Sponsorship in Formula One and Formula E, 2018

Find out how the range of deal values between Formula 1 and Formula E compares and whether the gap is narrowing in this SportBusiness Sponsorship data report.

Formula 1 vs Formula E – getting closer in value

The range of deal values between Formula 1 and Formula E is closest at the level of team title and race title sponsorships, and diverge most at the central sponsorship level where Formula 1 central partners currently share a six-partner platform, against Formula E’s 11- partner platform plus series title sponsor ABB.

At the team level, Formula E title deals begin at around $3m per year and, until recently, reached a top level of about $7m per year. An example of a mid-range deal would be MS&AD’s $4m per year deal with Andretti Formula E, while towards the upper end, PSA Peugeot-Citroën’s DS brand paid $6.2m per year for title rights to the Virgin Racing team.

Sports Sponsorship Insider understands that a soon-to-be-announced team title deal will be worth between $9m and $12m per year.

In Formula 1, team title deals are now the exception rather than the rule, partly because prices are prohibitive. The most expensive title deal, between the Mercedes team and oil company Petronas, is worth around $50m per year. Though not a title deal. Nissan-owned luxury car brand Infiniti is thought to be paying Renault around $60m per year as its lead partner.

At the race title level, Formula E races are sold individually for between $1.2m to $3m per year, while Formula 1 race are worth between $4m and $10m. Race title deals in both series are frequently bundled with central deals.

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At central partner level, ABB’s Formula E title deal – worth $25m per year – is commensurate with sums paid by central partners in Formula 1. ABB excepted, the range is much greater. Formula E deals that were contracted in series one or two can be worth as little at $1.5m per year, while the upper end of Formula 1 deals are worth between $35m and $40m – as exemplified by deals with Emirates, Rolex, Heineken and Pirelli.

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DHL deals reveal logistical differences

Outside of car manufacturer Renault, logistics firm DHL has made the most significant investments in both Formula 1 and Formula E.

DHL pays around $25m per year for Official Logistics Partner rights with Formula 1, with only a small amount of value in kind as part of the deal. In its most recent renewal, signed this year, DHL also became the first official global partner of the Formula 1 Esports Series.

The brand’s initial deal with Formula E was very different in size and scope. According to industry sources, Formula E was in urgent need of a logistics partner in season one and negotiated its first-year deal at around €1m plus VIK – the transport of all Formula E equipment. The cash component of this deal is likely to have been revised upwards subsequently.

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All change in auto sector support

Sector support from Formula 1 and Formula E motorsports teams is consistently led by the automotive sector, though there has been greater than usual churn in recent years. Automobile sponsors that have traditionally operated in Formula 1 are increasingly joining the Formula E circuit.

Major manufacturers in Formula E include BMW, Audi, Citroën, DS, Jaguar, Mahindra, Renault/Nissan and from season six, Mercedes and Porsche. The series also features specialist electric vehicle manufacturers Nio and Venturi. In Formula 1, Ferrari, Mercedes and Renault are factory teams. Ferrari, Renault, Mercedes and Honda are engine suppliers. Infiniti and Aston Martin are sponsors.

Industrial manufacturing is the second strongest team category in Formula E, but does not figure in Formula 1. Formula E attracts an electrification infrastructure sub-sector – exemplified by series title sponsor ABB – that does not crossover to Formula 1.

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Title partners off McLaren menu

The structure of McLaren F1’s sponsorship roster may become increasingly common among Formula 1 teams, where title deals are no longer the norm. McLaren’s lead sponsors are technology group Dell Technologies, LVMH-owned sparkling wine brand Chandon and Brazilian oil and lubricant brand Petrobras, all paying similar fees of about $10m per year.

Zak Brown, executive director of McLaren Technology Group, says he is not looking for a traditional title sponsor but for a principal partner, but this too, is not the only solution, according to the team’s chief commercial officer John Allert.

Allert told Sports Sponsorship Insider: “I take a far more diverse portfolio view on making sure that we have a spread of the right kind of business categories represented on the car and we’re commercializing those as much and hopefully more than any of our competitors. For me, the objective isn’t principal partnerships so much as maximizing the opportunity that we have with the real estate that we have available.”

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