The cost of F1 2019: Team budgets analysed

Like Formula 1 drivers, team bosses are, by their very nature, a highly competitive species who exist not only to win, but by as large a margin as possible.

The nature of this sporting business means that for every constructors champion there are a number of also-rans for whom the challenge lies in achieving the best possible performance over a full season within the constraints of their respective budgets.


Thus, the true measure of any team’s effectiveness is not its eventual championship classification, but the ratio between the number of points scored during a season and the particular team’s overall budget, effectively its Bang for Buck.

The first component is easy to obtain, being available once the championship classification is declared ‘final’; the second requires voluminous research – whether into financial records or via interviews – plus good old-fashioned sleuthing.

Companies House returns are available for all UK-based teams, and thus the financials of Mercedes, Red Bull Racing, McLaren, Renault, Racing Point and Williams are all (eventually) in the public domain – albeit up to nine months in arrears. Although these returns provide a solid basis, they need to be purified, for not all operations are dedicated solely to F1.

The financial records of non-UK domiciled operations – Ferrari and Toro Rosso (both Italy), Sauber (Switzerland) and Haas (international) – are not publicly accessible, and thus best guesstimates have been applied where teams have been uncooperative for whatever reasons.

Then, Ferrari does not split its finances – either within the group or within Gestione Sportiva – as does Mercedes’ F1 team, which operates separate engine and chassis operations. Fortunately, though, there are contacts willing to divulge – either on- or off-record – their teams’ financials for reasons best known to them. Then there are folk who migrate to other team, and take useful knowledge with them.

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F1’s front-runners out-spend the rest
The imposition of regulatory budget caps from 2021 onwards will, of course, make it easier to track team finances, but there are still expected to be fairly substantial variances between the spends of the ‘haves’ and the ‘have-nots’, while the list of exclusions – which includes driver retainers – and the ability to ‘fudge’ marketing and executive salaries is such that up to 50% of total spend could remain hidden.


The biggest ‘haves’ – Ferrari and Mercedes – spent over $400 million each (without engine costs) in their quests for championship glory in 2019, in the process each employing 1,000 heads to field two cars for two hours on 21 Sundays. Add in engine departments, and these numbers swell by up to 50%.

Equally, Red Bull blew almost a billion dollars on fielding its two F1 teams – with ‘free’ Honda engines for both outfits on top of that – while at the other end of the spectrum ‘have-not’ Haas, which operates to an out-sourcing model, spent $150m to end ninth. Tail-ender Williams had a similar spend despite having a full manufacturing facility – neatly demonstrating the vastly different business models adopted by teams.

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Is Gene Haas happy with what he’s spending on F1?
These numbers, more than any others, highlight both the costs of F1 and disparity across the grid, yet they also underscore F1’s global appeal, for ultimately whatever the different spends by teams and/or sponsors, such sums are approved by hard-headed businesses on the basis of tangible returns on investment. Simply put: were F1 not an effective marketing tool, no companies would be onboard and there would be no F1.


Significantly, team budgets crept up by an average of 10% despite the number of races remaining stable at 21. However Racing Point, rebuilding after plunging into bankruptcy as Force India last year, recorded the largest increase at 30%, followed by Haas (25%) and restructured McLaren (14%). Of the trio, only the latter improved its championship position. Haas slipped four places…

Until 2021 (at least) the sport will – in all likelihood – continue to be dominated by the ‘Big Three’, who collectively share a quarter of the sport’s prize fund in return for simply turning up on Sundays. Indeed, during 2019 Ferrari received $90m in performance-linked revenues, and an attendance bonus of $115m.

Still, Liberty Media, three years into its custody of F1’s commercial rights, must have done something right, for all major metrics are pointing in the right direction, albeit some marginally so. For example, based on official figures, average race attendance is up 1.85% at 202,000, while Liberty’s FWONK share price climbed from $29 to over $45 – a growth of over 50%, thus disproving the sentiments of naysayers.

Formula 1’s revenues are disbursed according to a complex formula as outlined in the bilateral agreements – euphemistically, but incorrectly, referred to as ‘Concorde Agreements’ – as entered into between the CRH and teams individually. The basic prize fund is made up of 47.5% of F1’s earnings after deduction of all the sport’s operating expenses before income tax, depreciation and amortisation (EBITDA).

The prize ‘pot’ amounts to approximately 66.6% of EBITDA, so around $1 billion disbursed in 2019 – with Liberty retaining the rest ($480m) to settle whatever loan and shareholder obligations the company has. The ‘pot’ is disbursed to teams in ten monthly tranches between March and December, save where a team has entered a cessation event (bankruptcy).

The basic fund, worth $700m, is distributed according on two “columns”, with all teams to be classified in the top ten of the FIA constructors championship at least twice over the previous three years receiving an equal share of ‘Column 1’, while ‘Column 2’ is disbursed based to a sliding scale table.

In addition, selected teams continue to receive bonuses: Constructors’ Championship Bonuses (CCB) for titles won before 2013 by Ferrari/Red Bull/McLaren, a Long-Standing Team (LST) award for Ferrari, multiple championship payments to Mercedes for titles won since 2013, and $10m heritage bonus paid to Williams. In 2019 these bonuses total a projected $300m, taking the ‘pot’ up to a billion bucks.

Still, unlike previous years, all 10 teams made it through the year without visits from bailiffs, and this situation is expected to continue through 2020, with the subsequent new era promising all change and heralding improved stability for all.

After three seasons under Liberty and one to go before current covenants expire and F1 casts off the shackles imposed by previous rights holder CVC Capital Partners and former F1 tsar Bernie Ecclestone, F1 is finally heading in the right direction. It still, though, requires steady hands at the wheel, and that poses Liberty’s biggest challenge in 2020: maintaining this new-found stability while preparing for massive changes.



2019 F1 team budgets

Notes:

1) This report is split in two: places ten to six in the championship, with the top five teams coming under scrutiny next week. In addition, next week will include our unique financial indices, which not only examine performance relative to budget (‘Bang For Buck’), but also the costs of lap time improvements over 2018.

2) Team budgets exclude engine divisions where applicable, with the assumption made that the FIA’s guideline charge of approximately $25m for an annual two-car supply is applied internally. However, tyre charges of $1.5m for a season’s two-car tyre supply are included in overall budgets.

3) Variances may exist between 2018’s projections and actual comparisons a year later – these are in any event minor, and due to ‘firmed up’ numbers being released after the previous report was published.

3) Currencies have been converted from Euro (Ferrari/Toro Rosso), Swiss Francs (Sauber) and Sterling (others) to US Dollars simply as Brexit has played havoc with rates, particularly given that most sponsors contracts are US$-based, with Liberty dispensing prize monies in the US currency. For ease of comparison the rates used are: $1 = €0.90/SFr1.00/£0.80


Williams

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If 2018 proved torrid for Williams, this season was doubly so. The FW42 was late and proved slower than its predecessor, while whispers suggest the severance payments made to Paddy Lowe, the former chief technical officer who was shown the door during the season, dented an already tight budget hit by substantial reductions in F1 revenues due to a 10th-place finish in 2018.



But it was not all doom and gloom on the financial front: Orlen upped its spend to place Robert Kubica in a race seat, while the team snared enthusiastic support from Rokit. That said, Williams was close to agreeing terms with Rich Energy.

Unilever provided additional income, although they and Orlen depart this year, with the Kubica-linked petrochemicals firm being replaced by Rokit’s drinks brand. A major share in Williams Advanced Engineering is due to be sold as this is written, in turn writing down debt but reducing future cross-subsidies.

Williams F1 recorded an estimated loss of $25m for the year, partially off-set by WAE income. But it is well-placed for F1’s new era, when budget caps restrict team’s ‘performance’ spending to $175m. The imperative is to survive 2020.

The team says
Our financial results reflect our finishing position in last year’s constructors’ championship and consequent reduction in prize money. There was an overall reduction in partnership income compared to [2018], although we secured major new partnerships with Rokit and Orlen.

Note: As a listed company Williams stresses that information provided is indicative, and does not constitute projections.



Haas

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Machine tool magnate Gene Haas uses F1 as marketing platform for his products, relying upon frugality and out-sourcing for cost-effectiveness. Thus the team’s assets consist largely of two contracts: Dallara for listed parts, and Ferrari for powertrains, non-listed parts and wind tunnel usage. Modest facilities in Banbury provide a race base.



Although Haas progressed rapidly during its first three years and achieved a best-yet fifth in last year’s constructors’ championship, 2019 provided reality checks. Car problems hampered performance, in turn affecting 2020 income. Equally, spats with Rich Energy resulted in the title sponsor’s exit after half a season, hitting income by an estimated $10m.

The team retains drivers Romain Grosjean and Kevin Magnussen for another year, but needs to acquire significant sponsorship deals or risk losing its owner’s patronage, for he is surely tiring of underwriting heavy bills. Poor 2019 results mean next year’s FOM revenues alone are likely to dip by $15m.

That said, with 2021’s regulations encouraging out-sourcing and parts sharing, Haas’s business model is fit for future purpose, while operating at well below budget cap levels means Haas has headroom for future growth.

The team says
If you lose out on big money like this, you have to put your thinking hat on how not to waste money next year. It’s not an existential problem and for sure it’s not like ‘Yeah, it doesn’t matter’. It’s something between – we need to manage it, it’s never a nice thing to manage [on] less money.




Alfa Romeo

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Swiss-domiciled Sauber falls under Islero Investments – itself owned by Swedish-controlled Longbow Finance – and forms part of a motorsport conglomerate consisting of the race operation and a supplier of motorsport engineering services, referred to internally as ‘third-party business’. The latter cross-subsidises the team.



This year, the second full season under team boss Frédéric Vasseur, saw the team again place eighth in the championship. Yet behind the scenes further progress was made at its Hinwil base. A chassis name change to Alfa Romeo from Sauber – a deal said to run to the end of 2021 – increased the brand’s presence and contribution, enabling headcount to grow a further 10% and funding a new simulator.

Shell came in as fuel branding partner in a single-year deal linked to Alfa parent FCA, with Latin American mobile company Claro, Singha (beer), Richard Mille (watches) and a raft of secondary sponsors providing additional support. Shareholders underwrite deficits as part of Longbow’s long-term investment strategy.

The relative strength of the Swiss Franc, though, poses an external challenge, as does the country’s labour costs. These factors will only be partially addressed by 2021’s financial regulations, and thus Sauber’s immediate challenge is to improve on, rather than consolidate, eighth place.

The team says
We did a strong job to improve income from sponsors. Compared to two years ago it’s a huge step forward and if we continue in this direction, we are in a good position.


Racing Point

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Although still F1’s ‘pink team’, much changed at Racing Point after a consortium headed by Canadian billionaire Lawrence Stroll last year saved the team from bankruptcy. Headcount grew 15% and installations and facilities have been upgraded and/or renewed. Having previously used Toyota’s wind tunnel in Cologne, in May the team switched to the Brackley facility operated by power unit supplier Mercedes.



These were substantial changes but the biggest is yet to come. The team recently acquired a 27-acre ‘green’ site upon which to expand with planning permission currently in process. This 10-fold increase in surface area is a further sign of its intentions.

Given that FOM revenues remained stable from 2018 – although there is a dispute (see below) – budget growth was fuelled mainly by sponsorship. BWT remained as primary backer, with betting company Sport Pesa joining as title sponsor (as we revealed in January) and a number of other brands, such as JCB and Bombardier, transferring with driver Lance Stroll. Sergio Perez’s loyal Mexican backers continued their support, thus reducing shareholder exposure.

Year-on-year comparisons are distorted by the circumstances surrounding Racing Point’s change of ownership, while a concern is the dispute with Liberty/Haas over a right to so-called ‘Column 2’ money – up to $60m is at stake – which is expected to be arbitrated late next year.

The team says
What makes us optimistic is knowing where we sit in the midfield, and knowing what’s coming in the future to enable us to get back to the fourth place that we’re used to.


Toro Rosso

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Toro Rosso exists as a finishing school for Red Bull’s cadre of development drivers, and maintained its policy of rotating drivers on behalf of the main team. Undertaking Honda’s development work in 2018 paid off this year. A pair of massive, though arguably fortuitous, points hauls in Germany and Brazil propelled the team to sixth place in the championship, equalling its previous best finish 11 years earlier.



This bode well for its 2020 income which is projected to rise by $15m, rebounding from the dip caused by its travails with Honda last year. Its other three sources of income are Red Bull and associated brands (who will rename the team Alpha Tauri next year), Honda (power units and cash), Moose (a Thai cider linked to Alexander Albon, subsequently promoted to the main team following his seat swap with Pierre Gasly) and long-time backers Casio and Acronis, the latter linked to Daniil Kvyat.

The team’s headcount increased marginally over 2018 in both Faenza and at its Bedford aerodynamics base despite (or due to?) 2021’s regulations placing greater emphasis on component and technology sharing. The team already draws transmissions and sundry components from the main team and through Red Bull Technologies, with this trend expected to continue in future.

The team says
[The Big Three] operate with budgets of up to €500 million; we have less than a third of this, and are simply not in a position to compete against these teams. This is also not the target of Toro Rosso.


https://www.racefans.net/2019/12/27/the-cost-of-f1-2019-team-budgets-analysed-part-one/

 

Renault


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Despite a solid boost in budget, derived mainly from improved performance income and increased contributions from the parent company, Renault F1 again suffered defeat at the hands of an engine customer. McLaren relegated its supplier to fifth place, suggesting all is not well at the factory team. Indeed, as 2019 drew to a close, Renault confirmed the appointment of Pat Fry (ex-McLaren) as technical director.

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Renault slipped back into the midfield
Headcount grew by 15% – roughly in line with budget growth – bringing the team in line with anticipated 2021 budget cap levels. Facilities at the team’s base in Enstone are also being upgraded.


Funding is derived from three sources: primarily the Renault parent company, which subsidises group motorsport activities to the tune of $200m per annum across all categories, half of which is allocated to F1. Then there is FOM income – up $10m due to tits improved 2018 performance, and thus paid out this year – and commercial funding, mainly BP and Castrol, plus sister brand Infiniti, although the team has secondary sponsors too.

Depending upon measure, the Renault-Nissan-Mitsubishi alliance ranks between first and third in the pantheon of motor manufacturers – and its F1 team should thus perform at the sharp end of the grid. Yet in this most visible of marketing platforms treads water as it awaits clarity from above, where extended chaos reigns after a number of boardroom skirmishes.

Operating separately from the F1 team is the engine division in Viry-Chatillon outside Paris, which designs, develops and distributes power units, but sub-contracts all component manufacture. Thus, this operation is substantially smaller than those of Mercedes and Ferrari.

The team says
We will remain in Formula 1 provided it continues to make sense for the business, for Renault, from a marketing, from a strategy perspective. Right now the indications are pointing in the right direction because it’s pointing towards an improvement of the business case and the value proposition of Formula 1.



McLaren


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From sixth to fourth: in simple terms the change in championship position does not do justice to the season-on-season improvement made by McLaren. They hide quantum leaps in commercial performance with, for example, British American Tobacco choosing to make a (controversial) return to F1 – via its ‘alternate’ products brands – with the team, with a number of other brands also adorning the team’s papaya and blue cars.

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McLaren returned to the podium after five years away
That said, a switch to customer Renault power units from ‘works’ Hondas in 2018 mean engine bills need to be covered these days. The likes of Estrella (loyal partner to Carlos Sainz Jnr), Huski Chocolate, Coca Cola and Dell offset the lost Honda support. All in, McLaren has an impressive portfolio – as it should, given CEO Zak Brown is known in F1 circles as ‘Mr Sponsorship’ – and star rookie Lando Norris provides youthful zest.


The investment required to restore McLaren to its former competitiveness means the team continues to rely upon support from its main shareholder entities. These are Mumtalakat, the Bahraini sovereign wealth fund, and the Ojjeh family from Saudi Arabia. Indeed, shareholder support amounted to 20% of the overall $250m budget. And without that $35m FOM bonus they would have needed to dig a lot deeper.

Still, the shareholders are clearly ambitious. Having welcomed Andreas Seidl as team principal and James Key (technical director) earlier in the year, they immediately tasked them with drawing up a wish list of facilities. A new wind tunnel and driver-in-loop simulator are on order, with other upgrade programmes already underway – timed to anticipate 2021’s limitations on capital expenditure.

All this is a far cry from the doom and gloom of 2017, when the team was classified ninth, when some feared it faced elimination. It had been that close just a few years ago.

The team says
We hit our numbers this year on our sponsor projections. We anticipate hitting them again next year. The car is gradually filling up, some great companies, but definitely we’ll have some great partners for next year, and everyone we have is staying.



Red Bull

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For three years on the bounce Red Bull Racing has been classified third, meaning FOM performance income and bonuses remain stable at $150m total. So have Red Bull’s marketing contributions ($65m). Budgets boosts came mainly from Honda, which from 2019 supplied ‘works’ engines to both Red Bull teams and provides commercial support, and savings on customer Renault units.

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Honda tie-up lifted Red Bull on- and off-track
Red Bull operates two interlinked companies: Red Bull Technology (800 employees), which provides components and technical services to Red Bull Racing (60), the race team. However, RBT provides services to other group companies (including Scuderia Toro Rosso) – and partners such as Aston Martin (Valkyrie hypercar project) – so the purified budget is estimated at $335m, with ‘race’ headcount stable at 780.


The switch to Honda saved the team around $25m per annum, with Honda support amounting to a total of $50m in cash and kind – providing a budget ‘swing’ of $75m – which ultimately explains Red Bull’s ability to run Mercedes and Ferrari close despite an overall budget of some $100m less. True, Honda improved enormously, but the RB15 was believed by many to be the sweetest chassis on the grid – winning three races on merit.

Aston Martin, TAG Heuer and Exxon Mobil provided supplementary funding, with big names such as IBM and AT&T also lending support. But title sponsor Aston Martin’s future involvement remains doubtful. The company is under pressure and could soon change hands – Racing Point owner Lawrence Stroll is a potential suitor – which could put this relationship at risk beyond the 2020 F1 season.

Intercompany synergies mean all Red Bull’s F1 entities are well-placed to benefit from F1’s 2021 financial regulations, which encourage component sharing, although question marks hang over the continued enthusiasm for F1 of Red Bull owner Dietrich Mateschitz, and Honda’s commitment: The Japanese company, in the throes of electric vehicle development, extended its partnership by a single season to the end of 2021.

The team says
It’s been a tough year with the calendar that’s been [long], but it’s also been a productive year, embracing a new technical partner in Honda which has laid the foundation for a solid future. We’ve seen a [budget] increase dictated by the regulation changes and the inflationary costs that go with it.







Ferrari

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Ferrari uniquely produces its F1 cars and kit within one complex, sharing R&D and manufacturing facilities with the road car division, which supports Gestione Sportiva in lieu of marketing. This business model complicates our reporting as separate financials are not available, with cross-over between departments further fudging the numbers. Thus it will be fascinating to analyse their numbers once the budget cap comes into force for the 2021 F1 season.

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Ferrari removed PMI’s Mission Winnow branding at most races
In total 1,500 employees are allocated to the F1 project, with a (small) number seconded to power train customers Alfa Romeo (Sauber) and Haas. the latter also draws non-listed parts from Maranello in a (renewable) deal said to expire at the end of 2020. This income flows primarily to the F1 engine department and has thus been disregarded in this exercise, as has income from Haas’s wind tunnel usage.


Ferrari pockets the largest slice of F1’s revenues, pocketing 20% of F1’s prize pot despite not having won a title since 2008. Shell, UPS and a raft of other brands complementing the $100m provided by Philip Morris International in exchange for carrying its ‘Mission Winnow’ messages (at some races) and providing access to team and image for promotional purposes. Ferrari tops up F1’s joint-largest budget.

But there is push-back, particularly in the USA, against ‘alternate’ tobacco products. That PMI contribution, effectively a quarter of the budget, could eventually be at risk.

Ferrari’s financial fortunes are reflected in its share price (RACE, NYSE), which almost doubled from $98 last January to a September peak of $170, boding well for the future. Although there were concerns about Ferrari’s continued participation in F1 once the budget cap arrived, Ferrari voted in favour of the full regulatory package at FIA World Motorsport Council level.

That said, 2021’s regulatory package is likely to affect Ferrari FOM income, with its Long Standing Team bonuses reduced substantially. Equally, Ferrari carries F1’s largest infrastructure and payroll – albeit partially offset-able within the wider company – so will feel the biggest pinch. However, it is likely to ramp up facilities massively in order to boost productivity, and thus 2020 is likely to be Ferrari’s most expensive yet.

The team says
We do not comment on our financial situation.







Mercedes

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Daimler-Benz’s F1 activities are split into two: Mercedes Grand Prix (race operations) based in Brackley, and High-Performance Powertrains, situated in Brixworth and operating independently to the degree that a single director is common to both operations. The latter supplies the main team, plus engine customers Racing Point and Williams.

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F1 proponent Zetsche has gone from Mercedes
Surprisingly the common director between the two is not F1 team principal Toto Wolff but Markus Schäfer, member of the Daimler board and responsible for research and development. The former is, though a 30% shareholder in MGP, with Daimler holding 60 per cent and the estate of Niki Lauda – who, intriguingly, was an HPP director before his untimely death in May this year – holding the balance.


RaceFans understands that the shareholdings of Wolff and Lauda revert to Daimler at the end of 2020, with a complex formula based on exposure, capital investment and operating costs determining their value. Then the entire cycle could start again – without Lauda, of course – depending upon the company’s sentiments towards F1. Or otherwise.

Crucial to this decision is Sten Ola Källenius, who was appointed chairman of the board of management of Daimler in May this year after the retirement of Dieter Zetsche, who was the prime mover behind the F1 team. Previously head of HPP, Källenius is now known to favour electrification, so will study return on investment.

Petronas continues as title partner and the team boasts an impressive roster of sponsors to supplement FOM revenues. As serial champions, Mercedes receives the largest cut of FOM’s pre-bonus revenues, but trails Ferrari on overall payout. Daimler contributions increased marginally year-on-year in line with the headcount increase and, crucially, facilities investments ahead of 2021’s belt-tightening.

All this points to a team operating at the very top of its game, and therein lies the biggest challenge: to carry this momentum to a seventh set of double titles while reducing the need for Daimler’s contributions, which would in turn secure its future.

The team says
F1 represents one of the best returns on investments within the whole Daimler group [but] we need to become more efficient. We need to reduce the contribution from Daimler, and if we’re able to achieve that, then we’re in Formula 1 for the long term.








Conclusion
Formula 1 is heading into its final season under the remnants of regulations, processes, procedures and structures imposed by its former owners CVC Capital Partners – who sold out to Liberty Media after inflicting lasting damage on the sport. It does so off the back of a solid 2019, one during which all major metrics headed in the right direction despite increasing competition from that pesky upstart, Formula E.

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McLaren were one of the year’s most-improved teams
Crucially, all teams survived without major scares; equally there were no scandals – no surprise, though, given the major focus was on 2021. One thing is, though, indisputable: F1 is markedly better off without CVC, which is now chasing rugby. Small mercy.


“Clearly a massive performance gap exists between the ‘Big Three’ – Mercedes, Ferrari and Red Bull – and the rest,” we concluded after crunching these numbers 12 months ago. “No team outside of this trio has won a grand prix in the 100 races since FOM began making inequitable team payments. This is reflected in the size of their budgets.”

These sentiments still prevail, save the number of wins by said teams increased to 121 – further underscoring this point – while budgets at the sharp end got even bigger. Yet, encouragingly, Toro Rosso and McLaren gatecrashed the podium three times between them. While chaotic conditions contributed to their performances, the fact is both teams are on the up.

Mercedes cannot be blamed for again dominating the season – if anything, Ferrari is guilty of serially dropping the ball. Yet such predictability does the F1 brand no favours: not a single one-two victory features strongly in the race ratings by RaceFans readers, while events such as Germany and Brazil, in which the Silver Arrows bombed spectacularly, received massive thumbs-up. Telling, that.

In 2019 F1 teams gained numerous sponsors – BAT controversially led the way and Rokit added colour – while others renewed their commitments. Alfa Romeo saw fit to return, and Honda extended its partnership with the Red Bulls, albeit only for another year. The less said about Rich Energy the better, although the brand’s brief dabble in this piranha tank certainly added short-lived colour.

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It was a costly season for Williams
However, dark clouds loom at motor manufacturer level: Mercedes’ share price has slumped 50% since 2016, Renault’s alliance with Nissan is shaky and their boardrooms more so, Honda’s future is electric, and Ferrari’s holding company (Exor) hopes to ink a merger between its Fiat Chrysler alliance and PSA (Peugeot/Opel). These developments will impact on F1 in the long term; the crucial question is: how much?


During the year Liberty and the FIA withstood pressure from F1’s two biggest teams to minimise change ahead of 2021, so much so that both operations gave the eventual package their thumbs-ups, which bodes well for F1’s future. This most political of sports needs strong, unequivocal leadership to thrive, and the relationship between commercial rights holder and regulator seems more united than at any time this decade.

In the final analysis F1 is not yet in rude health, but no longer needs intensive care. That Liberty achieved this turnaround in three short year attests to its solid leadership and the forward vision of its management. Any wonder the FWONK share price sustained record levels in 2019?

The Bang-for-Buck index
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Mercedes won 15 of the 21 races
Due to restrictions on race team strength, wind tunnel/CFD usage, engine and tyre costs, bans of testing outside of official sessions and other costs inputs, it costs around $100m to design and race two cars over a grand prix season – whether for Mercedes or McLaren – with the delta to actual spend being incurred mainly on development.


On that basis most midfield teams have around $50m per annum discretionary spend for development; the top two, namely Mercedes and Ferrari, over $300m. Yet they found just 0,22 seconds apiece over 2018 at a cost of almost $2bn dollars/second, while McLaren – with its $150m development spend – improved by 1.35 seconds, costing the papaya team $185/second, or a tenth that of Mercedes.

Still, F1’s ultimate yardstick is points scored, and thus team efficiency is measured in performance per dollar terms, or Bang for Buck. In our B4B Index (below) the clear winner is Mercedes despite its $250m budget advantage over independents. This is primarily due to the weighting of points in favour of wins, but a salient point is that the top four B4B teams also receive bonuses of some type. That said, so does Williams.

By whatever measure, Mercedes did the business, so hats off to the team.




https://www.racefans.net/2020/01/02/the-cost-of-f1-2019-part-two-what-the-top-teams-spent/