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December 14, 2005 7:07 pm

Vodafone and Intel sign up for F1

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Vodafone and Intel, two of the largest companies in the mobile telecommunications and computer services sectors respectively, have signed long-term sponsorship deals with top Formula One teams collectively worth an estimated minimum of $500m.

The agreements – Vodafone with McLaren Mercedes and Intel with BMW – have been concluded despite ongoing uncertainty over the future of Formula One, with the five big car makers involved – Renault, Mercedes’ parent DaimlerChrysler, BMW, Toyota and Honda – still threatening to set up their own rival series unless improved financial arrangements for the teams and agreement on the sport’s governance can be reached with promoter Bernie Ecclestone and the Fe(ac)de(ac)ration Internationale de l’Automobile, the governing body.

McLaren’s deal with Vodafone covers 10 years, with a review after five year – the longest and potentially the most valuable contract the team, 40 per cent owned by DaimlerChrysler, has ever concluded. The sponsorship will not start until the 2007, following the expiry of Vodafone’s current five-year sponsorship deal with Ferrari. Neither Mr Bamford nor McLaren team principal Ron Dennis would comment on the financial aspects of the deal – “but we bank with HSBC and when we gave them the details they weren’t exactly crying”, Mr Dennis told the FT.

Wednesday’s announcement came less than a month after Vodafone cut short a £36m shirt sponsorship deal with Manchester United, the English football club, two years into a four year contract. It switched its football allegiance to Uefa, European football’s governing body, and is to sponsor the Champions League, the continent’s leading club football competition, as part of the agreement.

Both United, known as the Red Devils, and Ferrari are strongly associated with the colour red, as is Vodafone. With the mobile phone group saying yesterday it had no plans to move away from the colour, the expectation is that McLaren’s new livery, to be unveiled in time for the 2007 season, will be predominantly red.

The Intel sponsorship with BMW covers a five-year period starting next year and will take the computer technology group into a three-part alliance with the German car maker, covering joint global marketing, use by BMW of Intel’s  technology across virtually all areas of its business including dealer network operating systems, and a role as the BMW-Sauber team’s official corporate sponsor, with the cars in Intel’s livery.

The McLaren team will be renamed Vodafone McLaren Mercedes as part of the agreement, regarded by Vodafone as “a very strategic step for us”, Peter Bamford, Vodafone’s chief marketing officer, said on Wednesday. He predicted that the partnership would allow Vodafone to work more flexibly  with McLaren to achieve its global marketing aims than  had been possible with its current partner, Ferrari.

He acknowledged that the deal was being struck despite F1’s future remaining unresolved after the current Concorde agreement governing F1’s financial and other arrangements expire at the end of 2007, “but at the end of the day you have to make some judgments, sometimes while having no perfect vision of the future. But our own experience and belief is that F1 will continue in its present form.”

Intel is taking its first substantial plunge into F1 – it has had a minor alliance with Toyota  in the past – also in the belief that  the split will be resolved.Since then “Intel has changed from two- three years ago as a ‘speeds and feeds”[computer chip] company into a much more end-user approach under which we will get a real benefit from F1”, said Graham Palmer, Intel UK’s managing director”.

An indication that new initiatives may be under way to resolve the F1 split was also given by Mr Dennis, who indicated that a peace formula could be agreed within the next three to six months.

Additional reporting by David Owen and Mark Odell

 

 

 

  

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