There are some astronomical numbers behind Formula 1
FINALLY, we know the real reason Daniel Ricciardo’s always smiling. Take a look at the figures behind F1 , they’re absolutely nuts.
WHY is everyone involved in F1 complaining? They’re loaded. At least, that’s what it looks like on the surface.
According to the latest financial statements released by teams (for 2014 — they’re still counting the wads of cash procured in 2015), those that competed on the F1 circuit pocketed a combined revenue total of almost $AUD2 billion that year.
According to Christian Sylt of Forbes, who wrote a detailed article on teams’ latest revenue figures, the main reason F1 has been able to maintain such a steady stream of revenue is because the sport has managed to keep a majority of its stakeholders, even if it has had difficulty appealing to new sponsors.
Red Bull had an awful 2015 — coming fourth in the Constructors Championship after failing to win a race for the first time since 2008. But its 2014 was considerably better — they came second behind Mercedes while Aussie Daniel Ricciardo finished third in the Drivers Championship, compared to his disappointing eighth last season.
That’s partly why they were responsible for the biggest chunk of overall revenue among the teams — 22 per cent in fact. Finally, the team with all the troubles in the world last season has something to smile about.
Raking in $392 million in 2014 represented a 3.6 per cent revenue increase for Red Bull compared to the previous year, but it was Indian team Force India that had the biggest upswing with a 26.8 per cent increase in revenue over the course of 12 months.
According to Forbes, sponsorship remains the biggest money maker for teams, ahead of other sources including prize money and payments from owners.
While you’d think a combined windfall of $1.78 billion would be music to the ears of team owners and F1 administrators, it’s not all sunshine and lollipops.
Manor and Caterham went into administration with combined debts of $169 million, due in part to the much publicised switch from V8 engines to a hybrid V6 engine — one of the biggest strains on teams’ purse strings.
Forbes reported that Mercedes boss Toto Wolff suggested last year it was “about 15 to 20 per cent more for the new generation of hybrid power units” — leading to an annual cost for teams of $25.6 million.
There have been plenty of calls for the sport to return to the louder, more visceral V8 power units, but such a move has yet to eventuate, meaning teams will continue to fork out more than they’d like.
While revenue was high, it didn’t always offset teams’ expenses. In fact, for the billions made, Forbes claimed teams actually had a net loss of $454 million — a number three times higher than what it was five years ago. Formula Money tweeted this was an interesting figure considering total revenue has increased 23 per cent in the same time frame.
So while revenue keeps increasing, profit margins aren’t doing the same. It’s another realisation that, as so many people have been calling for recently, F1 needs to change to remain not just popular, but commercially viable too.
F1 teams filed accounts made available to the public, with Ferrari and Sauber (based in Switzerland) two teams that didn’t follow suit.
Teams file financial reports at the end of the year after the one they refer to. So reports for 2014 were filed at the end of 2015.
2014 REVENUE LIST (in AUD)*
FORCE INDIA — $114.8 million
MANOR (MARUSSIA) — $43.3 million
McLAREN — $342.4 million
MERCEDES — $281.5 million
RED BULL — $392 million
RENAULT (LOTUS) — $219.8 million
TORO ROSSO — $212.3 million
WILLIAMS — $170.9 million
TOTAL — $1.78 billion
*Taking into account the undisclosed statements of Ferrari and Sauber, the total figure would likely be pushed towards $2 billion.
