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Formula 1 as a sport generates a lot of interest and revenue each year, making it one of the top 10 most expensive sports in the world. Any company name you spot on a team’s car, driver’s helmet, or racing suit had to pay for that exposure. It made me wonder how much does it cost to sponsor an F1 team?
Sponsoring an F1 team can range from as little as $0.1 million to as much as $60 million per annum. The higher the sponsorship, the more lucrative the deal regarding marketing and networking opportunities for both parties. Sponsoring a successful team will cost more than sponsoring a minnow team.
If you are looking to sponsor an F1 team, you will find that being a main sponsor or partner will cost you the most money. Companies compete for that sponsorship slot, as it will provide excellent marketing and networking opportunities. If your company can’t compete with the big boys, sponsoring a smaller team could be your smartest move.
The Cost Of Sponsoring An F1 Team
All the participating F1 teams have numerous sponsorship deals from various companies. Many sponsorship deals are for 3-5 years. These amounts can range from $100k per annum to $60 million per year.
Sponsorship deals are often referred to as partnership deals, where both brands work together in a specific area – for example, going “green” or zero carbon emissions by a specific date. Other deals often only include money, resulting in the company’s name branded on the car, racing suits, and other apparel.
Each team has a host of sponsors, partners, and suppliers – and they all have a different sponsorship structure in place – whether it be money or services rendered. The most successful teams get the biggest sponsorships, while the minnows attract less money from big investors.
What Is The Budget For F1 Teams For 2022?
While some minnow teams have to make do with $30 to $100 million a year, compared to the budgets of hundreds of millions of the bigger teams, something had to be done to level the playing field.
For the 2022 season, the teams have agreed on a spending cap of $145 million. The budget cap will not include:
- Driver Salaries
- Senior Staff Salaries
- $15 million Engine Cost
The FIA (International Automobile Federation) has been pushing for the budget cap change for a long time to restrict the massive spending inequality between the top and minnow teams, ultimately sustaining the sport and leveling the playing field.
As you can imagine, the bigger teams were not too excited about these proposed changes, but all have agreed to a further budget cut in the 2023-2025 season – $135 million – before reviewing again in 2026.
Let’s discuss how much it will cost you to become a sponsor of an F1 team:
Oracle Red Bull Racing
You may have noticed that Red Bull Racing has changed to Oracle Red Bull Racing. American software giant, Oracle, signed a 5-year deal to become Red Bull Formula One Team’s main sponsor.
According to Reuters, the deal is worth $300 million – and one of the biggest in F1 history. The deal works out to $60 million per year, and the company will also provide the team with software solutions going forward.
On top of the massive deal above, the Oracle Red Bull Racing team also signed what they claim to be the largest cryptocurrency deal with Bybit. The deal is worth a staggering $150 million over three years ($50 million per year.)
The company’s logo will feature predominantly on the front of the Red Bull car. Here are some sponsors, suppliers, and partners that sponsor a little less than the main sponsors:
|Mobil 1||$15 million|
|Tag Heuer||$5 million|
Mercedes-AMG Petronas Formula One Team
Petronas, the title partner of the Mercedes team, has extended their sponsorship deal with the team (the length of the deal isn’t clear), and they will continue paying $42 million per year, as they have done since 2017.
Principle partner, Ineos, has a sponsorship deal in place with the Mercedes team until 2024, where they pay $26 million per year.
|Tommy Hilfiger||$3 million|
|Monster Energy||$2 million|
|OZ Racing||$0.3 million|
Scuderia Ferrari Formula 1
Santander has returned as Ferrari’s primary sponsor after sponsoring them from 2010 to 2017. The deal’s financial details are not public, but we know that the previous sponsorship deal amounted to about $50 million a year.
Santander’s logo will be displayed again on Ferrari’s racing cars, the drivers racing suits, and on their caps.
Who Is Sponsoring F1?
In F1, it’s all about sponsorships. Without them, F1 as a sport won’t survive, as the overall cost of running a championship across the world is indeed a very expensive exercise. Most F1 teams won’t be able to participate, never mind compete, without their sponsors.
Companies can also sponsor F1 itself, as we see with Crypto.com, which is sponsoring a whopping $100 million to become the official event partner for the F1s sprint series and the main title sponsor of the Miami Grand Prix.
F1 broadcasting rights were secured by media heavyweight – Nordic Entertainment Group (NENT) – for a cool $36.6 million a year (3-year deal) until 2024. The company’s streaming service Viaplay will be used to broadcast the races in:
Broadcasting rights in France are held by Canal+, which has a contract until 2024, paying F1 a hefty $65.6 million a year.
F1 has a new sponsor in the form of Salesforce, which in partnership is looking to increase the global F1 fanbase and manage existing fans’ expectations through Salesforces’ CRM (Customer Relationship Management) platform.
Salesforce is also tasked with helping the series achieve its zero-emissions goal by 2030. The deal is worth $30 million a year. Salesforce joins the global partner roster, which includes:
Sponsoring an F1 team can cost a company millions of dollars or hundreds of thousands. Don’t expect your company name to feature on the car for everyone to see if your sponsorship is under a million. Even when it’s above a million, you may still only get a shout-out on the driver’s hats.