Bankruptcy of FTX, sponsor of Mercedes: a warning signal for F1?

Brief reminder of the facts: FTX, pillar of the cryptocurrency sector, signatory of a multi-year sponsorship agreement with Mercedes in September 2021, plunges into turmoil.

Initially, Mercedes maintained its confidence in the firm and kept its logo – very visible on the side panel of the rear wing of the single-seaters – before changing its mind and suspending the agreement with the cryptocurrency platform.

Why this change of heart? Because the Securities and Exchange Commission (SEC), the US federal regulatory and supervisory body for financial markets, is investigating FTX's management of its clients' funds and its cryptocurrency loans.

For the German firm which seemed willing to maintain its confidence in its sponsor, the rapid evolution of the situation and the fear of a financial scandal pushed it to suspend the partnership with immediate effect.

“Initially, we suspended our agreement with FTX,” Brackley explained. This means that the company will no longer appear on our car nor on other assets of our brand from this weekend. We will continue to closely monitor developments in the situation.”

Even if FTX still hopes for a rescue, the signal it sends is that of a negative sector also affected by the crisis.

Domino effect?

A signal received 5 out of 5 by the small world of F1 which, in recent months, had shown a certain appetite for its “crypto-sponsors”, the latter having massively canvassed the stables.

« We all have crypto sponsors, confirms from Interlagos our interlocutor from a well-known team, But no two do the same thing. They do not all have the same degree of exposure.

Afterwards, this area of ​​cryptocurrency is very speculative and it should not be surprising that fortunes are undone as quickly as they are made. Good exposure, young environment, very techno, cryptocurrency players have everything to seduce, but we will turn the page if necessary.

I don't think we need to worry about a possible impact on F1 if the sector were to find itself in crisis because there are currently more requests for sponsorship than space on the cars! »

For our man, it is not so much that the source is drying up that is worrying, but the image problem that being associated with partners who could be involved in a scandal poses for manufacturers and teams. financial.

« We must also be careful that this does not reflect on other sponsors.he says again. This is a major image problem that no one wants to mess with.

The process of rupture can also be complicated because the society involved does not easily accept that its own image is thus degraded. Even if she is reimbursed, it is a double penalty that awaits her because she would have done well without this type of publicity. »

In short, in the paddock, if everyone is concerned, the time is less for worry than for vigilance. The FTX affair is being followed very closely, and not only at Mercedes.

In the paddock, no one has forgotten the “subprime” crisis in 2007 which began in the United States before spreading to all global economic players and led to an unprecedented banking and financial crisis.

In the fall of 2008, F1 had not been spared and no one wants to relive the explosion of a new bubble.

Be vigilant therefore, the world of Cryptos may not be the Eldorado you hoped for.