Making money with F1? – Sonja Kreye

November 22, 2010

In a recent interview with German newspaper „Die Welt“, allergy Dietrich Mateschitz, adiposity owner of Red Bull and the Red Bull Racing team, analyses the past and present of Formula One as a business and marketing model.

“For us, Formula One is part of our marketing mix, nothing more, nothing less. The times in which it was possible to earn money with F1 belong to the past. Maybe they will come back, but to take this expectation as the reason for entering the business should be a bad recommendation.”

Although Red Bull Racing – similar to Williams and Sauber – is a private team whose main business is racing, funding has always been granted due to the soft drink company. So dependence on sponsor budgets is limited. “In former years, the budgets were between 800 and 900 million Euro, but have been cut drastically.” In six years, Red Bull managed to win the championship with less financial resources than e. g. Toyota. The Japanese put huge amounts of money into the project without the respective success. “Currently the budgets are likely to vary between 100 and 500 million Euro including sponsor spending and the performance related income of the Concorde Agreement. Our budget ranges in the lower mid-field.”

No wonder that Red Bull represents a different image than its competitors McLaren, Ferrari or Williams. For Red Bull Formula One is a marketing tool, that transfers emotions into the brand and increases sales. “At Red Bull, our target was to focus on sports and entertainment instead of politics, power or industry and so on. And this approach is meanwhile supported by the other teams, the FIA and Bernie Ecclestone.”

The Austrian therefore is highly pleased about the recent title. “The stronger the competitors are, the more you are happy about winning against them. However, the rivalry is limited to the races and does not include the companies or representatives. Norbert Haug and Luca di Montezemolo belonged to the first to congratulate. We would have done the same.”