Why Virgin is getting into bed with Brawn

There’s a strong story doing the rounds here in Melbourne that Richard Branson’ s Virgin group is going to announce a sponsorship deal with Brawn GP tomorrow (Friday). Branson himself is believed to be on his way out here to make the announcement.

It is well known that Virgin looked seriously at buying the team from Honda over the winter, but pulled out because, among other reasons, it felt the sport’s environmental credentials were not as strong as they need them to be.

I imagine also that they were put off by the uncertainty about the performance of the car and the cost control rules for this year and beyond. The picture has become a good deal clearer now and in some ways you could say that they probably realise that they might have missed a trick. The car is the fastest in the field and the era of the budget cap will soon be upon us. Brawn GP is a fantastic asset. As a business model it is starting to make a lot of sense for a company like Virgin, which would get a massive return on investment.

Ross Brawn is sitting on an asset which will be worth tens, possibly hundreds of millions of pounds in a few years time. The move to a budget cap and the stunning performance of the Brawn car are two reasons for Virgin to reconsider involvement in Brawn. Ross needs strong partners for the future, to consolidate the team and then take it forward as an established top team. Virgin may in time become more than a sponsor. It makes little sense in branding terms for the cars to be called Brawns. They are not using F1 to try to build a brand, like Mercedes or Renault or Red Bull. They might as well work with a partner with a strong brand.

And now clear, for the moment, of the regulatory hurdle of the diffuser row, the way is clear for a very opportunistic piece of sponsorship business.

The Brawn cars will totally dominate this weekend and the next few as well, until the others can catch up. Brawn has some development parts in the pipeline, which could keep their noses in front for the first half of the season, For a sponsor it is a golden opportunity, of the kind which does not come along too often. And Branson is nothing if not an opportunist.