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Discover how Formula 1 turns speed into profit: a thousandth of a second can be worth millions. Teams invest fortunes to convert performance into revenue.
In 1986, Ayrton Senna and Nigel Mansell starred in one of the most thrilling laps in the history of Formula 1 – F1, where by just 14 thousandths of a second, the Brazilian won his third victory in the category. This decisive moment perfectly exemplifies the expression 'time is money' in the world of Formula 1, where fractions of a second can be worth millions of dollars. Understand how Formula 1 teams transform speed into astronomical profits, revealing the secrets behind the million-dollar investments that drive this industry. Every millisecond translates into lucrative contracts, huge sponsorships and the financial success of the teams.
What are the expenses of Formula 1 teams per year?
According to a report on the website USA Today, a Formula 1 team car costs between 12 and 15 million dollars. According to the article, the engine represents the largest part of the expenses, which can reach values of up to 10,5 million dollars, something like R$ 50 million reais at the current exchange rate.
Other items on the list also draw attention, such as the $50.000 steering wheel and the front wings, which are constantly broken and cost around $200.000.
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These costs are just to have a car in a condition to compete, but you still need to add the team's operational expenses, such as travel expenses, transportation of equipment, payment of track teams and factory teams, wind tunnel, driver salaries and many others.
All in all, a team like Mercedes, one of the top teams in the category, spent around 2022 million dollars in 400. The big question that arises is: how does Formula 1 make money to cover such high costs?
Do teams invest in Formula 1?
How are we talking about motoring, it is common to think that the big car manufacturers are the biggest source of money behind Formula 1 teams and, in part, it is true, as brands such as Mercedes, Renault and Ferrari, among others, are present on the Grid.
Despite this, the money from the car manufacturers does not represent the largest share of the teams' revenue. Since we are talking about a highly competitive environment, where secrecy is an important part of each team's strategy, there is no precise data on the exact amount received by each team, but with some data it is possible to get an idea.
A report from the English magazine Motorsport 2017 stated that in the previous year, the Mercedes team had earned £289 million and, according to team boss Toto Wolff, Daimler, the company that owns the Mercedes brand, had contributed 10% of the amount, that is, less than £30 million.
The same is true for French team Renault, owner of the Alpine team, and Ferrari, which has the most traditional team in the competition. Teams that do not have a manufacturer behind them often receive money from their owners, who can be individuals or companies, as is the case with Toro Rosso, an Italian team owned by energy drink manufacturer Red Bull.
How does Formula 1 make money?
The answer to how Formula 1 makes money is simple: in many different ways, such as the sale of broadcasting rights, charging promoters who organize the grand prizes, product licensing and also brand sponsorship, such as Rolex and Pirelli.
These are the main sources that generated almost 2,5 billion dollars in 2023 and generally a little less than half of this amount ends up in the teams' coffers. Since the exact division and the criteria are not disclosed, some experts on the subject make estimates of how much each team receives in prize money.
According to one estimate released by the motorSport website, In the 2023 season, the teams shared more than 1 billion dollars and Red Bull, as the grand champion, pocketed more than 140 million dollars. The prize will decrease, until it reaches the last placed team, Haas, which received 60 million.
