Written by Vyas Ponnuri, Edited by Simran Kanthi
Sponsors are essential to a team's success in motorsport. Their impact on the sport as a whole and on teams individually is widely visible. The relationship between sponsors and teams is a win-win for both parties. Sponsors benefit from the increased visibility on the team's cars every race, which can enhance their sales and target markets. Consumers develop an emotional relationship with the brands, especially a brand sponsoring their favourite team. Teams benefit from the sum received from the sponsors in relation to their performance on the track.
Brands can choose to be title sponsors of a team, the outcome of which is their presence in the team's name. For instance, Oracle's five-year deal to sponsor the current constructors' champions Red Bull Racing from this season, sees the team's name change to Oracle Red Bull Racing. The same is the case for Petronas and Mercedes AMG, a successful partnership ever since Mercedes returned to F1 as a Constructor in 2010. Alpine has BWT as its title sponsor, who previously sponsored Force India/Racing Point from 2017 to 2020. Alfa Romeo has the Polish petroleum refinery company Orlen as its title sponsor, whereas Haas recently signed a deal with Moneygram International Inc, an American financial services company for title sponsorship from 2023. Title sponsorships are the highest level of sponsors for teams in F1 and are costlier compared to other sponsors. Red Bull's sponsorship with Oracle is worth $300 Million.
While title sponsorships can be expensive, brands can choose to sponsor a team for a lower sum with their name being placed on the car. Several sponsors come under this umbrella, with teams having as many as 20 sponsors donning their cars. Scuderia Ferrari and Red Bull Racing have had over 25 sponsors each in 2022, with the likes of McLaren and Alfa Romeo not too far off that figure. Teams look to sign more sponsors every year with a bid towards increased funding, in return for greater visibility for these brands.
How did sponsorships in F1 emerge and become the force it is today? Let us take a trip down memory lane to 1968, the year when it all began.
The history of Sponsorships: Gold Leaf International and more
Back in the early days of Formula 1, sponsorship was still a relatively unknown commodity. Automotive brands such as Ferrari, Honda, Ford, fuel brand Castrol, and tyre supplier Dunlop could essentially be classified as "sponsors". The idea of using Formula 1 cars as a medium of sponsoring one's product was still a novelty; it was unexplored territory.
1968 was an important year in the history of sponsorships in F1. Major sponsors pulling out ahead of the season led to the FIA allowing unrestricted sponsorship in the sport. The first team to implement sponsorship colours in their livery was the privateer team, Team Gunston, painting their car in the colours of Gunston Cigarettes, a South African cigarette brand. The distinctly coloured orange car caught the attention of many, it seemed, and their type caught on with the rest too.
In the very next race, in Spain, Lotus followed suit, becoming the first works team to implement sponsorship on their car in the form of Imperial Tobacco's brand, Gold Leaf International. Their car was decked in the brand's red, gold and white, marking a milestone in the sport's history. Gold Leaf's success was a breakthrough for Formula 1 and tobacco brands advertising in the sport, as this was the first in a long list of successful tobacco companies sponsoring F1 teams.
The advent of tobacco companies as sponsors in F1
Seeing Gold Leaf International's success as an F1 sponsor, many tobacco companies decided to use Formula 1 as a medium of advertising themselves. It didn't take long to figure out why tobacco companies chose F1 to market their products, as was stated in the 1980s by Barrie Gill, a well-known journalist in F1 circles, and then CEO of Championship Sports Specialists Ltd:
“It’s the ideal sport for sponsorship. It’s got glamour and worldwide television coverage. […] It’s got total global exposure, global hospitality, total media coverage, and 600 million people watching it on TV every fortnight … It’s macho, exciting, colour, international, and glamour… They’re there to get visibility. They’re there to sell cigarettes.”
During this era (and even after), many F1 teams had tobacco companies as title sponsors for many seasons - Lotus was decked in the iconic black and gold this time with John Player Special as their sponsor, and later Camel. The iconic sight of a red-and-white Marlboro McLaren car, driven by Alain Prost and Ayrton Senna, still lives strong in the memories of F1 fans. The Philip Morris International-owned company sponsored Ferrari as well as a minor sponsor during the 1980s, before going on to become their title sponsor during their glory days in the late 1990s to early 2000s. Camel and Rothmans too became a sponsor of Williams in the 1990s, the iconic white-blue-yellow cars being a familiar sight at the front of the field during the races then.
Following their long and glorious stint with Marlboro, McLaren signed a title sponsorship deal with West, Imperial Tobacco's company, who had earlier been the title sponsor of the smaller F1 team Zakspeed in 1987. West was McLaren's title sponsor for eight years and their presence on the cars' sidepods caught the eye of one and all, as Mika Häkkinen won two world championships for the team during this era, and a young Kimi Räikkönen showed flashes of potential in the latter stages of this famed partnership.
There were other brands sponsoring teams in the sport too - Mild Seven sponsoring the Benetton F1 Team in the 1990s, most notably when Michael Schumacher won two championships for the team; Lucky Strike by British American Tobacco, and 555 being title sponsors for BAR Honda in their starring 2006 season; famous British company Benson & Hedges being a title sponsor for a large portion of Jordan's stint in F1.
Even as recently as 2019, Philip Morris International had a presence in F1, in the form of title sponsor Mission Winnow for Ferrari during their eventful season that year.
The end of the road for tobacco advertising in F1
While tobacco advertising definitely produced some iconic liveries that still live long in the memories of F1 fans, it was certain that their time in the sport would eventually come to an end.
In the late 1990s and early 2000s, regulations were imposed by the European governments on tobacco advertising, and after pressure from WHO as well as these countries, tobacco advertising was banned for good at the end of the 2006 F1 season.
This led to teams finding alternative methods of advertising their title sponsors - either through bar codes, driver names stylised in the brand name's font, finding an alternate sponsor to fill the vacant slot on the car, or putting on a like-for-like name. Nevertheless, tobacco companies leaving the sport left a huge void for the teams to fill. This continued late into the 2010s and even into the 2020s too.
Tobacco advertising's downfall led banking companies, telecommunication companies, and many other companies from various fields to join F1. Some of the banking firms that made their way into F1 were - British bank HSBC becoming the main sponsor of Jaguar between 2000 and 2004; Credit Suisse, who became a major shareholder of Sauber in 2004; ING being Renault's title sponsor during their infamous 2008 and 2009 seasons; Royal Bank of Scotland (RBS) sponsoring Williams for a short stint between 2008 and 2010, leading the team to adopt a dark blue and white livery; Union Bank of Switzerland (UBS) being a long-time sponsor of Mercedes. Very recently, Spanish banking firm Santander too returned to sponsor Scuderia Ferrari from 2022, having left the team at the end of the 2017 season. American Financial company Moneygram is set to become the title sponsor of Haas from 2023.
Another field that came to the fore post the era of tobacco advertising was that of energy drinks and beverages. The biggest gainer of this industry has been the energy drink superpower Red Bull, who went from being a minor sponsor of Sauber in the 1990s to purchasing the struggling Jaguar F1 team in late 2004. This team has now won a total of 11 World Championships (six Drivers' and five Constructors') in the sport in its 18-season stint. Another sponsor of note here is the famous energy drink, Monster Energy sponsoring Mercedes. The Californian energy drink company sponsors seven-time World Champion Lewis Hamilton as well, their logo being largely visible on the Briton's race helmet. Another Austrian beverage company, Best Water Technologies, better known as BWT, was a title sponsor of the former Racing Point team for four seasons between 2017 and 2020, before becoming Alpine-Renault's title sponsor from 2022, their signature pink shade being visible on the team's car. Bigwigs in the beverage industry Coca-Cola have a deal in place to sponsor McLaren. Beer brand Heineken sponsors races in the sport and is the sport's official Global Beer Partner.
While this sector has seen many successful sponsorship stories, one can't forget the story of Rich Energy and its title sponsorship of Haas in 2019. This highly-anticipated partnership ended earlier than expected, the saga coming to a head during the British Grand Prix weekend in that season.
Another industry that entered into major sponsorships with F1 teams was the petroleum/petrochemicals industry. Most notably, Malaysian petrochemicals company Petronas has been the title sponsor of the Mercedes AMG F1 Team ever since the team returned to F1 in 2010. Ineos, a British chemicals company, is also a major sponsor of the team, on the car and in terms of shareholding as well. Famous petroleum company Shell has been a major sponsor of Ferrari for almost its entire stint in the sport and the team even had Italian fuel company Agip as a sponsor during the 1960s. At present, the fuel companies sponsoring other F1 teams in various capacities include - ExxonMobil (Red Bull and Alpha Tauri) and their company Mobil 1; Castrol and BP sponsoring Alpine-Renault; and Aramco being a title sponsor of Aston Martin from the 2022 season. Aramco is also a major sponsor of F1 itself.
Present - The crypto wave
The era of new regulations also saw partnerships signed by F1 teams with companies from a new field - cryptocurrency. This saw cryptocurrency companies having their presence on various parts of the car: Bybit on the Red Bull RB18's rear wing; Velas on the Ferrari F1-75's rear wing; now bankrupt FTX for the Mercedes AMG F1 Team; Binance sponsoring Alpine; Crypto.com sponsoring Aston Martin and F1; and Tezos sponsoring McLaren and Red Bull. Fantom was also sponsoring AlphaTauri and FLOKI sponsored Alfa Romeo.
However, with the crypto industry showing a downfall, many teams have decided to drop these companies from their sponsorship deals for the 2023 season. The only remaining sponsors are Crypto.com and Bybit, the rest being dropped by their respective teams ahead of the upcoming season.
These are only a handful of examples from the numerous sponsorship stories across F1's rich history. From an era of teams having minimal sponsors, and looking at this as an unexplored territory, to having over 25 sponsors pumping in plenty of cash for the teams to provide them finances in return for a slot on the car for better advertising, sponsorships in F1 have definitely come a long way.