Ahead of last weekend's Santander British Grand Prix at Silverstone, eight teams announced their intention to form a rival race series next year. This would be beyond the control of Bernie Ecclestone's Formula One Management group, the sport's rights-holder and overall controller.
The schism followed attempts to impose a £40m budget cap on the teams. To put this figure into perspective, the Ferrari F1 team's budget for this year is in the region of £250m, of which about £60m comes from sponsorship.
Brand marketers may now be asking themselves what it is they are buying with an F1 sponsorship. Some would argue the value resides in the race series itself, while others would cite the teams and drivers, such as Jenson Button, who lend the sport that great intangible: stardust.
Each contract is different, says Scott Garrett, director at sponsorship agency Synergy, and the list of sponsor benefits can run to 30 elements or more. By sponsoring McLaren Mercedes, however, brands such as Vodafone and Santander have bought an association with lead driver Lewis Hamilton, which they exploit by using him in ad campaigns.
'Hamilton has a ring-fence deal with McLaren,' says Adam Wylie, managing partner at consultancy 23Red. This severely limits the driver's ability to create his own ties. An exception to this is his deal with Reebok, which is not 'on the car' (a McLaren sponsor), suggesting that team owner Ron Dennis has allowed the world champion to 'line his pocket and therefore persuade him to remain with them'.
A statement issued last week by the Formula One Teams Association (FOTA) suggested it was confident that the teams still had sponsors' support. 'The drivers, stars, brands, sponsors, promoters and companies... associated with the highest level of motorsport will all feature in this new series,' it said.
Before any new race series makes it to the starting grid, how-ever, the teams face a formidable foe. Sponsors have long admired the business model created by Ecclestone, which offers a regular inter-national platform matched by few other major sports properties. The current race calendar includes 17 races in as many countries, each shown on free-to-air TV in the major markets and offering a range of business benefits.
'[Ecclestone] has built the best broadcast network of any sport in the world,' says Wylie, a 'peerless' asset very difficult for any rival series to replicate.
Eccelstone's reputation as a negotiator was reinforced last year when ITV dropped its F1 contract and the BBC stepped in to pay £200m for a five-year deal, a 33% hike, despite the absence of a rival bidder. That contract would be in jeopardy if FOTA carried out its threat.
Over the weekend, a compromise seemed in sight, whereby the teams would accept a budget cap, but at a higher level. This could present the ideal endgame for sponsors, ensuring their own contributions fall in line with the lower team budgets. Same product at a lower price? Get the Champagne out.