Scuderia Ferrari Backs Off from Sponsorship Deal with Crypto Firm
- The luxury Italian manufacturer Ferrari, Scuderia Ferrari, has decided to end its partnerships with its cryptocurrency sponsors.
- It has exited its multi-year sponsorship deals with Qualcomm Technologies’ Snapdragon and Switzerland-headquartered Velas Blockchain.
- As for the agreement with Qualcomm Technologies (worth around $25 million), the separation appears to be mutual.
- The two deals with Snapdragon and Velas represented about a quarter of Ferrari’s commercial revenue for 2022.
As the crypto winter intensifies, many sports companies and other divisions have cut off their sponsorship deals with crypto companies. One of the major reason behind the same is the collapse of multi-billion dollar crypto exchange FTX. In the light of similar events, the racing division of luxury Italian manufacturer Ferrari, Scuderia Ferrari, has recently decided to end its partnerships with their cryptocurrency sponsors.
Ferrari has exited its multi-year sponsorship deals with Qualcomm Technologies’ Snapdragon and Switzerland-headquartered Velas Blockchain, resulting in a total loss of $55 million for its renowned Formula One racing team ahead of the 2023 season. Notably, the two deals represented about a quarter of Ferrari’s commercial revenue for 2022.
The partnership with Scuderia Ferrari and Velas, which was set at $30 million a year starting in 2021, aimed to increase fan engagement via the non-fungible token (NFT) craze among other shared initiatives. However, as per a recent report by RacingNews365, the team did not adhere to the clauses that allow Velas to create NFT collectibles. Moreover, Velas is also going through a tough time from a financial point of view.
As for the agreement with Qualcomm Technologies, which was worth around $25 million along with the technical support, the separation appears to be mutual.
Notably, the chip manufacturing giant joined hands with the Maranello team as its premium partner in February 2022 with its Snapdragon Digital Chassis solution featured on Ferrari’s F1-75 challenger. It was working with Scuderia Ferrari on the data and analysis aspect of their digital cockpit. Meanwhile, Qualcomm Technologies recently revealed a massive “cockpit” electronics joint venture with Mercedes, implying that the Snapdragon brand could remain in Formula 1 if it signs a deal with the German side.
This crypto bear market has resulted in some major partnership terminations. In November last year, Mercedes also suspended its partnership with once-leading crypto exchange platform FTX to face a loss of $15 million. On the other hand, Red Bull Racing (RBR) also terminated its collaboration with the Tezos Foundation as the former reportedly backed out of its agreement renewal plan, citing strategy misalignment.
The Mercedes-AMG Petronas F1 Team’s CEO, Toto Wolff, has previously warned that other teams could take similar actions in the coming months. The F1 team had partnered with FTX, and as per a report from Bitnation, it ended the partnership with the exchange in early November when it filed for bankruptcy and protection from creditors.
“Each team has such sponsors and the F1 organization as such. So everyone would be affected. FTX was considered a solid company, whose bankruptcy is a huge damper not only for us, but for the entire crypto industry. This bankruptcy, with a $ 8 billion shortfall, shows that the entire industry is uncontrolled,” said Wolff.
It is interesting to note that F1 and the crypto industry are connected in ways that go beyond relationships. Formula One filed trademark applications for “F1” on October 20, 2022, announcing plans to launch an online marketplace for cryptocurrencies, meta tokens, digital collectibles, crypto-collectibles, and NFTs.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
