Royal Bank of Scotland (RBS) said on Wednesday that its sponsorship of the Williams Formula One team would end next year as it cuts funding of sport by 50 percent because of the global economic downturn.
The current three-year deal, which was worth around £10 million (US$14.2 million) a year, will not be renewed when it expires at the end of the 2010 season.
RBS has sponsored Williams since 2005.
“They have been very supportive in finding ways to reduce costs over the remainder of our contract,” RBS group director Andrew McLaughlin said.
The team’s title sponsor since 2006 has been American telecommunications giant AT&T.
“We are in a strong position to ride out the inevitable challenges of the next two years,” team principal Frank Williams said.
RBS, which has been partly nationalized by the British government, is undergoing a major restructuring that will see the troubled bank shed 20,000 jobs and review all its sponsorship activity. That will include looking at the future of individual deals with sports stars like top-ranked tennis player Andy Murray.
“We recognize that we are now operating in a very different economic environment and have been reviewing all of our activities since October,” McLaughlin said. “It is imperative that we respond to the reality of the situation we face and that we do so in an orderly way that respects the commercial agreements we have in place and the implications for our partners and the jobs they support.”
RBS has made savings by slashing hospitality costs in sport by around 90 percent this year and canceling trackside advertising at F1 races for next year.
The announcement came the day before RBS was expected to announce losses for last year of £28 billion, which would be the biggest loss in British corporate history.