The Business of F1

RACONTEUR THE BUSINESS OF F1 TODAY THE GLOBAL SPORT OF F1 IS VALUED AT $10 BILLION. IT IS THE MOST WATCHED ANNUAL SPORTING SERIES IN THE WORLD PULLING IN MORE THAN 425 MILLION TV VIEWERS. 38% |8,4% MANAGEMENT BAMBINO LEHMAN HOLDINGS BROTHERS CVC 12.2% 34.6% 141% 20.7% OTHER FINANCIAL WADDELL & REED 1% 5.2% INVESTORS WHO OWNS F1 FIA BERNIE ECCLESTONE The Formula One Group refers to several companies controlled by the DELTA TOPCO HOLDING COMPANY. Its contract, which expires in 2110 allows the company to monetise all aspect of F1. F1 TEAM BUDGETS F1 GROUP REVENUE Having a larger budget than your rivals can give you an advantage. However, outspending the competition is not a guarantee of success. $1200.8M Even a mid-ranking team can expect to spend around $243 MILLION a season in FOUR KEY AREAS. RACE HOSTING AND BROADCAST FEES $55M $63M $61M S60M OPERATIONS SALARIES R&D PRODUCTION AND MANUFACTURING Revenue at Formula One has TEAM SPENDING 2014 raced to a TOTAL OF $18 BILLION over the past 15 years even outstripping its closest rival the FIFA World Cup. $375M Fl's annual revenue MERCEDES comes from six main sources. $334M MCLAREN $254.4M ADVERTISING AND $317M SPONSORSHIP FEES RED BULL RACING $89.2M CORPORATE HOSPITALITY $208M WILLIAMS TICKET SALES $39.2M $186M LOTUS $152.0OM $29.4M VENDING AND CONCESSION SALES OTHER GP2 SERIES SALES $170M TORO ROSSO $1.765BN $519.8M FORCE INDIA $133M TOTAL NET PROFIT 2014 2014 $130M MANOR NOTE: 2014 FIGURES; FERRARI AND SAUBER DO NOT FILE PUBLIC ACCOUNTS | $75.5K COST OF AN F1 CAR |$227K |$2K $225K $260K FRONT WING TYRES PER SET STEERING WHEEL BRAKES EXHAUST |$15K Even a car at the back SUSPENSION of the grid, is worth STRUT approximately $6 MIL- LION in material costs and that's without an engine. Teams spend more than $11 MIL- LION to fine-tune each perfect racing chine. ma- $453K FLOOR $378K $88K $1.1M $1.5M $5.3M $142K NOSE CONE UNDERTRAY GEARBOX MONOCOQUE ENGINE REAR WING BRAND SPONSORS Today, more than 300 BRANDS spon- sor F1, spending close to $1.5 BILLION ANNUALLY. $2,023M $692M $690M $564M| $496M MARLBORO VODAFONE PETRONAS SHELL MOBIL 1 The biggest spending brands to date are: |Marlboro PETRONAS Mobil 1 vodafone Shell I$25M |$25M $10M SPONSORSHIP COSTS REAR WING SIDEPODS SIDE OF TUB (LARGE LOGO) (LARGE LOGO) (MEDIUM LOGO) Around 39 per cent of team revenue comes from spon- sorship. The rear wing, sides of the air intake box and the sides of the car itself are prime logo posi- tions, and a sponsorship deal with a top team involving any of these positions is likely to cost around £15 MILLION. $5M $1M $5M $3M REAR WING ENDPLATES (MEDIUM LOGO) LOWER SIDEPOD WING MIRRORS TOP OF NOSE (SMALL LOGO) (SMALL LOGO) (SMALL LOGO) TEAM PAYOUTS Even though Mercedes won the 2014 season, it was Ferrari that received more money than any other team in Formula 1. Everyyear the teams receive around63 percentof F1's underlying profits as prize money. The core of this is 47.5 per cent of the underlying profit which is divided into two, with one half split between the top ten teams in the championship on a sliding scale. The other half is split evenly and only goes to teams which have finished in the top ten in two out of the past three years. DRIVER SALARIES In 2015 the top five drivers earned a COMBINED SALARY OF ALMOST $145 MILLION. A further 7.5 per cent is handed to the top three teams based on the number of races won in the four seasons prior to 2012 (Ferrari, McLaren and Red Bull Racing), with additional historic payments to Mercedes and Williams. Sebastian Vettel was the highest-paid driver, taking home $40 million following his move to Ferrari. In 2014, Ferrari finished fourth, netting $71.8 million ($12.4 million less than champions Mercedes). But with a premium payment of $92.2 million Ferrari netted more than any other team, a total of $164 million. Lewis Hamilton was paid $35 million, though it's worth noting the Brit's new deal will likely see him become the sport's highest-paid driver earning an estimated $40 million in his first year of the contract. Total Premium Prize money ($m) 164 FERRARI 99.2 71.8 $40M 117.1 RED BULL 37 ($> SEBASTIAN VETTEL 80.1 FERRARI 109.2 MERCEDES 25 84.2 $35M (S4OM 2016) 100.7 ($) MCLAREN 33 LEWIS HAMILTON MERCEDES 67.7 96.0 WILLIAMS 20 $3OM 76 ($> 63.5 FERNANDO ALONSO MCLAREN FORCE INDIA 63.5 59.4 $25M STR 59.4 ($> KIMI RAIKKONEN FERRARI 55.3 LOTUS 55.3 $15M 51.1 MANOR ($> NICO ROSBERG 51.1 MERCEDES 46.9 SAUBER 46.9 O raconteur.net Source: FN Formulamoney