Analysis Sponsorship

5 times F1 sponsorship deals were cut short

Over the weekend, sources disclosed to Decalspotters and that Petronas is to be replaced by Saudi Arabia’s oil company Aramco as Mercedes-AMG’s title sponsor – despite a currently active contract.

It’s not uncommon to see contracts end abruptly in Formula 1, whether it’s related to drivers, engineers or sponsors. What’s more, some announcements have been made without a signature on paper, rather just a handshake or conversation.

When it comes to sponsorships, an interrupted deal can make-or-break the fate of a team, especially to independent entries. In the past decade, 3 teams have folded because of funding problems.

Formula 1 is one of, if not the most expensive category in motorsport, so it’s only logical teams have to rely heavily on sponsorship revenue to compete and house its staff.

Here’s a look at recent examples of prominent sponsor deals that were broken off in F1.

Rich Energy – Haas F1 Team (2019)

Haas F1 is the youngest team in the grid, having made its debut in 2016 as the first American F1 squad in three decades.

The Kannapolis-based team is mainly supported by owner Gene Haas’s CNC machine business Haas Automation Inc. His racing venture in Europe had a reason – increase sales of his machinery.

Gene Haas wasn’t actively looking for a title sponsor unless there was a reasonable pay. The American was once cited: “we have lots of people who want to sponsor us, they just don’t want to pay us the money we want”.

Come Rich Energy. After flirting with Williams in 2018, the energy drink brand was announced as Haas F1’s title sponsor prior to the 2019 season in a four-year contract valued at around $50 million.

© Haas F1 Team

But just 6 months into the F1 calendar, Rich Energy’s CEO Rich Storey tweeted that the company had terminated their contract with the team for “poor performance”.

Storey continued to make comments about the team and the sport on Twitter, complaining about its “politics and PC attitude”.

In the meantime, Storey faced a lawsuit regarding Rich Energy’s logo which was found to be a plagiarism of Whyte Bikes’ branding. A fine of £35,416 was not paid on time, if at all.

While the tweet was untruthful, only in September did Haas F1 officially terminate the contract with the energy drink brand – all related branding was then removed from the team until the season end.

SportPesa – Racing Point (2019)

Racing Point, now-Aston Martin, is the sucessor of the old Force India team, which was taken over during 2018 by a consortium led by Lawrence Stroll.

The independent team from Silverstone announced SportPesa, Kenyan betting company, as its title sponsor ahead of the 2019 season in a three-year deal.

© Aston Martin Cognizant F1 Team

SportPesa were happy to continue the relationship into 2020 as agreed, but in late 2019, Kenya introduced a 20% tax on all betting stakes, prompting the company and its brand to exit the country.

Despite this, SportPesa seemed adamant that its sponsorships with Racing Point and English football team Everton would remain unaffected, as the news were only related to its Kenyan offices.

“None of SportPesa’s sponsorships in the rest of the countries in which SportPesa operates are affected by this change of policy and will continue as before.”

SportPesa UK

This was not to be, because in early 2020 Racing Point announced BWT as its new title partner with no SportPesa branding to be seen on the team’s livery and overalls.

The Kenyan bookmaker said in a statement the company had decided to end the sponsorship deal due to a “new business strategy and sponsorship approach”.

Johnnie Walker – Force India (2018)

Before SportPesa it was Johnnie Walker, one of the most popular whisky brands in the world, who aligned with the Silverstone-based team.

The whisky brand had signed with Force India at the end of 2016 to be a main sponsor in a multi-year contract valued at $15 million per season, starting in 2017.

Johnnie Walker is a brand owned by DIAGEO, which prior to the sponsorship had agreed to buy 55% of Force India’s owner Vijay Mallya’s alcohol business United Spirits’ shares.

As part of the settlement, previous alcohol partner Smirnoff was then replaced by Johnnie Walker, which was given a prominent position in the team’s liveries.

However, when it was time to unveil Force India’s car in F1’s 2018 pre-season testing, all Johnnie Walker branding was gone from the team.

This seemed to be a result of a legal battle between DIAGEO and Vijay Mallya, who in 2019 was ordered to pay the drinks company $135 million for a “breach of contract”.

DIAGEO removed Johnnie Walker from its sponsorship agreement with McLaren at the same time as well, a partnership which started all the way back in 2005.

After signing as the title sponsor of the 2019 Belgian Grand Prix, Johnnie Walker ended its association with the sport at the end of the year.

ING Bank – Renault (2009)

Renault had just won 2 consecutive World Drivers’ and Constructors’ Championships with title sponsor Mild Seven, tobacco brand owned by JTI, but there was a problem – starting from 2007, tobacco advertising was to be banned in motorsport.

Dutch bank ING came in at the end of 2006 to announce it had signed a three-year contract to be Renault’s title sponsor, valued at $267 million total in 2007 money.

However, Renault did not perform to expectations during the first year of the deal, ending the season 153 points behind newly-crowned Ferrari in 3rd place.

© Groupe Renault

What ING wasn’t expecting at all was its partner to be involved in one of the most infamous cheating scandals in sporting history.

During the 2008 Singapore Grand Prix, Renault team chief and race director Flavio Briatore and Pat Symonds instructed one of their drivers Nelson Piquet Jr. to deliberately crash in order to let teammate Fernando Alonso win in a “masterstroke” strategy call.

It was only until the following year that Piquet Jr. revealed that he had been indeed requested by the team to do the events transpired, after being dropped by Renault midway through the 2009 season.

Following the verdict of the World Motor Sport Council in September 2009 of a suspended disqualification of the French team from Formula 1, ING announced an immediate termination of its contract with Renault.

The bank had already announced it would departure from the sport after the season concluded, but decided to end the sponsorship early in lieu of the cheating scandal.

“ING is deeply disappointed at this turn of events, especially in the context of an otherwise successful sponsorship. As announced on 16 February of this year, ING decided not to renew the three year sponsorship (2007-2009) contract with Renault F1 and to end its presence in Formula 1 after the 2009 season.

Anneloes Geldermans, ING Press Officer

ROKiT – Williams Racing (2020)

An iconic name in Formula 1 founded by Frank Williams, Williams Racing is the third oldest team in the sport following Ferrari and fellow Brits in McLaren.

From 2014 to 2018, the Grove-based team had Martini as its title sponsor, another iconic brand in motorsport. By the end of its last year in F1, the drinks brand made it apparent its program had reached its objectives.

Williams then signed a $75 million five-year title sponsorship deal with ROKiT before the start of the 2019 season, which then expand to include its ROKiT Drinks subsidiary by 2020.

ROKiT is a company owned by ex-Goodyear mechanic Jonathan Kendrick, who aided Williams in its winning days at the turn of the century, and entrepeneur John Paul DeJoria.

The British team encountered itself at the back of the field since 2018 but the performance didn’t seem to bother the ROKiT men, as they enhanced the sponsorship to include more brands under the company’s umbrella during 2019.

Unexpectedly however, Williams Racing announced during the 2020 calendar pause caused by the COVID-19 global pandemic that it had terminated its sponsorship arrangements with ROKiT and ROKiT Drinks, effective immediately.

“I can’t go into detail on the ins and outs. What I can say is that we met all of our contractual obligations to ROKiT.”

Claire Williams, Williams Racing, Deputy Team Principal

Though unexplained by either party, the split-up seemed resultant of a mutual disagreement rather than money.

ROKiT continued its other motorsport ventures in Formula E and W Series despite the sudden divorce with Williams Racing.

Petronas in 2022?

Petronas has been partnered with Mercedes since the German manufacturer returned as a works team in 2010, becoming an integral part of its success with 7 world titles.

The COVID-19 global pandemic hit the Malaysian oil company in its finances, reporting a massive loss at the end of 2020.

In mid-2021, Petronas announced it would close its motorcycle racing operations by the end of the year – a consequence of the financial results.

Decalspotters understood from sources that Petronas would be leaving Formula 1 as well with Saudi oil company Aramco becoming its replacement at Mercedes.

Following the publication of our article, Mercedes-AMG reached out to Decalspotters with a statement regarding their current deal with Petronas:

“PETRONAS and Mercedes have been partners since 2010 in a collaborative long-term relationship that is mutually beneficial to both parties. Last year, we extended our partnership for another multi-year cycle and we are proud to continue to be working together to deliver cutting-edge performance.”

Mercedes-Benz Motorsport Communications Director

Petronas is a renowned name in motorsport, and its involvement with Mercedes cannot be understated. Nevertheless, its economical landscape isn’t looking positive for the oil company.

Will Petronas break the deal off with Mercedes? Only time will tell.

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