Not quite wrapped up

The fallout from Crashgate came very quickly and very hard – both ING and the Spanish insurance company Mutua Madrilen have cancelled their sponsorship of Renault F1 effective immediately.

James Allen reports that ING were providing $65 million annually with $5 million annually from Mutua Madrilen. Losing $70 million is a big hit – makes one wonder what sort of reserves are available to support the team in competing in the last four races of this season – will they make it all the way through?

And what are implications for next year? If the economy doesn’t improve by Jan/Feb, then Renault may be hard-pressed in securing sufficient budget for next year’s campaign.  Would fallout from this scandal, along with what’s already taken place this year and last, cause more sponsors to look at bowling or model ship building as a safer investment?

Other news today that Bernie (FOM) and Luca (Ferrari) are interested in reducing Flavio’s lifetime ban from F1. If that’s pulled off, it will further lessen the validity of the FIA penalties and make sponsors (and fans) turn their backs in disgust.

More immediately, some poor saps have to scrape ING and Mutua Madrilen logos off of race cars, equipment, clothing, signage and Web sites. TONIGHT – all as fast as possible.  I bet we’ll see either white space or a Renault decal of sorts. But changing livery is not a trivial task, especially under “crisis” like circumstances.  As of this writing, both sponsors were still on the Renault team Web site.

If the economy fails to improve in Q409, sponsors looking for an “out” will have an easier way to go. And sponsors thinking of getting in will do a bit more due diligence and likely want more oversight than was done before. It’s a shame these consequences remind me of the US financial industry as it tries to reestablish itself.  Potentially turning some things up on their heads!