Explaining how sponsors contribute to F1 team performance.

What is it about?

In combination with related literature, this study substantiates a complete sponsorship performance cycle in the sports context. Based on 50 years of Formula One (F1) team and sponsor alliances, this study models the effects of three different sponsorship categories on team performance in the annual F1 constructors’ championship. Results demonstrate that each incremental sponsor offering performance-based resources is associated with four additional team points in the championship, controlling for factors such as past success and team experience. Conversely, sponsors offering access to financial or operational resources have no competitive impact. This performance-based sponsor effect is illustrated in models of the current and following seasons.

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Photo by CHUTTERSNAP on Unsplash

Photo by CHUTTERSNAP on Unsplash

Why is it important?

Hundreds of millions of dollars are spent on sport sponsorship each year and most sports organizations and events depend on this sponsorship support to operate. Understanding how sponsors contribute to sporting performance and how that performance ultimately benefits sponsors is important to future budgetary decisions.