The Basics of Motorsports Sponsorship

A high level overview of how motorsports works, the different types of sponsorship, and how you can get started
Samuel Pawlak
Owner of Grand Prix Studio
December 19, 2020

Welcome to part one - the basics - in our 2020/2021 off-season guide to motorsports sponsorship. Each part in this off-season series will act as a vignette of sorts, highlighting specific areas of sponsorship, and how it works. As the title of this blog entry suggests, we're starting out with some basic concepts. So, if you've been in the racing industry awhile, or have received sponsorship in the past, Part 1 is gonna feel like a bit of a re-run. But, we'll go into far greater detail and give real strategic value for people like you in future series posts, so hang tight. Now, if you're more of a novice, or are looking for your first ever sponsor, get your notebook ready because we're about to lay out the basics of how sponsorship actually work.

SRO Nissan 370Z race car with Ikoniqa decal on the rear bumper

First, let's define "Sponsorship". See that? (Nissan 370Z Image)...That's our company's logo on an actual race car. But this by itself is not racing sponsorship. So what is? Simply put, sponsorship is an exchange of value. The sticker on the car is simply a bi-product of such. In other words, you, as the driver, need to provide tangible value to a company in exchange for cash to go racing.

We can already hear you say "Yeah but I can't bring real value!"...We beg to differ. For Pt.1, we’ll cover on a high level all the major ways drivers (and teams) bring value directly back to their sponsors, and make their investment into your racing endeavors worth the price.

1. The Brand Ambassador Role

How it Works: You, as the driver, are now a full-time marketing asset to the brand and company that’s paying for your racing career.  In exchange for their payment (because remember, sponsorship is an exchange of value), you promote their product and service religiously. This role can and usually will apply to ALL future methods we’re about to mention.

Example: The partnership between the fashion company Kimoa and Fernando Alonso, wherein Alonso is the BA to Kimoa.

2. The B2B Method

How it Works: The company that sponsors you is doing so on the basis that its involvement with you and the sport will act as an introduction and a gateway to new clients for them. Your job is to help facilitate that relationship and introduce them to new partners that are also involved the sport.

Example: Arrow Technology’s partnership with McLaren SP in IndyCar. Arrow is using the team as a platform to showcase their tech namely to other IndyCar partners, but also a wider TV audience. (Don't worry if your series has no TV coverage, we’ll cover that in a future post)

3. The B2C Method

How it Works: Probably the most common method, and it can take a lot of different forms. It can be as simple as you earning a small commission on the sale of a company’s good or service (potentially as a Brand Ambassador), to actually receiving company inventory with the task of selling it yourself.

Example: Here’s a more realistic example for those racing in lower series. Partner with a local race shop and bring their products to the track, selling their product for them. Maybe you race in a series that’s applicable to their market, but you attend circuits and race with teams that have yet to be introduced to their products.

These three streams of value are the framework for motorsports sponsorship. In Pt.2 we'll talk about what makes something a good fit for a sponsor, and follow that up with a fictional example in Pt. 3. Stay tuned!