008. Writing in the comments last month, Shostak explained why Santander are weathering the global financial crisis better than their rivals:

Emilio Bot??n, as he says, only buy a bank which he knows very well. This is his policy. Spanish banks only give credit to people with solid guarantees. European banks have gone bankrupt while not a single Spanish bank is in that situation.

The bigger concern for Mclaren about Santander was that they might take their sponsorship to Ferrari along with ex-McLaren drivers Fernando Alonso. But with Alonso now committed to Renault, who are already backed by another financial institution, that now seems less of a threat.


Intel – Electronics

Intel’s stock price has fallen by half since December. But it still dominates the global market for computer chips and CEO Paul Otellini has said that although sales will be down in 2009 he believes Intel has cut costs sufficiently to be able to bear them.

Dell – Electronics

The Texan computer giant has stopped hiring staff in the USA and asked employees to take a week’s unpaid leave. Techcrunch estimates Dell has shed 8,900 jobs so far.

Credit Suisse – Financial services

Credit Suisse lost significant amounts on the loans it held and reported a third-quarter loss of $1.1bn on Thursday.


ING Group – Financial services

ING’s sponsorship of Renault is due to end after 2009. However the Dutch bank has received ??10bn ($12.73bn) in support from the Netherlands government, which may lead to questions about whether it is appropriate to continue its sponsorship of F1, which extends beyond Renault to include the title sponsorship of several Grands Prix.


Panasonic – Electronic goods

Despite quarterly profits falling 19%, Panasonic still claims it will achieves 8% profit growth for the entire financial year. It is taking over Sanyo in a deal worth a reputed $8.8bn.


There are concerns over the Icelandic owner of some Williams sponsors

Hamleys, Mydiamonds, All Saints, – Toys, jewellery, and fashion

These three companies are owned by Icelandic company Baugur. Iceland’s economy has been hit especially hard by the recession, with its government taking control of three three largest banks. Bauagur has weathered the storm for the time being, but still has 1bn of debt.

Royal Bank of Scotland – Financial services

RBS, like ING, has received aid from its national government, and its sports sponsorship may now be seen as inappropriate given its support from the British taxpayer.

Lenovo – Electronics

Lenovo, the world’s fourth largest computer manufacturer, yesterday announced its earnings had fallen by 78% in the second quarter of the year. Its share price fall by 20% on the news, and it is cutting its global workforce of 23,200.

Air Asia – Airline

As with Etihad, Air Asia competes in a market under great pressure, but Asia is the stronger area of that market at present.

Allianz – Financial services

Yesterday Allianz posted a net loss of ??2.02 billion ($2.56 billion) for the third quarter of the year. Much of this was losses incurred by Dresdner Bank, which Allianz then sold, amounting to ??2.6bn in losses.

Force India F1 Team

Kingfisher – Airline

Facing similar circumstances to Etihad and Air Asia, but the difference here is that Kingfisher is owned by Force India boss Vijay Mallya.

Samsung – Conglomerate

Samsung’s investments extend beyond the realm of electronics for which they are well-known. Although that side of the business has recently given up its attempt to expand by taking over SanDisk, other areas are still very strong. Its shipbuilding business recently posted its largest ever profit.

Honda, Red Bull and Toro Rosso

These teams have few prominent sponsors. For the past two years Honda has used its livery to promote its environmental awareness message. Red Bull and Toro Rosso are used to promote Red Bull soft drinks.

What else

This is not a complete list of F1 sponsors – see the forum for more details on the major companies pumping money into F1. How are they coping with the crisis? Leave your comments below.

More on F1 and the economic crisis

Author information

Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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20 comments on “F1 sponsors hit by global recession”

  1. But with Alonso now committed to McLaren.

    Really ? They kept that one quiet :~)

  2. Hm, wasn’t Allianz a BMW sponsor?

  3. But with Alonso now committed to McLaren

    Well Keith just retroactively predicted the world’s financial crisis. :-)

    Sadly almost every logo on the Williams is taking a hit.

  4. Seems I’ll have to do that bquote thing some other time again

  5. Oliver – fixed the McLaren thing, thanks!

  6. Sales of Red Bull increased in 2007 to about £2.3bn. I’ve heard though that they might be cutting back on the lavish rock ‘n’ roll parties they throw next year in a cost cutting measurement. Perhaps an indication sales are down at the moment?

    Their end-of-season party in Sao Paulo cost well over £1m for example!

  7. I think you mean Alonso committed to Renault not Mclaren.

  8. Varun.S.Murthy
    8th November 2008, 18:14

    I think Force India is pretty much screwed..I dunno how deep Vijay Mallya’s pockets really are..Kingfisher is getting pretty much belted badly..ICICI and Reliance,which are sponsors to FI are taking huge hits in the Indian stock market..The only silver lining might be that Vijay Mallya is a liquor baron and that never goes out of demand does it?? :)

  9. I’m no marketing expert, but isn’t it a smart thing to up your advertising in economically lean times? Since everybody else will usually cut back?

    Since I’m Dutch, I’ve read a lot about the ING ‘bail-out’, but the alleged € 50 million in sponsorship is of course peanuts compared to the € 10 billion in government support.

  10. From ITV today.

    “Martin Whitmarsh was claiming afterwards they were telling Hamilton not to race Vettel at this point, that he didn’t need to.”
    Hamilton contradicted this, saying: “They were telling me I had to repass Vettel. I couldn’t believe it.”

    I do not hate to say it, but I was right!!, McL did not tell LH to stay calmed. He just was not able to repass Vettel. For me he is not worthy, just deserving champion. Now the issue is closed for me.

    About this one above, there is no doubt that the finalcial crisis or the economic crisis what ever they want to call is not only going to change the F1 but also our lifes aswell. Also the whole sport, and probably will see those “stars” earning a much more balanced salaries according to what they are able to do.

    I hope we will be in a position that competitiveness still excite us instead of being too worried of other personal situation.

    All the best for everyone.

  11. But the gripping climax left me with a couple of unanswered questions. One was following this commentator’s quote: “After the final bend it was all over and the Brazilian was beaten.”

    Was it the technical phrases “bend”, “over” and “beaten” that drew Max Moseley to F1?

    crazy quote i found somewhere….

  12. ING’s Australian branch has been helped out by the taxpayer too. Not so good for the title sponsor of the Melbourne GP. And with a record loss for the GP this year, things might be looking bad again for Oz.

  13. The Oz GP has just advertised that “The Who” are playing after the race. Wonder if that will boost ticket sales?

  14. Terry Fabulous
    9th November 2008, 3:14

    @ Pink Peril

    My generation, Substitute!

    I’m there!!

  15. @Santi
    Yes you can keep your views about a driver being worthy or not being. Something you fail to take into consideration is that Lewis was on the second race with that engine, and Mclaren had to turn the revs down to reduce the chances of blowing up the engine. Had the Brazilian GP been held early on in the year, the team would have had no reason to be too conservative.

  16. @ Pink Peril – last year they had Kiss right after the race and there were many people who were taking up the best places for the concert hours before the race start :-) Kiss was more important than F1 to some :-)

    @ Lustigson – yes, when the sales are down that is the time to start pumping even more money into advertising, if you have the money of course. but, sponsorship is not always only about advertising but often also about saving up on the profit tax payments. that motivation may not be there for many now …

  17. HounslowBusGarage
    9th November 2008, 16:49

    Milos is right about the sponsorship bit. Advertising is easier to defend in a recession as it can be centred on benefits and advantages of a specific product, whereas sponsorship is a far less focussed weapon. Great for creating a positive association with the brand, but hardly likely to motivate people to purchase.
    I’d be amazed if ING stay with all the race sponsorships (6 this season?) as well as Renault. But maybe the contracts for 2009 have been signed already . . .

  18. Good article as always Keith. A few more that I know of off the top of my head.

    – Boeing: The currently have a technology partnership with Renault. Boeing has had a lot of problems with delays in the 787, slowdown in orders as the economy continues to go south, and labor strife at home. That said, they are not in half the trouble as these financial institutions are in.

    – Denso is partnered with Toyota. Their second quarter results were U.G.L.Y. The car component manufacture’s sales were down almost 50%.

    I think there is a clear difference between the teams who will weather this storm well and those who will sink. The key difference is the sectors which their sponsors come from. For example I would feel pretty safe if I were Ferrari or BMW with a major commodities (shell and Petronas respectively) rather than something in financial or retail as a prime sponsor (say like Renault or Williams.)

  19. I thought Credit Suisse were no longer sponsoring BMW Sauber after 2008?

  20. ING have reported loses of 585m euros (£478m;$737m) for the three months up until September: http://news.bbc.co.uk/1/hi/business/7723956.stm

    Surely the chances of them remaining in F1 after 2010 is very slim?

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