Formula One teams come in all shapes and sizes: some are privately owned, some are co-owned by a variety of shareholders, some remain tied closely to major car manufacturers – and two, of course, are owned by an energy drinks brand. As preparations intensify for the new Formula One season, a 19-race sprint around the world which begins in Melbourne with the Australian Grand Prix on Sunday, SportsPro takes a look at the commercial challenges facing each of the 11 teams which will be on the grid this year.
Red Bull Racing
- Infiniti has upped its sponsorship of the team to become Red Bull Racing's first title partner. The Nissan-owned luxury car brand will assist the team with the development of new technologies via its R&D facilities. The sponsorship is said to be worth as much as US$32 million.
- A combination of a favourable new commercial deal, as a result of its recent title-winning performance, and the Infiniti expansion means the team is less reliant than it once was on its energy drinks parent. In this month's SportsPro magazine team principal Christian Horner (pictured) also has some well chosen words for those who believe the team has found success through simply spending money. He said: "We spend prudently and invest it in the right areas. We operate out of three industrial units on an industrial estate in Milton Keynes. We've put our money into the car and into key areas where we believe we'll see a return.” He added: “We do not fritter money away. It would be totally wrong to assume we spend more money than any of our major counterparts."
- A busy winter for the Ferrari team saw Hublot, Kaspersky Lab and energy drink TNT expand and extend deals with the Formula One part of the company, while the Scuderia also snared its first Chinese partner. Heavy duty vehicle manufacturer Weichai Power's logos feature on the car this season, as does the familiar brown logos of UPS. The logistics giant has signed a company-wide deal with Ferrari, brokered by Just Marketing International (JMI) and said to be worth as much as US$18 million.
- Although Ferrari’s sales in Italy fell by 46 per cent in 2012, its overall business appears in rude health. Overall revenues rose by eight per cent on 2011, to €2.433 billion, with 7,318 cars delivered. Net profits grew 17.8 per cent to €244 million. Sales in China rose by four per cent, Japan was up 14.4 per cent and the US, Ferrari’s largest market, by 14.6 per cent. Merchandising and licensing continue to be big business around the world, too, with Ferrari reporting retail sales up five per cent and licensing up 22 per cent: it has long been a fact that Ferrari sells far more caps than cars.
- Vodafone enters the last year of its title sponsorship, with much speculation about whether it will continue a relationship which began in 2007. McLaren team principal Martin Whitmarsh faces the task of either renewing with the telecoms firm, or looking elsewhere. Elsewhere could well be Mexico, home of the team's new young charge Sergio Perez. Perez’s long-time backers Telmex have remained at his previous team, Sauber, for 2013, but McLaren remains one of the most attractive names on the grid.
- For the first time, the team is paying for its engines in 2013. Mercedes-Benz was once a 40 per cent shareholder in the company, but since the German manufacturer's decision to plough its own furrow in Formula One the relationship between the two has evolved to the point where McLaren is now a mere customer. The best guess is the engine supply will cost the team some e15 million this year, although at least some of that will be offset by a reduction in driver salary following Lewis Hamilton's departure. Rumours continue to persist that Honda may return to the sport in 2015, with McLaren considered a likely partner.
- A new commercial philosophy, which better suits the team's relatively new independent status in its post-Renault guise, has resulted in an innovative series of deals with the likes of Coca-Cola's energy drink Burn and Microsoft Dynamics over the last year or so. The team has a stronger consumer sponsor presence than most, with Unilever also aboard in 2013 for a second year of a US$15 million annual deal.
- The hunt, though, remains on for a title sponsor to replace Group Lotus, which terminated the sponsorship element of its deal last year but continues to give its name to the team via a licensing agreement. American technology giant Honeywell has long since been tipped for the role, but the sponsorship soothsayers who said the deal would be completed before the season began appear to have missed the mark.
- The arrival of Lewis Hamilton should have been the big story at Mercedes but instead it was the executive changes which have seen three-times world champion Niki Lauda arrive as a non-executive chairman and Williams shareholder Toto Wolff appointed to run Mercedes' global motorsport programme. Both men have been handed shares in the team, which operates in the UK but is driven by Mercedes' board in Germany. The long-term future of team principal Ross Brawn remains cloudy at best, with former McLaren technical director tipped to be on his way to the team once his current contractual obligations are fulfilled.
- Mercedes have fewer issues commercially, however. Malaysian oil giant Petronas is in the fourth year of an initial five-year partnership as title sponsor, while BlackBerry has entered Formula One this season with the team in a deal reputed to be worth around US$12 million.
- Despite Sergio Perez's switch to McLaren, Sauber has retained the bulk of the Mexican partners who were attracted to the team when Perez was signed in 2010. That is largely a result of the team's promotion of another young Mexican driver, 2012 reserve Esteban Gutierrez. The Swiss team has signed a crop of smaller deals and renewals over the winter, with the likes of clothing supplier Wiklund, footwear brand On, racesuit supply OMP, watchmaker Certina and automotive inspection firm Dekra. The latter, a long-time sponsor of Michael Schumacher, is a personal sponsor of the team's new driver Nico Hulkenberg.
- The most intriguing partnership the team has remains its tie-up with Premier League side Chelsea FC, details of which are still being developed despite the initial announcement coming as long ago as May. "We launched a joint merchandising range and we’ll see how the market will respond to it," Sauber marketing director Alex Sauber told SportsPro late last year. "Some areas are obviously very new to both of us, but it’s a fact that everyone in Asia, where the growth potential is huge, loves football or Formula One. With the combination you reach a wider audience. But we really have to figure how this pays off.”
- Despite a near-constant stream of rumour about the team's financial position, Sahara Force India is expanding. New investment from the team's owners is focused on developing new infrastructure in and around the team's Silverstone headquarters. The rumours appear to be rooted in the reality facing co-owners Vijay Mallya and the Sahara Group in India, but there is little sign of any financial repercussions for the team - yet.
- TW Steel, the watch brand which has made a name for itself through an active presence in and around motorsport since 2008, has switched from Lotus to become a Sahara Force India partner this year, tempted no doubt by the opportunities for business growth India presents.
- The British team remains heavily funded by PDVSA, the Venezuelan state-owned oil company who signed up in 2010, when the team recruited driver Pastor Maldonado. A pay driver he may be, but Maldonado proved he was significantly more than that when he won last year's Spanish Grand Prix, Williams' first win since 2004.
- Solid progress has been made commercially for 2013, with global information services company Experian joining as a new partner, plus upgraded deals with longstanding supporters Randstad and Oris. Two personal sponsors of the team's new driver Valtteri Bottas, Kemppi and Wihuri, have also expanded deals with Williams which were initially signed in May last year.
- Red Bull's second team remains largely funded by Austrian energy drink dollars, but its small band of sponsors have renewed deals for 2013, including Falcon Private Bank, Spanish oil firm Cepsa and Canada's Nova Chemicals.
- The team is poised for a 2014 switch from Ferrari to Renault engines, a change which will align the team with sister team Red Bull Racing and should allow a more seamless transition to the new 1.6 litre, V6 turbo engine era.
- The team founded by Malaysian entrepreneur Tony Fernandes as Lotus in 2010 should be a more stable proposition after a year full of turmoil in 2012 - a change of headquarters, plus the integration of the Formula One division into the wider Caterham Group growing up around it, plus the arrival of a new team principal in Frenchman Cyril Abiteboul, resulted in significant change. Expect plenty of effort to further develop the Caterham brand, as its road car division begins to establish itself.
- It is a sign of the financial times in Formula One that the team has recruited two drivers with budgets for 2013. The pairing of young Frenchman Charles Pic and debutant Dutchman Giedo Van der Garde sadly means no room for the talented Heikki Kovalainen. The reported US$10 million which Van der Garde has brought to the team, largely via the McGregor fashion house whose marketing director doubles as Van der Garde's manager, should help the team balance the books.
- The Russian-owned, British-based team insist that the lack of a commercial offer from Formula One Management does not affect planning going into 2013, despite the fact that the other 10 teams have agreed their own deals. Things are undoubtedly tight at the team, which ran as Virgin Racing in 2010 and 2011, but so too are the processes and budgeting. Efficiency is everything.
- The team has made no bones about the fact that its driver line-up for 2013 was, ultimately, a financially-led decision. Family money has contributed to Briton Max Chilton's rise through the ranks, but the team's 2013 preparations hit a snag when a sponsor supposed to be providing funding to fuel Brazil's Luiz Razia's drive defaulted. Razia was cast aside and has been replaced by Frenchman Jules Bianchi, a man with less direct financial backing than some but a driver who could be worth his weight in gold to the team in the long-term. Bianchi has close links to Ferrari, having been part of its young driver programme, and could open doors as Marussia searches for a new engine partner to replace Cosworth in 2014.
The April edition of SportsPro, out this week, features a comprehensive commercial guide to the new Formula One season, including in-depth interviews with Red Bull Racing team principal Christian Horner, Lotus chief Eric Boullier and Marussia team president Graeme Lowdon. The Black Book 2013, the annual guide to the business of Formula One, will be published by SportsPro in early April. To subscribe to SportsPro, or to buy the Black Book, click here.