How much money do Formula One teams make?




Bernie Ecclestone had said in 2012, “A gentleman should not talk about money nor about last night” when he was dealing with the financial terms for the Singapore GP. Bernie, the chief executive of the Formula One Group which handles all the commercial aspects of the Formula One races, has always refrained from openly showing the commercial might of Formula One.It is however estimated, by Reuters, that the highest level of single-seated motorsport racing, Formula One, has a revenue touching $1.5 billion annually.

How much money do Formula One teams make?

How much money do Formula One teams make?

Formula One is a very popular sport internationally which attracts more than millions annually, 600 million television viewership in 2008, mostly from the European region. In 2013, Bernie explained the part of the deal as he was getting ready to bring three new teams into the sports. He speaking to The Daily, he said the top ten teams get a part of the prize fund and other teams get a small portion however that was to change, “We pay the top ten teams, that’s what we do. For three years we did something different because we had an agreement with the FIA president, Max Mosley, but now on we will pay the top ten and that is it”.

2013 Formula One Prize Money (all figures in $million)
Team Column 1 Column 2 Total 2013 Standing
Red Bull 35 66.5 101.5 1
Mercedes 35 56 91 2
Ferrari 35 45.5 80.5 3
Lotus 35 38.5 73.5 4
McLaren 35 35 70 5
Force India 35 31 66.5 6
Sauber 35 24.5 59.5 7
Toro Rosso 35 21 56 8
Williams 35 17.5 52.5 9
Marussia 0 14 14 10
Caterham 35 0 35 11

As one can see, the Formula One team earnings depends a lot on its performance and how it fares in the entire season rather than just in a race or two. Hence it is important that the team continuously keeps pushing itself and stays alert to the threat which other teams pose over the entire season. Stakes have only risen over the few years with more teams and higher sponsorships.

It a famous un-kept secret, that Ferrari has a special deal with Formula One group that makes sure Ferrari gets around 2% of the prize money straight off the top regardless of its performance in the season. Ferrari is the oldest and the most prestigious team with maximum pedigree as compared to the other teams. Ecclestone goes out of his way at times to make sure he keeps the bosses at Maranello happy, the team that attracts maximum support and crowd as well during each season. Other teams which cry foul, given an instance that Ferrari earned $17.5 million in 2011 more than others just due to the above “understanding” with Formula One Group, can hardly do anything about it.

Many have questioned the sport’s financial structure after two teams, Marussia and Caterham went into administration last year. In a way, it is wrong to just single out Formula One with teams in financial trouble. Football for example, generates larger revenue still teams and clubs get into financial trouble. Big teams in Formula One like Red Bull and Ferrari spend close to $400 million in a season over design and testing for the new car while Mercedes and McLaren are estimated to spend in the region of $300 million annually. Other teams cannot afford more than $100 million on the development of the car. However, the amount of money spent annually on R&D is not an indicator of the performance of a team in the races.
The prize money which is calculated as a percentage of F1’s underlying profit, spiked in 2013 season, increasing the team’s share from 59.6% to63%. The problem with the Formula One teams is performance. Teams like Sauber, Force India, Williams, Lotus are all struggling currently but manage to keep themselves afloat by sponsorships, contracts and commercialising their technologies, rather than depending on Formula One prize funds. Thus, in the past too, teams like Jordan, Spykar, Midland, Brawn, Super Aguri all having done well for at some period, could never stick around for long and exited the sport after financial troubles like the recent Marussia and Caterham teams.

Tags: , , , , , , , , , , , , , , , ,

Anjan K Merkap

Author:

Cricket

ICC Champions Trophy Final 2017: India vs Pakistan – Live Cricket Score

ICC Champions Trophy Final 2017: India vs Pakistan – Live Cricket Score

Posted by: Atish Home Chowdhury on June 17th, 2017

The two cricket giants of Asia; India and Pakistan will lock horns against each other at the epic ICC Champions Trophy finale match at the Oval on Sunday. India ..

Football

Match officials for the FIFA U-17 World Cup India 2017 appointed

Match officials for the FIFA U-17 World Cup India 2017 appointed

Posted by: Vikram Kamboj on August 18th, 2017

With only two months to go before the FIFA U-17 World Cup India 2017 kicks off, the FIFA Referees Committee has appointed 21 trios of match officials, represent ..

Tennis

Rafael Nadal vs Stan Wawrinka: French Open Men’s Final 2017 – Preview

Rafael Nadal vs Stan Wawrinka: French Open Men’s Final 2017 – Preview

Posted by: Atish Home Chowdhury on June 11th, 2017

The stage is set for the mouth-watering and nail-biting clash of the two Tennis stalwarts of the current era; Rafael Nadal and Stan Wawrinka. This will be the u ..

F1

Life Lessons learned from Sports & Fitness #TOSBDay

Life Lessons learned from Sports & Fitness #TOSBDay

Posted by: Vikram Kamboj on September 26th, 2016

Held on Sept 1st, The Outstanding Speakers’ Bureau (TOSB) Twinterview consisted of sports panelists such as Mark Gallagher (Public Speaker on F1 race), Shayam ..

Boxing

Boxing Federation of India successfully concludes AIBA Course and Examination

Boxing Federation of India successfully concludes AIBA Course and Examination

Posted by: Vikram Kamboj on February 24th, 2017

Rohtak, February 24, 2016: In continuation to produce the AIBA certified Coaches, Referees and Judges; Boxing Federation of India successfully organised the AIB ..

Other Sports

Indian athletes begin impressively at 22nd Asian Athletics Championships

Indian athletes begin impressively at 22nd Asian Athletics Championships

Posted by: Vikram Kamboj on July 6th, 2017

Indian interests on the opening day of the 22nd Asian Athletics Championships were high with national record holder Muhammed Anas easing into the semi-finals of ..

One stop guide to all the latest sports news, reviews, opinions, fixtures and live scores from India and around the world.

Copyright © 2017 | The Sports Mirror