F1 Winter Break
Mercedes lands €30 million Petronas sponsorship
Mercedes lands €30 million Petronas sponsorship
Posted By: James Allen  |  21 Dec 2009   |  11:51 pm GMT  |  96 comments

The Mercedes GP team has won the hotly contested battle to secure the sponsorship of Malaysian oil company Petronas, in what it describes as a “long term deal”. The deal is a significant one, worth €30 million per season. Combined with the prize money the team won this season as Brawn GP, which is of the order of €50 million, this gives Mercedes an €80 million budget for 2010 before they themselves have injected anything, or any other sponsors have contributed.

Alongside Ferrari and McLaren, this team is starting to look like a new powerhouse team for Formula 1, something it never was under BAT or Honda ownership.

The team will be known as Mercedes GP Petronas F1 team, so it is basically a title sponsorship, although the sponsor name comes after the Mercedes name.

This is a great coup for the new Mercedes team, which was Brawn GP this year until Mercedes acquired a 75% stake.

In addition to the media value that Petronas will derive from being on a car which is likely to be pretty high profile in 2010, particularly if Michael Schumacher is driving one of the Silver Arrows, there is a strong business to business deal behind it. One of the incentives Mercedes can offer a company like Petronas is a deal to put its lubricants into its road cars, as Ferrari does with Shell, but clearly Mercedes is a far larger volume seller of cars, vans and trucks. Equally, Mercedes will look to leverage Petronas’ networks in Asia for business growth. With McLaren, Mercedes had a long association with Mobil.

“Within the limits of the new Formula One resource restrictions, the Mercedes GP PETRONAS Formula One Team will be well positioned to achieve our goals, “said Mercedes’ Norbert Haug. “We will all strive to present efficient success in the future knowing at the same time that the new Formula One season with some fundamental rule changes will be a particularly challenging one.”

The deal is a blow to Sauber, which has a relationship with Petronas stretching back overy 10 years. Since being forced to take back the team from BMW, Peter Sauber is battling with not having any prize money rights and now has lost a major sponsor. It is also a blow to Lotus, which is Malaysian owned and which has strong political associations in Malaysia.

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I've seen a mock-up of the paint job on another site - looks like the "Silver Arrow" has tuned into a Mint Aero Chocolate Bar 🙂


Nestle Aero Chocolate

There ya go, another potential sponsor!


Let's hope they get rid of the ugly graphics on the mirrors. Mint green mirrors would be great.


I wonder how BMW are viewing this. Their main German rival has taken on a greater involvement in F1 while landing the ex BMW main sponser and Schumacher. Meanwhile BMW have exited after a disasterous year, what a contrast.


I think Mercedes is about to teach BMW a lesson on how to enter F1, step one buy a winning team, contract the best driver in the world and a legend at that, and watch the sponsorship money role in.


Unless BMW can make some serious gains out of saloon cars (WTCC, DTM, whatever), they seem to have mishandled this one badly.

I'm actually looking forward to the post-manufacturer era in F1 but you've got to say Mercedes have played a blinder so far.


I cant imagine the revenue Mercedes will earn if Michael signs up. I'll be first in line for some Schumi/Mercedes merchandise!

Merry Xmas James et al!


Serious question. I'm not taking the mick.

Why would you want to wear some clothing that would make you a human advertising hoarding?

Then on top of that, why would you want to pay for it?

And finally having paid for it why are you happy that it is made of nylon? I'm presuming the nylon bit, but its true of football kit, etc.

Seriously, I am curious. If I was wearing a T Shirt with Mercedes on it, it would be because I worked for the company or it was free. And if it was made of nylon I'd need to be paid to wear it.

Thus I'm curious why you'd pay to have the disadvantage of clothing with what are effectively advertising emblems on it.

I saw a guy in the local Sainsbury's the other day wearing what looked like was McLaren Mercedes team clothing (not stuff you can buy) and it looked, well, dreadful. I think the only prestige thing about it was that you had to be a team member to own it.


If you are a fan of Mercedes there is nothing wrong walking round with the three pointed star. If you are a fan of McLaren there is nothing wrong walking around with the Kiwi logo. The partners and sponsors on the uniform just make it more genuine to what the team members and drivers wear. Give me a pair of McLaren overalls and I'll wear them for sure. I'd like some Senna & Prost spec ones. So much better if they have Marlboro on them - that's genuine. No Marlboro logo = political correctness and boring. Plain clothing = boring.


I guess that is part of the problem I have with this. I have worn team colours in the past - but I was part of the team. The only people that could have that clothing were the team.

That is what made it special.

And the clothing wasn't nylon, it was well made, really good quality cotton.

If anyone other than the team could have that clothing it would have been pointless.

Whereas your outlook seems to be you want to look as if you are a team member - something you are not. I'm confused as to why you would want to pretend membership of something.

I note the neither respondents to my question have addressed the nylon question.


Simple answer is im looking for something to wear for my first GP trip next year also i attend a lot of home motorsport events and drive in a few. I have a few Ferrari shirts but they are not full of logos. I prefer the simpler styled ones.

Also i dont have a problem with people who are walking advertisements, they obviously have a passion for the sport and im not really bothered if its not the height of fashion etc

Christopher Snowdon

I would rather Petronas back Sauber if i'm honest, Mercedes don't need this investment. James I know its a Mercede's/Petronas comment area but surly Jean Totd will see Sauber gets the reward money he deserves at the very least. Any chance Petronas will also show some loyalty with a minor sponsorship?

p.s. - Just wanna say thanks, your blogs have been terrific over this winter period, not only are you my F1 news source, you also answer the fans question to cover all aspects. I have pointed fellow fans in your direction! This is truly the way forward for F1 media.


Thanks I really appreciate that


Echo that too James. Really enjoyable blog - thank you very much!


For all those people who have been poopooing Nick Fry, I think he's answered his critics back in great fashion.


Has he answered his critics? For 3 years he got no sponsors in. Then he signed a deal with a convicted fraudster that he didn't do diligence on.

Then he got replaced as Team Principal and his replacement turned a back of the grid nowhere team Fry couldn't get across the finish line around in one year - with the same staff. And fewer facilities. And a reduced budget.

Then new owners came in and scored a huge title sponsor and the greatest driver ever - within a couple of months.

Both the Petronas and Schumacher moves have come straight from Ross and Daimler.

If anything, the events of the past few months have shown just how badly BAR/Honda was managed and run under Fry.


who's to say he's still the backing force, I'm sure Merc will put some of their own pressure. Haug is a savy guy.


If only he could do it on his own without the people at Mercedes helping him out then he'd make someone a great office boy one day.


With brawn winning both championships this year, Mercedes taking the majority stake in said team, Schmui (potentially) as the #1 driver etc. this deal sells itself. Even Nick fry couldn't screw this up. This is a no brainer for Petronas. I doubt Fry's skills and abilities had anything to do with this coup. He's along for the ride.


Poor old Fry boy still gets poopooed!

Come on guys, you'vee got to be fair. He can't be damned for doing something and be damned for doing nothing. 🙂

Glad at least he and Brawn were smart enough to sell to Merc.


There's something about Nick Fry's TV presence that fails to inspire but his track record at Prodrive was quite impresive. David Richards doesn't strike me as a man who suffers fools gladly, so I'm willing to give give Fry the benefit of the doubt. He's just not a good spokesperson.


My thoughts exactly.

Mercedes buy in, followed by an excellent recovery from the Henkel debacle.


It goes to show again and again that there is never any loyalty in F1. Sorry for Sauber.


Its business - loyalty has nothing to do with it. Mercedes can do more for Petronas worldwide than Sauber and Lotus put together.

The combo of Schumy and Merc will probably be a worldwide brand, and as James says look at the relationship between Ferarri and Shell, Renault and Elf - the 2 go hand in hand. Thats what they will want to reproduce.


That's absolutely right. Nevertheless, I hope Sauber finds sufficient backing from elsewhere. Peter Sauber appears to have behaved impeccably through all this and deserves a break.


Petronas just spent 30 million very wisely.

Schumacher is already bringing Mercedes $$$ and he still has'nt officially announced his comeback ..


I was under the impression that Sauber would be receiving Pansonic sponsorship because they signed Kobayashi.


For the doubters who think this team is not for real...this is serious evidence to the contrary. This could mark the descent of McLaren to mid-pack and the ascent of the Brawn squad to the top level of F1. In 2-3 years time Mercedes Petronas F1 could supplant McLaren and be one of the top two. Ross Brawn and Schumi taking on Ferrari would be an epic battle to watch. My money is on the Brawn boys.


A coup of great magnitute after the henkle disaster.


Didn't BMW kept the Sauber on there name while running the team? Why doesn't Sauber have any right to prize money?


they didn't sign the concorde agreement.


Because BMW was so "smart" to not sign the new Concorde Agreement before they pulled out ...


They (BMW) didn't sign the Concorde agreement when they had the chance and so lost their original slot.


I think its because BMW did not sign the new concorde agreement (probs because they new they were leaving and didn't want the hassle if they couldn't sell the team on) so the new incumbant, naming aside, has to start from scratch.


*fangirl mode*

I really hope Mercedes will produce a dog next year.


James, do you see this as significant in regards to the signing of Schumacher, and his ties with Shell? Will Shell for instance be less likely to allow Schu to leave his contract to go to a team whose name includes that of a competitor in Petronas?


Schumacher's Shell contract is separate from his Ferrari deal.


Youcan kinda see a mutual end to that deal as it would be a conflict of interests. But it also shows the extent to which Schumi wants to race again - that he will break the Ferrari relationship and also those with other sponsors.

James do you think Schumi will have problems when he hangs up his helmet again - in terms of going back to Ferrari as team principal etc or do you think the Merc move will end such hopes?


It is also a blow to Kubica's hopes to get the seat at Merc. Petronas will undoubtedly push for Schumacher or even they signed the deal because they were assured Schumacher already is there. It looks like Kubica stays where he is, I am going to have to make peace with it.


Having associated with BMW in the past 4 years, I can see why Petronas has opted for Mercedes for their next long term tie-up. They need to be associated with a well known road car brand for the synergy and Sauber unfortunately can't offer now. Lotus is in a less favourable position to win the sponsorship, barring any political intervention.


Interesting move, I didn't think they would go anywhere else but Sauber or Lotus. Two questions though:

You mentioned that Mobil had a connection with Mercedes through their McLaren deal. Do you know if they will be staying with McLaren now that Mercedes are gone?

Also, there were rumours that Kobayashi had Panasonic sponsorship, could they replace Petronas at Sauber?

If not, they could be in some trouble, because they also lost FxPro to Virgin, and BMW had very few sponsors in 2009, after the departure of Credit Suisse, Dell and the reduced sponsorship of Intel at the start of 2009.


The deal with Mercedes F1 can't have been all that difficult to decide upon if Sauber and Lotus were the other contenders for the sponsor partnership.

With respect to Sauber and Lotus the opportunity to leverage off a Mercedes new vehicle supply arrangement and brand association is huge for Petronas in terms of uplifting quality, performance and image perceptions in every market in the world...

It was truly a no-brainer and 30 million quid a year will seem like chicken-feed in comparison to the short, medium and long term benefits that will flow to Petronas from this golden deal.

And as to the prospect of having ambassador Schumi (ex. Shell of course) on board as well...

The Petronas top brass must think all their Christmas's have come at once! And of course Ross Brawn, Nick Fry, Norbert Haug and the Mercedes big wigs will also be feeling pretty chuffed with themselves.

In terms of business-to-business win-win deals... Do they get any better? Sure a Malaysian oil company called "Petronas" may not seem very sexy (and the 'Sauber-Petronas' brand probably never sold many T-Shirts outside of Malaysia) but it's still a great deal for everyone.

P.S. Better b2b win-win deals? How can you go past the Ferrari-Shell Red and Yellow link-up or the Ferrari-Marlboro Red and White. Or the combination of all three... Lotus-JPS Black and Gold?

What accents would make those Silver Arrows look absolutely stunning? Come to think of it those Vodafone-McLarens actually looked pretty cool didn't they...


There were others too, like Williams


Interesting that Nick Fry isn't the one announcing this? I think everyone expected Petronas to get dragged into Lotus or stick with Sauber. Big coup for Mercedes.


How exactly are Sauber funding next season now they have lost Petronas? I hope it doesn't lead to a pay driver (e.g. Petrov) taking an experienced driver's seat (e.g. Heidfeld)


Well seeing as Kobayashi is the only japanese driver in F1 now he brings a lot of sponsorship, it's possible Panasonic could become Sauber's new title sponsor.


James, just out of interest do you know what the official nationality of the new Lotus team will be. They are a British name but with Malaysian backing. Do you know which way they are going to go?


James, a little typo it was BAR not BAT

Tanks for the great blog. My book arrived over the weekend here in sunny 34oC South Africa!



No it was deliberate; British American Tobacco owned the team, as Honda owned the team


Intriguing. How will Sauber manage.

I also agree with the comments from everyone regarding this years blog.

Whether it was the the Monaco GP webchat that had me grinning ear to ear (the fact i got to talk to one of my favourite commentators), the toolbar or of course the great news on here, this season has really been improved for me with this blog.

I can't think of a blog like it, and I can appreciate how busy you are James as im usually up to my eyes in stuff and i work in community radio.

Merry Christmas James and to the rest of the JAF1 gang, (oh and a great new year)!!

PS- as we say in kernow james- Proper job (well we did before the devonians stole it...)


BMW > Petronas > Mercedes

BMW > Kubica > ?


I think it is great news, I just hope Sauber now get that Panasonic sponsorship...any news on that story James?


Now, so when all the sums are added up, how much is Ross Brawn’s bank balance going to look like? Or have I got it all figured wrongly?


Forgive the anorak question James, but who was Brawn's lubricant partner last yr? Did they use Mobil through Mercedes?




i would say that the merc phenomenon is getting stronger day by day... for me the event of the year has to be merc taking over bgp.. and MS hasn't even stepped into the picture yet...

my word... as we say here... its all happening...

this news is even more of a shock since all the news that were "officially" announced until now had already been speculated in the media all over the web... seemed like every one knew abt em... but this one... who would have thought??

all teams be afraid.. be very afraid!!!!


How likely do you think it is that Daimler AG will receive some compensation from Henkel over the employee fraud screw up? This Petronas deal effectively matches/replaces what Mercedes GP were hoping to get from Henkel - looks like win/win for both sides, but would be even sweeter if Mercedes GP received some compensation €€€ too!

Also James, have you heard anything more about possible Panasonic sponsorship of Sauber?

I have also enjoyed following your blog this year, thank you and hope you have a merry Christmas.


Why would Henkel pay compensation to Brawn/Daimler? From what has been reported, it appears that BrawnGP didn't do due diligence on the deal, didn't make the appropriate checks, and caused a massive amount of embarrassment all round. Henkel had a rogue employee, Brawn did not, it had... well.


James, your comment about the new Mercedes team becoming an F1 powerhouse is an interesting one. Despite all BAT's money and the others that followed, it took one man, Ross Brawn, to make it happen. Impressive.


Oh yeah and dont forget the engine. That didnt help at all.


Thanks, GP, my thoughts exactly. All the money in the world is no match for good management.


I dont think Ross Brawn should take that much credit I think it was more to Honda spending much more time developing a car built around a car with a double diffuser and no kers. Way before he was there.


Wrong. Work started on the BGP001 early - at Ross's decree. Before the first race of the season, apparently. He told his drivers they'd be stuck with a crap car all year and he wasn't spending a moment trying to improve it. Because of his reputation, they stuck with it. As to Honda's credit - they spent equal amounts of money and time in previous years and got nowhere. Ross provided that team with leadership, direction, and according to the people that worked for him, showed them how to get the best out of themselves.

If it was Honda's car, it was only Honda's car up to the point where they had to saw 6 inches off the back of it and bodge the gearbox together with spacers, and stick in a new engine. It's not like dropping an engine into a clio and going to Halfords to get a fake chrome exhaust.


Well everyone wants to back a winner... and with Ross, Schumi, Mercedes, Title winning team, etc it doesn't get better.

It sort of says, what were Brawn doing about arguing over Jensons wages... there's more money in that team that all the others.... It is also said that Mercedes new that Schumi was gutted about not being able to return... me smells a rat..

Of course all those ingredients do not necessarily translate into titles. If McLaren, Ferrari, Red Bull etc... keep taking titles away from Mercedes what will be evident is there is no whee to hide..


Is using Petronas lubricants in Mercedes road cars a part of this deal? I can't imagine that Mercedes would take that step, as I'm not sure Petronas products are well known (or known at all) in the US and Europe.


Well, maybe it's high time for people in America and Europe to know that Petronas products do exist and they are also of good quality.


This is quite an interesting deal from a marketing point of view and represents a possibly huge shift in what we all associate in our minds as to what is Mercedes. Let me elaborate a little more:

Mercedes are very European, Mobil has been associated with their brand for many many years pretty much to the extent that both brands are positioned in the same area of value that we hold for each, both are seen as a prestigious brand.

Petronas on the other hand does have some work to do to leverage the same respect within Europe. Can this be done? Perhaps yes it can bit it will take many years and does mark a shift in how Mercedes perhaps plan to market their vehicles in the future.

It's great to see something new happening.


I would imagine that Mercedes is eyeing potential expansion opportunities in the Asia Pacific. Malaysia (Petronas' home) could well be the regional manufacturing/assembly hub.

If I am not mistaken, Petronas is already in the European lubricant market (albeit only a small %) through its purchase of Italy's FL Selenia.

Both parties can only win from this partnership.


Perhaps its more the other way around? Asia is the growth area for cars and trucks these days. Perhaps Mercedes wants more exposure with a known brand in Asia/Pacific?


I have to say the projected image of the car (if you see it on other F1 news websites) with Petronas sponsorship does not look so great. What I'm really wondering though is what Michael Schumacher's helmet will be like next season.


Well, it is your opinion but I think it will be great. Come on, please try to accept changes once in a while. I have the feeling that you are not happy that an Asian company from Malaysia is sponsoring a well-known F1 team, Mclaren Mercedes!


Not likely. I'm from Asia myself.:) I just think the Petronas green doesn't go with the Mercedes silver. 😉


Well Tarek. You have to get use to silver with green. Glad to know that you are from Asia.


James, completely off-topic but I'm off to brave the snow for Christmas break now and see if I can get through to my poor old ma's house.

Just wanted to say thank you for a year of fantastic journalism. Your articles are second to none and your interaction with us on this blog is ground-breaking in my opinion.

Hope you have a well deserved break and a good Christmas and I'm looking forward to your company on here through 2010... it's going to be a cracker and your hard work is a very big part of that for many of us. It is noticed and it is appreciated.


Credit to Ross and the team.

A lot of this goes back to Nick Fry (not always popular) having the sense and courage to employ Ross. Credit where credit is due.


It's the only good thing he ever did......


Makes you wonder if this deal has been in the works for a long time. And the only way to get it done was to get Schumacher there. They needed Nico there in case it didnt get done. And with Jenson there in the way of a Schumacher deal they had to get rid of him the most political way they could. In which they did and once that was done to the surprise of everyone the schumacher rumors started. Kimi stated on November 19th this "I feel they will run two German drivers next year, now that Mercedes are involved." Just something to think about.


I think this makes 110% sure MS is back...being a proof and a cause at the same time...


Blue chip brands like Mercedes will always find sponsorship easier to acquire than independents, especially from companies connected to the automotive industry, because of the association with a prestige product.

Yet, in terms of true impact, the graphics on the car are vital. Does Joe Public really associate Shell with Ferrari? I'm not convinced, but for example, Marlboro (or even Yardley) McLaren are much more marketable than Vodafone or West (somebody tells me they made cigarettes) McLaren. Silver McLarens smacked of Mercedes and so will silver Mercedes, which suits me very fine indeed but the sponsors may have a different view.


Full marks to all parties for this deal as I can't see a loser, unless next year's car turns out to be a complete dog which is unlikely given the pedigree of the engineering team.

Daimler buy Brawn GP for a snip (did I read €200 million?) and inheret €50 million 2009 prize money, Mercedes GP get €30 million a year from Petronas, Petronas supply lubricants to Mercedes-Benz, the employees of Brawn GP must be feeling pretty secure and Brawn GP's one careful owner(s) won't be left out of pocket either.

After this, anyone less than Schumacher is going to be something of a disappointment.

Stuart the Old Geezer


You mentioned some time back the possible entry into F1 of Audi. With the resurgence of the now mighty Mercedes Benz Team are we about to see a return to pre-war German dominance, MB versus Auto Union? Scary.

Merry Christmas and thanks for the most interesting F1 Website; pity you lost the seat alongside Martin Brundle.



Cheers and Merry Christmas to you


That's a good spot, makes sense to me since Panasonic themselves stated their intent to remain in F1.


Forget it Red Bull or McLaren for the title next year the rest will be in their slip streams


Big financial crises always create big oportunities for some people to get a lot almost for free from those who were severely caught.

Honda was in big trouble after having poored huge money into the actual champion car which was rebranded as Brawn. They took long time and a lot of money to develop something very special, with the advantage of having developed it from the beginning with the double difuser in mind.

We will never know wether it would have won with the Honda engine. Maybe yes IF the engine had been upgraded in order to match their competitor’s ones, but this just speculation.

Ross Brawn got some more millions with all the 2009 success by selling his share of the team to Mercedes.

Mercedes had a good engine but without the withdrawal of Honda they would not have had a competitive package. Mc.Laren was a bad car…

Honda’s pull out was a blessing to Ross (more millions in his already deep pocket) and for Mercedes which bought a good team for cheap.

This is life, big failures represent a fortune for those who take over the business and have luck.

There were many lucky coincidences in all this affaire. I´ll not talk about them all because it doesn´t matter anymore. F1 2009 season came to an end and the “winners”, with or without luck, were Ross and Mercedes (Brawn doesn´t exist anymore).


James, it would be fascinating to read a blog on how you see the future shaping up for McLaren. I know they recently announced a multi-year Merc supply deal but it seems improbable that they will be happy to be merely a 'customer' team for too many seasons. A few weeks ago there was talk of McLaren buying the BMW engine dept with a view to building their own power-plant - is this likely to happen?

Whilst writing, many thanks for all the excellent blogs this past 12 months and best wishes for 2010.


Off the subject i know but James can you shed some light on the USF1 name.I seem to recall that Bernie told them they couldnt use 'F1' in the title and they confirmed that they would be known as USGPE.Does Bernie think that as they wont be on the grid it doesnt matter what they are called....!?


That was until they had their entry accepted. But I think that there are still some problems with the name and particular in the use of it as a URL.


James news is just breaking that accordind to Bild online Schumacher has signed a deal with Mercedes!

Can you comment on this?


The BBC and Times are reporting Schumi as having signed for Merc. Deal done.


Schumi HAS signed. woop woop!!


Schumacher has signed! can't wait for racing in 2010


I got my copy of the JA book today 😀

Though I was only allowed a 10 minute browse before it was swiped off me for wrapping, the 10 mins i saw was a top read!!

Merry xmas JA


Cheers. Happy Christmas

Paige Michael-Shetley

It looks like the rumors of the new Mercedes/Brawn title sponsor being an Asian company were correct.

Surely, they'll bring a whole hoard of new sponsors on board given the brand name of Mercedes, the fact its the defending world champion, and that they will now have Schumacher driving for them.


There is an assumption in the article that I would question: namely that Brawn GP gets to keep all of the FIA prize money that the team won in 2009.

If I was Honda, and I was agreeing to provide most of the funding for the team for a season after I was withdrawing from F1, I would want to minimize the financial exposure, since there is no promotional upside for Honda for Brawn GP winning races and championships. Ideally I would want to keep all prize money won by the team, so that I can net it off against the money provided to keep the team operational in 2009, for which I get no promotional value. At the very least I would want a split between Brawn GP and myself for the prize money. This would give Brawn GP a powerful financial incentive to win, but would also provide Honda with a return on its investment.

I do not believe that Brawn GP/Mercedes GP gets to keep all of the 2009 prize money. They may well get to keep some of it, but I refuse to believe that Honda were ill-advised enough to not stipulate that some of the money would be returned to Honda as an offset against their emergency 2009 funding for Brawn GP.

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