NOVEMBER 11, 2002

Jordan and Deutsche Post

The announcement that Deutsche Post has ended its various sponsorship deals with the Jordan team was not unexpected. Deutsche Post - which also owns the DHL and Danzas marques - has been the team's title sponsor since the start of the year but has supported the team since the first deal was signed in December 1999. The company said that it had achieved all its goals in Formula 1 and that it was therefore "a good time to stop".

This is not entirely the truth for although the F1 program did do a lot of raise the profile of the company our sources suggest that some of the Deutsche Post management would have been happy to continue if there had been more money available. In June the company ran into trouble with the European Commission's Competition Directorate and was ordered to repay the German government $538m of subsidies which it received in the 1990s. The Commission conducted a three-year investigation and has now ruled that these were illegal as they gave the company an unfair advantage over its major rivals. The repayment amounted to about a third of the company's annual profit.

There were also rumors of talks between Deutsche Post and other F1 teams, notably Renault and McLaren, the implication being that the relationship with Jordan was not always an easy one, particularly in the summer of 2001 when Eddie Jordan took it on himself to fire the team's German star driver Heinz-Harald Frentzen and replaced him with Jean Alesi. The company, although privatised, is still controlled by the German government and the loss of Frentzen was a blow.

What will be interesting now will be to see what Jordan is going to do about his funding for next year. There is the hope that Benson & Hedges will decide to increase its sponsorship budgets again if the team takes on Eddie Irvine although we have also heard suggestions that Jordan could be in line for a completely image overhaul with a totally new package of sponsors. Obviously Jordan is not negotiating from a strong position at the moment but as with the Orange Arrows deal, decent sponsorship can be found if an entire car is available. For Jordan such a deal would be a godsend at a time when money in F1 is very hard to find.