AUGUST 25, 2008

Marlboro on the move?

The e-magazine GrandPrix+ is reporting that Marlboro may be preparing to end its relationship with Ferrari, earlier than has been thought. The existing deal is due to run until the end of 2011. This six-year deal, signed in 2005, was for the entire car and is believed to have been worth around $1.1bn, although the tobacco company had (and has used) the right to sell the space on the cars to other sponsors.

This gave Ferrari a solid long-term budget and no hassles with needing to activate sponsorships. It is seen to be significant that the company has now hired two long-established

marketing men from the bigger British teams with McLaren's Steve Wright and Renault F1's Rhys Edwards. Wright has been running the Johnnie Walker deal for McLaren and Edwards has been looking after ING at Renault.

The rumoured change of heart at Marlboro is believed to have come about because of fears that the European Union will introduce stricter anti-tobacco laws, such as banning point-of-sale advertising or even cigarette machines, if the tobacco companies do not make more compromises. Marlboro has taken its name off the cars, but in some countries has used racing cars on its cigarette packets, rather than running tobacco logos on the cars. There are still Marlboro-styled panels on both the cars and the drivers, and there is no question that these perpetuate the sponsorship, even if that happens only in a subliminal way.

There are other elements that may have led to a change of view, notably the March 2008 spin-off from parent company Altria of the Philip Morris International tobacco businesses.

The departure of Marlboro is not as big a worry as it might appear for Ferrari as most of Ferrari's sponsors would simply switch to direct deals with Ferrari rather than going through Philip Morris. There would be some spare space on the cars but Ferrari is such a strong and successful brand that there are certain to be other sponsors who would leap at the chance of a Ferrari deal. There have been rumours for some weeks that Spain's Santander could leave McLaren for Ferrari if Fernando Alonso is signed by the Italian team, as has been rumoured for some time.

Marlboro is one of the longest-established F1 sponsors. It entered F1 with a small sponsorship of Jo Siffert's March in 1970 and then ramped up the programme with a major deal with BRM. The company was briefly involved in Frank Williams‘‚    ‚  ‚s Iso team and then in 1974 Marlboro joined McLaren, for a successful partnership which continued until 1996, when the company moved to Ferrari. There have been many other smaller deals with teams and drivers along the way.