19/03/2010
NEWS STORY
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It is a bold move for a bank to be involved with F1 in the current economic climate. In the past two years ING, RBS and Credit Suisse have all either left F1 or announced they will pull out. The big exception was Spanish bank Santander which has not only stayed in the sport but this year expanded its F1 involvement by taking up prime logo slots on the Ferraris whilst retaining coverage on the overalls of the drivers at the McLaren team which it has sponsored since 2007.
It was widely seen as a grand endorsement of the fact that Santander is one of the world's few banks which is still in good health with net profits of £7.8bn last year. However, according to new data, the model which underpins the sponsorship involves much more than show boating.
The ROI Review produced by F1's industry monitor Formula Money reveals that Santander was F1's best-exposed sponsor in Bahrain getting media coverage worth an estimated £4.5m ($6.9m). In a nutshell, if Santander had bought television advertising for the amount of time its logos on the two Ferrari cars were on-screen during the race it would have cost the bank £4.5m. If it maintains this level of exposure the bank is in line to make nearly three times the return on its estimated £32.8m ($50m) deal.
There was only one brand which topped Santander and that is Red Bull which is not classed as a sponsor by its Red Bull Racing team but is instead is its owner. With a performance which nearly sealed it victory in the race, Red Bull got exposure worth £14.7m ($22.4m) - nearly a quarter of the amount that the drinks company invests in F1 annually.
In contrast, sponsors of HRT, Lotus, Sauber and Virgin together got media exposure worth £1.6m ($2.4m) - less than any other single team. HRT's sponsors got a measly £30,400 ($46,300) in media value from the 18 laps which its cars completed. It paints a bleak outlook for these teams since sponsors provide the fuel to keep them racing. If the sponsors don't get enough coverage then it makes no sense for them to continue in the sport.
Only half of the grid scored points in Sunday's season-opener and none of the new teams were amongst these lucky few. It means that their budgets have so far borne no fruit and since points mean prize money in F1 they are not yet on the road to getting a financial return from competing in the sport.
At the other end of the scale, Ferrari is in pole position. Each of the 43 points that it scored at the Bahrain GP cost an estimated £315,000 ($480,000) to win. It is followed by McLaren which spent £340,000 ($520,000) to win each of its 21 points at the race. As the pressure to race for a lower cost increases, this ranking is sure to see as much jostling for position as there is on the track itself.