In an economic climate in which sponsors are considering pulling the plug on existing arrangements rather than inking new ones, Formula 1 has struck up a significant new partnership with LG Electronics.
In an announcement that goes against the grain of the credit crunch currently sweeping the globe, the leading international technology company will become a premium global and technology partner of the top flight from January, and as part of the five-year agreement will assume marketing rights as F1's official consumer electronics, mobile phone and data processor.
Moreover, in its first truly international sponsorship deal, LG will receive branding on the official broadcast feed, graphics and live timing service at events and on television – being shown to a global audience of some 600 million viewers – and will gain the right to produce a range of F1-branded goodies.
“Formula 1 represents the absolute peak of technological innovation and style,” commented Dermot Boden, chief marketing officer of South Korean-based LG, “which is also our vision for the LG Electronics brand.
“We feel the excitement and electricity of F1 is unmatched by any sport, and we feel the same passion and energy here at LG.
“History shows that if you want to build a brand, you have to invest in that brand, and if you want to be successful, investing when there's a downturn is probably one of the best times to really build your brand.
“In today's economic climate, all organisations need to be strategic with their expenditures. Here at LG we can think of no more important investment than our brand.”
LG produces goods ranging from vacuum cleaners to laptop computers, and news agency Reuters
quotes Boden as having described the deal as one running into tens of millions of dollars over the five-year duration. The company currently sponsors British Premier League football club Fulham and – unusually for a Korean organisation, the Financial Times
points out – has of late taken on a number of international staff in senior management positions.
LG is bidding to sell itself as an exclusive outlet for quality goods with an added hint of luxury, recently developing a new mobile phone in tandem with high-profile Italian fashion house Prada.
“The identity and character of Formula 1 is very similar to the identity and character of LG,” a spokesperson told the FT
. “They prefer a Prada phone to a $50 phone.”
“LG is a leader in its field,” added the sport's commercial rights-holder Bernie Ecclestone. “It pioneers cutting-edge technology, delivering innovation and excellence in a stylish package, which is what Formula 1 is about too.
“We have so much in common. I am very excited to begin our association and look forward to the technology solutions they can bring to us also.”