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Bahrain F1 race shows flip side of sponsorship

Bahrain F1 race shows flip side of sponsorship

Sponsors ploughing money into Formula One have been left squirming after the motor sport's rulers ignored human rights concerns, and went ahead with the Bahrain leg of the race despite continuing anti-government protests and violence.

April 24, 2012 3:59 by

Companies whose names adorn the high-speed cars distanced themselves from the event, saying they did not entertain clients at the Bahrain International Circuit, and that the decision to race on Sunday was not theirs.

Formula One chief Bernie Ecclestone put a positive spin on a race that drew widespread condemnation from abroad, and became a focal point for protests on the Gulf island. “You know what they say – there is no such thing as bad publicity,” said Ecclestone, the sport’s 81-year-old ringmaster who has expanded it from its European base to more lucrative, but politically-charged, venues in faster growing economies.

Not everyone takes such a sanguine view. A group of British politicians warned sponsors they risked harming their brands by association with the race, held against a backdrop of protests aimed at the ruling Al Khalifa family. “Based on what we have seen in the past, it is going to do damage to their reputations,” says Chris Avery, board chair of Business & Human Rights Resource Centre. “It’s hard to put a monetary value on that. Each of them has to decide whether this association with Formula One is worth the damage it is doing,” he added.

Mobile phone group Vodafone, which sponsors the McLaren team of British drivers Jenson Button and Lewis Hamilton, was one of the few companies to comment on the race, saying it had sent no staff to Bahrain and had set out its concerns to McLaren. Although other firms said little publicly, executives were clearly loathe to be seen at the track while TV beamed footage of riot police firing teargas at demonstrators. There was plenty of room at the usually packed Paddock Club, where big-money sponsors treat prized guests to gourmet food and a trackside view.

This goes to show that global sponsorship is not a one-way bet, and illustrates the problems when sports and ethics collide. Among other recent cases, campaigners seeking more compensation from Dow Chemical for victims of a 1984 poison leak in Bhopal, India have seized on the firm’s sponsorship of this year’s Olympics to publicise their cause. Asia-focused bank Standard Chartered, shirt sponsor of former English champions Liverpool, raised its concerns with the club earlier this year after Uruguayan striker Luis Suarez became embroiled in a race row.

John Constantinou, head of global sponsorships and marketing at mobile phone company Orange, says companies tap into local knowledge to look at potential deals.
“In terms of evaluating a sponsorship property, we work with our local teams to ensure we are looking into the background of organisers and events,” explains Constantinou, whose company is a sponsor of this summer’s Euro 2012 soccer tournament. “The tricky bit is where there are sporting events where we do not have a base. There we would work closely with the organsiers of the event and we have to put a lot of faith in those third parties.”

(Reporting by Keith Weir; Editing by Peter Graff)

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