AUGUST 7, 2009

Santander, Alonso and Ferrari

One of the enduring rumours of recent months has been that Fernando Alonso will move to Ferrari next year with sponsorship coming from the Spanish financial services company Grupo Santander. It is expected that there will be an official announcement of the deal at the Italian Grand Prix in September. The intention was for Alonso to come in to Ferrari and partner Felipe Massa and this may still happen, depending on the fitness of the Brazilian. Kimi Raikkonen seems to be out of the picture. The fact that Ferrari is willing to allow one of its major assets to take part in a World Rally Championship event - from which he exited rolling twice into a forest - suggests that the team is not really bothered about him in the future. One cannot imagine any major F1 team allowing such a thing these days given the investmentthat has to be made in the drivers.

Alonso wants only to race a truly competitive car. After two World Championships at Renault he moved to McLaren hoping for great things. Santander joined him. The deal was for three years with an option to extend two more. This was a good move at the time as the Spanish bank could use Lewis Hamilton to promote the rebranding of its British subsidiaries while Alonso could be used for promotions in the Spanish-speaking world. The troubles at McLaren in 2007 led to the early departure of Fernando and caused Santander to have a rethink about the sponsorship. It was agreed that the bank would stay for the three years as agreed, but would not take up its option for 2010 and 2011.

Alonso wanted to go to Ferrari in 2008 but the team had no space for him so he settled for Renault, unconvinced by the other options available. It is believed that Alonso signed a pre-contract with Ferrari at the end of last year to join the team in 2010. Ferrari then turned around and used this to bid for the Santander money. Ferrari's problem was that Santander wanted primary sponsorship but could not have it because Ferrari had previously agreed a deal with tobacco company Philip Morris International (PMI), the owners of the Marlboro brand, to continue until the end of 2011. Originally PMI had wanted to stop funding Ferrari at the end of this year, despite a deal that ran to 2011. PMI has long owned the entire sponsorship space on the Ferrari and sells it on to other sponsors, at a premium of around 30% on top of the price it paid. In order to keep the Marlboro money Ferrari promised to significantly increase the money that PMI made from the sponsorship. Santander was keen to join the party with Alonso and so a deal was agreed that will begin in 2010 and will provide Santander with significant badging on the car and an option to become title sponsor in 2011, PMI with a much better return on its investment, Alonso with the hope that he might be able to win another World Championship while Ferrari has the budget it needs - a win-win situation for all concerned.