What’s in a name? In F1, it’s all about the money

Formula 1 is preparing for a new season with two “new” teams on the grid, at least in name: Stake F1 and Visa Cash App RB. Only, these are two existing teams under a completely new guise.

The first is the new name of the long-standing Sauber team, which was renamed Alfa Romeo in 2019 in a deal that lasted until the end of last season. The latter is the new identity of Red Bull's second team, which previously raced under the name Toro Rosso – “Red Bull” in Italian – before taking the name of the energy drink company's AlphaTauri fashion brand in 2020 .

Unsurprisingly, the names (especially Visa Cash App RB) have sparked extremely negative reactions from F1 fans.

On the surface, and compared to the eight other teams that will compete in 2024, the names are ridiculous and borderline farcical, but both represent a key injection of large sums of money at key moments in the life of these two teams. These are perhaps the main indicators of the scale of commercial opportunities in the global boom that F1 has seen in recent times.

Sources told ESPN that the two naming rights deals are worth between $30 million and $35 million per year. To put that into perspective, MoneyGram's title sponsorship of Haas is worth around $20 million per year.

It's important to differentiate between the different types of sponsorship at play here – title sponsorships such as MoneyGram and naming rights such as Stake and Visa Cash App –. The reigning world champions are technically known as Oracle Red Bull Racing, while the team they overtook as F1's leader is officially Mercedes-AMG Petronas F1 Team. Despite their official titles, these teams are called Red Bull and Mercedes by fans and media, a distinction from the new identities of Stake and Visa Cash App, which will make anyone who follows the sport trip over every word of the conversations around these teams. .

At a time when F1 used brand awareness as one of the reasons for rejecting Andretti's application to join the sport: “While the Andretti name brings some recognition to F1 fans, our research indicates that the F1 would bring value to the Andretti brand rather than the other way around,” read a statement – ​​the introductions of Stake and Visa Cash App RB are particularly infuriating. So what do these new identities mean for their teams and for F1 in the future?

F1 issue

Stake will for two years carry the name of Peter Sauber's F1 team, which has competed in the championship since 1993. The team raced under its own name until 2006, when the majority of its shares were purchased by BMW and the team was known as BMW Sauber and then again between 2011 and 2018. Most recently it relinquished the naming rights to Alfa Romeo.

Now it is known as Stake. This is an interim naming rights agreement until Audi joins forces with Sauber in 2026 as the team's technical partner and engine supplier, as Audi is unlikely to continued to play a leading role with Stake from that point on.

Sauber's history contrasts with this new agreement. Although Peter Sauber has happily relinquished his team's naming rights in the past, both of these occasions took place with manufacturers that had a well-established motor racing heritage. Fans were happy to refer to the team in its Alfa Romeo guise, perhaps showing how followers of the sport don't care that much about the name change as long as there is a heritage behind it. Stake, an online gambling company, is a radical departure from Sauber's past.

The presence of Stake as a name on the grid this year is perhaps easier to stomach knowing that far more exciting times – and a return to a name with racing heritage – are on the horizon for Sauber. The deal with Audi, which includes a commitment from the German automaker to build an engine, has made the Swiss-based team a hot commodity in the drivers' market.

Audi will enter the sport adopting a new set of regulations with completely redesigned engines. While it may be a tall order, Audi has every right to think that it could master F1's regulations on the first try and become a legitimate force upon arrival on the grid.

Visa Cash RB app

Internally at Red Bull, its second team is designated by the acronym “VCARB” (Visa Cash App RB), which we will do for the rest of the article.

Unlike the Stake deal, this appears to be a much longer-term partnership between the teams and sponsors. Although the VCARB name has drawn criticism and mockery externally, internally it has sparked hopes of transforming Red Bull's second team – which has struggled for so long to establish itself as a competitive force – into a team capable of racing alongside Red Bull. some of the biggest names in sport. While the transformation may take time, an annual infusion of more than $30 million will go some way toward making VCARB a legitimately competitive team in its own right. Being on equal or similar footing to Red Bull's senior team seems far-fetched, however, and such a near-term turnaround seems unlikely.

There's a lot to unpack with this deal. The first and most obvious thing is that this is all a direct result of the death of Red Bull founder Dietrich Mateschitz in October 2022.

His death caused something of an existential crisis for the company over how best to proceed with its most famous product: its Formula 1 operations. Initially, it was thought that selling the second team was the best option. Sources told ESPN that Red Bull received a serious offer from an interested party in early 2023, which was rejected. Mateschitz's son Mark, who owns 49% of Red Bull GmbH, opposed the sale, saying his father had always wanted two teams in F1. There was a caveat, however: if the energy drink giant were to continue with two teams on the grid, it could not have one that was as clearly the second team.

Red Bull has often resisted the media labeling Toro Rosso or AlphaTauri a “junior team”, but that is exactly how it has operated throughout its existence so far. The Italian team has given debuts to Max Verstappen, Sebastian Vettel, Daniel Ricciardo and many others, but apart from the Australian's return from a sabbatical in 2023, has never recruited an established driver.

Sources told ESPN that companies including JP Morgan and Hugo Boss were in discussions about a similar deal, before Visa and CashApp joined forces and became the flagship option. As part of the deal, part of VCARB's operations will be moved to Red Bull's headquarters in Milton Keynes, which McLaren CEO Zak Brown has suggested could be a way around cost cap rules of F1.

Despite the promise brought by the finances of the arrangement, fans are very upset with the extent to which the identity of the second team has been distanced from its original appearance. For a time, it was reported that the team would be called “Racing Bulls”, a label that circulated internally and was reportedly still in effect a few weeks before the company chose VCARB. The vague “RB” is all that remains of this name. By removing the “Racing Bulls” option, fans and media effectively have no choice but to call the team either by its clunky full title or by VCARB.

Red Bull is likely to insist that its second team's new name is no different than when it first entered the sport, buying a team that was previously Jaguar, Stewart and Jordan, and giving it a title. 'business.

This comparison, however, is not valid. Obviously, the biggest difference is that Red Bull had purchased both teams, rather than entering into a lucrative naming partnership like Visa and Cash App did here.

Another selling point might be that Visa and Cash App are brands looking to disrupt the established order, just as Red Bull has successfully done over the past two decades. That doesn't fly either.

When she joined F1, Red Bull had already made a name for itself as a fringe, offbeat and underground brand – it had become a staple of the European nightlife scene in the 1990s – while Dietrich Mateschitz focused on the use of sports sponsorships. as a vehicle for the business as a whole. Fellow Austrian Gerhard Berger was the first sports star to receive sponsorship from Red Bull in 1989, and the company quickly spread its wings to F1, NASCAR and the emerging extreme sports scene. In 2003, around the same time that Mateschitz struck a deal to buy Jaguar's F1 team, the Red Bull Air Race took place for the first time. “Red Bull Gives You Wings” was a hugely successful advertising campaign that helped separate Red Bull's status as an energy drink company and as an innovator in sports and marketing. The same cannot be said for Visa or Cash App. Visa was named 112th on Forbes' Global 2000 list and is one of the world's most established brands. Even Red Bull isn't on the list.

Red Bull expects fans and media will soon get used to calling the second team VCARB, just as they have become accustomed to its company coming to dominate and reshape F1 in such a short time. Whether this is true remains to be seen.