Wow...$200m deal between Castore and Red Bull Racing & Red Bull Technology 🔥
Yes, an undisclosed length of contract, but whether 5 ($40m/pa) or 10 ($20m) years, it's a move into the big leagues of sportswear/team deals.
🏎 Red Bull - build on the impressive previous year revenue (£278m) through (assumed) long term partner association 📈
🎽 Castore - brand exposure and sales alongside the dominant team in a global sport, and a big statement post their 2023 £140m raise 🚀
Why is this so interesting?
...Formula 1 is a tier one product and we regularly see massive kit deals signed in other sports:
Adidas 🤝 Manchester United = $1.1bn 10 year agreement/$110m pa
BUT:
1️⃣ Very few numbers have been released around previous agreements between sportswear and F1 teams, unlike in football.
Simply, with this deal, we get an insight into the attractiveness of the sport/media asset that is a modern F1 team to a major sportswear brand.
2️⃣ The moment of performance is not the key driver (apologies) in sales; we don’t go and buy the race suit of Verstappen or Hamilton.
Sales = kit that is worn pre and post race by drivers, the team principles collared attire, the engineers logo heavy outfits, headwear...
There’s an automatic assumption that without the opportunity/need to buy the gear associated with the biggest names in their 2 hours of unbroken media exposure, sportswear partnership value would reflect this quantitively….
Match shirts are the driver of sportwear x football partnerships, not ‘training’ wear.
But that’s not the case here.
If you're not relying heavily on sales generated through exposure during a race (or the athletes to sell it), opportunities to engage the audience diversify.
3️⃣ ...and more broadly, through a combination of ‘traditional’ sportswear deals and fashion collaborations, F1 teams are unlocking the potential of both the activewear market and high end brand associations available due to the luxury status of the sport. E.g:
Sportswear:
Castore 🤝 Red Bull & McLaren Racing
PUMA Group 🤝 Scuderia Ferrari & Williams Racing
Fashion:
HUGO BOSS 🤝 Aston Martin F1 Team
Tommy Hilfiger 🤝 Mercedes-AMG PETRONAS Formula One Team
Reiss 🤝 McLaren
The ability to attract and demonstrate value to both sportwear and luxury fashion companies creates increasing opportunity to generate yet more revenue through creative licensing and partnerships, while appealing to a broader audience:
🔸McLaren team wear and merchandise 🤝 Castore
🔸McLaren premium travel wear 🤝 Reiss
Multiple touch points = more opportunity to buy product = more opportunity to drive revenue. Simple.
Will we now see more of these deals and a greater transparency of terms?
Either way, this is a significant tangible marker for the commercial appeal of F1.
Excellent work from friend of the show Thomas Beahon and the Castore team 💥
#formula1 #redbull #castore #merchandising #brandpartnerships
We're proud to announce that we are extending our long-term partnership with Castore. In a landmark agreement that sets a record-breaking $200 million deal, the alliance becomes the single largest commitment by duration and value of a sportswear brand in the history of motorsports.
The extended collaboration will see Castore provide performance athletic wear for both Oracle Red Bull Racing and the Red Bull Academy Programme.
Read more 👉 https://lnkd.in/e6fw4E_D
Way to go Coty!!