Virgin agrees sponsorship deal with Brawn for 2010

[Daniel]

http://www.sportsprodailydeal.com/deals/_a/virgin_guarantees_brawn_us30_million_for_2010_seas on/?utm_source=Feeds&utm_campaign=Latest+Deals&utm_medium=rss

[Malbec]

http://www.sportsprodailydeal.com/deals/_a/virgin_guarantees_brawn_us30_million_for_2010_seas on/?utm_source=Feeds&utm_campaign=Latest+Deals&utm_medium=rss

So Brawn thinks that the team is worth a total of $30 million a year in sponsorship? That figure seems a little low to me, especially since the team stock has risen by winning its first race and looking mightily competitive.

[Daniel]

So Brawn thinks that the team is worth a total of $30 million a year in sponsorship? That figure seems a little low to me, especially since the team stock has risen by winning its first race and looking mightily competitive.
I agree. I think Virgin is getting a good deal out of it for sure.

[Malbec]

I agree. I think Virgin is getting a good deal out of it for sure.

Or the article is wrong...

[woody2goody]

They are going to have more sponsors though obviously...

[ChrisS]

the deal is similar to what Philip Morris has with Ferrari

[ioan]

Great news for Brawn, no matter what they are insured for next season.

[Tazio]

2nd Apr 09, 09:58
Here is my take on this subject on another thread earlier this morning :dozey:
--------------------------------------------------------------------------------

It looks like the Virgin Logo should be quite prominant in 2010
Branson is going to ransom other commercial income.
So If I'm reading this correctly,
they might as well Change their name from Brawn to Virgin! Whatever


Sir Richard Branson's Virgin Group is poised to strike the most extraordinary sponsorship deal with the new Brawn GP Formula One team. It has exchanged heads of agreement whereby Virgin Group will guarantee the team US$30 million in sponsorship for 2010 in exchange for exclusive rights to the team's commercial income from any further sponsorship it can gather.

http://www.sportsprodailydeal.com/deals/_a/virgin_guarantees_brawn_us30_million_for_2010_seas on/?utm_source=Feeds&utm_campaign=Latest+Deals&utm_medium=rss

[AussieV8]

What will be the typical budget of a team next year? With all the cost cutting, $30 million might not be the tiny amount that some people think it is.

However, if the cost cutting is not implemented, Brawn may find itself backed into a corner as any further sponsorship they may attract goes to Virgin. ie: even if another $50 million worth of sponsors come on board, that goes to Virgin and not the team.

[aryan]

This is similar to the Ferrari deal with Philip Morris. Ross Brawn is of course, more than familiar with that deal.

However, this also guarantees that Brawn is getting $30 million for 2010, and no more from sponsorship.

No matter the cost cutting, this seems too low for me. They surely can't survive on that.

Why such a low price? Considering their form?

[Dave B]

I'm surprised, becuase right now BGP can pretty much name their price. $30M isn't exactly chicken feed, but it does seem low for a team currently leading both championships.

[Tazio]

I'm surprised, becuase right now BGP can pretty much name their price. $30M isn't exactly chicken feed, but it does seem low for a team currently leading both championships.

Dave, Doesn't this deal really limit Brawn?
Or is it typical for F1 teams to have one advertiser take the revenue of all the others?

[Dave B]

I can only speculate that Brawn is banking on the budget cap being ratified for next year, but it all seems rather strange.

[Tazio]

Thanks dude!!

[PSfan]

I wonder if having the threat of losing their results of the first couple races, and having to make compromises to their chassis that might relegate them to the back of the pack might have some bearing on their sponsorship asking price?

of course the little devil on my shoulder is pointing this part of the article out: The deal has been negotiated by the team's commercial supremo David Butler and helped along the way by Formula One supremo Bernie Ecclestone. and is suggesting that this insanely low sponsorship deal could be Bernie's way of sabotaging the value of all F1 teams sponsorship income, and forcing them into a spending cap...

[wmcot]

of course the little devil on my shoulder is pointing this part of the article out: The deal has been negotiated by the team's commercial supremo David Butler and helped along the way by Formula One supremo Bernie Ecclestone. and is suggesting that this insanely low sponsorship deal could be Bernie's way of sabotaging the value of all F1 teams sponsorship income, and forcing them into a spending cap...

I thought that by saying "the little devil on my shoulder," you were referring to Bernie!

[PSfan]

I thought that by saying "the little devil on my shoulder," you were referring to Bernie!

The little devil on my shoulder might try to convince me to do bad things from time to time, he isn't nearly as Evil as Bernie :p :

[Mark]

Interesting points there. Firstly that the team is fully funded for the 2009, bascially Honda is paying (or has paid) the bills for 2009, so we needn't worry about them slipping back too quickly. And Virgin is giving them £250,000 per race just to have their name on the car.

Then we have Virgin giving them $30 million from which they could get $50million back! So why doesn't Brawn sell it's own space and keep the $80 million for itself?!

As others have said, it's the budget cap.

[ArrowsFA1]

Or is it typical for F1 teams to have one advertiser take the revenue of all the others?
IIRC all advertising space on the Ferraris is/was owned by Philip Morris (Marlboro). They then leased that space out to other sponsors.

[I am evil Homer]

I'm surprised, becuase right now BGP can pretty much name their price. $30M isn't exactly chicken feed, but it does seem low for a team currently leading both championships.

2010 sponsor though...who says they'll better than midfield come next year? $30m seems about right given it's for next season.

[Tazio]

IIRC all advertising space on the Ferraris is/was owned by Philip Morris (Marlboro). They then leased that space out to other sponsors.Thanks Arrows. I'll file that under "Free Enterprise in it's Purest Form" ;)

[Somebody]

The only way this could make sense, as far as I can see, is if this "guaranteed" US$30m is some sort of bare minimum, and they get extra $$$ per-point.

Even the proposed budget cap is around £30m. There's no way Brawn - who as a "new team" won't get as much TV money next year as they should - could make any sort of profit even with a budget cap if the only sponsorship income they get is US$30 million.