With tobacco revenue now forbidden, Formula O
By KATE WALKER
FOR DECADES, Formula One was synonymous with tobacco. Not only was the sport awash with money from cigarette companies, but the cars’ liveries were also reflections of their sponsors, from the red and white Marlboro Mclarens to the black and gold of the John Player Special Lotus.
Tobacco brought in an average of $350 million per year for Formula One earlier this decade, and companies like British American Tobacco and Philip Morris International helped pay for the sport’s continuous cycle of development, the technological arms race that often ensured that those who spent the most won the most.
But that all ended late in 2006 after Formula One banned tobacco advertising.
In 2015, the last year for which public figures are available, the sport’s 10 teams raised about $750 million from sponsorships, a $200 million drop from 2012.
That loss of income hit the sport about the same time as the financial crisis, which forced the Honda, Toyota and Renault teams to shut down, although Renault eventually returned. And now F1 is reconsidering whether to continue to accept advertising from alcohol, fast-food and snack companies.
So the sport has been looking for a new source of money, and in the past few years teams have been working to form partnerships with the deep-pocket companies in the technology industry that can bring not only high-tech expertise, but also revenue.
Technology and Formula One are natural partners, and companies like Microsoft and Dell have long invested in the sport. Mercedes, the current champion, has a number of technical partners, including wireless technology company Qualcomm and audio experts Bose, as well as Tibco, Pure Storage, Rubrik and Epson. Microsoft Dynamics has partnered with the Renault team since 2012, and Dell returned to the sport this year with Mclaren, having previously worked with the now-defunct Caterham team.
Mclaren has been aggressive in obtaining partnerships over the past decade.