Why Formula 1 sponsorship is the best brand deal for fintech and payments

01 March 2024 Be the first to comment

Dominique Dierks

Content Manager

Finextra

Member since

11 Sep 2023

Location

London

Contributed

This content is contributed or sourced from third parties but has been subject to Finextra editorial review.

As we enter our first race weekend of the 2024 season, many fans have been amused (or irritated) by some of the new sponsors that have emerged for this year’s teams. Especially Visa Cash App RB – a name that doesn’t exactly roll off the tongue, neither does its acronym VCARB – has been subject to countless memes from the sports’ following on social media.

Stake F1 Team (aka Stake F1 Team Kick Sauber aka Kick Sauber) is another example. Formerly known as Alfa Romeo and Sauber, the announcement of Stake as the main sponsor going into 2024 has caused a ripple effect that will undoubtedly lead to much confusion throughout the season.

And the trouble has already started before the season even kicked off: Stake, an online gambling company, is not allowed to be promoted in all the countries F1 visits throughout the season. In Switzerland, which is ironically where Sauber F1 team is based, the promotion of online gambling is restricted, and the national gambling regulator had opened proceedings against Sauber.

So while Sauber will be able to be branded under its official name of Stake F1 Team for most of the races, during other races it will have to be branded and referred to under a different sponsor’s name: Kick Sauber.

Still with me so far?

Why Formula 1 is increasingly attractive for fintechs and payment services

Corporate sponsorship in Formula 1 has been around since the late 60s, yet over the last few years, fintech and payment sponsors have increasingly popped up in the space. And much of this can be attributed to Liberty Media’s acquisition of Formula 1 in 2017.

Previously owned by Ecclestone, Formula 1 didn’t quite manage to capture the younger generation, with Ecclestone himself saying in 2014: “I don't know why people want to get to the so-called 'young generation'. [..] Most of these kids haven't got any money. I'm not interested in tweets, Facebook and whatever this nonsense is. I'd rather get to the 70-year-old guy who's got plenty of cash.”

Dissatisfaction among fans continued, viewership kept dropping. Enter: Liberty Media. Liberty Media’s acquisition turned Formula 1 into an entertainment brand. F1’s first marketing division was established, and Liberty Media managed to identify what Ecclestone failed to do: the younger generation wants more involvement, and they want to get to know the people underneath the helmets.

Social media strategies were created, restrictions for teams regarding the sharing of original content were relaxed, and for the first time, fans managed to get a behind the scenes look. The strategy paid off quickly: Formula 1 was the fastest growing sport for the first three years under new management.

The cherry on top of Liberty Media’s strategy was undoubtably the success of Netflix’s Drive to Survive, which managed to pull in demographics previously uninterested in the sport. And as the sports’ popularity shot through the roof, so did the sponsorship deals.

Formula 1 represents prestige and the idea of elite, and combined with the fact that its races take place all over the world, make it the perfect canvas to promote fintechs and payment players that are increasingly playing towards an international and cross-border audience.

Sponsorship can look different. From branding on the cars, which is well visible thanks to onboard coverage during broadcasts, to signage around the track. But payment brands have increasingly started to pop up as title sponsors. From MoneyGram Haas F1 Team to Visa Cash App RB, title sponsorship quickly end up the butt of the joke. Yet you can’t deny that it’s doing what it’s designed to do – people are talking about it.