McLaren's Struggle to Land a Title Sponsor Highlights a Larger Problem for F1

Matthew Walthert@@MatthewWalthertFeatured ColumnistJanuary 9, 2015

McLaren went the entire 2014 season without a title sponsor.
McLaren went the entire 2014 season without a title sponsor.Mark Thompson/Getty Images

It has now been more than 10 months since McLaren CEO Ron Dennis guaranteed his team would have a new title sponsor early in the 2014 season. Now, racing director Eric Boullier says the team would be fine if it had to go another season without one.

"We can afford to run without a title sponsor; that's a privilege," Boullier told ESPN F1. "We want it because it's another step we can go and we have many projects we would like to do, but to be honest, today, we can afford to run without."

While that certainly appears true for McLaren, Formula One has already lost two teams from the 2014 grid, while others continue to struggle financially.

McLaren racing director Eric Boullier.
McLaren racing director Eric Boullier.Drew Gibson/Getty Images

If McLaren—one of the oldest, most successful and most popular teams in the sport, despite their recent struggles—are having so much trouble finding a company willing to pay whatever rate Dennis deems acceptable, it is bad news for other teams.

If the teams cannot attract sponsors, they will not be able to afford to go racing. Sure, teams like Mercedes and Ferrari have big car manufacturers behind them, using F1 as a marketing platform. But the independent teams, like Sauber and Force India, depend on sponsorship money for their budgets.

And now the teams are not only competing against one another—there is a bigger fish in the pond. In recent years, F1 CEO Bernie Ecclestone has been scooping up potential sponsors and signing deals with them to be the official this or that of F1.

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Bernie Ecclestone
Bernie EcclestoneMark Thompson/Getty Images

For example, two years ago, Rolex signed on as the official timekeeper and timepiece of F1. Agreements like that are great for the investors who own the sport's commercial rights and they are great for the companies, who get much more exposure as an F1 sponsor than as the sponsor of a specific team.

They are not great for the teams, though. They cannot compete with Formula One management in terms of the value they can offer potential sponsors.

Rolex branding is now ubiquitous at races and during television coverage, no matter which teams are winning. Were the company to sign a deal with a particular team, their logo would only be seen sporadically, rather than lap after lap.

These days, Rolex is everywhere you look in F1.
These days, Rolex is everywhere you look in F1.Ross Land/Associated Press

With that in mind, maybe it is no surprise that teams—even ones with a pedigree like McLaren's—are having problems attracting sponsors. It is not for lack of trying. 

"I'm not saying we don't want one, we want one and we still have some stuff to do," Boullier continued in the ESPN F1 piece. "Let's have the right one at the right moment. We will not go like other teams, let's say, and go cheap."

For 2013, the McLaren Group, which has many business interests outside F1, reported revenues of £268 million. They can afford to be picky.

Those other teams, though, some of whom are desperate for cash just to stay on the grid, may not have a choice. They either drop their rate card or starve.

In 2013, the airline Emirates signed on as an F1 global partner. At the time, The Telegraph estimated the deal could be worth £127 million over five years. Meanwhile, McLaren's previous title sponsorship with Vodafone cost the telecommunications company £40 million per year, according to the Daily Mail's Simon Cass.

If you were a marketing director for an international company, which would you choose?

Emirates getting their money's worth on the U.S. Grand Prix podium.
Emirates getting their money's worth on the U.S. Grand Prix podium.Mark Thompson/Getty Images

At the U.S. Grand Prix last November, Ecclestone admitted that, "there is too much money probably being distributed badly," per Autosport's Jonathan Noble.

Teams are compensating by taking on more drivers that bring personal sponsorship with them. Sauber's all-new line-up, for example, is bringing an estimated $50 million this year to the Swiss team.

In the end, though, sponsors will go where they get the best value. Right now, that seems to be with Ecclestone.

Unless the teams find a way to attract new money—or the sport comes up with a more equitable distribution of revenues—the smaller ones will continue to struggle.

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