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SBD Global/March 15, 2013/Marketing and Sponsorship

Vodafone To End F1 Sponsorship After Season; Telmex May Be Replacement

Vodafone is ending its long-standing sponsorship with F1.
Long-time F1 sponsor Vodafone "will pull out of the sport at the end of the season after a review of its marketing strategy," according to Thomas & Blitz of the FINANCIAL TIMES. Sources said that Vodafone has paid as much as $75M every year for a sponsorship package centered "on the McLaren racing team and its current and former British drivers Jenson Button and Lewis Hamilton." Vodafone "has already withdrawn from other global partnerships, instead preferring to use its funds on domestic events that carry greater impact with local customers." Other long-running sponsorships, such as the England cricket team and Champions League football, "have also ended in the past few years." A Vodafone spokesperson said that "the group would create a Vodafone-owned marketing platform that would sponsor local events more directly rather than partner with other brands and events" (FINANCIAL TIMES, 3/14). The PA’s Ian Parkes reported McLaren has "confirmed they will announce what will be only the fifth title sponsor in their history on December 2, but will not disclose beforehand out of respect to Vodafone.” Mexican driver Sergio Perez has joined McLaren and “has a long-term relationship” with Telmex. Telmex is “currently still a sponsor at Sauber,” but is “widely thought of being the likely replacement of Vodafone” (PA, 3/14). Also in London, Paul Weaver reported the news that Vodafone "is also quitting at the end of 2013 is another serious blow, even though its departure has been the source of much speculation over the past year." The loss of Vodafone means McLaren "cannot afford to slip further behind as they try to lure another major sponsor to the team, as any deal is likely to be performance-related" (GUARDIAN, 3/14).

BAD PRESS: In London, Nic Fildes reported Vodafone has been “reconsidering its involvement” with F1 since “bitter acrimony broke out in April over the Bahrain Grand Prix, which went ahead despite a violent uprising in the country in which thousands of anti-government protesters confronted police.” Several corporate sponsors, including Vodafone, “pulled their hospitality plans but could do little to press for the removal of their branding from the cars because of the structure of sponsorship deals.” Vodafone was “particularly sensitive to events during the Arab Spring after it was forced by armed forces to shut down its network in Egypt in January 2011 and send out a text message on behalf of the Mubarak government to ‘confront the traitors and criminals.’” The company became a “lightning rod for criticism by activist groups both within Egypt and in the UK and the prospect of its brand appearing on racing cars during the Bahrain uprising threatened to backfire on the company a year later” (LONDON TIMES, 3/14).
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