Formula 1: A Sponsorship Example Not To Be Followed
Posted: 9/2/2010 9:30:45 AM by
Jim Andrews | with 0 comments
Much has been written and said about Bernie Ecclestone, the brilliant, mercurial puppet master who pulls the strings of the Formula 1 international racing circuit. While I am not expert enough in the details of F1’s business to join the polarized debate over whether he is the best or worst thing to happen to the sport—although I’m sure the answer as it always is in these cases is somewhere in the middle—I do believe he has made a major misstep in the sponsorship arena.
The short version of the story is that Ecclestone recently demanded that F1 teams remove all sponsor branding in their garage areas at F1 tracks (including from their haulers and other vehicles), arguing that all venue sponsor ID belongs to companies who have purchased trackside sponsorship and advertising through Allsport, the company F1 sold those rights to.
The point here is not about which party technically or legally has the right to promote their sponsors in the garage area—although Ecclestone’s position does seem absurd to me—but the destruction that can be done by such a take-no-prisoners approach. How does it benefit F1 to take away a major benefit from the sponsors who pay for its teams to race around the world?
This is short-term thinking at its worst, and while Ecclestone may be the most extreme culprit, he is not the only one on the sponsorship scene, be it in sports, causes, entertainment, etc.
As he has done in many other instances, Ecclestone ignores the fact that his sport—like many others—is predicated on a number of independent organizations with competing interests finding a way to cooperate so that they all may benefit.
Whether it is dividing sponsorship rights among constituent organizations, or negotiating a benefits package with a sponsor, the most successful rightsholders over the long term are those who heed the sage advice to leave the last nickel on the table. They understand that no matter how much power one side may appear to have, in the long run everyone must work together or the entire enterprise is doomed to fall apart.
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Filed under: international, motorsports, packaging, venues, assets