Ferrari and Philip Morris share the longest-lasting partnership in Formula 1, a partnership that began in 1973, after Marlboro became the world’s best-selling cigarette brand in 1972. Initially at the behest of Drake Enzo Ferrari, the logo appeared only on helmets and overalls and not on the car, ‘positioning’ which changed starting withn1984 when the brand appeared for the first time also on the livery of the single-seaters made in Maranello. The big leap took place in 1997, when Marlboro became title sponsor of Scuderia Ferrari and lasted also during the golden five-year period of success with Michael Schumacher at the wheel. Over the years, tobacco-related sponsorships in Formula 1 have become increasingly fraught with obstacles, with the Marlboro brand initially transformed into a barcode and then starting in 2018 with the arrival of the Mission Winnow brand on the Ferrari cars.
The agreement between Ferrari and Philip Morris, which due to expire in 2021, has not yet been renewed and, according to what was recently declared by team principal Mattia Binotto, Mission Winnow may no longer be the title sponsor of Ferrari as happened in the last three seasons. Below are some excerpts from the considerations by the journalist Dieter Rencken published on racefans.net, as he underlines that Ferrari does not have great worries regarding the prospects of losing the title sponsor Mission
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“Plus PMI has since 2011 used its Ferrari relationship as a business-to-business platform for key trade customers in hospitality and allied fields rather for direct consumer marketing purposes. ‘Mission Winnow’ is a corporate message rather than a product slogan; there are no reasons why such B2B benefits could not continue in future. Sponsorship has evolved to a level where the primary benefits are not derived from (relatively crude) sticker marketing but from personal relationships cultivated in the course of partnerships. Meanwhile title sponsorship in F1 has gradually reduced to the degree that a third of the current grid has its team name linked to a commercial entity – excluding proprietary ownerships such as Red Bull and Haas.
Ferrari has long been aware that the partnership may well not be extended and surely made contingency plans to cater for such an eventuality. Anything less from a listed company would be a severe breach of fiduciary duty. Indeed, Ferrari’s cautionary statements regularly point to the inherent commercial risks of F1.
Overlooked in all the drama is that the budget cap means any reduction in sponsorship income will have little or no direct impact on performance. Before the cap’s introduction this year, teams’ annual budgets ran to close to $500m all-in – racing, marketing and hospitality and power units – of which around $300m was allocated to the racing operation.
Under 2021’s financial regulations that has fallen to $145m (2021), dropping a further $5m per year in 2022 and again in ‘23. Reduced budgets more than compensate for the loss of revenues – which could in any event be replaced. Such cushioning against potential losses of sponsorship was one of the drivers behind the budget cap – indeed, that was one of the reasons Ferrari agreed to it – and 2022 could prove the wisdom of such precautions.
All this points to Ferrari next year dropping ‘Mission Winnow’ as title partner – and possibly even reverting to a more traditional scarlet hue rather than racing under what has become known as ‘Marlboro Red’. Entering as ‘plain’ Scuderia Ferrari is even a possibility, but to suggest that Ferrari’s performance will suffer as a direct result is an assumption too far.”
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