Financial problems ahead for Ferrari??

[Sharky]

This is just my guess but. Well, I read on the newspaper this weekend that a court has ruled agaist Phillip Morris in a 145 billion (with a b) dollar lawsuit. Now, they've appealed and they'll surely be able to cut down on that ammount but it would still be a number followed by at least 9 zeros for sure. That would put the company in a very difficult financial situation and they'll have to start cutting down on their expenses. Now, the first thing every company cuts down when they're in truble is on advertisement. Taking into account that it's rumored that Marlboro pays over 100 million a year to ferrari one could think that they would consider cutting down on that ammount or even break the sponsorship deal. That would leave Ferrari in a very delicate situation as they strongly depend on that money and it's very unlikely that Shell would rise their participation much less another company stepping forward and paying that amount of money.

Now maybe I could just be making a "novel" out of nothing...but maybe.....what do U guys think?

[Schume]

Interesting one to ponder.
As you say advertising usually gets hit when a company is cutting expenditure.
But I am sure that they would consider carefully what they get for the money they pay Ferrari: A qualifying session and a race every two weeks from March to October with several hours coverage each time.

Ferrari are always in the frame on and off the track. Counting how many hours of advertising this adds up to on TV alone worldwide would be impossible.
Then you have the spin offs like pics in newspapers and mags reporting on the race in hundreds of countries.

I would think that they get very good value for what they spend and would be very disappointed if they had to pull out of F1 for whatever reason.

[Devlin]

Besides, one would think that Ferrari (as well as all the other teams) have a contingency plan sponsorship-wise, in light of the upcoming total ban of tobacco advertising. I'll have a Big Mac and a Coke, please.

[Slowcoach]

Interesting topic , funnily enough I answered a call on my mobile yesterday which was a survey all about F1 (has anyone else had that ?) All the questions seemed to be focussed on which teams were sposored by who ? As I answered the questions it dawned on me how many other names were starting to infiltrate the once Tobacco dominated cars , eg Orange , Hugo Boss , and the interviewer asked me at the end specifically about Coke..... I guess they might have been behind the survey - they were asking particularly about which age groups were attracted to F1 .
On reflection now that F1 seems have become a truly 'global' sport or should I say business , it appears that 'global' brands such as those mentioned early by Devlin have woken upto the fact that the coverage F1 generates is phenominal , they will gradually step into the gap left by Tobacco , and let's not forget all those Dotcoms...., suddenly they seem to be advertising alot on TV all of a sudden , that I feel , will soon progress to sports sponsorship - and I seem to remember Yahoo on a certain F1 car !
Back to the point - I think Ferrari , particularly with Schumacher in the seat will not have to much trouble attracting sponsorship......it'll be the smaller teams that suffer first because their sponsors will see spaces appearing and move to the 'higher profile' teams at the top of the pile which means the gap will start to widen again between the 'haves' and 'have nots' which is a big shame for everyone involved in the sport .

[Sharky]

Coke....mhh....coke is red.....and Ferrari is red....so....Mhhhhh....interesting thought Slowcoach. The thing is that it's widely rumored that the sponsorship deal between marlboro and ferrari is the most expensive deal of that kind in the world....over soccer, basket, tennis or any other sport and there aren't many companies in the world that could find that ammount of money. And don't forget that the main reason why Tobacco uses auto racing for publicity is because they can't advertise on TV or radio or most newspapers in the world. So the only way they can get air time on any of those types of media is by sponsoring the sport wereas soft drinks or .com companies can advertise everywhere.

However.....you really can't get a bigger world wide audience than the one you get with F1....much more with a winning team and driver.

I guess that we'll just have to see if that lawsuit really hurts Marlboro and if Ferrari has a backup plan.

[Gerard]

Ofcourse Ferrari have a backup plan.
With tobacco advertisements dissapearing from Formula One in a couple of years, all teams have to think ahead.
And the cigarette companies are going to appeal to the court's decision which could take another 15 years, yes, that's 15 years.
So, as long as tobacco sponsoring is allowed in Formula One, Ferrari don't have to be afraid of losing any of it.

[Tristan]

Yes, but FIAT have infinite dosh. Basically. Silvio Berlusconi's fortune is bottomless. Don't forget, this man owns NASA, Juventus and was Italian PM. There is no financial trouble at Ferrari. At all.

[Sharky]

Silvio Berlusconi?? You mean Giani Agnelli. Silvio is the guy that owns the AC milan football club while Giani owns the FIAT empire. Anyway.....they do have a lot of money but I have my doubts about him supplying that ammount of money. I would really like to see what company will fill the spot of the current tobacco sponsors at teams like Mclaren or Ferrari.

or...could it perhaps that we're close to begin an era of more "reasonable" budgets without the tobacco guys?

[angst]

Oh please please let it be so..... but then the manufacturers are getting more involved, so maybe not. Though when the not as quick as the quickest realise they can't all win (unless they start fixing it among themselves) how long will they hang around ?

[f1ciamp]

f1 is alredy moving away from tabacco ,see, orenge yahoo,hugo boss tictac, and many many others that are not coming up my memory right now, coke ferrari seems good, and its logical to becouse coke wewr loosing some market latly
so they mite try to regsin it with formula 1 and whats better then ferrar with ms?
i wander if ferrari will allow wite stripes acroos the car!
but i dout it will take down the prices, as in a few years ther will bee at lest 4 or 5 teams on the top fiting for the championchip as opposed to todays ferrari -mclaren domination we will se renault ford and bmw up ther to.

[jvilleneuve2000]

emmmmm say that again

If arrows can find all of that sponsorship then i dont hink ferrari will have a problem. It is mor likely that they will be fighting them of.

[angst]

I don't think Arrows' sponsorship is anything like the scale Ferrari are used to, but I see your point that THE team in F1 isn't going to have a problem gaining new sponsors. The point is that for tobacco companies F1 is almost the only advertising medium available so they will be willing to spend more than, say, Coca-cola,McDonalds etc. as they can freely advertise through other medium. So are they going to be able to bring in the huge amounts that allow them to pay TGF what he wants.
However, if its's likely to be 15 years before appeal, this is all pretty academic anyway.

[bobdrummond]

I find it interesting that in a series such as Nascar, the dominant sponsors are beer companies, DIY stores, carparts companies and food brands. In formula 1 there are , however, quite a few companies that Joe Ordinary wouldn't neccessarily recognise or patronise (Technology companies, Merchant banks and suchlike), a similar situation to CART where telecoms companies are becoming more commonplace as sponsors.
I believe that the wider appeal of F1 will mean that money shall never be a problem for the likes of Ferrari but if there is a tightening of corporate belts, I think F1 will hog all the Telecoms, Internet, Network and PC manufacturer money at the expense of CART whereas Nascar will retain its appeal for Kellogs, McDonalds , Tide and suchlike. It's all about the fans. Nascar, allegedly the most popular motorsport in the US, doesn't hold much appeal for high-tech companies like Lycos who didn't even finish out the year with Johnny Bensons top-ten team.

[Ralf's Girl]

I think it'll be a long time before tobacco advertising is banned in F1. But even if it is, Ferrari will have all that money from Fiat.