The evolution of F1 sponsorships and brand partnerships

Since its inaugural race in the early 1950s at Silverstone, Formula 1 has evolved into a highly lucrative industry — largely driven by the power of brands and sponsorships. Over the years, the sport has attracted prestigious global brands that have elevated its commercial profile and contributed significantly to its financial growth.

Yet today, sponsorships and brand partnerships in F1 are used for more than simply financial gain. As one team principal allegedly stated, “in today's F1, a smart partnership can be worth more than an extra tenth on the car”.

Here, Aleena Siddiq explores how sponsorships are changing in the sport and offers four top tips for F1 teams to ensure that their agreements are fit for purpose.

The power of sponsorships

Luxury and lifestyle brands have found a natural fit within the glamorous world of Formula 1. Recent additions to the competition’s growing list of blue-chip sponsors include Nestlé’s Kit Kat — which is F1’s ‘official chocolate bar’ for the new season — and luxury group LVMH, home to brands like Moët & Chandon, Tag Heuer, Givenchy, Dior and Louis Vuitton.

Louis Vuitton took the position of title sponsor for the first grand prix of the 2025 season in Australia. Other notable sponsors include American Express, Santander, McDonald’s, The Lego Group and Mattel’s Hot Wheels.

These high-profile sponsorships not only draw attention to the sport but also generate substantial revenue for Liberty Media, the current owner of F1. According to Liberty Media’s 2024 Investor Day presentation, the company earned $632m in sponsorship revenue in the 12 months leading up to the end of the third quarter of 2024 — more than double the amount it made in 2019.

Benefits to F1 teams

For individual teams, sponsors and partners provide more than just logos on their cars. The technical assistance and operational efficiency gained through these partnerships are invaluable, especially as the F1 team cost cap continues to shrink. Currently set at baseline of $135m, automating repetitive tasks is crucial for teams to use their resources efficiently and operate cost-effectively.

Oracle, for instance, is not only paying a reported $300m to be Red Bull’s title sponsor but also providing cloud infrastructure, AI expertise and software to support its tactical team in making calculations for pit stop strategies. 

Similarly, Google’s partnership with McLaren involves providing technology and expertise in exchange for a global platform to test its services against competitors. 

Long-standing partnerships — such as the one between Petronas and Mercedes — also highlight the value of technical assistance. Petronas is heavily involved with Mercedes' engine designers to maximise power and efficiency, as well as fuel development.

The unique nature of sponsorship deals means that while some last only a few years, many continue for longer periods. As one significant sponsor departs, another often takes its place, as demonstrated by ByBit’s exit as Red Bull’s cryptocurrency sponsor and its replacement by Avatrade, an online trading broker.

Benefits to brands

With races held across five continents and a global fanbase, F1 offers a unique platform for brands to reach a diverse and engaged audience. 

The sport’s extensive media coverage and highly engaged social media presence make it a formidable marketing channel. Brands that partner with F1 teams, races or the sport itself gain access to millions of viewers who aren’t only watching the races but also interacting with content across multiple platforms.

Future trends in F1 sponsorships

Looking ahead, we anticipate several trends to continue and emerge within the sport.

1. More technical partnerships 

Expect more collaborations where partners directly contribute to car performance. For example, Toyota announced a technical partnership with Haas, allowing Haas to access Toyota’s design, technical and manufacturing services.

2. Sustainability focus

As the sport moves towards sustainability and achieving carbon-neutral goals, partnerships that enhance a team’s ‘green’ credentials will become increasingly valuable.

3. Increase in diversity

As the motorsport industry works to become more inclusive, sponsorships focusing on diversity and inclusion will continue to rise. This includes increasing sponsorships for female athletes, promoting the F1 Academy and endorsing programs that promote diversity.

4. Digital presence

In a world where digital presence is vital for business growth, partnerships that leverage the digital space will be highly coveted. This includes online marketing, content creators and brand-centric social media talent for platforms like Instagram and TikTok — especially as F1’s digital presence continues to grow exponentially, tapping into a younger demographic.

4 top tips for winning agreements and partnerships

When entering into a sponsorship or partnership agreement, F1 teams should ensure that it’s:

1. Synergistic — it’s important to create partnerships where there’s a natural synergy and alignment of values and ethos.

2. Precisely drafted — your lawyers must be innovative, smart and precise when drafting sponsorship agreements to maximise your ability to reap the rewards. 

3. Tailored — agreements must be tailored according to specific rights, sectors and regions. 

4. Robust — agreements should correctly secure the rights that sponsors are paying for, whether that’s advertising and image rights, driver access, signage or tickets and hospitality. Nothing should be able to undermine or impede these rights.

Talk to us

By understanding these dynamics and trends, F1 teams and brands can forge partnerships that not only enhance their visibility but also drive mutual growth and success in this fast-paced, ever-evolving sport. 

Our award-winning sports team is here to assist in creating beneficial and well-aligned sponsorship agreements for both F1 teams and sponsors. We’re highly experienced and specialised legal advisers who truly understand the sports environment.

Talk to us by giving us a call, sending us an email or completing our contact form below.