McLaren, a $100m-per-year deal and Formula 1’s sponsor boom
Formula 1 is becoming a hotbed for advanced sponsorship, and McLaren’s announcement has completed a special title set.
BWT, Aramco, HP, MoneyGram, Petronas, Visa Cash App, Oracle, Stake and Atlassian; these aren’t simply some of the world’s most recognisable and developing brands but title sponsors for teams in Formula 1.
And as of next year, all of the teams that began the 2024 Formula 1 season will be partnered off with a major brand – like a corporate Love Island.
Because payment giant Mastercard has filled the only remaining vacancy, signing a multi-year, $100m per season agreement with McLaren.
Throw in Revolut’s title involvement, when “Stake F1 Team Kick Sauber” (yes, really) rebrands to include the neobank on its side panels, and the sport continues to visibly become very brand heavy.
Formula 1 boom
McLaren held out, says Sean Connell, editor of The Sponsor.
“Competition for the top sponsorship slots in Formula 1 is fierce and demand is sky high,” he adds. “For a brand seeking global exposure a title place on the grid is about as good as it gets.
“However, McLaren is a great example of a team that knew its worth and resisted the temptation to jump at the first opportunity. Instead, it held out for a partner that not only matched its valuation but also fit strategically.
“That can mean short-term pain, but the reward is a long-term, mutually beneficial partnership that stands the test of time.”
McLaren have operated a tiered partner system – whereby the likes of Google and OKX pay more than, say, Allwyn and DP World, who in turn pay more than the likes of Goldman Sachs and Hilton – for a number of years.
It has been an extremely rewarding process for Zak Brown’s team, but their title partnership move marks a shifting point for Formula 1 – a sport whose a holding company, Formula One Group, with a market cap of over £18bn.
“With every F1 team now boasting a title sponsor, we’re now seeing clear evidence of the sports commercial maturity,” Professor Rob Wilson tells City PM.
“This isn’t just a rush of cash either. It’s the result of a clear strategy in F1 to position itself as a premium marketing platform.”
Cadillac entry
American manufacturing giant Cadillac will become the 11th team on the grid next season as the Formula 1 circus expands to house a further two cars.
They’re yet to announce a title partnership but they’ll almost certainly be chasing one. They’ve signed Tommy Hilfiger, formerly of Mercedes, and will be increasingly looking to make major moves in the partnerships space.
“When a manufacturer chooses F1,” Professor Wilson adds, “it’s not only to promote its engineering ability. It’s for brand prestige and global reach.
“The sport continues to be cash rich, for sure. But it’s also investment rich with teams and sponsors building long term value over short term gains.
“The entry of Cadillac also reflects a deeper confidence in F1’s return on investment potential. With F1’s tightly controlled cost cap it’s possible to manage budgets effectively and the revenue inflow from brands, manufacturers and global media rights remain significant.”