Ferrari F1 racing team set to face a $55M hit following split with crypto sponsor
Ferrari is set to hit a $55 million loss after its collaboration with sponsors was torn up and legal action considered. Reports reveal that Velas (VLX) and Scuderia Ferrari would cease renewing their partnership after 12 months.
VLX and Snapdragon cut ties with Scuderia Ferrari
According to recent reports, cryptocurrency organization Velas and chip semiconductor firm Snapdragon have cut ties with Italian race car company Scuderia Ferrari. The news suggests that the two organizations formed 25% of the Italian firm in annual income generation. VLX contributed $30M, while Snapdragon dedicated $25M for the sponsorship with Scuderia Ferrari.
This will lead the two organizations to seek justice in court, whereby Ferrari is set to lose $55 million. Commencing January 1, the Velas (VLX) logo didn’t appear on the Scuderia Ferrari premium collaborator’s list. In addition, the logo of Snapdragon, a chip semiconductor organization, wasn’t on the list either; it was removed. The two were part and parcel of the Maranello team’s premium joints.
Following the start of 2022, Scuderia announced a long-term partnership deal with the digital currency firm ahead of the F1 championship. The partnership was conducted as branding logos portrayed on the F1-75 vehicle, Charles Leclerc, and Carlos Saenz’s racing suits.
Nonetheless, reports indicate that a source close to two parties has verified that Ferrari’s Maranello office failed in complying with the stipulation which enables Velas to generate Non-Fungible Token images as the blockchain firm seems to undergo drawdown in terms of financial stabilities. The two organizations felt tormented, and the parties sought legal action to end the deal.
The saga continues
In the forthcoming days, a press release is expected to address the Qualcomm Technologies contract, which was endorsed with a premium partnership with Ferrari’s Maranello team in February 2022. The Snapdragon Digital Chassis solution’s logo on the F1-75 challenger seemed intact. However, the break-up is considered mutual.
The contract seems unclear if the situation will be linked to Benedetto Vigna, Ferrari’s chief executive officer who previously worked for rival STMicro.
Ferrari partnered with Qualcomm technologies for a premiership deal. The firm worked with the Italian organization on the analysis and data part of their digital cockpit. Notwithstanding, Mercedes and Qualcomm technologies revealed a huge cockpit electronics joint journey signifying that the Snapdragon brand could be on the verge of signing a deal with the German side, a clear indication of remaining in Formula 1.
As the quarterly representation of the two firms (Velas and Snapdragon) commercial income on Scuderia Ferrari was underway, the Italian side needed to seek new firms to close the hole left. The two companies provided massive gains to the Italian side, such as technical assistance and financial capabilities.
Crypto collapse continues affecting F1 racing teams
The crypto ecosystem has seen major hits throughout 2022, leaving different beneficiaries, including racing teams sponsored by crypto empires, counting severe losses. For instance, FTX, a digital currency exchange, lost and filed for bankruptcy protection in the United States, making Mercedes lose $15 million worth of investments. This made the German side drop all FTX’s branding in all the branded assets in the last session of last year’s F1 season.
Mercedes F1 racing team boss Toto Wolff declared that the situation would torment the vast Formula 1 team. He noted that every F1 organization has an endorsement like theirs with FTX, and the majority will be affected as the crypto wave in racing companies (F1) will halt.