Red Bull and Auto Racing: Sponsor or Own a Formula One Team?

Red Bull and Auto Racing: Sponsor or Own a Formula One Team?

By
George Foster, David Hoyt
2007|Case No.SPM35

In 2004, energy drink company Red Bull considered purchasing the Jaguar Formula One (F1) racing team from Ford Motor Company. F1 was the pinnacle of international auto racing, and Red Bull had previously sponsored F1 teams and drivers. At the time, Red Bull was expanding globally, and F1 was one of the top global sports. However, F1 was not popular in the United States. To raise the sport’s visibility in the U.S., Red Bull had also developed a program to find and groom outstanding young American drivers, who hopefully would eventually drive Red Bull cars.

The case describes Red Bull’s growth and high profitability as of 2004, as well as the extensive use of sports to promote its brand. It describes the state of F1 racing, the company’s involvement in the sport prior to 2004, and considerations in choosing sponsorship or team ownership to promote Red Bull. It asks students to consider the company’s objectives in being involved in sports, and the ways in which these objectives can be achieved.

Learning Objective
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