The Formula 1 cars being unveiled this week are unlikely to be the same as those we see racing in a few weeks from now (with teams keen to disguise any new ideas) and, to be honest, the most significant thing about yesterday’s Red Bull launch is that the Austrian drinks company has moved its name from the sidepods of the car to make way for Oracle which becomes the title sponsor of the 2022 Oracle Red Bull Racing.
It is not the first time that Red Bull has let a sponsor take over the sidepods as it was a similar story with the RB9, RB10 and RB11s (2013-2015) when the team ran with Infiniti on the pods. Aston Martin may have been the title sponsor after that but the signage was never very large.
And while much is being made of what is rumoured to be a deal worth $100 million a year for five years from Oracle (which sounds rather a lot given recent trends in F1 sponsorship) – and the number has not been confirmed officially – it is perhaps most important not as a sign that there are vast sponsorships out there, but rather as an indication of the way in which F1 is growing in the United States of America.
Oracle joined Red Bull this time last year with what was said to be a multi-year deal and that now seems to have been expanded. The company will continue with its other major sponsorships in the world of sailing and in American sport. If the deal is worth $100 million a year then we will see that reflected in Red Bull Racing’s financial results this time next year as they will be required to report a significant profit, given the fact that there is a pretty stringent budget cap. Still, if the team has convinced Oracle to pay most of its budget for the next five years, it can only be applauded.
While $100 million a year sounds a lot of money, it is not much when one considers that Oracle had revenues in 2021 of $40.5 billion and produced pre-tax earnings of $13 billion. So money really is not a problem. Oracle’s chief marketing officer Ariel Kelman said that F1 interests the firm because it is the fastest-growing sport in the US and is “a perfect fit” for Oracle because it is the most high-tech and most data-driven of all sports.
As part of the deal Red Bull will using Oracle technology for its cloud computing, engine and driver development.
Kelman said that he is a recent convert to Formula 1 having started watching in 2018 and then being gripped by the Netflix docuseries Drive to Survive which started in 2019. Kelman called the series an “amazing TV product”. This is very true and why US corporate interest in F1 is growing all the time.
We expect to see more US sponsorships appearing on the cars in the months ahead while the word is that Alfa Romeo will also see significant new sponsorships from China this season when the team launches its 2022 livery at the end of the month. This is due to the team signing driver Guanyu Zhou.
The launch of the Aston Martin today featured the already-announced deal with Aramco. The team did not do well in 2021, dropping from fourth in the Constructors’ Championship in 2020 (when it was Racing Point) to seventh last year. The reality is that the Saudi oil company had few choices of teams with space available for an oil partner as most of the major F1 players already have oil company partnerships: Mercedes with Petronas, Red Bull with ExxonMobil, Ferrari with Shell, Alpine with BP/Castrol, Alfa Romeo with PKN Orlen and McLaren with Gulf. The last-named was probably the chief rival for the Aramco deal and the decision to go with Aston might have surprised some as McLaren Racing did well in 2021 and is now part-owned by the Saudi Arabian sovereign fund PIF. But the Saudis will no doubt be happy to have influence with two teams and, of course, with the Formula 1 group as well – as Aramco is an official partner of the sport. McLaren’s deal with Gulf is also a lot to do with a first-fill with McLaren road cars and so it probably worth more than it appears to be. Having said that there are still a number of so-called oil super-majors which are not involved in F1: notably Chevron, TotalEnergies and ConocoPhillips, not to mention China Petroleum & Chemical, PetroChina and Russia’s Lukoil.
It is worth noting that the Aston Martin deal will not mean that the team uses Aramco fuels and lubricants, as the engine supplier Mercedes-Benz will no doubt have insisted on running the engines with Petronas. This kind of thing is not unusual in F1 circles and is one of the downsides of teams that use customer engines as they usually have to use a fuel designated by the engine company. And that means that their oil partners cannot claim to be producing the fuels that are being raced in F1. Some do not care but this can mean that others turn away. The fuel changes coming up in F1 and the likelihood of new engine manufacturers mean that oil sponsorship is likely to increase more in the years ahead.
joeblogsf1 
Great article Joe. Presumably, the F1 team is likely to be a profit centre, but with the engine development costs, the team as a whole won’t be?
Somewhat stunned that Renault/Alpine doesn’t have a Total/Elf fuel supply deal, but also, shows how much exposure that Castrol has got out of it, in that I had to look up who they did have. Contrasts somewhat with Shell, Petronas, Gulf, Esso etc…
Thought the RB launch yesterday took the Michael somewhat. I’m not sure what viewing figures they got, but I’m bet 95% of the audience were there to see the new car, not a title sponsor announcement, and so like me felt they’d been ripped off for their time.
Total/Elf has a major industrial deal with the Stellantis Group and so if they are to turn up in F1 it would only be with Alfa Romeo, one of the Stellantis brands.
Let’s hope we don’t see Putin anywhere near the podium at Sochi….the man who hands out the caps could make a great name for himself by shoving him headfirst over the barrier!! He might spend the rest of his life is the salt mines, but it would be worth it!!
Given Putin’s security, I doubt anyone who chucked the President over the barrier, would make it as far as a salt mine. His security crew not only look like they have weapons in every pocket, but they all look like they could kill you without even using a nail file.
‘Australian drinks company’? Is Mark Webber returning to Red Bull?
Guess you’re a bit rusty, Jo! Trust you’re well and looking forward to all your brilliant input for another season . . .
I was caught out by auto-correct. It lasted a whole two minutes before I remeoved it
Remeoved? Just when you thought that you didn’t need auto-correct.
It’s still there Thursday evrning, 20.30 CET…
… it’s the on-track business of Formula 1 which ceases to grow in importance –
Customer teams can choose to run on a different fuel to the works manufacturer (like RBR did with the Renault engine, when they ran a different fuel and oil than the factory Renault team did). It comes at the cost of doing your own dyno testing and prove-out of those lubricants and fuels at your costs. Probably cheaper to run the PU dedicated products pumped into drums of the right branding but like you say, you lose the potential engineering partnership as a marketing approach.
I don’t think this is the case these days. In most cases one MUST use the engine supplier’s designated fuel.
You still can 😉 according to the 2022 tech regs, appendix 4, homologation, art 2.4: Each Power Unit Manufacturer shall submit a homologation dossier for each Competitor it intends to supply. There may only be one homologation dossier for each Competitor. With the exception of Power Unit wirings, and fuel specification and engine oil specification if an alternative supplier is preferred by the customer Competitor, the dossier for each Competitor supplied by a Power Unit Manufacturer must be identical at any given time
In any case, always a great view / insight from your self Joe, chapeau for being a role model of journalism day in day out!
Don’t think it’s the regulation that is the problem, much more to do with the technical requirements of the engine.
Very few people know how the very high efficiency of the ICEs is actually obtained but it is certain that one important factor must be compression ratio hence the knock resistance and burn characteristics are critical. The fuel spec is therefore hugely important. Knocking will destroy an engine in no time.
… to make sure the customer engine isn’t faster than their own ones 😉
Everybody’s so looking forward to yet another naked girl grid walk, from Bertha-Boob the killer whale, and her ghost gun toting entourage of hip-hop thugs!
Can I have some of whatever it is that you are on…
+1
Sounds good!
:)))
“Red Bull will using Oracle technology for its cloud computing” … oh dear.
Every serious cloud computing user has looked at Oracle’s over-priced, under-performing, and hard-to-integrate offering and said, “nuh-uh!” and gone to Amazon, Google or Microsoft!
Maybe will get their pennies back double quick from developing the necessary technology !
Yep, a crappy product that generated $40.5 billion in sales. Apparently there are folks out there who see merit in the systems
That figure of $40.5 billion is for the whole company, not their cloud computing arm (which earns rather less than that).
In the cloud computing market, it is correct to say that Oracle is a minor player and not the provider of choice for many. Their global market share is estimated to be about 2%, which means they’re probably only about the 7th largest provider – the criticism about their pricing structure is also a fair one, as it is criticised for being more opaque than their rivals and also being more expensive than a similar offer from, say, AWS.
And thus, you have discovered WHY the name Oracle is on the side of the cars now. Colin Chapman had the idea a while ago. It’s still a good one.
Joe, there’s talk that Lada together with Lukoil are pushing to sponsor Haas if Mazepin is offered a new extended deal….
I don’t see how Lada is going to badge a Ferrari engine. Lada belongs to Renault and Haas is very tight with Ferrari.
Rich Energy said they will be back as a title sponsor this year. Can’t work out who that would be with at the moment.
It could be anyone, as it exists only in his head
That guy is a kook. I honestly can’t figure out what he gets for his money – the chance to hobnob is not worth that many millions of dineros. He has no way of turning his exposure into money. His drink isn’t stocked anywhere and his other lines of business seem to involve farming in Africa.
What a remarkable job both Carey and Bratches have done. Nobody believed those two would have been able to pull this off. Even a former F1 team principal openly spoke of his preference for Bernie in the Missed Apex podcast. Hats off to Chase, what a brilliant underrated CEO.
I agree
Disappointed not to see any Honda branding on the Red Bull given their on going support. The HRC token sticker seems rather mean.
Hi Joe a great read as always, any news on Otmar joining Alpine ?
Not yet
Thanks for the news update and info Joe, which we would have been unlikely to read in as much detail on other F1 platforms. Interesting in the light of reported comments by Sebastian Vettel on the Sport v the Show that Oracle seem to be coming on board as a result of the show as much as the direct business opportunity, although I realise the two are interconnected with regard to marketing.
[OT]
Joe, two questions about the 2022 cars if I may:
1/ Does the need to run these cars low and flat to maximise downforce put Mercedes and AMR at a development advantage because of their experience running low-take designs, or is everyone starting from the same blank sheet of paper?
2/ If the new cars are going to be more stiffly-sprung and more reactive, which drivers do you expect to benefit and which might suffer based on their different driving styles?
I think it is best to wait and see
Joe – how can McLaren accept such prominent sponsorship from VELO, a nicotine product from British American Tobacco?
I thought F1 has a tobacco company sponsorship ban – or does Liberty turn blind eyes these days?
It’s not against the law
Re. Velo – I’ve only seen the one line product description, but they sound like Skoal Bandits to me. And I thought those *were* banned after research evidence linked them with oral cancers – and that that’s why Skoal pulled out of F1 in late ‘85 and RAM went under…
Is my memory faulty, is the product different, or did the rules get changed?
Until I read that ^^^^ I assumed “VELO” had something to do with bicycles. McLaren did co-sponsor WorldTour Team Bahrain a couple of years ago.
Lots of money in vaping and “alternatives”… BAT are going hard in the paint on that one. They must be so excited to be able to flex the big tobacco money pump again and actually have corporate events to boot.