Mastercard to re-enter F1?

The news that the Coca-Cola Corporation is coming into F1 with its Burn brand is great news for the sport as it is a major multinational that is recognising the marketing power of F1. In recent years there has been quite a lot of negative activity around F1 as sponsors have pulled out because of the recession. Now, it seems, they are starting to come back.

There have been rumours for some weeks about other big new deals and the latest whisper in Brazil is that MasterCard Inc. has agreed a major trackside signage deal with the Formula One group.

There are currently 1.8 billion MasterCards in the world, compared to 2 billion Visa cards. The two are well ahead of the rest of the opposition but are competing to win new customers in the emerging markets. The credit card company, originally started by a group of banks in California, which grew to be a cooperative involving more than 25,000 financial institutions, has been expanding globally around the world is competition with Visa and American Express. The company was launched on the New York Stock Exchange in 2006.

MasterCard has a longterm commitment to football and recently signed a new three-year sponsorship deal for the 2012–15 cycle with the UEFA Champions League, continuing its relationship with UEFA. It will be an Official Sponsor of the UEFA European Championships and will also support the Copa America and the South American Qualifiers championships. It is the official payment cars of the PGA Tour in golf and sponsors a number of tournaments. It is an official sponsor of Major League Baseball and has smaller deals with New Zealand Rugby Union and music events such as the Brit Awards and various fashion weeks.

MasterCard joined forces with Lola back in 1997, but the Lola T97/30 was a disastrous car and Vincenzo Sospiri and Ricardo Rosset were unable to do much when the team made its one and only appearance at the Australian GP in 1997. The cars were slow and the team quickly fell apart.

It is not clear when the FOM deal will be announced, but there is talk of various other deals involving financial institutions which seem to be returning to the sport after the recession, having studied the impact of F1 around the globe and concluded that it makes more sense than other sponsorships.

24 thoughts on “Mastercard to re-enter F1?

  1. You might want to mention how MasterCard forced the team to race far before they were ready. Hope they’ve learnt from that.

    1. definitely 97. It was such a farcical project you could be forgiven for forgetting it. How a global brand and a major chassis manufacturer ended up with something that made Andrea Moda look good is beyond me. I sometimes wonder if it wasn’t some kind of tax dodge.

    2. The Lola debacle was certainly in ’97, with the intention that the sponsorship would be funded by MasterCard customers joining a special club. From memory the team turned up at Melbourne having only done a brief shakedown at Santa Pod.

      As an aside MasterCard also sponsored Jordan during the latter part of the ’97 season in a more conventional sponsorship deal.

      1. Just read the wikipedia entry of the guy supposedly doing the engine for that project. It’s….interesting.

  2. What would make my day is if this was confirmation of a exodus from online ads. The irony is that I don’t think F1 has done anything to deserve such deals flowing in, but I’d be very happy if the kind of exodus I am talking about finally brings attention back to print media which have been devalued by countless content free subject similar websites. Is this a sign F1 can weather what is truly the greatest financial snow storm ever created?* Well, I need something to cheer me up. Natural depressives will, I suppose, always have ZeroHedge. though I wonder just how man of those also subscribe to the better sources ZH likes to lionise.

    Right, I am now off to check who is handling the Lola insolvency, and if I can sell the name to two rival businessmen.

    *Well, the numbers, adjusted or massaged any which way, are staggering, but if you look at it through the Captain Sunshine tinted glasses I donned a while back, what does it matter? We’ve all been doomed since birth. But beware, for the love of your superior being, the moment it is decided to inflate out of this debt, if you have insufficient equity.

    – –

    Joe, I am truly suspicious of anyone speaking of “after the recession”. Because it looks like everything is policy wise in denial and likely to exacerbation problems, and the headline numbers are pure imagination. Though the more I looked, I came to doubt whether there have been any “correct” numbers in my lifetime. So I started to wonder if so much of this is about the coming of age of a generation I am part of who grew up with the ability to cheaply compute complex mathematics and process deals, got old enough to recognise our own frailty, took a look under the bonnet of the models, and cried “Holy Fffk” and simply clapped that out that around the internet echo chamber. So I’m suspicious of the doomsayers also. After all, F1 was proper exciting at other times the economy was a crock.

  3. Joe, this might sound like an odd (and slightly off-topic) question, but have you heard anything about the Astana Group getting involved in Formula 1?

    A friend of mine in Dubai told me that Nursultan Nazarbayev, the President of Kazakhstan, was in the paddock at Abu Dhabi, and nobody seems to know why because he’s apparently never shown an interest in the sport before. Granted, my friend doesn’t actually follow Formula 1 and I have no way fo finding out more myself, but it did strike me as an interesting proposition.

    As President, Nazarbayev controls the Astana Group, which represents the interests of state-run enterprises in Kazakhstan. They’re no strangers to sports sponsorship in general and motorsport sponsorship in particular; they back Team Astana in cycling, and they sponsor Daniel Juncadella and the Prema Powerteam in Formula 3. I initially thought Nazarbayev’s presence in Abu Dhabi might have been to try and secure a future for HRT by promising sponsor dollars through Juncadella and his connection to Luiz Perez-Sala, but since HRT looks like it’s about to close (depending on who you talk to), that idea might not be true (or entirely true, but no buyer was ever found, and the deal with Astana fell apart).

    But this post of yours has made me reconsider, particularly your note that companies are looking closely at Formula 1 as a viable means of sponsorship. Given that Astana are no strangers to sports sponsorship, it occurred to me that they might be looking to back both Chelsea FC and Sauber. Or even a particular driver to encourage more toursits from a particular destination (Vitaly Petrov springs to mind)? Especially since tourism campaigns are popping up in Formula 1 of late – Sauber curretly sponsor Mexico, and Venezuela sponsors Williams, and Kazakhstan has recently embarked on a brand-new tourism campaign that pitches itself as “the Heart of Eurasia”. Given that they are not particularly fussy about who they sponsor (if they want a driver from Kazakhstan, they’re probably going to be waiting a long time), could we see Astana in the sport in some capacity?

    I know, the whole thing sounds bizarre … but that’s only because most peoples’ knowledge of Kazakhstan is limited to what Sascha Baron Cohen “told them” about Kazakhstan.

  4. Any figures yet Joe? How much are they spending on F1?

    As far as my rough calculations go, the trackside audience is about 2m per year or maybe slightly more. The tv audience of course much reduced, Karen gave us the figures a few months back. So it comes down to JoJ’s area of expertise, how much you spend in advertising per new unit of product sold vs the amount allowed for it within the gross profit per unit.

  5. Anecdotally, Mastercard has been losing ground to Visa recently. Two of my Mastercards have been switched by the issuers to Visa.

  6. It is good to see that at least the sponsorship money is going where it is most needed, straight into Bernie’s pocket, rather than to a team to enable them to employee drivers, or to even to a team to keep them running.

    1. Something like 54 percent of the money will go to the teams. The rest will go for company uses, namely repaying the loans taken out by CVC Capital partners. I doubt Bernie will get anything

  7. It would be very nice to have more track sponsors, they have become very sparse in 2012! Vodafone has gone, Allianz and DHL don’t appear as often this year, and we have been left with mostly UBS, Santander, Pirelli and LG…

    1. And with the trials for digitally placing the sponsors on track rather than physically, the tracks are about the look even more sparse!

      Joe,

      Do you know if any conclusions have been taken by FOM or broadcasters on how of if digital placement of sponsors will be used again in 2013?

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